Friday, October 31, 2008

Whalertly Endorsements: Issuef 5 and Issue 6

Post 68

If you would like to see the full Secretary of State reports on the issues please follow THIS LINK.

Issue 5

Referendum on legislation making changes to check cashing lending, sometimes known as “payday lending,” fees, interest rates and practices.

If a majority of Ohio voters approve Section 3 of H.B. 545, all short term lenders, including check cashing lenders, would be subject to the following limitations:

The maximum loan amount would be $500;

Borrowers would have at least 30 days to repay the loan; and

The maximum interest rate would be 28% annual percentage rate (APR) on all loans.”

The maximum should be slightly higher (say about 1000) so that it could cover a months car and rent payments. This, however, is of little importance. I feel that the 30 days minimum is a good idea for a payback method. These are supposed to be short term loan agencies, and 30 days is a perfect amount to make sure they can afford it. This also means that there can be less obscene overage charges as the borrower has more time to get the money gathered to repay the loan. As for the interest rate, 28% APR is high, but still well within a payable amount (for the borrower) and a profitable amount (for the loan company).

From the against 5 committee - By voting NO on Issue 5, you will preserve the jobs of thousand of employees within the financial services sector. In Ohio’s difficult economy, further job losses should be avoided, particularly good jobs - with competitive salaries and benefits

This is one of those fear arguments. Seeing as most of the companies have already started to file under this system, and seeing that most will still make a fair amount of money, there is little chance that most of the loaners will shut down. I feel that while jobs are important, they are not worth a sacrifice of the loss of homes and bankruptcy of other Ohioans. Furthermore, as has been shown, there is no real loss of jobs at all.

Issue 5 is a good proposal as it makes sure that all Ohioans have a chance to still get loans for those days that they are short on cash. Furthermore, it makes sure that all who use said loans then are not in danger of loosing their homes and financial freedoms due to these loans. In the end, by helping keep Ohioans financially free, and helping to preserve jobs, Whalertly endorses Issue 5.

Issue 6

to amend the constitution by initiative petition for a casino near Wilmington in southwest Ohio and distribute to all Ohio counties a tax on the casino.

Authorize one privately owned casino with a required minimum initial investment of $600 million dollars on a 94-acre site located near the northwest corner of State Route 73 and Interstate 71 in southwest Ohio in Chester Township near Wilmington, Clinton County, Ohio.

Blah Blah Blah, this is merely what it does, no actual discussion needed...

Require the casino to pay a tax of up to 30% on its gross receipts for gaming less payouts. The taxes are to be used first to pay expenses of regulating and collecting taxes from the casino, then for funding of gambling prevention and treatment programs, and the remainder to be distributed in the amount of 10% to Clinton County and 90% to the remaining counties based on population and to be used at each county’s discretion.”

The tax is not enough in my opinion. While there is a large tax base created by this casino, I feel that we should tax it far more. I propose we amend this to 50% tax. This keeps our economy running and would help even more to keep those who become addicted having treatment. That said, I like the distribution plan otherwise.

Reduce the tax paid by the casino authorized by this amendment to the lesser of the rate taxed on another casino or 25%, in the event another casino is permitted in Ohio in the future.”

This is my biggest issue with this proposal, and this is the loophole mentioned in the commercials. While 25% is not that big of a deal compared to the 30%, we are talking about MILLIONS of dollars not going to the state. Plus, it is then only half of what I want it to be. As for the loophole, assuming we charged another casino no tax (for say, 5 years like we do with Car plants) then this casino would owe nothing. This to me is outrageous, and we should not allow a changeable tax rate put in. We should have one that is set.

Require that the casino be subject to all other applicable types of taxes that are currently in effect in Ohio.”

I assumed they would be paying golf, show, food, and liquor taxes. Don't see why this is even in here.

Authorize the casino to conduct any game permitted in the State of Nevada, or any state adjacent to Ohio, including any type of card or table games, slot machines, and electronic gaming devices, except bets on races or sporting events. Only persons age 21 and over would be permitted to place bets. Amounts of bets would not be subject to any limits now or in the future. Days and hours of operation would not be subject to limits. “

Okay, so I have two issues with this: What if Nevada comes up with some sweet-ass gambling situation similar to the Gladiatorial Arena in Rome? Well, then this casino can do it too. I know this is a far stretch, but something like that could happen. The other part is the age. I think that if you are over 18 (our legal age, plus you can do the lotto then) you should be allowed to gamble. Days, hours, and size of bets should be governable by our state. Furthermore, if we amend the state Constitution later, this part doesn't matter.

Set aside the application to the casino of all local and state laws and any constitutional provisions that would prohibit the operation of this privately owned casino, including any local zoning law that would prohibit or place restrictions on a casino from operating on the property in question.”

This is absolutely a horrible idea. The locale should be allowed to govern certain rules that deal with the casino and its property in general. Furthermore, as pointed out above, this regulation means nothing if we later change the state Constitution.

A proposal for a casino in this state has been turned down time and time again. The people of this state do not want a casino, and they don't for very good reasons. This casino makes no guarantee about the amount that it will put into the economy, it harms the citizens, and it does have some loopholes. Furthermore, it opens the door for Indian casinos to come into this state. Due to the dangers presented to the citizens of Ohio by having a casino, and due to the fact that there is little oversight of it, Whalertly says NO to Issue 6.


Casey said...

Forget if you agree with pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. Big brother style.

Forget if you have used a PD loan or not-- FOCUS on the fact that other consenting adults do and are capable of making their own decisions, based on their individiual situations. Who are we to say no, you can't use that credit card? Or no you can't use that bank?

Forget everything else -- FOCUS on the fact that eliminating payday loans DOES NOT eliminate the need for short term financial options. I bet 99.9% of the OGA doesn't have to worry about the day to day necessities the rest of are dealing with. They have insurance, pensions, well paying jobs.

Forget about the Pday loan argument -- FOCUS on the controlling and spending of our household money by the state. Considering our current economic situation... I vote for less intrusion!! PLEASE let me manage my own darn $$ since the gov't has shown they are not responsible, accountable or budget conscious. Ohio>> 60M in debt!!

Forget about the Pday loan side-- FOCUS on what else the government is going to decide in the future (under the guise of "paternalism") that we aren't capable of handling as adults. Restricting how much can be spent on food? alcohol? cigarettes? housing? gambling? clothes?

FOCUS on the fact that the OGA is intruding on our personal financial decisions... where does it stop?? Why do they think they know better what will work for us than we do? We live it every day!!!

The Issue of 5 is waaaay bigger than PD Loans >> its about Financial Freedom of Choice, which I consider to be a BASIC FUNDAMENTAL RIGHT!

***NO on ISSUE 5!****

Barga said...

Casey, I assume that you have this resonce canned for other reasons. That said, lets ask this, does the government have the right to tell you not to drive too fast? Not to drink? Not to shoot another? Get my point yet?

Casey said...

I get your point. And we aren't talking about a potentially life and death situation, such as you described, driving fast or killing.

Having financial options does not possibly lead to death. So trying to equate PD loans with shooting and driving is not accurate.

Barga said...

Fine, so we are talking about bankruptcy and the loss of actual financial independence. The state here, instead of governing life and death, are governering how much debt a person can get into. I see no issue with this.

Steve said...

I agree with Barga. 391% APR and an endless cycle of payday loan debt don't amount to financial freedom. Most folks who take out a loan from a payday lender have every intention of paying it back or simply using the product once or twice to get out of a tight squeeze. But instead, borrowers end up trapped in debt for months, of not years. It's time to lower interest rates on payday loans! Vote yes on issue 5!

Casey said...

Don't you find it rather ironic that the Ohio General Assmebly has created a 60M deficit yet, they want to restrict how Ohioans use their own hard earned money??? Im an adult and I will weigh my options and make the decisions that are best for me and my family. I don't need the OGA further intruding on my personal finances under the guise of protecting us from ourselves. Give me a break!!

Here are the facts about typical PD customers:
The majority of payday advance customers earn between $25,000 and $50,000 annually;
Sixty-eight percent are under 45 years old; only 4 percent are over 65, compared to 20 percent of the population;
Ninety-four percent have a high school diploma or better, with 56 percent having some college or a degree;
Forty-two percent own their own homes;
The majority are married and 64 percent have children in the household; and,
One hundred percent (100%!!) have steady incomes and active checking accounts, both of which are required to receive a payday advance.

You may also want to read about the myths and the reality of the PD industry here

B/c you are only spewing "myths", not facts.

Vote NO on 5

Casey said...

"Myth: Payday loans trap borrowers in a never-ending “cycle of debt”.
Reality: Although the phrase “cycle of debt” is a favorite among industry critics, it’s NOT based on the truth. In states that permit rollovers, CFSA members limit rollovers to four or the state limit—whichever is less. The reality is that a loan cannot be outstanding longer than eight weeks (two-week loan rolled-over four times).

Researchers and state regulators consistently report that 70-80% of customers use payday advances between once a year and about once a month. People who bounce checks and use overdraft protection often do so at a higher frequency. The fact is that a payday advance is more economical than other options.

Myth: Payday lenders take advantage of poor people and minorities.
Reality: Critics of the industry have been successfully perpetuating the myth that the payday advance industry exploits the downtrodden. By perpetuating this myth, they have created a warped idea of the industry’s customer base.

Actually, payday advance customers represent the heart of America’s middle class. They are typical hard working adults who may not have savings or disposable income to use as a safety net when unexpected expenses occur."

Rollover loans are not allowed in Ohio, but since you are quoting 391%APR let's talk about that. Even if the loan was rolled over for the entire year, the high APR of payday loans **pales in comparison** to the realistic alternatives considered by consumers.

How does a $100 payday loan compare?

$100 payday advance with a $15 fee = 391% APR
$100 bounced check with $54 NSF/merchant fees = 1,409% APR
$100 credit card balance with a $37 late fee = 965% APR
$100 utility bill with $46 late/reconnect fees = 1,203% APR.

Hmmmm, gee I wonder why people use PD loans?? Obviously b/c THEY ARE CHEAPER than the other options!!!

!!Vote NO on 5!!

Barga said...

Pray tell me, why is a person from Fort Worth Texas arguing so hard for us to not get rid of payday lenders?

ALso, it would not be the OGA that does it, but the citizens of Ohio.

Casey said...

Im not in Fort Worth Texas, but my company headquarters are. I am in Ohio. Which is why I am so deeply concerned about Issue 5.

And to correct you---the OGA are the ones that voted and passed this "law" first. B/c of the ballot process, now Ohioans are going to be allowed an opportunity to voice their opinions on financial restrictions.

Vote NO on Issue 5!!!

Barga said...

Unless you are directly routing through their internet (i doubt) then the IP would show up somewhere in Ohio.

That said (and I know, it was a strawman, leave it at that), I am saying that the citizens of this state will ban the fees and types of Pay Day loaning. My question to you is why you think that the current plan is a good one (i.e. with such interest)


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