The Ohio Coalition for Responsible Lending is a broad-based organization of non-profit, religious and civic organizations that have joined together to seek fair and just lending practices by payday lenders in Ohio.
The Ohio Coalition for Responsible Lending opposes unfair lending practices within the payday loan industry in Ohio!
Resources
Letter from Governor supporting rate cap
NAACP Payday Lending Issue Brief
Senate Companion Bill Co-Sponsorship Memo
Letter from former Representative E.J. Thomas to Ohio Senate
Resolutions & Ordinances
Columbus City Council Resolution
Cleveland City Council Resolution
West Salem City Council Resolution
Dayton City Commissioners' Resolution
Wooster City Council Resolution
Summit County Council Resolution
The Continued Growth of Payday Lending in Ohio
Ohio payday lending continues to grow, reaches 1,638 stores
This study from the Housing Research & Advocacy Center and Policy Matters Ohio analyzes data on Ohio payday lending locations from the Ohio Department of Commerce, examines family budgets, and uses information gathered by shoppers at payday loan locations. The study updates findings from last year, which reported on the previous decade's data.
Among the data:
- The number of payday lending stores licensed in Ohio increased from just 107 locations in 1996 to 1,638 locations in 2007, growing by a multiple of more than fourteen. There were 76 more payday lenders in 2007 than 2006, a 5 percent increase.
- In 1996, payday lenders were concentrated in urban communities. Payday lending has since become a much more ubiquitous part of the overall Ohio landscape. All but two of Ohio's 88 counties now have at least one payday lender, and 41 counties, seven more than last year, had more than ten lenders. On a per capita basis, 68 counties had more than one payday lender per 10,000 people.
- Franklin (189), Cuyahoga (163), and Hamilton (125) counties each had well over one hundred payday lenders in 2007. These three counties represent more than 30 percent of Ohio's payday lending stores.
- Large urban counties have the most payday lenders in absolute terms, but less populated counties have a greater number of lenders per capita. Of the ten counties with the highest concentrations per capita, not one is a large urban county. Belmont County had the highest concentration, with 3.56 lenders for every 10,000 people. Washington and Gallia counties ranked second and third with 3.00 and 2.57 per 10,000 people.
- Most payday lending locations in Ohio are chains or franchises. The two most common locations are Advance America (177), Cashland Financial Services (144), and First American Check Advance (111) with more than 100 locations each.
- Testers visited 36 total payday loan sites in Franklin and Cuyahoga counties, finding that all locations charged the maximum rates allowed by law. In several stores, staff was unable to explain what the annual percentage rate meant for a payday loan.
- An anlaysis of basic budgets for low- and moderate-income families demonstrates the near impossibility of a family paying off a $300 loan in two weeks' time, contributing to the cycle of debt many families face.
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Continued Growth of Payday Lending in Ohio
North Carolina After Payday Lending
Researchers conclude that absence of payday lending has had no significant impact on the availability of credit for households in North Carolina
The University of North Carolina Center for Community Capital undertook this study at the request of the North Carolina Office of the Commissioner of Banks to assess the household credit market since the closure of payday lending stores in North Carolina in 2006.
Researchers were asked to determine:
What effect has the end of storefront payday lending had on low- and middle-income households?
Do residents have adequate options to deal with financial hardships?
What options are most commonly used, and how do they compare to payday loans?
Are North Carolina residents worse off or better off without payday lending?
In this report, we find that:
- The absence of storefront payday lending has had no significant impact on the availability of credit for households in North Carolina. The vast majority of households surveyed reported being unaffected by the end of payday lending. Households reported using an array of options to manage financial shortfalls, and few are impacted by the absence of a single option - in the case, payday lending.
- More than twice as many former payday borrowers reported that the absence of payday lending has had a positive rather than negative impact on their household. The ban on payday lending has made no difference to most, and helped more households than it has harmed.
- Payday borrowers gave first-hand accounts of how payday loans are easy to get into but a struggle to get out of. These borrowers universally agreed that the cost of payday loans was excessive.
- Nearly nine out of ten households surveyed think that payday lending is a bad thing. This overwhelmingly negative view of the product did not vary significantly for households that had experiences a financial shortfall.
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North Carolina After Payday Lending
Springing the Debt Trap
New CRL study finds state measures short of an interest rate cap fail to fix payday lending problem
The debt trap of payday lending persists even in states that have put restrictions on payday loans while exempting them from interest rate caps.
Breaking down the impact by state, we also calculate the savings to families in states that have banned payday lending.In this report, we find that:
- 90 percent of payday lending business is still generated by trapped borrowers with five or more loans, even in states that have attempted reform;
- 60 percent of payday loans go to borrowers with 12 or more transactions per year;
- 24 percent of loans go to borrowers with 21 or more transactions per year;
- One of seven Colorado borrowers have been in payday debt every day of the past six months;
- Nearly 90 percent of repeat payday loans are made shortly after a previous loan was paid off.
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Springing the Debt Trap:36% Cap Springs the Trap
Related Items
Executive Summary: Springing the Debt Trap
Telenews Conference Audio (Windows Media)
Categories: Payday Loans
Trapped By Design
The payday lending industry's lobbying message is clear, “Payday advances should be used for short-term financial needs only, not as a long-term financial solution.” But their goal, in fact their very survival, requires that they pull their occasional customers into a cycle of repeated loans over the long term. Never mind that the customer’s original intent was only to borrow a reasonable sum and only until their next payday.
The reports from publicly owned payday lenders reveal the dimensions of Ohio's payday lending industry and the extent to which customers become ensnared in repetitious loan transactions. These repeat payday borrowers drive the payday loan business model and finance the alarming expansion of payday storefronts across the state.
In this report we find that:
- Ohio payday borrowers pay over $318 million in payday loan fees annually
- The average payday loan is $328 with an average APR of 391%
- The average Ohio payday borrower takes out 12.6 loans per year;
- Over 300,000 Ohio payday borrowers are ensnared in a payday debt trap1
- The payday lending industry actively encourages repeat borrowing and is dependent upon its ability to lure most of its customers into this devastating debt trap.
The payday lending industry's survival requires that it lead most of its customers into a wave of successive two-week loans. This is a particularly oppressive form of highinterest lending, and damages all of Ohio’s residents.
Ohio’s usury laws were amended in 1995 to specifically enable payday lending to Ohio's citizens at triple-digit interest rates. A decade later, it is clear that the exemption for payday lenders was a mistake.
1. Adams County Report 2. Allen County Report 3. Ashland County Report 4. Ashtabula County Report 5. Athens County Report 6. Auglaize County Report 7. Belmont County Report 8. Brown County Report 9. Butler County Report 10. Carroll County Report 11. Champaign County Report 12. Clark County Report 13. Clermont County Report 14. Clinton County Report 15. Columbiana County Report 16. Coshocton County Report 17. Crawford County Report 18. Cuyahoga County Report 19. Darke County Report 20. Defiance County Report 21. Delaware County Report 22. Erie County Report 23. Fairfield County Report 24. Fayette County Report 25. Franklin County Report 26. Fulton County Report 27. Gallia County Report 28. Geauga County Report 29. Greene County Report 30. Guernsey County Report 31. Hamilton County Report 32. Hancock County Report 33. Hardin County Report 34. Harrison County Report 35. Henry County Report 36. Highland County Report 37. Hocking County Report 38. Holmes County Report 39. Huron County Report 40. Jackson County Report 41. Jefferson County Report 42. Knox County Report 43. Lake County Report 44. Lawrence County Report 45. Licking County Report 46. Logan County Report 47. Lorain County Report 48. Lucas County Report 49. Madison County Report 50. Mahoning County Report 51. Marion County Report 52. Medina County Report 53. Meigs County Report 54. Mercer County Report 55. Miami County Report 56. Monroe County Report 57. Montgomery County Report 58. Morgan County Report 59. Morrow County Report 60. Muskingum County Report 61. Noble County Report 62. Paulding County Report 63. Perry County Report 64. Pickaway County Report 65. Pike County Report 66. Portage County Report 67. Preble County Report 68. Putnam County Report 69. Richland County Report 70. Ross County Report 71. Sandusky County Report 72. Scioto County Report 73. Seneca County Report 74. Shelby County Report 75. Stark County Report 76. Summit County Report 77. Trumbull County Report 78. Tuscarawas County Report 79. Union County Report 80. Van Wert County Report 81. Warren County Report 82. Washington County Report 83. Wayne County Report 84. Williams County Report 85. Wood County Report 86. Wyandot County ReportFinancial Quicksand: Payday lending sinks borrowers in debt...
New CRL study finds borrowers pay $4.2 billion every year in excessive payday lending fees
Every year, payday lenders strip $4.2 billion in excessive fees from Americans who think they're getting a two-week loan and end up trapped in debt. This report finds that across the nation payday borrowers are paying more in interest, at annual rates of 400 percent, than the amount of the loan they originally borrowed.
Despite attempts to reform payday lending, now an industry exceeding $28 billion a year, lenders still collect 90 percent of their revenue from borrowers who cannot pay off their loans when due, rather than from one-time users dealing with short-term financial emergencies.
Based on data collected by state regulators, financial records released by payday lenders, and assessments by third-party analysts, we update our 2003 quantification of the cost of predatory payday lending to American families. Breaking down the impact by state, we also calculate the savings to families in states that have banned payday lending.
In this report, we find that:
- Ninety percent (90%) of payday lending revenues are based on fees stripped from trapped borrowers, virtually unchanged from our 2003 findings. The typical payday borrower pays back $793 for a $325 loan.
- Predatory payday lending now costs American families $4.2 billion per year in excessive fees.
- States that ban payday lending save their citizens an estimated $1.4 billion in predatory payday lending fees every year.
Download the Report
Related Items
Executive Summary: Financial Quicksand
Statement of Michael Calhoun, CRL President
Telenews Conference Audio (Windows Media)
Quantifying the Economic Cost of Predatory Payday Lending
CRL 2003 Research Report
Published: November 30, 2006
Source: Center for Responsible Lending
Author: King, Uriah; Parrish, Leslie; Tanik, Ozlem
Categories: Payday Loans
Trapped in Debt: The Growth of Payday Lending in Ohio
The number of payday lending shops in Ohio catapulted from 107 locations in 1996 to 1562 locations in 2006, a more than fourteen-fold increase in a decade, according to this report from Policy Matters Ohio and the Housing Research and Advocacy Center.
The report finds that payday lending shops are now more common than McDonalds, Burger King and Wendy's restaurants combined in Ohio. Once concentrated in troubled urban centers, payday lending locations have now become ubiquitous across the Ohio landscape, appearing in all but two Ohio counties. The high-interest, high-fee loans pushed at these locations often lead borrowers into a destructive cycle of debt.
The report ends with recommendations to rein in this disturbing form of credit.
Press Release
Executive Summary
Full Report
