In a Wall Street Journal op-ed post, dated March 7, 2008, former Presidential Candidate, George McGovern gives his two-cents regarding the recent anti-payday loan legislation. He observes:

With payday lending, people in need of immediate money can borrow against their future paychecks, allowing emergency purchases or bill payments they could not otherwise make. The service comes at the cost of a significant fee -- usually $15 for every $100 borrowed for two weeks. But the cost seems reasonable when all your other options, such as bounced checks or skipped credit-card payments, are obviously more expensive and play havoc with your credit rating.

View the full article, click here.

The Following is the executive summary of a paper published by the Consumer Rights League in February. For the entire report, click here.

The term “predatory lending” seems to have appeared out of thin air in recent years. In reality, the prevalence of the term—and the accompanying public panic—owes much to a sophisticated public relations campaign carried out by the increasingly high-profile Center for Responsible Lending (CRL).

As the most visible face of the half-billion dollar team of “Self-Help” non-profit organizations, CRL attacks competing loan products. Under the guise of advocating in the interests of its low-income customers, Self-Help makes loans at highly profitable rates and uncharitably takes those low-income customers to court over trivial monetary sums. Worse, CRL’s advocacy has worked to the disadvantage of low income borrowers.

This report utilizes documents in the public record to demonstrate:

• CRL’s advocacy agenda—built on pseudoscience that relies on arbitrary and opaque definitions and unreliable estimates and assumptions—has harmed consumers, according to recent Federal Reserve research.

• CRL’s troubling alliances—a spokesman who pled guilty to felony larceny, an employee who engaged in eavesdropping, and a multi-million-dollar grant from a wealthy Wall Street investor with a stake in the outcome of CRL’s lobbying activities.

• The Self-Help network attacks other lenders for allegedly using practices that it employs -- taking in charitable grants and low-interest government loans while charging its customers uncharitably high rates and prosecuting low-income customers for amounts as low as $96

Over the past couple of weeks, we have been helping to develop a new resource intended to educate consumers regarding the candidates who are running this election season.

PaydayPolitics.org has officially been launched, but needs content. We want to get as much information as we can about any candidates who are running this year as it pertains to the Payday Loan industry.

Help us inform consumers about which candidates support their right to make choices in the marketplace and which candidates want to take away their freedoms and turn this country into a socialist slum!

Thanks,

Jonas

by Jonas Walker

Five years ago, the term, “Shock and Awe” became a well-known term pertaining to our military’s strategy in the Middle East. The point was to attack our enemies with as much as we could throw at them in a swift and wholesale manner in order to show them our capabilities and discourage mass retaliation.

The same strategy is a cornerstone to any propaganda campaign and is alive and well in the sensationalist strategies implemented by the CRL and other opponents of the Payday Loan industry. These strategies are implemented in such a way that they appeal to well-meaning citizens and politicians who, instead of taking the time to understand the dynamics involved, are broadsided with sensationalist statements that seem to be legitimate, but are merely sound bytes proliferated by special interests.

It’s a basic one-two punch scenario, which I’ll break down in super slow motion for our readers:

The “Shock” is simply a sob story that is so unbelievable that it can’t help but get the attention of the listener. A classic example of a “shocker story” in this context is a highly publicized account of how a victimized individual’s life was “utterly destroyed by payday loans.” For instance, “Arthur Jackson, a 69-year-old warehouse worker, renewed his Advance America payday loan every payday for over five years. He was flipped over a hundred times, paying over $5,000 in interest for a loan of less than $300, causing him to fall behind on his mortgage payments.”

While they have you trapped like a deer in the headlights with their “shocker story,” they hit you with their “awe” statement, usually a sensationalist urban legend-esque comment about how there are more payday lenders in the state of California than there are McDonalds, Wendy’s, and Burger Kings combined or, depending on their mood, how Payday Lenders charge over 400% interest.

I'm working on putting together a resource so that visitors concerned about the Payday Loan industry can be informed about where those running for office stand on issues that affect the industry. I would like it very much if you would post any information regarding politicians' stances on this topic into this forum.

Thank you,

Jonas

[link to original]

Somewhere along the path of Ohio legislative sausage-making, House Bill 333 was transformed into House Bill 545. HB545 (ne. HB333) was the legislation I wrote extensively about that limited the interest rates that could be charged by Payday Lenders in the State of Ohio. The bill was signed into Law on June 2, 2008 by Governor Strickland.

When the law takes effect in 90 days, it will put an end to the payday lending industry as it exists in Ohio, likely pushing many of Ohio’s 1,600 payday stores out of business. No longer will lenders be able to offer two-week loans with a 391 percent annualized interest rate ($15 per $100 on a two-week loan).

My pastor regarded the Bill’s passage as a great victory in providing social justice for the poor. I cannot concur with that simplistic opinion. I have written my opposition to the Bill (whatever its number) in this blog on numerous occasions. My objections were scriptural, moral, and practical. If events work out as indicated in the Columbus Dispatch, then my predictions will prove to be frighteningly accurate.

A PaydayFacts.org member commented the other day on the exorbitant markup on coffee. Since we so heartily support the paternalistic legislation that is being passed in Ohio, we thought that we should make it our responsibility to make the CRL aware of the travesty affecting poor citizens desperately in need of a caffeine kick in the morning. It's not right for restaurants to charge the high rates that they get away with and we're not going to stand idly by as this organized crime continues to operate.

An Open Letter to Brent Larkin, Opinion Editor:

Dear Mr. Larkin:

It astonishes me the extent to which the editorial board of a newspaper will not only press its agenda, but continue to press it long after its validity has been debunked.

I refer to the endless parade of editorials denouncing payday loans. Over and over again they appear on your pages, often penned by Thomas Suddes, whose racist rhetoric and wholesale ignorance of both facts and basic logic have made these articles a laughingstock.

Yet here we are again, on June 10, and I find yet another tiresome screed directed at payday lenders -- this time expressing outrage at this industry's right to take the payday loan issue to the people. Imagine that! How awful that the people should be given a voice regarding the availability of a product that was torn from them without consent.

Before I lambaste your ill-conceived jihad against legitimate sources of short-term credit, I need to correct your latest editorial as well as gut it of outright falsehoods. But following that, I issue a challenge to you. I hope you'll stay tuned.

Payday lenders have not "leeched grotesque profits" from anyone. These transactions are entered into by mutual informed consent, where the borrower is told the cost of credit as well as its terms. You also perpetuate this preposterous argument as to what constitutes "grotesque profits" without defining it. Is it grotesque because you disagree with the product? In that case, where are your editorials decrying fast food restaurants and liquor stores -- all of which cause profoundly more damage than payday loans ever could? Is it grotesque because of the absolute dollars made, or because of net profit margins? Then where are the stream of editorials criticizing half of the S&P 500?

Your position is both inconsistent and in this case poorly defined, Mr. Larkin.

[link to original article]

My response:

Destiny, please try to understand that it's not the government's business to tell us as consumers what we can and cannot do. You folks in Salt Lake City should know better than anyone else what happens when the government starts telling you what to do (i.e. Utah's admission into the United States).

We live in a capitalist society, where the people are supposed to have the final word. We vote with our dollars. If you don't approve of a business because of its principles, practices, or prices, you have the ultimate power to decide its fate. You're the consumer, and in an ideal capitalist society, you have the power. It's vitally important, especially in these times, that we as consumers don't give the government too much power. By giving the government too much power in the 1930s, the welfare system was established and is now an inoperable tumor that grows and grows within our society. THAT, my friend, has established a permanent lower class in our society. Please keep your mind open.

I just found this article and would like for everyone to read it and spread it around as much as possible:

Chris Widener Embodies All that is Wrong with the Ohio GOP - if you support the GOP's traditional stance on encouraging smaller, limited government and oppose any restrictions of consumer power in the marketplace, this article is a great place to start.