For immediate release:
Friday, August 22, 2008

Committee Says Bill Faith Should Stop Perpetuation of Lies
Disclose Spending

Columbus― The Committee of Ohioans For Financial Freedom today responded to Bill Faith’s ongoing efforts to confuse Ohio voters.

“We have fully investigated these bogus allegations and yet Mr. Faith continues to perpetuate lies – especially about Butler County where we have documented evidence from the Secretary of State and Butler County Board of Elections, that our circulators were NOT there,” said Kim Norris spokesperson for Ohioans For Financial Freedom. “Rather than perpetuate lies, the public would be better served by knowing who is paying for Bill Faith’s campaign – he should report where the money is coming from.”

The Committee investigated this allegation of two homeless individuals allegedly being paid $1.00 for their signatures and found it to be completely false, and asked Bill Faith to immediately retract this false allegation, and any references to it on his website or any other website maintained by his organizations.

The Committee did not obtain the Attorney General's certification of its summary of the law to be referred until late in the day on July 10, 2008. Circulation of the Committee's referendum petition did not begin until July 12, 2008. It is impossible for either Mr. Schirmer or Ms. Smithers to have signed the Committee's referendum petition in June, let alone to have been paid for doing so.

Originally posted at www.news-press.com

The author George Orwell stated: "to see what is in front of one's nose is often a constant struggle." In the case of payday lending, an industry under constant attack by the media and special interests, seeing the obvious truths about this service requires an epic struggle with its critics. One of the loudest critics is The Center for Responsible Lending, an organization dedicated to the elimination of payday lending. If we are to believe their full-throated indictments against payday lending we would think that lenders are making profits hand over fist.

But this just isn't the case.

On average, the nation's five publicly traded payday lending companies earn a 6.6 percent profit on their income. To help put this in perspective, IHOP Corp., otherwise known as the International House of Pancakes, earns a profit margin of 12.6 percent. Is IHOP gouging Americans' wallets with their Belgian waffles, omelets, and blueberry pancakes? The restaurant industry is commonly said to have "razor-thin profit margins," yet payday lending companies earn half of what this well-known chain brings in.

When compared to traditional banks, payday lenders' profits are measly. The average profit margin of the top 10 banking holding companies in the United States is 18.5 percent. Traditional banks earn far higher profit margins on late charges, bounced checks fees, ATM fees, over-draft protection, and credit card balances than what payday lenders earn on their regular fees. The bank profits come from charges most people don't think twice about paying nearly every day. But again, no one is accusing the traditional banks with overcharging Americans.

http://www.ohioans4financialfreedom.com/

This ad brings up a very important issue: consumer choice. Whether you agree with payday lending or not, the point is that consumers should have the freedom to make their own financial decisions. Who are politicians to take away these freedoms?

-Jonas

Check out this ad. It brings up some great points...

http://www.ohioans4financialfreedom.com/

Here's a blog about this ad... and a forum for your comments...

http://blog.dispatch.com/dailybriefing/2008/08/payday_lenders_up_with_fi...

Why can't these people understand that taking away consumer choice is not what America is about? If the price gets too high, the market will dry up. That's the way economics works. Unfortunately, these people want the government to decide what everything should cost. Hey wait... doesn't that sound familiar... seems like I heard about that in the '80s... oh yeah, they called it the USSR...

It's obvious that the Government doesn't want to acknowledge the need for financial options for families, especially in states which are adopting new "nanny legislation" which limits consumer choice regarding small, short-term loans. The fact is that limiting financial options does nothing but handicap families when hardships and emergencies occur.

The Urban Institute put together a great report that gives new perspective to the plight of average citizens. Please take a few moments to look at some of the important points discussed in it.

http://www.urban.org/UploadedPDF/411734_enabling_families.pdf

Unfortunately for many Ohioans, when the Governor was asked about this report yesterday at a news conference, he completely blew it off.

Is Governor Strickland in any way concerned about the truth, or is he too caught up in justifying his legislation to care about the financial needs of everyday Ohians?

This report is only a drop in the bucket. The underlying fact is that consumers deserve the freedom to choose for themselves what financial options best meet their needs.

-Jonas

Urban Institute report recommends better disclosures and increased competition to protect consumers

WASHINGTON--A new report by the Urban Institute finds that if payday advances are eliminated they "could be replaced by alternatives that make families even worse off."

In "Enabling Families to Weather Emergencies and Develop the Role of Assets," by Signe-Mary McKernan and Caroline Ratcliffe, the researchers find that low-income working families need access to small loans, such as payday advances, to help weather bad patches.

Instead of regulating prices charged on small, short-term loans, the authors argue that increasing competition will drive prices down. They express concern that regulating prices "would make fewer small, short-term loans available" and suggest that prices can be driven down, not by setting rates, but by "regulating disclosures; requiring licensing, reporting, and examinations; and creating incentives for financial institutions to provide small loan services."

"The Urban Institute understands that eliminating payday advances is not in the best interest of working families," said D. Lynn DeVault, president, Community Financial Services Association of America. "Its recommendations ensure that consumers would be aware of all of the fees associated with a credit product so they can compare their alternatives and make an educated decision based on what is best for them."

Specific policy recommendations in the Urban Institute report:

Disclosures. Regulate standard, clear, and timely disclosures of the total loan cost so consumers know their full obligation and can easily compare what various lenders charge for loans...Stating the fee as a dollar amount instead of or in addition to the annual percentage rate (APR) may be easier for consumers to understand on short-term loans.

I was at a dance party in Newport Beach, California the other night (Yes, my girlfriend is a dance teacher so there I was) and the subject of what I do for a living came up.

Now, when I’m in the haughty suburbs of Newport Beach my typical response to the question of, what I do for a living is usually, “I’m in the sub-prime financial services industry.” Probably just like you, I’m not in the mood to defend myself for making money with payday loans. And I know after working on the “front lines” or the “counter” as we say, that we really do help a lot of people. However, I still cringe a bit when this subject comes up. Not as much as I used to but I still get the shivers.

So of course, being in Newport Beach on the “left-coast”, there had to be some kind of consumer protectionist with a desire to attack me. (Actually, I really think he was simply jealous because I am a better dancer than he. I swear he was watching me out of the corner of his eye as I did the West Coast Swing.)

Now this guy was not your typical Center for Responsible Lending (CRL) sympathizer! He knew enough of the “facts” to try to give me a hard time.

But, luckily for me, and the rest of us in the payday loan industry, I had the benefit of very recently reading:

“Predatory Reporting” on Payday Lending?
Donald Rieck, July 18, 2008 (updated, July 21)
Do payday loans sink people into inescapable debt, forcing them to pay many times more the original borrowed amount in interest?

Now this IS ONE REALLY WELL WRITTEN and, more importantly, WELL RESEARCHED article on the REAL FACTORS affecting the attackers of our industry. It’s a bit lengthy but you really should check it out in it’s entirety:

http://www.stats.org/stories/2008/how%5fbad%5fpayday%5floans%5fjuly18%5f...

A few highlights…

A Factiva search of newspapers across the country shows that there were over five thousand negative payday loan stories in 2007 alone. NO SURPRISE HERE!

How many Americans does it take to flood the Federal Reserve with tearful stories of how "greedy" credit card companies are responsible for their misfortune? 30,000 and counting, according to an article posted at creditcards.com. As the August 4th submission deadline for public comments regarding the "unfair or deceptive" trade practices of credit card companies nears, Federal Reserve workers are receiving a record number of pity party invitations... and as the mail pours in, America's integrity rises and dissipates like the last wisps of smoke from Lady Liberty's torch.

As I've mentioned before, the key to America's Liberty is the ability to wield that great power, which requires, above all, individual responsibility... and how can we expect greatness from a nation comprised of whiny babies who will not take responsibility for their actions, but would rather point the finger of blame at someone else in order to dodge the consequences of said actions.

The worst part of all this is that our government is playing the role of the protective mother of a spoiled brat, shewing away all who "dare mess with her precious baby."

An excellent article at www.limaohio.com posted July 11th points out the absurdities regarding Ohio's recent "nanny state" legislation. In the article, Ronald Lederman, Jr. uses artful language to sarcastically "thank" Ohio's legislators for "protecting" its constituents by limiting their financial choices.

After reading this article, I have a harder time than ever understanding why legislators have to limit our freedoms in order to "protect" us from hurting ourselves.

I think that the danger that lies in this type of paternalistic view of the role of government only hurts its constituents, because it sends the message loud and clear that YOU PEOPLE CAN'T MAKE RESPONSIBLE DECISIONS AND THEREFORE, WE'RE GOING TO TAKE AWAY YOUR OPTIONS.

Subconsciously, this type of government policy tells us, as "the governed," that we are unable to make our own decisions. It ultimately destroys the need for the level of individual responsibility that is required in a society such as our own. Once you, as a government seeking infinite power, convince the governed that they are unable to make their own decisions, you have destroyed the very thing that makes America great.

I would like to remind everyone reading this article that America was born as a great nation because it recognized the freedoms of the individual and along with those freedoms, the responsibilities that are required of each individual. Over the centuries, the government has gained more control and subtly, but effectively, has relieved us of many of the responsibilities that are necessary in a free society.

We as Americans should ask ourselves if we truly desire freedom. If we do, we must realize that in order to live freely, we must require of ourselves and our fellow citizens a higher level of responsibility.

The worst part about the Internet is that ignorant people who take no responsibility for the integrity of their journalism can post whatever they want and more ignorant people accept it as gospel. Talk about an endless cycle...

It seems that at the staff of "The Daily Press," they take pride in their position at the top of the waterfall of ignorance, for they blatantly and unapologetically misrepresented the Payday Loan industry in this article, without as much as a shred of fact.

They actually seem to believe that, "overdraft protection on a bank account" is a "cheaper option." Hmm... let's do the math on this one, I know it takes about a third-grade education to understand it, but here goes... If you overdraft $100 (or anything less, for that matter), you will pay from $24 to $35. If you take out a $100 payday loan, it costs $15 to $22. $22 is less than $35... remember?

They also warn their audience that "Some of these costs [involved in payday loans] can be hard to understand." How hard is it to understand?? You borrow $100, you pay back $122. I guess that if it's that difficult of a task to do research before you write an article, it's probably "hard to understand."

Finally, the author passes on his advice that consumers should, "Get a copy of the loan agreement and take it home, read and understand it before signing." I guess you should practice what you preach, bud, because if you even stepped one foot into a Payday Lending establishment, you would have some facts and not appear to be a complete ignoramus.