How'd that work out?
More than a third of Ohio's payday lending storefronts have been shuttered since new restrictions on short-term lending took effect six months ago, state officials said.Payday lenders operated roughly 1,600 retail locations across Ohio before voters approved new restrictions. Now, payday lenders run just 960 storefronts. While industry operators bemoan their struggle to keep running their businesses, critics charge they are using loopholes in the state's regulations to continue lending at high interest rates.
The debate will likely pick up steam as Ohio legislators mull a bill to be introduced this month by state Rep. Matt Lundy, D-Elyria, to further limit short-term loans.
Possibly hardest hit among the largest chains in Ohio is Columbus-based CheckSmart. A chain of 215 stores still has 95 stores in Ohio.
"The change has been a tremendous blow to the company - I've closed 10 or 15 stores and I've got more on a watch list," said chief executive Ted Saunders. "We were on a growth spurt until this happened."
So far, Saunders said, he's cut about 100 jobs statewide and now employs about 750 in Ohio and about 1,400 total. And more cuts are on the way.
Ohio's biggest payday lender, Spartanburg, S.C.-based Advance America, says it's in the process of closing a quarter of its stores - 60 by the end of 2009. While the Buckeye State is its fourth-largest market in terms of stores, the company says its Ohio operation is unprofitable and is considering ramping up the cutbacks.
Now if you were one of those busy bodies who voted for this, do you intend to open one of these stores to serve the population these were servicing?
What about opening another business so you can give a job to one of the people who worked at these places?
That's what I thought.
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1 comment:
To give you an example of how ludicrous this legislation is, my office deals with bounced checks for city provided utilities. We charge $30 for a rubber check and the any given bank also charges a minimum of $30. That's $60 for a bounced check and that doesn't include the hassle someone has to go through.
Now, let's say Joe Six-pack owes $100 for his water/sewer bill but only has $25 in his checking account. He used to be able to run down to Check Smart or Ohio Cash Advance and grab a Franklin for $15 until payday. I was happy because I got paid. The customer was happy because he avoided late charges and utility shut-off. The cash advance place was happy because they made a profit and could count on seeing Joe Six-pack for his next quick cash need.
Now, my bounced checks have tripled. Shut-offs are at an all-time high and we now have a half-dozen more people on unemployment not paying me 1.5% income tax each year. Sure, we have a couple more new citizens in town with Italian sounding names, but I don't think they're the tax-paying type.
And that is somehow more desirable than the nice tidy cash-advance arrangement we had going.
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