You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Congress weighs payday lending changes

Panel told lenders are skirting existing regulations.


Nearly six years after the Ohio General Assembly passed a bill aimed at cracking down on payday lenders in the state, those products have been replaced with auto title and installment loans, an Ohio consumer advocate told a Senate panel Wednesday.

David Rothstein, director of public affairs for Neighborhood Housing Services of Greater Cleveland, said the 2008 law, which curtailed interest rates loan amounts and the number of loans in the state, has effectively “morphed” into auto title and installment loans, which still paralyze consumers and in some cases culminate in them losing their car or being saddled with similar loans with triple-digit interest rates.

He spoke during a hearing of the Senate Banking Committee’s subcommittee on financial institutions and consumer protection. The hearing was chaired by Sen. Sherrod Brown, D-Ohio, who argued such products are predatory.

While marketed as short-term loans, the products are ultimately used repeatedly to cover basic expenses, said Brown, who argued that consumers get trapped “in a cycle of debt that leaves them worse off than they started.”

Some 12 million Americans use payday loans per year, and small-dollar lending is an $80 billion per year business, according to Brown.

Other lawmakers expressed concern that cracking down on such lenders would limit consumers’ ability to borrow during a time of need. “People in this town want to shut off access to credit in a number of ways,” said Sen. Pat Toomey, R-Pa., ranking member of the panel, who suggested it was arrogant that regulators might “forbid we let people decide what is the most sensible thing to do with the circumstances that they face.”

Sen. David Vitter, R-La., meanwhile, said he was irked at reports that the Department of Justice had partnered with regulators and become involved in a crackdown on short-term lenders.

Vitter said while he opposed predatory lending, he was concerned that the Justice Department’s efforts were ultimately meant to “shut down that entire industry, whether folks are following the rules or not.”

A report released this week by the Consumer Financial Protection Bureau found that more than 80 percent of those who use payday loans often renew those loans or take out another loan within 14 days. Those borrowers ultimately end up borrowing the same amount or more than what they initially borrowed.


Reader Comments ...


Next Up in Springfield Entertainment

Celebrities show solidarity with Women's March
Celebrities show solidarity with Women's March

Scores of celebrities attended marches in Washington and other cities Saturday joining millions of people across the country in a show of solidarity with the movement bringing attention to women’s rights the day following President Donald Trump’s inauguration.
'House of Cards' will 'Bring the Terror' in Season 5
'House of Cards' will 'Bring the Terror' in Season 5

As the nation watched Donald Trump being sworn in as the 45th president, Frank Underwood already was planning ahead. Netflix released a teaser Friday for the fifth season of its presidential drama, "House of Cards." Underwood, the crafty politician played by Kevin Spacey, will return to action on May 30, Netflix announced.   The teaser...
Wright State illuminates Modern Art
Wright State illuminates Modern Art

One of the terrific ongoing arts collaborations in the Miami Valley is known as CELIA. The innovative Wright State University program — the acronym stands for Collaborative Education, Leadership and Innovation in the Arts — benefits both our community and the school’s students by bringing top-notch artists to town to interact with...
Wright State expects fewer foreign students because of ‘Trump effect’
Wright State expects fewer foreign students because of ‘Trump effect’

Wright State expects to enroll fewer international students in the short term because of what provost Tom Sudkamp referred to in a trustees meeting on Friday as “the Trump effect.” Sudkamp made the comment, which he said is “commonly used” in higher education, just hours after the inauguration of Donald Trump as the nation&rsquo...
'NCIS: Los Angeles,' 'Crossing Jordan' actor Miguel Ferrer dead at 61
'NCIS: Los Angeles,' 'Crossing Jordan' actor Miguel Ferrer dead at 61

Actor Miguel Ferrer, who starred in the TV shows "NCIS: Los Angeles” and "Crossing Jordan," in addition to the film "RoboCop" and doing voiceover work in "Mulan," has died at age 61 Thursday, Variety reported. Ferrer had been battling cancer. "Today, 'NCIS: Los Angeles' lost a beloved family member...
More Stories