Comments on Blue Bexley: Payday Lenders Hail Mary Petition Drive

I was listening to John Corby on WTVN yesterday an...

2008-06-19T13:42:00.000-04:00

I was listening to John Corby on WTVN yesterday and he made an interesting observation...

First, let me say that spent my whole career at CompuServe, which was for a good deal of time owned by H&R Block. HRB was the first to do a large-scale Tax Refund Anticipation Loan program, which they called Rapid Refund. Their fee structure was about the same as the payday lenders - a fixed fee regardless of how small/large the refund. If you looked at the fee as though it were an interest payment, the rate would be in the same range as these payday loans, with little risk since it is the US Treasury who repays the loan.

The Rapid Refund program made a lot of money for HRB, although I think it's much less in demand these days given the high speed in which electronic filing and direct deposit gets money back to filers.

... anyway, Corby's comment was that retail banks charge huge fees for bouncing a check. My bank, National City, charges $30 for an overdraft, and then another $8 per day that the account stays overdrawn, after the third consecutive day.

So if you write a $100 check that overdraws your account (by maybe only $1), and you don't get it covered for a week, you get charged $30 + (4 x $8) = $62. Doesn't that seem a little excessive?

Corby suggested that it is the banking industry which has a problem with payday lenders, and that it was their lobby dollars that got the bill passed. Sounds pretty plausible to me.

Legislating morality has always been tough, and it's never eradicated the behavior, only criminalized it. The arguments are well-worn: e.g. why is alcohol okay but not pot? We tried outlawing alcohol, but it just created an opportunity for the Mafia to build a profitable underground business.

But to your central point - yes it is concerning that firms such as the one you describe could allow easy access to the ballot if you have enough money. Look what has happened in California with their Prop this and Prop that.

Of even more concern is the fact that American voters only listen to sound bites. As was the case with the GIRFOF amendment, the sound bite is compelling (lower property taxes and fix school funding), but the underlying motivation is much more nefarious (guarantee the income and retirement funding of Ohio's teachers!).

PL

I know that Mr. James, above, is just a capitalist...

2008-06-18T22:32:00.000-04:00

I know that Mr. James, above, is just a capitalist functioning in a democracy, (and is running a ballot issue business, not a payday lending business)so he may not be the correct person to respond to the criticism of the payday lending industry that I'm about to make, but I'd certainly welcome his take.

That said, can somebody look me in the eye (metaphorically speaking) and tell me that an industry that can feature triple digit interest rates and preys upon the most vulnerable members of society is, somehow, beneficial on the whole?

It's absolutely comical to assert that payday lending is anything but greedy speculation, built on the ruined financial fortunes of its "clients". "Oh, but these loans are risky, and so many people default so we need to charge that much interest." No shit, Sherlock. You give money to people who lack, in many cases, the basic means to pay it back. You're the fiscal equivalent of a pawn shop and the sooner you dry up and wither away from Ohio the better.

Joe,Before I get into this, let me calibrate:If he...

2008-06-18T17:29:00.000-04:00

Joe,

Before I get into this, let me calibrate:

If heroin addicts would prefer that heroin were legal, would you support the legalization of heroin?

That's not a rhetorical question. There's a libertarian principle that opposes pretty much all narcotics regulation, and the counter to that is much different than the counter to the 'some things should be regulated but not this' argument.

Ian,I understand that you're busy. As much as I wa...

2008-06-18T17:26:00.000-04:00

Ian,

I understand that you're busy. As much as I was tweaking you guys for not responding, I was signaling that I had made some attempt to substantiate my position. I'd rather have had the background (For instance, I explicitly allowed that you had a lot of experience *prior* to founding the new company, and your note substantiates that, but believe it or not, I had actually done that Google search before I first contacted you, and most everything comes up with a date on or about January 8, 2008, or is an employment ad. Well, that and Pullins's description of y'all. I would have loved info about the Sick Days campaign, but oh well.) I bought the hype that your company has an innovative methodology. Perhaps I'm wrong, and you're just repackaging what you and your colleagues have been doing for years. My bad.

Oddly enough, I didn't consider this post (unlike the previous paragraph...) to be particularly snarky. If you guys can get the HB545 repeal from language approval to ballot-eligible in 7 weeks, especially considering the fiasco that was the SB16 referendum, getting a referendum on the ballot (generally) would have to be considered a fundamentally diminished hurdle. I sincerely believe that, and I sincerely believe that it will have more of an effect on Ohio than the presence or absence of a payday loan industry. Not only did I not take exception with your work, I set you up with a license to print money if you pull this off. Your response was certainly interesting, but I'm gonna have to hold back with the other adjective.

If responding to me really is having a negative impact on the Sick Days initiative, then please don't take time to respond to this. Heck, I'm sorry then that you read this far. It's understandable that the same level of activity that forestalled the earlier response caused you to not read the post very closely. Best of luck to y'all.

You state: "A substantial portion of the base of s...

2008-06-18T17:19:00.000-04:00

You state: "A substantial portion of the base of supporters for their position are people who use their financial products"

So their customers are against outlawing these companies? Who is the state trying to protect again?

I appreciate your mention in your blog today. Feel...

2008-06-18T16:55:00.000-04:00

I appreciate your mention in your blog today. Feel free to blog on us more in the future. Thank you for the mention.

As we have been very busy collecting the signatures to place the Sick Days issue on the ballot, I was unable to respond to your request. My apologies.

While we strive to reply within 24-48 hours, your email was set aside until we had more time to respond. As you would expect, we are focused on signature collection rather than press emails. In the future, if you would like to speak with me directly, please feel free to call 586.1003. The number is listed on the contact page as well.

Your blog is interesting and insightful, however, you respectfully need to have a greater understanding of the process and our team's vast experience in the process before you take exception with our work. If you had this understanding you would realize that our office directors have collected with me and others on several past campaigns and still more of our petitioners have years of experience collecting. No slouch in the political ring, I humbly have just over 25 years of practical political/petition experience. I realize that's probably not enough for some, but it'll have to do for our clients.

Now I accept some of the blame for not enlightening you because I was busy helping get Sick Days on the ballot so that working families would someday have the right to care for a child or loved one. So again, please forgive the non-response. Had I realized you were blogging today, perhaps I could have stopped working with the 200 Ohioans we have working on this project.

If I may, for your next blog on our company, you might want to check Ohio Petition Company in a Google search. In doing so you would find a variety of articles that speak to the experience we have, the system we use and the knowledge my company brings to the collection process. It is this knowledge and energy that OPC brings to the collection process that led Ohioans for Healthy Families to hire our firm to place Sick Days on the ballot.

I love a good snarky blog. Therefore I loved yours. Keep up the great work!