loumeinhart 0 #1 April 30, 2008 cleveland newspaper article So HB 545 would cap the APR at 28% on all loans. Problem is these are short-term loans (usually 2 weeks) and the cost is somewhere around $15 per hundred borrowed. Well of course if you took a year to pay it back then 15x26= 390 dollars, or 390% APR. Who would take a loan for 390% APR right? So the bill will cap the APR at 28%, so 28%/26weeks = 1.08% for 2 weeks of borrowed money. This means the cash advance stores can charge a max of $1.08 for every hundred dollars borrowed. Anyways the link above does a better job explaining this. I'm just wondering what day this week we take down the American flag in Columbus... . Quote Share this post Link to post Share on other sites
lawrocket 3 #2 April 30, 2008 I don't know exactly why they need this law. Doesn't Ohio have usury laws? There is indeed a HUGE problem with these loans charging seemingly small but practically exhorbitant fees. When you've got companies that make credit cards look tame with their interest rates, it's saying something. As an aside, these payday loan businesses are causing some serious readiness issues for the military. The debt and credit issues are affecting clearances and deployability. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
Andrewwhyte 1 #3 April 30, 2008 Quote cleveland newspaper article So HB 545 would cap the APR at 28% on all loans. Problem is these are short-term loans (usually 2 weeks) and the cost is somewhere around $15 per hundred borrowed. Well of course if you took a year to pay it back then 15x26= 390 dollars, or 390% APR. Who would take a loan for 390% APR right? So the bill will cap the APR at 28%, so 28%/26weeks = 1.08% for 2 weeks of borrowed money. This means the cash advance stores can charge a max of $1.08 for every hundred dollars borrowed. Anyways the link above does a better job explaining this. I'm just wondering what day this week we take down the American flag in Columbus... . Good times for the local mob. Quote Share this post Link to post Share on other sites
labrys 0 #4 April 30, 2008 Now's the time to rent a storefront in Rittman, then. About half of them are about to be unoccupied. Owned by Remi #? Quote Share this post Link to post Share on other sites
loumeinhart 0 #5 April 30, 2008 QuoteThere is indeed a HUGE problem with these loans charging seemingly small but practically exhorbitant fees. I don't get it. If I'm going to lend $100 for 2 weeks, what should I charge? Nothing? I agree that the practice of letting a delinquent balance accrue interest at 390% is not smart business because the borrower is much less likely to repay the loan. I think I would stop interest charges after maybe 4 weeks then add a flat late fee. Remember these are designed as **payday advances**. "Want your paycheck early? No problem, $15 please." Nothing wrong with that. Quote Share this post Link to post Share on other sites
labrys 0 #6 May 1, 2008 Quote I think I would stop interest charges after maybe 4 weeks then add a flat late fee. Remember these are designed as **payday advances**. "Want your paycheck early? No problem, $15 please." Nothing wrong with that. Agreed. Your's is a reasonable business model. Their's a a tad more aggressive.Owned by Remi #? Quote Share this post Link to post Share on other sites
Gawain 0 #7 May 1, 2008 I could see challenges to this by the lending industry, including some banks which have a stake in some of these businesses and franchises.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
loumeinhart 0 #8 May 1, 2008 Hey Labrys let's open our own cash advance store in rittman for skydivers only. If they don't pay then they work it off with pack jobs Quote Share this post Link to post Share on other sites
labrys 0 #9 May 1, 2008 Quote Hey Labrys let's open our own cash advance store in rittman for skydivers only. Good idea. Got any cash? Owned by Remi #? Quote Share this post Link to post Share on other sites
kelpdiver 2 #10 May 1, 2008 QuoteI could see challenges to this by the lending industry, including some banks which have a stake in some of these businesses and franchises. Most of the big banks have a stake in it now. Poor/dumb people are more profitable customers. Leads to this unpleasant situation - banks are taking advantage, but people are supposed to take financial responsibility for themselves. Quote Share this post Link to post Share on other sites
kschilk 0 #11 May 3, 2008 I was a "command financial advisor", while in the Navy...counseling members who'd fallen into these payday lending and "easy financing, E-1 and up" scams. Some of the situations I encountered were unbelievable. One kid bought a $2000.00 car on one of those "E-1 and up" deals...had he paid the full term of the loan, according to the payment schedule....the car would have cost him over $35,000.00! With pressure fron NIS and Navy legal, we finally got him out of it but there were cases, where we really couldn't do anything to get them out of the contract. At one point, nearly half of the members in my division, had filed for bankruptcy."T'was ever thus." Quote Share this post Link to post Share on other sites