Payday lender starving out food bank on clarkhoward.com

Would you take out a loan with a 782% interest rate? Probably not. Yet that's the interest that payday lenders are ripping Ohioans with everyday. Payday loans are illegal in about 25% of the nation's states because they create extreme financial hardship for families. States that are rife with payday lenders include California, Texas, Tennessee and Ohio.

The Buckeye State is currently trying to cap the interest rate at 28% on payday loans. One major lender, Rent-A-Center (RAC), had been giving money to a local food bank that was part of a coalition supporting the loan cap. So what did the RAC do? It threatened to pull all charitable contributions. Such an action may be illegal -- that's for the lawyers to decide. Clark doesn't understand how you can pretend to be good by giving food and then turn around and rip people at 782% interest.

The payday loan industry knows it has a reputation for destroying lives. Its lobby has been giving a lot of money to influential politicians in the hopes of preventing caps or getting them overturned.

How does Clark's disgust with payday lenders square with his free market stance? In some ways it may seem inconsistent. But the lenders never disclose the high rate. Instead they do everything to make sure it's hidden. He'd be fine with 728% interest and full disclosure, but that's not the reality. Meanwhile, there is a reasonable level above which interest rates are usurious. 728% might just be that point. Clark invites any RAC representative to come on the air and explain their actions with the food bank.

What others are saying

Dr. Gupta........
Dr. Gupta is the chief medical correspondent for CNN, where he weighs in on broadcasts, and also runs a couple of blogs on CNN's Health site. Dr. Gupta has authored groundbreaking research, ran a successful practice as a neurosurgeon, and he did his undergraduate degree and his MD at University of Michigan, amongst the top in professional and graduate schools in the nation. Those programs aren't cheap – even with payday loans you can't afford it. He also worked as a White House Fellow during the Clinton administration. On assignment with CNN in Iraq, he participated in surgery to deal with damage done to US servicemen and Iraqi civilians. This all adds up to why Barack Obama has approached him to be the next Surgeon General of the United States, a position usually given to top medical authorities, which Dr. Gupta certainly appears to be. To see just how he operates click payday loans if you've got Dr. Gupta on the brain.
By Lincoln G @ 01/15/09 03:15:31 AMreport abuse
Title Pawn & Loan
How is it possible that this kind of lending is consider to legal, when consumers lives are ruin. My father took a loan of 5000.00 dollars in the year of 2004 and todaty he is still paying on that so call loan. The principal still being in the amount of 4995 as of todays date. All other money going toward interest. How is that legal. The mob had better lending practices. The AJC and Georgia watch all agree that the political contribuitions make this companies untouchable. They are taking advantage of low income and some less educated people, then making a profit off the persons desperation and some their only means of transportaion for work. The TV advertisement is misleading.
By Stephanie Benton @ 08/25/08 02:34:52 PMreport abuse
Financial Institutions GREED hurting U.S.
Consumers are making these poor financial decisions because we allow these types of abuses in our financial system. Calling interest (FEES) to miscalculate A.P.R. is a classic example of this abuse and financial institutions have failed to protect consumers who have little to no education and make very low wages. Yes, the risk of loaning money to this consumer is more difficult; however, it doesn't justify the abuse.
By Dan @ 08/15/08 03:20:13 PMreport abuse
R A C
I worked for them years ago and watched them rent, cancel or close out and rerent the same item to the same people. This resulted in rather large profits as you can imagine.
By Ryan @ 07/02/08 05:09:55 AMreport abuse
pay day lending
pay day lenders remind me of a vulture
sitting on a limb waiting for something to die so they can pounce on it.
By vulture @ 05/07/08 08:49:25 AMreport abuse
Pay Day Rip-Offs
I see the article about these loans and I'm wellaware that "Indiana" allows even higher rates. I've calculated rates here at over 990% per annum. These sociopathic loan sharks feed off of the ignorance of the uneducated and desperate. The Indiana business community is bad enough about engineering poverty and desperation, then the weasels turn around and calculate just how far they can push the public to satisfy the business community's financial whims. What you have is collusion between atate level political reps and the business community. The business class here pay a lot of money to state politicians to influence legislation so they can maintain "predatory lending." Oh they talk a lot "hot air" about stopping predatory business practices, but the organization of criminals within the business community always get their way.
It's defined angrily by many as "money talks and b.s. walks." Excuse me, but till the time comes that political career climbers and the organized criminals in the business community grow up and start accepting their moral responsibilities as members of the general community, the problem of predatory lending will never stop.
By Michael Angelo @ 05/07/08 04:11:20 AMreport abuse
Payday loans
When we loan 500.00, it costs 552.00 after two weeks to pay it off. Most people cannot get loans from banks and we take a high risk in loaning this money. If they default we cannot sue and we must pay for their money managing class.
By Nancy @ 05/06/08 10:47:04 PMreport abuse
Payday loans
Pay Day Loan operations absolutely rip people off with their rates. That said, I think that it's important to realize that they are not holding a gun to anyones head to get them to come in and borrow money. I also want to point out that expensive home furniture, for example, has a mark up in the 500% range. Are we going to ask the government to ban furniture makers from selling their product above a certain rate?

People need to be responsible for themselves and not expect government to be their nanny.
By Joe @ 05/06/08 09:48:11 PMreport abuse
Loan Sharks
I live in Ohio and my city has way too many cash advance operations. The main construction projects in my city have been building Pay Day stores and new Jail space. We have the Pay Days since regular banks would not deal with deadbeats,cheaters, and others. Over 2,000 honest auto workers have been laid off due to the Axle strike since March 3rd and some also are falling for the Pay Day gimmick. I know I will get to bail all of them out through higher taxes and costs once they go bankrupt.
By William @ 05/06/08 01:24:36 PMreport abuse
RAC
It is RAC's right not to support an organization that is against them. Why should RAC suport an organization that wants to stop your growth. Now I have never shop at RAC and will never shop there but I will defend their right to do business with people who are on their side.
By Lamans @ 05/06/08 01:11:32 PMreport abuse
pay day lenders
try looking at internet pay day lenders if you want to see unscrupulous
By donald @ 05/06/08 01:10:56 PMreport abuse
@The guy buying a coffee at starbucks
If you don't have enough money in your account for a 5 dollar coffee you shouldn't be buying one.
By Common Sense @ 05/06/08 11:50:59 AMreport abuse
Pay Day Loans
What I do not understand is the anger against the payday industry. What you have to remember are the other options the customers are facing when they live pay check to pay check and have an unexpected expense. They can ask for an advance from their employer or ask friends or family, they can miss credit card payments if they have a credit card or they can have an overdraft on their bank account; they often do not qualify for other loans or have limited collateral. These other options are either too embarassing for the customers to use or more expensive than the payday advance. The service that these payday lenders are offering are just another option that the Ohioans (or people from other states for that matter) should be allowed to have access to, in a country like America.
By Sarah @ 05/06/08 11:13:52 AMreport abuse
Pay Day Loans
So when I bounced my debit card at the local bank and they (and Starbucks) charged me $30 each (yes is was a $5 purchase) You mean I could have gotten a loan til my next payday for $15. Would have saved me a bundle. Why would we not want that option?
By Steve L. @ 05/06/08 10:39:38 AMreport abuse
Pay day Loans ohio
They are even advertising on their signs to vote against the bill.
Hopefully, it will work against them and make people aware of the bill.
By Holly @ 05/06/08 09:53:17 AMreport abuse
Quote
"We have the best politicians money can buy" Mark Twain
By PJ @ 05/06/08 05:29:21 AMreport abuse
Payday Loans
Thank you, Clark, for your comments on "Pay-day" loans. I used to live in Columbus, OH and at a time when I was marginally solvent, I made the mistake a took the risk of a payday loan and it turned into a HUGE downward spiral in regard to my financial well-being. I should have known better, but I was desperate.

Please continue to speak out against these 'blood suckers' in Ohio and elsewhere.

Thanks for your great work, I've learned SO MUCH from you.
By Dennis L. @ 05/05/08 09:51:39 PMreport abuse

Dr. Gupta........

Dr. Gupta is the chief medical correspondent for CNN, where he weighs in on broadcasts, and also runs a couple of blogs on CNN's Health site. Dr. Gupta has authored groundbreaking research, ran a successful practice as a neurosurgeon, and he did his undergraduate degree and his MD at University of Michigan, amongst the top in professional and graduate schools in the nation. Those programs aren't cheap – even with payday loans you can't afford it. He also worked as a White House Fellow during the Clinton administration. On assignment with CNN in Iraq, he participated in surgery to deal with damage done to US servicemen and Iraqi civilians. This all adds up to why Barack Obama has approached him to be the next Surgeon General of the United States, a position usually given to top medical authorities, which Dr. Gupta certainly appears to be. To see just how he operates click payday loans if you've got Dr. Gupta on the brain.

By Lincoln G @ 01/15/09 03:15:31 AMreport abuse

Title Pawn & Loan

How is it possible that this kind of lending is consider to legal, when consumers lives are ruin. My father took a loan of 5000.00 dollars in the year of 2004 and todaty he is still paying on that so call loan. The principal still being in the amount of 4995 as of todays date. All other money going toward interest. How is that legal. The mob had better lending practices. The AJC and Georgia watch all agree that the political contribuitions make this companies untouchable. They are taking advantage of low income and some less educated people, then making a profit off the persons desperation and some their only means of transportaion for work. The TV advertisement is misleading.

By Stephanie Benton @ 08/25/08 02:34:52 PMreport abuse

Financial Institutions GREED hurting U.S.

Consumers are making these poor financial decisions because we allow these types of abuses in our financial system. Calling interest (FEES) to miscalculate A.P.R. is a classic example of this abuse and financial institutions have failed to protect consumers who have little to no education and make very low wages. Yes, the risk of loaning money to this consumer is more difficult; however, it doesn't justify the abuse.

By Dan @ 08/15/08 03:20:13 PMreport abuse

R A C

I worked for them years ago and watched them rent, cancel or close out and rerent the same item to the same people. This resulted in rather large profits as you can imagine.

By Ryan @ 07/02/08 05:09:55 AMreport abuse

pay day lending

pay day lenders remind me of a vulture
sitting on a limb waiting for something to die so they can pounce on it.

By vulture @ 05/07/08 08:49:25 AMreport abuse

Pay Day Rip-Offs

I see the article about these loans and I'm wellaware that "Indiana" allows even higher rates. I've calculated rates here at over 990% per annum. These sociopathic loan sharks feed off of the ignorance of the uneducated and desperate. The Indiana business community is bad enough about engineering poverty and desperation, then the weasels turn around and calculate just how far they can push the public to satisfy the business community's financial whims. What you have is collusion between atate level political reps and the business community. The business class here pay a lot of money to state politicians to influence legislation so they can maintain "predatory lending." Oh they talk a lot "hot air" about stopping predatory business practices, but the organization of criminals within the business community always get their way.
It's defined angrily by many as "money talks and b.s. walks." Excuse me, but till the time comes that political career climbers and the organized criminals in the business community grow up and start accepting their moral responsibilities as members of the general community, the problem of predatory lending will never stop.

By Michael Angelo @ 05/07/08 04:11:20 AMreport abuse

Payday loans

When we loan 500.00, it costs 552.00 after two weeks to pay it off. Most people cannot get loans from banks and we take a high risk in loaning this money. If they default we cannot sue and we must pay for their money managing class.

By Nancy @ 05/06/08 10:47:04 PMreport abuse

Pay Day Loan operations absolutely rip people off with their rates. That said, I think that it's important to realize that they are not holding a gun to anyones head to get them to come in and borrow money. I also want to point out that expensive home furniture, for example, has a mark up in the 500% range. Are we going to ask the government to ban furniture makers from selling their product above a certain rate?

People need to be responsible for themselves and not expect government to be their nanny.

By Joe @ 05/06/08 09:48:11 PMreport abuse

Loan Sharks

I live in Ohio and my city has way too many cash advance operations. The main construction projects in my city have been building Pay Day stores and new Jail space. We have the Pay Days since regular banks would not deal with deadbeats,cheaters, and others. Over 2,000 honest auto workers have been laid off due to the Axle strike since March 3rd and some also are falling for the Pay Day gimmick. I know I will get to bail all of them out through higher taxes and costs once they go bankrupt.

By William @ 05/06/08 01:24:36 PMreport abuse

It is RAC's right not to support an organization that is against them. Why should RAC suport an organization that wants to stop your growth. Now I have never shop at RAC and will never shop there but I will defend their right to do business with people who are on their side.

By Lamans @ 05/06/08 01:11:32 PMreport abuse

pay day lenders

try looking at internet pay day lenders if you want to see unscrupulous

By donald @ 05/06/08 01:10:56 PMreport abuse

@The guy buying a coffee at starbucks

If you don't have enough money in your account for a 5 dollar coffee you shouldn't be buying one.

By Common Sense @ 05/06/08 11:50:59 AMreport abuse

Pay Day Loans

What I do not understand is the anger against the payday industry. What you have to remember are the other options the customers are facing when they live pay check to pay check and have an unexpected expense. They can ask for an advance from their employer or ask friends or family, they can miss credit card payments if they have a credit card or they can have an overdraft on their bank account; they often do not qualify for other loans or have limited collateral. These other options are either too embarassing for the customers to use or more expensive than the payday advance. The service that these payday lenders are offering are just another option that the Ohioans (or people from other states for that matter) should be allowed to have access to, in a country like America.

By Sarah @ 05/06/08 11:13:52 AMreport abuse

So when I bounced my debit card at the local bank and they (and Starbucks) charged me $30 each (yes is was a $5 purchase) You mean I could have gotten a loan til my next payday for $15. Would have saved me a bundle. Why would we not want that option?

By Steve L. @ 05/06/08 10:39:38 AMreport abuse

Pay day Loans ohio

They are even advertising on their signs to vote against the bill.
Hopefully, it will work against them and make people aware of the bill.

By Holly @ 05/06/08 09:53:17 AMreport abuse

Quote

"We have the best politicians money can buy" Mark Twain

By PJ @ 05/06/08 05:29:21 AMreport abuse

Payday Loans

Thank you, Clark, for your comments on "Pay-day" loans. I used to live in Columbus, OH and at a time when I was marginally solvent, I made the mistake a took the risk of a payday loan and it turned into a HUGE downward spiral in regard to my financial well-being. I should have known better, but I was desperate.

Please continue to speak out against these 'blood suckers' in Ohio and elsewhere.

Thanks for your great work, I've learned SO MUCH from you.

By Dennis L. @ 05/05/08 09:51:39 PMreport abuse

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May 05, 2008 -- Payday lender starving out food bank

What others are saying