With presidential elections ending in an unprecedented way, it is almost impossible to focus on the underlying issues. However, the outcome of these issues represents a state-to-state decision that will ultimately affect thousands of Americans. Due to the high controversy, payday loan programs often appear in election voting. Although debates and proposals have been made and demonstrated over and over again to help people understand the importance of the payday loan industry in the United States, it remains a negative part of our society.
What is the dispute? In short, payday loans are illegal in 15 states across the country, and it seems that more states are following suit. While most people say this is just an industry that tries to get consumers to pay an unnecessary amount of money, some people already understand the purpose of the loan business. Unfortunately, the other person is not required and has never used the system, and unfortunately, they are the vast majority of people actually voting on these issues. Since most payday lenders are concentrated in low-income areas of the country, many people see it as an illegal business. The truth is that they are there because they are needed. Most low-income consumers rely on payday loans to pay off unpaid bills, or just to earn a living.
Arizona has become the newest state in charge of the payday loan industry. With the annual interest rate of loans reaching more than 400%, many people feel the need to intervene. The fact is that the interest rate allows the lender to make a profit and the consumer can afford it. It only occurs when the loan is not used properly. Many consumers have misunderstood or did not follow the necessary steps to conduct effective and problem-free transactions. Those who oppose the industry raise the argument that their late payment fees are unreasonable when they are exactly the same as any other type of loan offered by banks or credit unions.
Since the 2010 payday loan in Arizona has been devastated, supporters in the industry have taken the opportunity to fight in the 2008 presidential election. Proposal 200 is called a reasonable proposal. This includes cutting the actual annual interest rate per $100 borrowed from $17.50 to $15. If there is no payment on time, there will be a repayment plan available and the carry-over fee will be eliminated. Finally, it only allows consumers to lend a loan at a time. Although the request was reasonable, the bill was not passed. 40.50% voted in favor, while 59.50% voted against it. The payday loan industry in Arizona faced a catastrophe in 2010.
In the past few years, Ohio’s payday loan industry has emerged, with institutions appearing in every corner of the capital. However, earlier this year, it became the newest state to pass laws on payday loans. The law [or issue 5] sets a 28% cap on the percentage rate, and by that time, the percentage rate has reached 391%. The law also limits the loan limit to four per year and limits the payday lenders associated with the Cleveland population. Although the initiative is said to be designed to adjust the percentage, it only makes the payday loan industry impossible. The upper limit is 28% and there is no room for profit. As a result, payday loans have gradually decreased from Ohio and more than 6,000 people are unemployed.
A payday loan delegation centered on Cleveland, Ohio, the Ohio Financial Freedom Organization, has made changes to the law a priority. They spent more than $16 million and won 279,174 signatures to reinstall the fifth issue of the 2008 presidential election. Their goal is to get enough voters to oppose this proposal, so the annual real interest rate of 391% and the unrestricted use of payday loans are restored every year. Las, it didn't pass. 64.55% of voters approved the issue, and only 35.45% of voters beat the issue. There is no doubt that the payday loan industry will not exist longer in Ohio.
There is widespread misunderstanding of the payday loan industry. It is true that most state legislators prefer the regulation rather than canceling payday loans. Their argument is that if a profitable but reasonable agreement can be reached between the industry and the rest of the country, this could be a valuable part of our society.