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Follow on Google News | Kent State College of Business Administration Economics Professor's Research Used in ArticleBy: College of Business Administration For seven long months after that, Kendrick, 39, struggled to get by. He ran up thousands of dollars on credit cards and got behind on bills. Soon his credit card company was garnishing his wages and filing suit. A payday loan seemed to offer a financial lifeline to someone drowning in debt. So he took out his first loan, and quickly, he said, “it became like a revolving door. You are getting paid and then giving them all your money.” He now works two jobs, one in food service and the other in custodial work at a local university. Then collection calls starting coming, and he found himself in over his head. Brandon Watkins, 33, tells a similar story. He moved to Cincinnati from Alabama to live near his wife’s family. He is a cook at a casino, with dreams of one day having his own restaurant. “The first time going in, I was happy with it. I got money in my hand very quickly, and all I needed was my pay stub. I had to make ends meet,” said Watkins, who is married with four kids. But he ended up taking out more payday loans, including from online shops. Like a recovering addict, Watkins said he has been “free and clear” from the tentacles of payday loans for a year. He and Kendrick, are now receiving financial counseling from Cincinnati-based CityLink Center, an integrated shop for social services in one of the city’s neediest neighborhoods. It partners with the business and faith communities to offer mentoring, legal assistance, transportation, job training, education and other services under one roof. Kendrick eventually pulled himself out of debt. But his experience with the payday loans industry left him battered and bruised. It was not meant to be this way. Ohioans overwhelmingly voted to put a stop to stories like this when they passed a package of legislative reforms in 2008 meant to rein in payday lenders. But storefront lenders quickly and seamlessly found loopholes in the laws and continued operating as usual. Lenders began doing business under Ohio’s Mortgage Lending Act or operating as a credit service organizations (CSOs). In fact, according to a study released earlier this year by the Pew Charitable Trust, payday lenders are more entrenched than ever in Ohio. According to the report, Ohio ranks first in the nation (http://www.pewtrusts.org/~/ “We have tried to estimate the number since then, but every time we get an estimate, several more have opened,” Policy Matters legislative liaison Kalitha Williams said. A 2014 short-term lending study led by Kent State University economics professor Shawn Rohlin estimated that the industry makes 6.5 million loans in Ohio annually, with a total loan amount of $3.7 billion. End
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