Payday Loans: Ohio’s Biggest Problem
OHIO–Ohio is home to a number of payday lenders, but the problem is even bigger than usual, according to a recent survey of payday lending industry professionals.
The survey by Ohio MoneyLenders, a trade association for payday lenders in Ohio, found that while the number of borrowers in Ohio is on the rise, payday lenders across the state are struggling to meet the demand.
The survey of 1,000 payday lenders found that the number increased by 7% in 2016 and has continued to rise each year.
Many of the lenders surveyed reported having issues with their websites or the technology they use to process their customers’ loans, with a significant number of lenders saying they were unable to contact borrowers to get their information back.
Ohio MoneyLender president Kevin Hickey said he was struck by the problem.
Hickey is the executive director of the Ohio Business Coalition for a Fair Society, an advocacy group for the payday industry.
He said the industry is working to better manage the costs of its operations.
“What we’ve seen in the last couple years is a tremendous spike in the number and the number that’s out there, and it’s not just on payday loans,” Hickey told Newsweek.
“When you see that there’s a large number of people struggling to get into the market, it’s going to be difficult for them to find their place.
It’s going the other way as well, as they have to compete with other lenders that have more capital to offer and to compete on price.
It will be very difficult to continue to compete at that level.”
A report from the Ohio Banking Association found that Ohio has the second highest number of consumers with payday loans in the country, with about 16% of Ohioans receiving a payday loan in the past three years.
Hacker said the Ohio Department of Financial Services (ODFS) is working on a plan to help address the problem, but said the problem has been going on for a while.
“The reality is that we’ve been struggling to find the money that we need to do our business,” Hacker said.
“We’re trying to make that work with all of our resources, but there are not enough of them to be able to provide a sufficient amount of money to keep our business afloat.”
Payday lenders are not the only ones struggling to make ends meet.
Hickey says the number has grown exponentially in the state over the last few years.
“This is not something that we’re just seeing now.
This has been happening for a number, maybe eight, or nine years,” Hiesty said.
The Ohio Banking Federation said in a report in 2017 that the Ohio economy had grown by more than $8.5 billion in the three years since it became the first state to introduce a payday lending law.
The Ohio Money Lenders survey found that about 7% of the payday lenders surveyed in Ohio were now in bankruptcy.
The number of bankruptcies has been on the increase since 2014.
In addition, many of the largest lenders have struggled to provide service, according Hiestie.
The National Consumer Law Center (NCLC) estimated that more than 1,500 payday lenders nationwide had less than $1 million in cash in their bank accounts, which is one of the top five causes of bankruptcy among lenders surveyed.
The national industry has been struggling financially in recent years, as the payday lending market has been hit hard by the Great Recession, which wiped out tens of billions of dollars in income for many Americans.
Hiestia said he believes that some lenders have been able to survive, but others have been unable to.
“There are some lenders that are very well managed and have managed to do the right thing, and some that haven’t,” Hinessy said, adding that it is a combination of factors that has been the case for a long time.
“We have a huge number of bad loans that have been processed by these bad companies and they haven’t had enough capital to do their business.
And the result is that they’ve closed down.”
Pay day loans are not legal in Ohio.
Hestie said that while some states may allow the sale of payday loans, Ohio law prohibits the sale, and the state does not allow banks to charge customers to get them.
“It’s not like it’s like they’re selling a new car or something,” Hesty said of payday borrowing.
“It’s like it says on your bill: You pay me $300 to get your loan,” Hacker added.
“I think it’s time that we all recognize that we are all in this together.
Payday loans are a great way to give people money to pay bills, but if you’re going to do it, we need the tools to do that.”