With new law in Ohio, 6,000 people lose their jobs just like that

[cashlenders]

As payday lenders across Ohio begin to close their doors, Ross County payday loan employees plan for unemployment, if they haven't been laid off already.
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"The only one left here is me," said Shelly Copley, manager of Fast Payday Loans. "They've already dismissed everyone else and we'll probably be closing really soon."

About 30 people in Ross County will be out of a job following the passage of House Bill 545, which placed tight regulations on payday lenders and capped interest rates which made the businesses profitable.

"Statewide there are 6,000 people losing their jobs," Copley said. "That's a lot of people."

Although Copley knows she will be losing her job in the near future, she said there are others in her industry who did not know when their jobs would be lost.

"My company is good enough to tell me what date, but there are some people who went to work and it was just closed," Copley said. "I'll probably have to collect unemployment until I figure out what I'm doing."

Sen. John Carey, R-Wellston, is chair of the Finance Committee that reviewed HB 545, he said the decision to pass the bill was not an easy one.

"I struggled with it," Carey said. "We had a lot of good people come and testify who were in the business, but we couldn't find a way to help them besides creating a pathway to allow them to operate under the Small Loan Act."

Carey said the payday loan industry wasn't able to offer alternatives that would protect Ohio consumers from becoming trapped in a cycle of debt. Instead he hoped some businesses could continue to operate under the Small Loan Act which would allow them to charge $15 additionally on a loan of up to $500 and $30 on loans more than $500.

The resolution recently signed by the Governor would put most payday lenders out of business because it caps two-week loan interest rates based on annual interest rate percentages. Most businesses charge about $15 for a $100 loan for a two week period, which is an annual interest rate of 390 percent. The new bill, which goes into effect in 90 days, would limit annual interest rates to 28 percent, meaning payday lenders could charge about $1.06 for every $100 loan over a two-week period.

"You can't make money off that," Copley said. "That's why we can't stay open, and there's going to be a lot of our customers struggling with nowhere they can get a loan."

Carey said the bill was drafted to use an annual percentage rate because it was a requirement of the federal government. He also said while he felt bad for those who may be out of a job, he couldn't continue to allow consumers to be trapped in a cycle of debt.

"I saw people that were involved in the business and it required they make eight or nine loans before they could profit from it, basically setting consumers up in a trap," Carey said.

Still, Copley said they have many responsible customers who use their business to take out a loan when an unforeseen event arises, like unexpected car repairs, she said she didn't think those drafting the laws considered the positive benefits of an advance payday loan.

"They didn't listen to the people who voted them into office, we collected signatures and held rallies," Copley said. "A lot of politicians can't understand that, their cars are paid for and their houses and they don't have the problems of everyday people."