June 28, 2016

Intermittent clouds

Business Beat: Batchelder leads push to cap payday loans

State Rep. Bill Batchelder, R-Medina, will champion legislation to control the payday loan industry, an industry that supplies loans with interest rates that in Ohio can reach 391 APR.

The two-week loans have 15 percent interest, but if they are renewed every two weeks for a year, the interest rate becomes 391 percent.

“In Ohio today we have more payday lenders than there are Burger Kings, Wendy’s and McDonald’s combined,” Batchelder said during a telephone news conference Thursday. “That gives an idea of the scope and also the profit of the industry.”

A quick phone book search reveals more than 10 such businesses throughout Medina County. This includes Advance America Cash Advance on North Court Street in Medina, state Route 303 in Brunswick and High Street in Wadsworth, and American Payroll Advance on High Street in Wadsworth, North Court Street in Medina and Wooster Street in Lodi.

The news conference was organized by the Center for Responsible Lending, a nonprofit research organization that released a report Thursday on the payday loan industry.

The report contends the industry is supported by borrowers who take out multiple loans each year to pay off previous loans. “Over 60 percent of loans go to borrowers with 12 or more transactions per year,” the report said.

“The simple truth is that borrowers who do not have cash for an emergency in between paydays will not have the money to pay off a 400 percent balloon payment plus all their other bills,” Uriah King, co-author of the report, said Thursday. “We find that borrowers have to take out loan after loan after loan between truly paying off their debts to the payday store. Not only is this how payday loans work, it is intended to work this way.”

However, Darryl Dever, a Columbus lobbyist for the check cashers’ trade organization, Ohio Financial Service Centers Association, explained that payday loans are often more practical for borrowers than other options, such as check bouncing. “People are obviously using these products because they are a viable option,” he said, explaining that a two-week loan in Ohio paid off in time results in 15 percent interest.

“If they write the check and their check is going to bounce, they’re going to incur bounced check fees at both the bank and the vendor. They are not going to pay their debt off,” he said.

Dever explained that 391 APR only happens when the loan is taken out every two weeks for one year.

Batchelder said he introduced legislation into the Ohio House that would put a 36 percent interest cap on loans of up to $800. In addition, House Bill 333 would prohibit payday loan businesses from granting loans to borrowers who already have outstanding loans from payday loan organizations.

“We provide alternatives. We provide education. We prohibit 391 percent interest, and we try to bring people to a realization that this is a slippery slope which can indeed lead to their family’s extreme financial difficulty,” Batchelder said.

However, Dever said, payday loan organizations would only make $1.38 for every $100 of a loan with the 36 percent cap, provided the loan was paid off within its two-week time limit. If the bill were to pass, he said, payday loan organizations “wouldn’t be able to keep the doors open. … They will be out of business.”

The House is simultaneously examining two other bills that also propose to regulate the payday loan industry. HB 358 would put a 25 percent cap on interest rates on such loans and HB 337 would have no cap. Batchelder said these and the bill he sponsors were first heard by the House’s Financial Institutions Committee last week and still have to go through more hearings before being voted on.

Dever said he supports HB 337, which mandates lenders offer an extended payment plan option that would allow borrowers to extend their loan at the same rates. This, he said, would not put the industry out of business. “Let the marketplace drive business,” he said. “It’s the American way.”

A winning team
Eight businesses that have made commitments to hire persons with disabilities will be featured in posters throughout the county made by the Medina County Board of Mental Retardation and Developmental Disabilities.

The board first decided to put together the posters as part of National Disability Employment Awareness Month in October. The posters, which are now being unveiled, feature various companies the MRDD works with and highlights a theme of “A winning team” between employers and those with disabilities.

“They’re putting a lot on the line to hire our folks, to put the extra training that is necessary to employ them,” said MRDD spokeswoman Lynee Bixler. “It’s just our way of saying thank you.”

Featured businesses include The Galaxy Restaurant in Wadsworth, Technical Tool and Gage Inc. in Brunswick, McDonald’s in Brunswick, Westfield Country Club in Westfield Center, the Wadsworth Public Library, Happy Tails Dog Ranch in Sharon Township, the Lodi Community Library and the MRDD Transportation Department. Each of the businesses received a large poster to display.

“We hope these posters will raise the community’s awareness about what persons with disabilities can do and the impact they can have in the workplace,” Ed Dryer, MRDD Community Employment Manager, said in a press release.

Chocolate Festival
Businesses don’t have to be in the chocolate industry to reach the thousands of people who will be attending the 11th Annual Chocolate Festival, says Dottie Nemec, vice president of financial development with the American Red Cross of Medina County.

She explained the Red Cross and J.M. Smucker, the two organizations sponsoring the festival, are looking for businesses to supply the treats chocolate lovers will be sampling at the Feb. 2 festival. Currently, she said, they have about 19 of the approximately 30 chocolatiers they are hoping for.

In past years, she explained, chocolatiers have included such businesses as Westfield Insurance, which supplied chocolate coins, and the Hoffman Group, which organized a Candyland play area for children. This year they are looking for any kind of business that wants to participate.

“We have about 5,000 people to show up to this. … It’s a great way for people to show off what they do,” she said. “You have a captive audience.”

Participating businesses are expected to supply 900 chocolate samples. Booth space for the event is free.

Businesses can also participate by being a sponsor. Sponsorship levels range from Silver Showcase ($1,000) to Deluxe Cocoa Bon Bon ($100).

In addition, local chefs can participate by entering the Decadent Chocolate Dessert and Cookie contests. Entrants must register by Jan. 28. The events will be held Feb 1 at Buehler’s River Styx location.

The Chocolate Festival runs from noon to 4 p.m. Feb. 2 at the Community Center at the Medina County Fairgrounds. Tickets for the event are $10, which is good for 10 chocolate samples, or $5, which are good for five samples. The $10 tickets will be available for $9 at all Buehler’s and Discount Drug Mart locations in Medina County.