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  1. #1
    ABW Ambassador jodyq's Avatar
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    Ohio Law Passes Regarding Payday Loans
    Hi there I was just wondering if there is any type of updates for the new laws in The State Of Ohio regarding payday loans? Does this effect us as affiliates? Thank you so much for responding!! I don't know if I posted in the right area so mods please move if I am in the wrong spot!
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  2. #2
    CPA Network Rep Joe Lilly's Avatar
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    Jody,

    This is a great question! We're going to put together a response and get it posted here as soon as possible.

    -Joe
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  3. #3
    ABW Ambassador jodyq's Avatar
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    Thank you!!!
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  4. #4
    Analytics Dude Kevin's Avatar
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    What specifically is the law? Can you provide a link? Thanks.
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  5. #5
    Believe knight01's Avatar
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    The law limits the apr on payday loans to 28%. There is also a reporting of the loans to the state to prevent consumers from obtaining more than 3 loans within 6(?) months.

    Most of the lenders have announced they are closing or have already shut down. Estimated 6,000 jobs lost.

    Don't get me started....
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  6. #6
    Analytics Dude Kevin's Avatar
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    Interesting.... what the market will bear, I've heard said....
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  7. #7
    Believe knight01's Avatar
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    The entire statewide ballot is listed here. http://www.sos.state.oh.us/sos/uploa.../Issues_08.pdf

    The payday issue is issue 5. I'm going to go pick teams at yahoo before I get too fired up.
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  8. #8
    ABW Ambassador simcat's Avatar
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    new laws in other states too
    http://www.azcentral.com/arizonarepu...ayday1110.html
    http://www.stltoday.com/stltoday/new...7?OpenDocument

    too bad loan sharks dont have affiliate programs lol

  9. #9
    ABW Ambassador jodyq's Avatar
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    Thank you for posting it! I am slowwww today!
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  10. #10
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    Let's see... predatory lending is stopped by voters voting on a measure. It wins 2 to 1.

    What next, people outraged that selling swamp land in Florida to retirees is stopped? Selling drugs to children by schools gets voted down? Seriously.

    If this hurt your business, good. You should think hard about the business you are in.

  11. #11
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Admin Note: Thread moved to Legal Lounge as this is now a multi network, multi merchant and multi state issue.

  12. #12
    CPA Network Rep Joe Lilly's Avatar
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    Thanks all for the links above. Here is some more detail:

    On September 1, 2008, Ohio HB 545 went into effect. Earlier this month, a referendum to defeat the passage of the bill was defeated (in the general election on November 4, 2008) – meaning that all of the changes of HB 545 shall remain in effect. Of particular interest is section 1321.36 which now reads:

    Sec. 1321.36. (A) No person shall engage in the business of making short-term loans to a borrower in Ohio, or, in whole or in part, make, offer, or broker a loan, or assist a borrower in Ohio to obtain such a loan, without first having obtained a license from the superintendent of financial institutions under sections 1321.35 to 1321.48 of the Revised Code. No licensee shall make, offer, or broker a loan, or assist a borrower to obtain such a loan, when the borrower is not physically present in the licensee's business location.

    (B) No person not located in Ohio shall make a short-term loan to a borrower in Ohio from an office not located in Ohio. Nothing in this section prohibits a business not located or licensed in Ohio from lending funds to Ohio borrowers who physically visit the out-of-state office of the business and obtain the disbursement of loan funds at that location. No person shall make, offer, or broker a loan, or assist a borrower to obtain a loan, via the telephone, mail, or internet.

    This law also caps APR at 28%, requires loans be under $500, requires 31 days to pay off the loans, and limits users to four loans per year.

    The effect of this type of legislation is that while it doesn’t in its language ban payday lending in Ohio, the restrictions essentially do. And while this appears to be targeted specifically at lenders, depending on how the legislature enforces certain newly added provisions, it may extend to affiliates and we won’t know this until it is actually enforced. A conservative affiliate would think twice before continuing in Ohio and would definitely want to consult with legal counsel.

    ***DISCLAIMER*** This post represents independent research and opinion of the author and is not to be considered or construed as legal advice. Affiliates should seek independent legal counsel for assistance in their particular advertising activities.
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  13. #13
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Joe Lilly
    Thanks all for the links above. Here is some more detail:

    On September 1, 2008, Ohio HB 545 went into effect. Earlier this month, a referendum to defeat the passage of the bill was defeated (in the general election on November 4, 2008) – meaning that all of the changes of HB 545 shall remain in effect. Of particular interest is section 1321.36 which now reads:

    Sec. 1321.36. (A) No person shall engage in the business of making short-term loans to a borrower in Ohio, or, in whole or in part, make, offer, or broker a loan, or assist a borrower in Ohio to obtain such a loan, without first having obtained a license from the superintendent of financial institutions under sections 1321.35 to 1321.48 of the Revised Code. No licensee shall make, offer, or broker a loan, or assist a borrower to obtain such a loan, when the borrower is not physically present in the licensee's business location.

    (B) No person not located in Ohio shall make a short-term loan to a borrower in Ohio from an office not located in Ohio. Nothing in this section prohibits a business not located or licensed in Ohio from lending funds to Ohio borrowers who physically visit the out-of-state office of the business and obtain the disbursement of loan funds at that location. No person shall make, offer, or broker a loan, or assist a borrower to obtain a loan, via the telephone, mail, or internet.

    This law also caps APR at 28%, requires loans be under $500, requires 31 days to pay off the loans, and limits users to four loans per year.

    The effect of this type of legislation is that while it doesn’t in its language ban payday lending in Ohio, the restrictions essentially do. And while this appears to be targeted specifically at lenders, depending on how the legislature enforces certain newly added provisions, it may extend to affiliates and we won’t know this until it is actually enforced. A conservative affiliate would think twice before continuing in Ohio and would definitely want to consult with legal counsel.

    ***DISCLAIMER*** This post represents independent research and opinion of the author and is not to be considered or construed as legal advice. Affiliates should seek independent legal counsel for assistance in their particular advertising activities.
    Parts of this law are clearly unconstitutional.

    Section B is clearly in violation of the Interstate Commerce Clause of the US Constitution (Article I, Section 8), and Section A would, as written, prohibit a friend or relative, not in the business of loaning money, from making a loan to such a friend or relative.

    This is not intended as specific legal advice to any person or affiliate, and anyone involved in any aspect of lending that may come under the purview of this law should seek independent legal counsel.
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  14. #14
    Full Member Greywolf's Avatar
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    Don't you hate government protecting us from ourselves?

    Think about who this legislation will REALLY harm and who it will help.

  15. #15
    CPA Network Rep Joe Lilly's Avatar
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    Here's some interesting reading related to the topic at hand.

    Source: http://www.businesswire.com/portal/s...84&newsLang=en

    November 12, 2008 12:09 PM Eastern Time
    Payday Loan Rate Cap in Oregon Has Harmed, Not Helped Oregon Households, New Study Circulated by CCRF Suggests

    Study Compares Oregon and Washington Households; Analyzes Changes in Key Aspects of Household Finances Before and After the Rate Cap

    HANOVER, N.H.--(BUSINESS WIRE)--Survey data on 400 payday loan users collected before and after the imposition of an interest-rate cap in Oregon suggest that the cap caused deterioration in the overall financial condition of the Oregon households. The results suggest that restricting access to expensive credit harms, rather than helps, consumers.

    The study, conducted by Prof. Jonathan Zinman of Dartmouth College, seeks to evaluate the effects of interest-rate and loan-term restrictions imposed by the State of Oregon in 2007. Previously, payday lenders had been charging borrowers at least $15 per $100 for two-week loans; effective July 1, 2007, the maximum finance charge that can be imposed on Oregon borrowers is approximately $10 per $100, with a minimum loan term of 31 days. The effective yield to lenders was reduced by two-thirds as a result of the new regulatory scheme.

    Most payday lenders have exited Oregon following the cap, and the study finds that payday borrowing has fallen dramatically as a result. It also finds evidence that some former payday borrowers turned to alternatives that can be even more costly than payday loans, such as overdrafts and late bill payments.

    The study estimates the effects of the Oregon cap by comparing changes in key aspects of household finances before and after the effective date of the cap, using comparable households in Washington state (which retained consistent regulation) as a “control.” The study covers changes from late June 2007 to early December 2007.

    The most important finding in the study is that, relative to their Washington counterparts, the Oregon households were far more likely to experience a change for the worse in the key financial outcomes measured by the survey: job status and respondents’ assessments of their recent and future financial situation. These results suggest that restricting access to payday loans harmed Oregon respondents over the term of the study.

    “Like some other studies, these results suggest that access to credit, even if expensive, can help some people make productive investments and help others manage their cash flows through emergencies,” Prof. Zinman said. “There’s more work to do to reconcile these results with findings from other studies that suggest access to expensive credit can exacerbate financial distress.”

    The data collection for the study was funded by a grant from Consumer Credit Research Foundation, which did not participate in the analysis of the data or the drafting of the study.

    The complete working paper on the study is available online at http://www.dartmouth.edu/~jzinman/Pa...ingAccess_oct0 8.pdf. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
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  16. #16
    ABW Ambassador jodyq's Avatar
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    Quote Originally Posted by chetf
    If this hurt your business, good. You should think hard about the business you are in.
    Your a little quick to judge there buddy boy. It in NO way Hurts my business, I have more than one niche, this one seems to pick up around this time of year so yea for me, you don't do it so good more customers for me, and if I don't do it somebody else will pick up where I left off. I have had to use a payday loan service prior and it helped out, it is good that states are putting guidelines and regulations on them, I just want to play by the rules, if rules change then I change. Simple. And According to the new play book Ohio is a big no no. Ok, even though i may not agree in its entirety a payday loan is exactly what it is a payday loan, it is a loan to cover any emergency expenses in between paydays. States I already steer clear from are GA, VA WV and now Ohio. That leaves me with more than a handful of ground to cover. Seeing that I also promote payday lenders in the UK and other parts of the world where permitted. And you compare payday loans to selling drugs to children u don't think that it is a wee bit extreme.
    Edit: Payday Loans In Oregon, My friend got a payday loan online 3 weeks ago, got a 300 loan had to pay 390 on payday, 30 dollars per hundred lended.
    Last edited by jodyq; November 14th, 2008 at 01:42 PM.
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