Sunday letters: Senate budget bill invites predatory lending; Red Cross works tirelessly to aid Haitian quake victims

Change to state budget bill

invites predatory lending

Amendment HC1867 to

the state’s budget bill would provide for two types of pawn licenses: the standard license and a new, predatory lending license called “pawnbroker-plus.”

Here is how the legislation is being sold: a pawnbroker-plus would only charge 3 percent interest compared to the current 5 percent per month plus $4 storage. Sounds like a good deal until one reads the fine print: The pawnbroker-plus could also charge a miscellaneous fee of 10 percent. In other words, a pawnbroker-plus could charge the consumer 13 percent per month.

Proponents want the public to focus on the “3 percent interest” headline. As for the additional 10 percent that consumers would pay, the proposed legislation shamelessly instructs that it ‘‘..shall not be considered interest for any purpose.” According to the Center for Responsible Lending, charging fees greater than 5 percent of the principal is characteristic of predatory lenders. It is another red flag when the lender disputes that the fees are interest.

The Truth in Lending Act is the federal law that requires lenders to disclose all charges that contribute to the cost of a loan. A $250 pawn loan currently costing $16.50 per month could run $32.50 at a pawnbroker-plus, a $500 pawn could go from $29 to $65, and the monthly cost of a $1,000 loan could skyrocket from $54 to $130!

A pawnbroker-plus could also deduct the 13 percent charges upfront from the loan proceeds, reduce the term of the loan, and forgo the current requirement of notifying borrowers by U.S. mail of pending forfeiture.

An out-of-state, payday-lending chain is behind HC1867 (locally owned pawnbrokers continue to operate profitably with the current, relatively low rates). Last year this chain pushed HB 192, which was debated and subsequently shot down. Now it is trying to sneak a very similar scheme through as an amendment to Ohio’s budget bill.

Tell our state lawmakers to say “no” to predatory lending by removing Amendment HC1867 from the final budget bill.

Jim Eckman, Boardman

Jim Eckman is president of Ace Diamond & Jewelry Brokers Inc. He and seven other Mahoning Valley pawnbrokers signed this letter.

Red Cross has worked

tirelessly to aid Haitians

Recently, there

has been information in the news about response by the American Red Cross to the 2010 Haiti earthquake disaster.

With the generous support of the American public, the Red Cross has helped millions of Haitians who desperately need help and humanitarian assistance. It is important to note that when partners were unable to provide land upon which to build new homes, the Red Cross made the decision to prioritize helping the most people get a roof over their heads after the earthquake – even if it was temporary – rather than waiting to build more costly new houses for a much smaller number of people. Working with partners such as Habitat for Humanity and Handicap International, we built thousands of transitional shelters that can last five years.

The funds also enabled us to build and operate eight hospitals and clinics, stem a deadly cholera outbreak, provide clean water and sanitation, job training and move more than 100,000 people out of makeshift tents into safe and improved housing. We also helped build and repair infrastructure that is vital to neighborhood recovery.

We worked closely with community residents to prioritize how we spent our funds. Ninety percent of our staff on the ground are Haitian.

All this was done by donated dollars to the Red Cross; no money was given to us by the government.

While the pace of progress is never as fast as we would like, and there is still more to do, Haiti is better off today than it was five years ago.

For 134 years, the American Red Cross has been there to help people in need, and we will still be there for the next disaster or emergency to help people here in the Mahoning Valley and in other areas around the world.

Karen Conklin, Youngstown

Karen Conklin is executive director of the