Sen. Brown seeks support for implementation or rules that would protect consumers from payday lenders

By Ed Runyan

runyan@vindy.com

WARREN

Two area women who found themselves in the “rat hole” of payday-lending debt and found help from area agencies described their ordeal to U.S. Sen. Sherrod Brown and others Monday.

Christina Sarno borrowed just $200 from a payday lender to avoid homelessness after she had her first child, but she quickly realized she could not pay back the principal or the interest.

“After receiving constant calls and having the store manager show up at my house to try to collect the money I owed, I gave up. At this point I had developed a lot of interest on the loan and owed more than I could possibly pay back on my income,” she said during a meeting at the Warren YWCA.

She lost her car, but the Beatitude House of Warren helped her with housing and education to avoid falling into the payday lending trap again.

Latita Parnell told Brown she was trying to avoid being homeless when she borrowed $700 from a payday lender. The only way out for her was filing bankruptcy, she said. With the help of housing and other services from the Wings at the YWCA, a housing facility for women and children, Parnell now has a job and is working toward leaving the YWCA and getting her own home.

Brown wanted to hear from the women and also wants such people to tell their stories to the U.S. Consumer Financial Protection Bureau so that it knows that new rules it has proposed to better protect consumers are needed.

The proposed rules would require lenders to determine whether borrowers can afford to pay back their loans, according to the CFPB. Such loans often carry an average annual interest rate of more than 300 percent, the agency says.

Brown and several members of the United Way-led Trumbull County Partnership for Financial Empowerment committee say both payday lenders and auto-title lenders can be “predatory lenders” whose tactics are aimed at low- and moderate-income people by advertising in places where such people work and live.

“The Trumbull County Partnership for Financial Empowerment was formed to give individuals and families the education and tools to make wise financial decisions,” said Ginny Pasha, president of the United Way of Trumbull County.

Just days after the CFPB announced its new restrictions on predatory lending, the Republican-led House Appropriations Committee advanced a bill that would block the consumer agency from implementing the new rules, Brown said.

Brown wants Ohioans who think the new rules should be implemented to send a letter to Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G St. NE, Washington, DC 20002.

The Center for Responsible Lending said last year that there are 836 storefronts in Ohio generating more than $500 million in predatory loan fees each year – twice as much as they collected in 2005, Brown said.