Michigan Survey Highlights Financial Destruction of Payday Loans, Urges Yes on Ohio Issue 5!
Today, a study was released by Michigan University Professor Michael Barr highlighting the negative impact that payday lending has on borrowers.
"While the Michigan survey does not establish a causal relationship, it finds that 11 percent of payday borrowers experienced bankruptcies in the preceding year, while only 4 percent of non-borrowers did so. Twelve percent of borrowers faced eviction; that rate was 6 percent for non-borrowers. Over a quarter (26%) of payday borrowers had their utilities shut off for non-payment in the preceding year, while only 9 percent of non-payday borrowers experienced this hardship."
"Dr. Barr presented the survey results to the Federal Trade Commission last Thursday, in a presentation concluding that alternative financial services like payday lending and other high-cost loans are "not well-designed to serve low- and moderate-income households." Barr said excluding lower-income households from lower-cost systems leads to economic inefficiency, is costly for low-income households, and "promotes dis-saving." The survey was a random, stratified sample of 1003 Detroit households."
Study is forthcoming. Will provide link to report as soon as it is available.
Released on the eve of a state initiative in Arizona and a referendum in Ohio, the report stresses the importance of voters being clear about what they are voting on:
"In Ohio, voters must vote "Yes" on Issue 5 to end 391 percent interest rates in that state. In Arizona, because of the wording of the ballot measure, voters must vote "No" on Proposition 200, or payday lenders will have a voter-protected law legalizing their 391 percent interest rates for good. In both states, the industry is spending millions of dollars trying to persuade citizens that voting their way will reform the industry."
To read the article about the study entitled "New University of Michigan Survey Finds Payday Borrowers Suffering Financial Hardships", please click here:
http://news.yahoo.com/s/usnw/20081103/pl_usnw/new_university_of_michigan_survey_finds_payday_borrowers_suffering_financial_hardships
Vote yes on issue 5! For more information about Issue 5, please visit .
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