Testimony of

CORE Spokesperson Niger Innis

Before the

House Financial Institutions, Real Estate

& Securities Committee

January 31, 2008

 Mr. Chairman and members of the Committee, my name is Niger Innis.  I am the National Spokesperson for the Congress of Racial Equality also known as CORE.   CORE was founded in 1942 and it is the third largest of the civil rights organizations in the United States.  For over 60 years, CORE has championed self determination and equal opportunity for all people.  I am pleased to be here today to address this committee, because we, like you, are working to find real solutions to the most difficult problems facing working families in our communities.

As part of our commitment to improving the lives of working families, CORE has looked into the payday loan issue.  We’ve researched the payday lending industry, its products and its customers.  We have found that, as in all industries, there are a variety of actors. And in the Payday lending industry there are many good actors. They are both responsible and they deliver a product that is wanted and needed in our communities.  Payday lenders offer a choice that is not widely provided by traditional lenders anymore.  Consequently, we think that payday lenders provide a choice that members of our communities should be allowed to make.

Mr. Chairman and members of the committee; I would like to address my remarks to and in support of House Bill 337.

 Financial Literacy.  House Bill 337 Creates a financial literacy education fund to be used to support various adult financial literacy education programs, that will be funded by a five per cent (5%) assessment of the financial institution fund.

CORE is a long time supporter of financial literacy.  We believe that people should be able to make their own financial decisions and that they are best able to do that when they are educated and given accurate information.  It is for these reasons, that in 2005 CORE initiated its Financial Literacy Choice and Awareness Campaign (FLCA) to educate the public about various financial choices as well as the opportunities and pitfalls associated with those choices.

We have talked to and engaged various members of the payday loan industry and other financial service providers, across the country, about its commitment to financial literacy.  This goal of HB 337 is admirable and, on behalf of CORE, we support this legislation and the efforts you’ve made to bring this to fruition

However, Mr. Chairman one respectful suggestion I would strongly recommend and urge; it seems to me that all types of financial service providers should be encouraged to do their part to fund financial literacy efforts in the state.  Financial literacy and awareness is the next frontier for the civil rights movement and we should all do our share to further that goal.

Other aspects of HB 337 that we are fully in support of are;

The Prohibitions against check-cashing loan programs in Ohio conducted through the mail or through the internet, drafting funds electronically from any depository financial institution or from billing any credit card issued by a financial institution for any loan or extension of credit ( is made pursuant to an agreement for deferred deposit of any check including any deferred electronic draft) without the business first having obtained a check-cashing loan license from the superintendent.  

Requirement of check-cashing loan businesses to comply with the “Fair Debt Collection Practices Act”, when collecting money owed under a loan contract and the collection Limit of the permitted check collection charge to no more than one time on the same check; and finally prohibiting licensees from bringing or threatening to bring criminal action against a borrower for failure to comply with the terms of a loan contract.

The creation of an optional extended payment plan for borrowers who are unable to pay their loan on its due date.  A licensee shall offer to each borrower at least one extended payment plan per calendar year.  It allows the borrower to repay the loan in four equal payments with the first payment being due on the date the borrower enters into the plan and the other three payments due on the borrower’s scheduled periodic pay date.  No additional interest, fees or charges may be applied to loans that go into the extended payment plan.  Furthermore, that a check-cashing loan business is required to post a sign that informs potential borrowers of the extended payment plan option.

This extended payment plan option is exactly the vehicle that people in my community could use to prevent the potential cycle of debt, while exercising a financial option made available with access to this product. 

In closing, I would like to extend my congratulations to this committee for its reasoned work on this important issue.  I understand that there has been a great deal of sensationalism and media hype about this issue in recent recently. I want to commend you for keeping cool heads and for endeavoring to do what is right for all of the citizens of Ohio.  It is easy to fall into step with political correctness.  But it takes character to do as you have done by considering what is best for the vast majority of consumers – not just the noisy few.