G4 Business HARRIS FROM G1 Drowning in debt to borrow again, only this time vary from store to store, but associ- ing can respond to complaints he will need a larger amount to ation members have until July to only through the column. pay off his current payday loan. put some type of program in place. Julie Robie of Cleveland Legal Whether lenders are members Previous columns online: Aid said that although the state or not, local payday stores are cleveland.com/columns StretchPay loans 'Grace loans' Hebrew Free created for military encourage saving Loan interest-free StretchPay short-term loans, Rita Haynes, chief executive The cheapest loan around is adopted by Northeast Ohio of Faith Community Credit free. credit unions in the past year, Union, said people living pay- The Hebrew Free Loan Associstarted at Wright-Patt Credit check to paycheck might be well ation began more than 100 years Union, which serves the com- advised to take out a short-term ago when several Cleveland busimunity around Wright-Patter- loan if the alternative is to miss a nessmen pooled their money to son Air Force Base in Dayton.
mortgage payment or not pay lend $25 to a peddler. Today, the They were designed as an al- for needed medicine. fund stands at roughly $600,000, ternative to payday loans for But, she said, "There's no ex- fed by donations, grants and the members of the military. cuse for Ohio payday lenders to money repaid on interest-free StretchPay has a $35 annual charge as much as they loans. fee for consumers who want to Ohio law just doesn't protect the The association lends without take out $250 monthlong loans consumer enough." regard to the borrowers' faith.
and $70 for those borrowing That's why Faith, a credit Clients use money for everything the maximum $500. The fee, union that serves anyone who from car repairs to college, wedsaid Wright Patt CEO Doug lives, works or worships in dings to business startups. Fecher, was developed to offset Cleveland, designed grace loans. The association grants emerthe cost of loans that go bad. They have a fee of $25 for a $500 gency loans of up to $500 that The annual interest rate one-month loan an APR of 17 can be made relatively quickly, not counting the one-time an- percent.
but it also makes loans of up to nual fee is 18 percent. Faith requires borrowers to $7,500. As with the grace loans of set aside a little money in a Checks are issued directly to Cleveland's Faith Community credit union savings account creditors, and borrowers are Credit Union, paying off (called a share account). limited to three free loans in a StretchPay loan will also help The reason is simple: The dif- lifetime. They must demonstrate build the borrower's credit rat- ference between folks who take need, show the ability to repay ing.
out payday loans and those who the loan and have a suitable coIronically, according to don't might just be a savings ac- signer for each $1,750 borrowed. Fecher, the original aim of the count. Some clients have used the program to help the military The Consumer Federation of money to pay off payday loan may be at risk. America says that people who balances or other high-cost debt, Last year, Congress passed a don't have enough cash socked but Rabbi Susan Stone, the execlaw to prohibit payday lenders away to pay for an unexpected utive director, said she encourfrom charging members of the car repair or other emergency ages clients to educate themmilitary APRs higher than 36 are more likely to turn to high- selves about budgeting: "If percent. cost payday loans than people someone came back to us a secIf the government includes who save.
ond time for payday loans, I fees in the APR when it writes Haynes hopes the savings ac- don't think we would do it." the rules, the law could pro- counts will help wean customers hibit StretchPay from being of- off payday loans. Additionally, Sheryl Harris fered to military members in the credit union offers free budits current form. (Traditional get and credit advice, as many i payday loans charge a fee with community credit unions do. each loan, unlike the once-a- On-time payments for grace year StretchPay system.) loans are reported to credit bureaus, so consumers who pay off Sheryl Harris their loans are also building healthier credit. That could qualify them to take out traditional small loans, which are even less expensive and allow a longer repayment time.
Sheryl Harris Payday alternatives In Ohio, payday lenders can charge $15 in interest and fees on every $100 borrowed. So two weeks after taking out a $250 payday loan, a customer would have to pay $287.50 which calculates to a 390 percent annual interest rate (APR). Here are some less expensive alternatives. StretchPay Grace Loans $250 or $500 loans $500 loans Available at: Three local credit unions Van- Available at: Faith Community Credit Union, tage Financial, Brook Park; Community United, Cleveland Strongsville; Kent, Kent. Fee: $25 (per loan) Fee: $35 (one-time) for unlimited number of Interest: None $250 loans in one-year period; $70 (one-time) APR: 17 percent for unlimited number of $500 loans in one-year Repayment time: 30 days period Requirements Interest: 18 percent a Credit union member APR: Varies depending on number of loans taken Save $10 per month in credit union account out.
If fees and interest are combined, APR for Contact: www.faithcommcu.org or one $250 loan calculates to 167.6 percent. Bor- 216-271-7111 rowers who take out 12 loans in a year would Interest -free loans pay an APR of 31.8 percent. $500 (emergency) to $7,500 loans Repayment time: 30 days Available at: Hebrew Free Loan Association, Beachwood Requirements Fee: None Credit union member for 60 days Interest: None No delinquent credit union accounts APR: 0 Loan paid down to zero before new loan is Requirements taken out a Show need Contact: www.vantagefcu.com, Show ability to repay loan 216-367-8000; www.cu-cu.org, Co-signer for every $1,750 borrowed 440-572-9950; www.kentcu.com, Three-loan limit in a lifetime 330-678-2274 Contact: www.hflaclev.org or 216-378-9042 APR is a lot like the grocery store's price per pound: It lets a consumer compare the real cost of a product, regardless of the size of the package, or in this case the size of the loan. An APR is the cost of credit on a yearly basis. It's so important to a consumer trying to compare costs that federal law requires lenders not just payday lenders, but credit card issuers.
as well to show not just the dollar amount of interest but the annual percentage rate as well. Small loans in Ohio are usually capped at 28 percent, but the legislature exempted payday lenders from that cap. Payday loan stores in Ohio typically charge $15 in fees and interest for every $100 borrowed. A consumer who takes out a $250 payday loan today would give the lender a check to hold as security. In two weeks, he would have to pay back $287.50 an APR of 390 percent.
But a consumer who doesn't have $250 extra this week isn't likely to have a spare $287.50 two weeks later especially because he still has to pay regular bills and expenses, said Uriah King of the Center for Responsible Lending. He is likely to have prohibits payday lenders from rolling over loans more than once, many of her clients simply go to another lender to pay off the first loan. Once a payday loan is paid, the consumer can borrow again the next day. Even though loans are constantly being paid, the consumer's debt is growing larger. "The typical person who comes to us wants to pay it off," Robie said.
"They just don't know how." Increased scrutiny Congress is giving renewed scrutiny to payday lenders. Last week, Faith Community Credit Union's Rita Haynes and David Rothstein of Policy Matters Ohio testified about payday lending in Ohio before a House subcommittee. Consumer groups, spurred by the success of an interest-rate cap on payday loans to military members, are agitating for the same thing to apply to all borrowers. In response, the Consumer Financial Services Association, which represents about a third of the payday stores in Ohio, launched a $10 million national marketing campaign urging consumers to use payday loans prudently. The piece that may be of most use to borrowers is a program that would give struggling consumers a once-a-year break, allowing them a longer period to repay loans.
CFSA spokeswoman Lyndsey Medsker said the particulars may A The Plain Dealer I Breaking news: -L sometimes willing to let struggling borrowers make installment payments over time, Robie said. It's worth asking. Why don't more institutions offer alternatives to payday loans? "Payday lenders aren't regulated like we are," said Haynes, chief executive of Faith Community Credit Union. Credit unions and banks, she said, have to answer to regulators for loans that go bad, and, in Faith's experience, small loans are time-consuming and not very profitable. The upside that some financial institutions don't see, she said, is customers come back: "They start to other products we have eventually, we're able to transfer them into positive members and able to give them a or checking account." Haynes said her grace loans have a better than 98 percent repayment rate: "They appreciate our service so much, they will pay us back.
Even if they lose their job, they come back and pay us." If you have a consumer problem you haven't been able to resolve on your own, e-mail plaind.com; write to Plain Dealing in care of The Plain Dealer, 1801 Superior Cleveland, OH or call the Plain Dealing helpline at 216-999-6344. By submitting a question to Plain Dealing, you are agreeing to have it published in the paper. Because ofthe volume ofcalls, Plain Deal- news: cleveland.com Sunday, March 25,2007 A consumer's guide to residential natural gas rates Here are the latest natural gas rates compiled by the Ohio Consumers' Counsel from independent marketing companies. An expanded chart is on the agency's Web site, www.pickocc.org. Prices are subject to change and should be confirmed with the supplier.
Consumers should also ask about cancellation fees, which can be prohibitive. In addition to the rates listed, there are sales taxes, which vary by county, and your utility's gas transportation charge. Consumers who do not buy from independent companies pay their utility's monthly variable gas cost recovery rate (GCR) or Standard Service Offer (SSO), plus a state excise tax of 4.89 percent and the utility gas transportation charge. Gas cost recovery, standard service offer and transportation rates for March Dominion East Ohio Gas of $8.987 per 1,000 cubic feet (Mcf) of gas through April 16. Total Dominion transportation rate: $2.46 Mcf.
Columbia Gas of Ohio: $1.01 per 100 cubic feet (ccf) of gas through March 29; $0.885 March 30 through April 30. Total Columbia, transportation rate: $0.21 cf for traditjonal utility customers; $0.29 ccf for Choice customers for the first 12 months, $0.21 ccf after 12 months. Dominion East Ohio Columbia Gas Supplier Contact information service areas service areas Commerce Energy 1-877-226-5371 $10.90 Mcf $1.1065 ccf (formerly ACN Energy) www.commerceenergy.com 1-year fixed 1-year fixed $11.20 Mcf $1.1147 ccf 2-year fixed 2-year fixed $10.19 Mcf $1.098 ccf Monthly variable Monthly variable Direct Energy 1-888-566-9988 $9.29 Mcf $0.98 ccf www.directenergy.com 1-year fixed 1-year fixed 2 $10.19 Mcf $1.069 ccf 5 A 1-year fixed 1-year fixed Dominion East Ohio Energy 1-800-990-4090 (Dominion) $10.49 Mcf $1.097 ccf 1-866-645-9804 (Columbia) Fixed through Oct. '07 Fixed through Nov. '07 www.dom.com $1.033 ccf Monthly variable Energy Cooperative of Ohio 1-877-439-3706 $9.65 Mcf $0.99 ccf (through SOAR Energy) www.soarenergy.org Monthly variable Monthly variable Integrys Energy Services 1-888-367-4493 $9.167 Mcf $0.944 ccf www.integrysenergy.com Variable capped rate, Variable capped rate, through March '03 3,4, 8 through March '08 6,7 $9.875 Mcf $1.2526 ccf Fixed April '07- Winter rate March '08 4, 8 through April '077 $8.995 Mcf $0.9991 ccf Quarterly variable, through Quarterly variable rate April- June '07 4, 8, 1 10 through April-June '07 7 $8.867 Mcf $0.944 ccf Monthly variable Monthly variable 1-year 4, 5, 8 1-year 7 $11.70 Mcf $1.067 ccf Variable summer, 1-year fixed fixed winter rate May '07 April '08 9 through May '07 4, 8 ccf Fixed fixed winter rate through Oct.
'07 7 Interstate Gas Supply 1-800-280-4474 $9.99 Mcf $0.979 ccf www.igsenergy.com Fixed through Aug. '07 Fixed through July '07 MXenergy 1-877-557-4355 $10.99 Mcf $1.099 ccf www.mxenergy.com 1-year fixed 1-year fixed $9.79 Mcf $0.975 ccf 4 months fixed 10 4 months fixed 10 Mcf Mcf 5 months fixed 11 5 months fixed 11 $9.99 Mcf $1.049 ccf Monthly variable Monthly variable People's Energy 1-866-273-5469 $11.00 Mcf No Columbia offer www.peoplesenergy.net 1-year fixed 12 available. Vectren Source 1-800-516-6753 (Dominion) $10.99 Mcf $1.185 ccf 47 1-800-516-6740 (Columbia) 1-year fixed 1-year fixed www.vectrensource.com $9.369 Mcf $1.05 ccf Monthly variable Monthly variable 1 Direct Energy: Introductory offer for two months, then increases 7 Integrys Energy Services: Offer not available in all area; to $10.39 Mcf for remainder of contract. restrictions and other details apply. 2 Direct Energy: Introductory offer for two months, then increases 8 Integrys Energy Services: Council of Smaller Enterprises (COSE) to $1.089 cof for remainder of contract.
members and member employees are eligible 3 Integrys Energy Services: Not to exceed $12.00 Mcf plus sales tax. for discounted rates. 4 Integrys Energy Services: Restrictions and other details apply. 9 Integrys Energy Services: Enroll by April 13 for this offer. 5 Integrys Energy Services: Price will be the NYMEX close price plus 10 MXenergy: Risk free plan, call for details.
$1.32 Mcf. Price to be determined monthly prior to billing month. 11 MXenergy: Guaranteed rate through August. 6 Integrys Energy Services: Not to exceed $1.30 ccf plus sales tax. 12 People's Energy: Offer good while supplies last.
SOURCE: Office of the Ohio Consumers' Counsel, 1-877-742-5622 THE PLAIN DEALE: UNIONS FROM GI Focus changing to attract members Local 507 just completed a contract with American Red Cross employees in northern Ohio. "We're all forced to look into new areas," he said. This may be just the beginning of the reshaping of unions at a time when factory jobs are being sent overseas or lost to technological changes. "As we lose manufacturing jobs, we're going to move more into nontraditional occupations," said' United Auto Workers Ohio President Lloyd Mahaffey. "The issues aren't different whether it's a health care facility or a factory.
It's about having a voice." In the last year, the UAW signed up 2,500 new members in Ohio at auto parts plants, county jails and a juvenile courthouse. The national union last year voted to move $60 million from its strike fund into recruiting new members. "We had a good year," Mahaffey said. "But it wouldn't be fair to say we're replacing everyone we lose." Job losses at the Big Three automakers and at parts makers knocked down UAW membership to below 600,000 members in 2005, from a high of 1.5 million in 1979. Union membership has declined steadily nationwide over the last 50 years.
Only about one in 10 workers belongs to a union compared with a third of all workers in the 1950s. "The question is, have unions fallen so far and so fast that they can't get up?" said Gary Chaison, a labor specialist at Clark University in Worcester, Mass. "I give them a 50-50 chance." State of the unions What labor unions are doing in changing economic times, a special report. 0). Saturday: While union membership is down to 12 percent of the U.S.
work force, union leaders are finding reason for optimism. Union families were once a tradition, but today more children of union members go into nonunion jobs. Today: Unions look to organize construction and service workers. Competition from foreign automakers hits Detroit and United Auto Workers. See G3 1 "They don't have to look overseas for fertile fields," he said.
"It's all around them. They just have to use their imagination." The Service Employees International Union has organized childcare providers who work at home in Illinois and janitors who clean office towers in Houston. The union has doubled in size in a little more than a decade, to 1.8 million members, and now is trying to unionize janitors in Indianapolis, Cincinnati and Columbus. "We need health care, we need better wages," Lauressie Tillman said at an organizing rally in Cincinnati in March. Tillman makes $6.85 an hour cleaning offices downtown to support her family of four.
She has diabetes and must pay for doctor visits. "I don't have money for my medicine," she said. Unions likely need at least 500,000 new members each year just to make up for their annual losses, he said. One challenge in organizing new members is that many workers don't value unions like they once did, forcing labor leaders to reintroduce and redefine themselves. They are pushing for more than better wages, telling workers that access to health care and the ability to join unions are civil rights not just bargaining chips.
And they are becoming less adversarial. "Workers are looking for an organization that solves problems, not one that creates them," said Andy Stern, president of the Service Employees union. Too many labor leaders are concerned only about negotiating contracts for their own members and aren't focused on solving problems facing all workers such as the lack of an adequate health care system, he said. "For way too long, we've tried to stay the same and, in some cases, stop change," Stern said. "That's a losing strategy." Unions also are trying to become a bigger part of their members' everyday lives.
That means bringing back labor-sponsored family events such as pumpkin patches and mother-daughter banquets. "It's an old idea regenerated," said Bill Lichtenwald, president of the Teamsters Local 20 in Toledo. Its membership has been cut in half since 1980 and now is down to 7,000. The union offers casino bus trips and ballroom dancing lessons at special rates. Teamsters also are going into schools to talk with students about what unions offer their members and how they have shaped the middle class.
"We're taking a lot of steps to re-educate," Lichtenwald said. "It used to be that labor unions were respected. That reputation went away." 4..
