Today’s Dispatch shows that idiots from both parties are teaming up to regulate pay day lenders:

Gov. Ted Strickland said yesterday that he strongly supports a 36 percent interest-rate cap on payday lenders. Meanwhile, House Republicans have drafted a compromise bill that does not lower the interest rate but, they say, should free customers from the payday debt trap.

Although the twin developments are incompatible, they both represent blows to the burgeoning payday-loan industry in Ohio.

Payday-lending supporters now feel like they’re being pummeled from all sides. As the governor backs an interest rate that the industry says would quickly put Ohio’s 1,600 stores out of business, House Republicans are crafting a bill that a payday lobbyist says could kill the lenders slowly.

Strickland called the annual interest-rate cap of 36 percent a “critical feature of any set of proposals aimed at breaking the cycle of debt.”

“As I travel throughout the state and meet with Ohioans, I am struck by the significant problems that have resulted because of the unfortunate practices of some payday lenders in Ohio,” Strickland wrote in a letter to the Ohio Coalition for Responsible Lending.

Meanwhile, Rep. Christopher R. Widener, chairman of the House Financial Institutions Committee, also issued a warning to payday lenders.

“I told the industry that their product is going to change drastically if they want to keep doing business in Ohio,” said the Springfield Republican, who took the lead in writing a revamped bill unveiled this week.

Three payday-lending bills have been debated in Widener’s committee for months. He took some parts of those bills and added new wording that doesn’t change the current annual interest rate of 391 percent ($15 per $100 borrowed on a two-week loan), but lets customers extend any two-week loan by at least 60 days.

391% is VERY misleading, as pay-day loans are supposed to be PAY-DAY LOANS… Which means an advance on a paycheck from an employer in two weeks. The actual interest rate is 15% (Get out your calculator: $15 is 15% of $100), which is quite reasonable, especially when you consider the risk these companies are taking by giving money to people who need short term loans.

So what will the legislature and Governor do by passing this law? They will decrease the availability of payday loans, which will put more hardships on working class people who might have an emergency need for a short term loan. So this will encourage more use of credit-cards and possibility bouncing checks, both options include hefty late-fees and serious fines.

This is just another example of the growth of the nanny state. The legislature needs to keep it’s grubby hands off of the payday lending industry and stop making more decisions for consumers. People, and not government, should be trusted to know what each person’s financial situation is and people who take out payday loans clearly know they are only for short term emergencies and understand the cost of delaying payment.

And if this law really puts 1,600 stores out of business, then this is one more example of Ohio’s government making Ohio’s business climate more unhealthy than it already is. Maybe if they would stop passing so many stupid laws, then more Ohioans could have better paying jobs and avoid short term emergency loans in the first place?