Every penny of 55-year-old Sandra King's monthly disability check is spent before it even arrives. The former nursing home aide hasn't worked for six years since she had quadruple bypass surgery. She's trying to manage her money better. So she's written out how she spends her $868 a month income on one page of a hand-sized pamphlet she got free in the mail from a debt counseling agency.
Sandra King: Number one: my rent. My lights. I have a food stamp card for my groceries, if it weren't for that I'd be in a little pickle there but I manage.
She's got $35.77 set aside for her monthly medications. She's got $8 down for food for her meowing cat Shante. There's nothing left over. But still there's a line item missing from King's fill in the blank budget worksheet: the money she owes payday lenders. She borrowed from storefront lenders two years ago and hasn't been able to pay it back.
Sandra King: The amount I owe is $405 - I don't feel that I owe that because they tacked a ridiculously high interest rate on it.
But if you know anything about payday lenders, the interest rate is the whole point. Storefront lenders make small, short term loans. In 2006, King borrowed $150 to help her move to a new apartment. She wrote a postdated check for $172.50 to clear a few weeks later when her disability money came in. The check bounced and she didn't go back. The interest keeps accumulating at an annual percentage rate of 261%.
In Ohio, there are more payday lenders than the number of McDonald's, Wendy's and Burger King restaurants combined.
Darryl Dever: Its supply and demand and if consumers are accessing these stores, then its not too many. There's obviously a need for short term help.
Darryl Dever is an Ohio lobbyist for payday lenders. In 1993, Ohio legalized payday lending, setting interest rates at $15 for every $100 borrowed in a single pay period. This week, Medina's conservative Republican representative William Batchelder has invited colleagues to study the issue. Payday lending critics hope lawmakers will endorse interest rate caps of 36%. Lobbyist Dever says that would put payday lenders out of business.
Darryl Dever: And if you eliminate this business, you're driving people to the internet and to unregulated borrowing opportunities - back to the street - where it's more than $15 for $100.
Feeling the heat, the payday lending industry launched a $10 million "borrow responsibly" campaign earlier this year. But critics like Jeffrey Dillman at Cleveland's Housing Research and Advocacy Center call the PR effort a diversion tactic.
Jeffrey Dillman: Its sort of like selling a car without any brakes and then offering to fund drivers education. The problem is they've got a product that's hurting consumers.
Borrowers like Sandra King aren't paying much attention to the politicking. She's still mired in numbers, trying to find spare dollars in between the lines of her handwritten budget.
MS: How much could you pay off a month?
Sandra King: Maybe about $20 a month.
MS: But the interest is going to keep going.
Sandra King: Well, I'm going to see if I can make some kind of arrangement whereby they can stop the interest until I get caught up. I'm just working within my means here, gotta do where I gotta do.
Even future legislation wouldn't help King, but she may have a chance to dig her way out of debt. The payday lending industry's national PR blitz includes a new "extended payment option." At least once a year, participating stores would give customers more time to pay back a loan with no financial penalty. She says she's already asked once about setting up a payment plan, and was turned away. Now she's hoping that her store gets the press release. I'm Mhari Saito, 90.3.