The state used to be a lot more prohibitive when it came to the loaning industry, as many companies were acting closer to loan sharks rather than lenders. There was a period in Ohio where the overall interest rates were significantly increased throughout the board, and we are regretful to say we were one of the companies who decided to lend the same.
With so many businesses and personal customers applying for and begin accepted for loans that were far beyond reasonable, there was an increase in bankruptcy throughout the state. Despite what city or town, you lived in, there is a chance your neighbour took one of these loans and financially struggled because of it.
The practice had run rampant because the regulations didn’t exist before then, and once the state realised, they would need to begin regulating the lenders it ended up pushing too far. Loans were difficult to approve because the conditions for a successful applicant had become too stringent.
Effectively, us and fellow lenders had priced ourselves out of business. Many lenders had become increasingly aggressive in following late repayments, and existing customers from before the regulations were the only customers that many lenders had left. The desperation for customers paying on time had become surreal.
There were a few lenders that had decided to go elsewhere. It became so difficult for some lenders to continue business that they decided moving to another state was the only real option left. Many could not see a future where the regulations would be pulled back, and it became smarter to just begin again elsewhere.
Luckily, things are not as bad as they were for a while, and responsible lenders are now able to thrive and continue business. But it is important to make sure that as an industry, we do not allow ourselves to fall to that same level.