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Payday Lending Reforms Approved By Ohio House Committee

payday lending sign
Tony Webster

A bill to crack down on payday lending passed an Ohio House committee without any changes, a week after the House Speaker resigned and a vote on the bill was halted.

The committee hearing room was packed on Wednesday with consumer advocates, payday lending representatives and interested onlookers, and also with questions and tension. 

Ted Saunders, CEO of suburban Columbus-based CheckSmart and head of the Ohio Consumer Lenders Association, addressed the tension right away.

“My company nor the trade association funded, attended, coordinated or endorsed any of the trips surrounding the scandal that resulted in the resignation of the Speaker and has tangentially touched our industry,” Saunders said.

Just a week ago, a vote on a compromise on the bill had been stopped by some members of this same committee, which met just hours after House Speaker Cliff Rosenberger (R-Clarksville) resigned. Sources say the FBI is asking about his international travel alongside title lending lobbyists.

But this time, the bill passed in its original form—though Rep. Bill Seitz (R-Cincinnati) proposed some changes, which were rejected by fellow Cincinnati Republican Lou Blessing, the committee chair.

“After having discussed this bill with the sponsors, they both felt that they’d prefer to have this bill passed out cleanly with no amendments,” Blessing said.

All committee members but Seitz voted to pass the bill, which would impose strict 28 percent interest rate caps and make changes to a payday lending crackdown law that voters upheld a decade ago.

And it’s a win for Rep. Kyle Koehler (R-Springfield), who proposed the bill a year ago along with Rep. Michael Ashford (D-Toledo).  

“The 2008 law was not workable. That’s why people went through the loophole,” Koehler said.

Though there had been some interest initially, the bill had stalled, and recently Speaker Pro Tem Kirk Schuring (R-Canton) announced he’d worked out a deal. Koehler said he’s not sure of the effect of the resignation of Rosenberger, but he’s happy with the committee’s nearly unanimous vote.

“I think it was a very crazy week last week," Koehler said. "I think, I don’t know what to think. But I do know that these folks stood up today, and I can’t be more proud of them. I really can’t."

Saunders, who opposed the bill, said that the Speaker scandal appears to have played a role.

“I have no judgment on that – I don’t know what did or didn’t happen. But I do know in American politics it’s a natural reaction whenever there’s an event to run away from it as fast as possible,” Saunders said. “I mean, that’s just human nature and I can’t fault people for that.”

Consumer advocates and faith groups, including Springfield pastor Carl Ruby, pushing the bill were pleased, after being very disappointed in the lack of action last week.

“I think having a week to think about it is helpful. I think they’ve had months to think about this, so this bill has been out there for a long time for them to think about. We just appreciate the fact that they’ve chosen to act on it,” Ruby said.

But the activists say they’re not taking any chances. Ruby says even though this bill is headed to the full House for a vote, they’re still continuing with a plan to put the proposal before voters on the ballot this fall.