Ohio Passes Legislation That Will Punch Payday Lending Industry In The Face

Ohio’s House of Representatives passed the ominous face-punching legislation that will, if passed by the Senate, become the strictest payday lending regulation around.

After months of debate over bills that were backed by either the payday industry or consumer advocates, the proposal that passed the House 69-26 is a victory for the Ohio Coalition for Responsible Lending, which pushed to lower the current 391-percent annual interest rate on two-week payday loans.

The group got a bill even more restrictive than it requested. It sought a maximum 36 percent interest rate and got 28 percent. The coalition wanted to limit borrowers to six loans per year, but the bill imposes an even tougher four-loan limit.

“It sends a really strong bipartisan message that we want to first be about protecting consumers in Ohio,” said Bill Faith, a leader of the coalition.

Meanwhile, the payday industry, which was talking optimistically a few weeks ago that lawmakers were not supportive of an interest rate cap, got steamrolled.

“What have you accomplished here? You’ve eliminated a product that people need, and you’ve eliminated jobs,” Daryl K. Dever, chief lobbyist for the payday industry in Ohio, told the House Financial Institutions Committee before it OK’d the measure this morning.

Even people who are married to lobbyists working for payday lenders voted for the bill, says the Dispatch:

House Minority Leader Joyce Beatty, a Columbus Democrat who in the past questioned the need for an interest-rate cap and whose husband is a lobbyist for a payday lender, voted for the bill.

How about that. Now the bill goes to the Senate, but a tipster tells us that it is popular with the Senate President and could pass as early as May 6.

Payday-lending bill passes Ohio House [Dispatch]
(Photo: taberandrew )