The march towards once again trying to reform Ohio’s payday lending industry has experienced several shifts in momentum. The latest comes from Statehouse Republicans.
The current bill would cap payday lending interest at 28 percent. Republican Rep. Kirk Schuring now recommends a move away from strict caps, saying they could lead to shutdowns of payday storefronts.
“If it is too restrictive then you might have someone who really needs emergency dollars won’t have access to it and if they don’t have access to it through a legal challenge then you might imagine what would happen if they have to look at alternative ways,” Schuring said.
Schuring is recommending a borrower can’t take a new loan out if they already have an active one, and the borrower would have a chance to pay the loan off interest free.
Payday lending reform advocates want to stick with the strict interest rate cap and say Schuring’s suggestions only water the bill down.
A citizen's group is also moving to put a reform measure before Ohio voters in November. It would cap all short-term loan rates at 28 percent. Ohio Attorney General Mike DeWine rejected the original proposed ballot language. Group leaders say they think they've fixed any issues with the ballot language and hope to move forward.
Ohioans overwhelmingly approved regulations for payday lenders in 2008, but the industry has been able to work around the regulations by rebranding themselves with titles including auto loan companies and credit service providers.