Payday Loan Reform Bill Set to Move to Ohio Senate

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The latest version asks:

• limit loans to a maximum term of 12 months and a principal of $ 1,000;

• limit interest and fees on a loan to a maximum of 60% of the capital;

• fill a gap used by lenders in the past;

• limit loan repayment schedules of more than 90 days to 7% of the borrower’s monthly net income.

It would also ban harassing phone calls, limit on-site check-cashing fees to $ 10, and clarify that a third party can repay the loan. Borrowers could also cancel the loan within 72 hours, compared to 24 hours currently.

Related: Lots of money and political muscle flaunt in payday loan dispute

The fight for Bill 123 has been fierce and has been going on for 10 years. In 2008, lawmakers approved strict limits on the amount that payday lenders could charge consumers. Ohio voters confirmed the limits in a referendum vote.

Immediately, the lenders began issuing loans under different sections of Ohio law. Pew’s research shows Ohio customers pay annual percentage rates of nearly 600%, the highest in the country.

State officials Kyle Koehler, R-Springfield and Michael Ashford, D-Toledo, introduced HB123 in March 2017, but the bill sat dormant for months. Ohioans for Payday Loan Reform, a coalition of more than 50 civic, business and religious leaders, has launched a campaign to put the issue on the ballot statewide.

Related: Payday lender made 3 international trips with former Ohio House speaker

Behind the scenes, FBI agents began investigating the international trips of Ohio House President Cliff Rosenberger, which were underwritten in part by payday loan companies. The Clarksville Republican resigned on April 10 after telling the newspaper he had hired a criminal defense lawyer to respond to FBI inquiries.

It took almost two months for House Republicans to choose a new speaker, delaying action on payday loan reforms. The bill cleared the House on a 71-17 vote the day after President Ryan Smith, R-Bidwell, took office. The house is not expected to return to Columbus until September.

As the FBI raided Rosenberger’s home and storage unit in May, the former speaker maintains all of his actions were legal and ethical.

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