| By Lorraine Bieber - May 14th, 2008 at 3:30 pm EDT |
Categories: Consumer and Worker Protection, Economic Fairness and Security, Social Justice, News
Congratulations go out to members of the Progress Ohio Community and to the Ohio Coalition for Responsible Lending, who for the past year have been writing letters, signing petitions, testifying in the Ohio legislature, and making calls to elected officials in an effort to pass this legislation.
The bill, already approved by the house, puts a 28% rate cap on payday loans. It passed the Senate today with a vote of 29-4. The four no votes were Senators Buehrer, Mumper, Seitz and Schuler.
The Ohio legislature has been under heavy lobbying from the Payday Loan Industry, which has given its employees paid time off to come to Columbus for rallies at the State House.
From NBC-4:
Finance Chairman Sen. John Carey said the industry presented them with no other alternatives. Testimony on both sides was compelling, he said, but the welfare of Ohio's citizens eventually won.
"I think it was a flawed business model to begin with," Carey said. "We also heard from people who got into trouble. They used it and found they couldn't get out. They talked about the collection practices: People calling their friends and relatives trying to collect. Not really understanding what they're doing when they walk through that payday lending door."
Tom Allio, chair of the Ohio Coalition for Responsible Lending, sympathizes with workers who might lose their job but said it’s the lenders who are to blame for keeping people in a cycle of debt. “Payday loans are toxic,” Allio said. “They’re a flawed product. They put stresses on individuals, families and communities as well as the economic health of Ohio.”
Because there were some minor changes, House concurrence is expected next week. The bill will then go to the Governor for signing.
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Let’s be clear: A 28% annual rate cap is a ban on payday lending. A 28% APR cap allows a fee of less than 8 cents a day, which is not enough to pay salaries and benefits, rent or other overhead costs. Independent research has shown that without the option of payday lending, consumers bounced more checks, filed for more bankruptcies, did not pay bills and even chose such dangerous options such as forgoing prescription medications.