Payday lenders, already forced to cap interest rates at 28 percent, would face tighter restrictions under legislation passed in the Ohio House on Wednesday.
Further regulation was needed to close loopholes payday lenders found after the state capped their interest rates in 2008, the bill’s supporters said. The lenders continued to gouge customers with fees for check-cashing and other services, proponents said.
“This is the crack-cocaine of the financial institutions,” said Rep. Dan Stewart, a Democrat from Columbus.
Lawmakers thought they reigned in payday lenders in 2008 when they capped interest rates on the short-term, low-dollar loans. But the lenders found other ways to make money.
Members of both parties agreed gaps in the law needed to be filled, but it took the House more than a year to do so. The bill faced opposition from Republicans who worried it would cost Ohio jobs and from some urban Democrats who said their constituents would have nowhere to get credit if payday lenders went out of business.
Rep. Sandra Williams, of Cleveland, was one of those Democrats. But on Wednesday, Williams voted in favor of the bill despite giving a floor speech moments earlier promoting the need for payday lenders in her community.
“Contrary to popular belief, everybody does not hate payday lending,” Williams said before the House voted. “Do you dry up credit for everybody? Or do you vote your conscience and not be afraid of what people are going to say about you in public?”
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Article courtesy cleveland.com
