Advocacy group wants to further restrict ‘payday lenders’


DARKE COUNTY — A consumer advocacy group is pushing legislation in the Ohio House that would further restrict so-called “payday lenders.”

Ohioans for Payday Loan Reform is calling for legislators to support House Bill 123, introduced by Rep. J. Kyle Koehler (R-Springfield) and Rep. Mike Ashford (D-Toledo).

“Payday loans in Ohio are the most expensive in the nation, with an average APR (Annual Percentage Rate) of 591 percent,” said Betsy O’Connell, speaking on behalf of the group.

One legislator the organization is targeting is Rep. Keith Faber (R-Celina) who sits on the Ohio House Government Accountability and Oversight Committee, where the bill currently sits.

“This region has payday loan storefronts and voted overwhelmingly in 2008 to support payday loan caps,” said O’Connell, referring to the 84th House District, represented by Faber, which includes Auglaize and Mercer Counties and parts of Darke and Shelby Counties.

Contacted by The Daily Advocate, Rep. Keith Faber said the bill will be given “due deference” if it comes up. However, Faber indicated he feels current legislation regarding payday lenders remains effective.

“Payday lenders are an issue that we resolved, took action on a couple of years ago,” he said. “It is my understanding that most of the payday lenders now are operating completely within that law and providing services that some people otherwise can’t get.”

“It is a very expensive product, but I think you need to talk to consumers that are utilizing that product, ask them what their cost and their circumstances are. We’ll give due deference and listen to what the testimony is,” he added.

However, O’Connell says that isn’t enough.

“Unfortunately, not one of the payday lenders operating in Ohio does so under the statute — the Short-Term Loan Act — passed by the legislature and approved by Ohioans in 2008,” she said. “Instead, the payday lenders are operating under the Small Loan Act, the Mortgage Loan Act and the Credit Services Organization Act. Those alternative statutes lack limits on the rates lenders can charge, which has resulted in Ohio having the highest payday loan rates in the nation. This was not the intent of legislators or voters.”

“Ohioans for Payday Loan Reforms is calling for changes in the Short-Term Loan Act so that making loans under it will be both profitable for lenders and more fair for borrowers. We want to make sure that people have access to credit, but that the credit is more fair and transparent,” she explained.

O’Connell says Ohio has the highest payday loan rates in the nation.

“A $300 loan over five months typically costs $680 in fees alone, which is far higher than neighboring states,” she said. “One in 10 Ohio adults has taken out a payday loan, among them urban and rural residents, veterans, single mothers and others. Many of the working people who take out such loans live paycheck to paycheck, further underscoring the need for reform.”

House Bill 123 would limit the duration of the loan and limit the amount of money loaned, with the loan not exceeding “5 percent of the borrower’s verified gross monthly income or 6 percent of the borrower’s verified net monthly income, whichever is greater.”

Further, the bill would allow borrowers to rescind or cancel the loan if done so by 5 p.m. of the business day immediately following the day the contract is received.

“Passing this legislation would benefit people in every community in Ohio,” said Pastor Carl Ruby, Director of The Ohio Coalition of Faith Leaders for Lending Reform. “We call upon our legislators to do the right thing and support much-needed reforms in payday lending in Ohio. This is not a partisan issue — this is an issue of fairness for Ohioans.”

Ruby’s organization is a member of the coalition, Ohioans for Payday Loan Reform, which includes community, faith, business, veteran and consumer groups throughout the state.

An advocacy group is asking legislators to support a bill in the Ohio General Assemby which would further restrict what it considers abuses by “payday lenders.” advocacy group is asking legislators to support a bill in the Ohio General Assemby which would further restrict what it considers abuses by “payday lenders.” Advocate graphic

By Erik Martin

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The writer may be reached at 937-569-4314. Join the conversation and get updates on Facebook search Darke County Sports or Advocate 360. For more features online go to

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