In a 21-9 vote this afternoon, the Ohio Senate passed a long-awaited payday loan reform bill which had repeatedly been delayed and threatened with debilitating amendments by vigorous lobbying from payday lenders.
Eventually, common sense prevailed. GOP Senate leaders may have wisely decided to no longer appear to bow down to lobbyists possibly involved in a federal inquiry into former Ohio House President Cliff Rosenberger, who resigned earlier this year.
The action of the Senate returns the measure initiated by the Chamber, Bill 123, to the House for its approval of the Senate amendments.
“This law has no loops or holes – it is waterproof,” sang Nate Coffman, leader of Ohioans for payday loan reform, in a report. “The Ohio legislature acted on behalf of its constituents who use these short-term loans. It was a choice between the people and the payday lenders, and the Senate chose wisely.”
The bill’s co-sponsor, Rep. Kyle Koehler, a Republican from Springfield, said he would ask the House to approve the Senate changes. The approval of the House would send the measure to Governor John Kasich. The House approved his version of the bill in a 71 to 17 vote on June 7.
The Senate’s nine “no” votes against the bill were cast by Republicans, including Sen. John Eklund, of Munson Township in Geauga County. But overall, Senate Republicans, led by President Larry Obhof, of Medina, deserve substantial credit for passing the bill, which provides borrowers with important protections while expanding, to some extent, profit margins allowed by the House bill. Senator Scott Oelslager, a Republican from Northern Township who chairs the Senate Finance Committee, helped push through the bill.
As amended by Senate Republicans, HB 123 “is a thoughtful, bipartisan and fair compromise that builds on the framework of the House bill,” said Nick Bourke, of the Pew consumer loan bill. Trusts. Trusts have been the main advocates of payday loan reform in Ohio.
Today’s Senate vote came after 16 months of toil at Statehouse to pass the bipartisan measure, sponsored by Koehler and Representative Michael Ashford, a Democrat from Toledo. Payday lenders have consistently opposed the bill. According to the Pew Charitable Trusts, based on a 2016 calculation, payday loans can cost Ohio borrowers annual percentage rates of up to 591%.
The legislative deadlock over HB 123 began to break in April, when a House committee approved Bill 9-1 a week after Rosenberger resigned. The FBI would investigate a Rosenberger getaway in London which included several payday loan lobbyists.
After the House finally chose Ryan Smith, a Republican from County Gallia, as its new president, he called the vote on HB 123.
The bill passed by the Ohio Senate guarantees that payday lenders will meet a 28% interest rate cap on loans up to $ 1,000 for 12 months, according to Laura Hancock of cleveland.com. Assuming the House approves the Senate amendments, the 10 percent of Ohioans who are supposed to use payday loans will save about $ 75 million a year, Hancock reported.
The Senate vote, like the House vote in June, was constructive and thoughtful, and benefits Ohioans statewide.
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