Poll shows most Ohioans want stricter payday lending regulations
Special to the Legal News
Published: April 20, 2017
A new poll shows most Ohioans share an overwhelmingly negative view of the payday loan industry and seek stricter regulation of exorbitant interest rates.
A group called Ohioans for Payday Loan Reform reported the findings late last week of a WPA Opinion Research Poll, commissioned The Pew Charitable Trusts.
The study found that although 62 percent of Ohioans polled had an unfavorable impression of payday lenders, nearly 80 percent responded that they favor more industry regulation in the Buckeye State, which has the highest borrowing rates in the nation for the short-term loans, the press release noted.
Nearly all respondents - 95 percent - said they believed the annual interest rate on Ohio payday loans should be capped at lower rates than those currently used.
The group used the following example:
A $300 payday loan costs a borrower $680 in fees over a five-month period, based upon the average annual percentage rate of 591 percent.
The group has lobbied for legislation that has been introduced in the Ohio House of Representatives, by Reps. Michael Ashford, D-Toledo, and Kyle Koehler, R-Springfield.
House Bill 123 calls for capping interest rates on payday loans at 28 percent plus monthly fees of 5 percent on the first $400 loaned, or a $20 maximum.
"This poll reinforces the strong belief that Ohioans who use these short term loan products are being harmed by an industry that charges borrowing costs that are obscenely high and unwarranted," Koehler said. "The Ohio Legislature needs to pass our recently introduced legislation that would result in much fairer costs for Ohioans who choose to use these products in the future."
Proponents of the measure believe the bill would fill loopholes they say the payday lending industry found to foil a 2008 law implementing a cap.
"In the job and family service system, we see firsthand the struggles of those trapped in the payday loan system," Ohio Job and Family Services Directors' Association Executive Director Joel Potts said. "For too long, we have turned our backs on the excessive fees being imposed on the working families who are struggling to make ends meet.
"We need reform ... ensuring credit continues to be available to those in need and leaving more money in the pockets of the wage earner so that they can afford to pay for other necessities.''
HB 123 awaits a hearing by members of the House Government Accountability and Oversight Committee.
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