Program Directory

City Club of Cleveland - Payday Mayday: Protecting Ohio Consumers

City Club of Cleveland

According to a recent report by the Housing Research & Advocacy Center and Policy Matters Ohio, the number of payday lending stores has significantly increased in the State of Ohio. These stores have grown from 107 locations in 1996 to 1,638 locations in 2007. They charge the typical borrower 391% interest on a two week, $300 loan.

For the past several months, the regulation of payday lending has been hotly contested at the State House. Consumer advocates, such as the 239-member Ohio Coalition for Responsible Lending, contend that payday lenders exploit borrowers, trap them into a cycle of debt, and are a modern day form of usury. The Payday Lending industry contends that they provide short term loans to those who have emergency needs and that their product is in high demand.

Ohio State Representative William Batchelder (R-69) is the chief sponsor of H.B. 333 that, among other things, caps interest rates for payday loans at 36% APR. Ohio State Senator Ray Miller (D-15) is the Senate Minority Leader and has agreed to co-sponsor a companion bill to H.B. 333 in the Senate. Both will speak on their efforts to change Ohio law to protect consumers from payday lenders.

March 28, 2008