OHIO HOUSE OF REPRESENTATIVES HEARS FURTHER TESTIMONY ON HOUSE BILL 486
On April 14, 2010 the Ohio House of Representatives Consumer Affairs and Economic Protection Committee held a second hearing on House Bill 486, a bill aimed at further restricting the small loan industry in Ohio. The Committee heard testimony from a John Edgar, a pastor at the United Methodist Church for All People, a borrower who had a negative experience with small loans, Rich Anderson, the general manager of VRS Hometown Loans, and Ted Saunders, CEO of Checksmart Financial Company.
John Edgar, a proponent of House Bill 486, discussed the bill from a faith perspective, stating that the loan products currently available were usurious. He testified that the religious community is opposed to such loans. One of the representatives questioned Mr. Edgar as to whether it was morally wrong for a gas station to charge $.30 more than a grocery store for a gallon of milk because people will pay for the convenience, and seemed to be making the point that there are many industries where people are required to pay a fee for a more convenient product or service.
The small loan borrower, a single parent of five children, gave brief testimony as to her negative experiences with such loans. She testified that she took out multiple loans from different small loan lenders, was using subsequent loans to pay off earlier loans, and is still paying off some of her loans.
Rich Anderson, an opponent of the bill, testified as to the detrimental effects that House Bill 545 had on his business and his employees, explaining that his company was forced to lay off most of its employees and close all but three of its twelve lending locations. He stressed that lenders were currently operating in full compliance with Ohio law, not through some so-called “loophole.” He also stated that his business operates with strict underwriting criteria, which prevents customers from borrowing more than they can afford.
Ted Saunders, an opponent of the bill, stressed that his industry is operating under current law and that the industry was specifically told by Ohio legislators to operate under these other statutes. He expressed how the passage of House Bill 545 resulted in a drastic decrease in revenue, and that House Bill 486 would likely result in the collapse of his business. He also answered, among other things, some tough questions regarding the industry’s motive for charging check cashing fees, stating that charging such fees was the only way to remain in business and that it was much more cost effective to keep less cash on location. He also explained that each customer is given a separate document, clearly explaining that the customer may cash the loan proceeds money order at any location he or she chooses.
We were informed by Matt Lundy’s office that no further hearings have currently been scheduled on the bill, but that they anticipated further hearings to be scheduled for next week. We will notify you if we receive information about any further scheduled hearings.
- Darrell Dreher and Elizabeth Anstaett