OHIO LEGISLATOR ANNOUNCES PLAN TO INTRODUCE NEW PAY DAY LOAN BILL
Ohio State Representative Matt Lundy announced at a press conference on June 2, 2009 that he will introduce a bill on June 3, 2009 to close “loopholes” in Ohio’s “pay day loan” law. Referring to the new bill as “The Issue 5 Pay Day Lending Enforcement Act,” Rep. Lundy said the new law would cap the interest rate on loans of $1,000 or less for a term of 90 days or less at 28%. The bill also will prohibit any other fees on loans of $1,000 or less for a term of 90 days or less, including check cashing fees.
Rep. Lundy indicted that the bill was drafted to address current practices and practices seen in other states. According to Rep. Lundy, the bill will prevent lenders from pushing loans through brokers or CSOs, increase the enforcement powers of the Ohio Attorney General in regard to such loans and make loans of $1,000 or less for a term of 90 days or less subject to the Ohio Consumer Sales Practices Act.
The Ohio General Assembly passed Ohio Sub. H.B. No. 545 capping the APR on “pay day loans” at 28% in May of 2008. Certain provisions of Ohio Sub. H.B. No. 545 were the subject of a referendum, Ohio Issue 5 in the November 2008 election, in which voters voted against repeal of certain provisions of Ohio Sub. H.B. No. 545. At the press conference there were questions regarding the Ohio General Assembly passing a bill with “loopholes.”
Please contact us with any questions or if you would like a copy of the bill once it is introduced.
- Elizabeth Anstaett and Darrell Dreher