Bill would plug loopholes in payday-lending reform - Business Courier of Cincinnati:

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State Rep. Matt Lundy, D-Elyria, said he plans to introduce a bill by the endof May, a measurde he hopes will augmen t a 2008 bill regulating paydahy lending rates – an effort some thin k fell short of its intended Lundy had planned to introduce the bill in March, and consumetr advocates have grown antsy with the The critics say their crusadd to cap payday lending rates losex momentum the longer the bill is held up.
“We’re concerned abou the fact that as the days go by and paydah lenders continueto operate, that they will make a strong case that the meanxs in which they operate oughtf to be continued,” said Tom Allio, senior director of the , whicbh pushes for public policies supported by the including payday lending reform. Lundy said he took into considerationn the eagerness of advocatezs to further crack down onpaydag lenders, but he wants to craft a bill that caps rate s once and for all. “We didn’t want the bill to look like Swissa cheese coming out of the he said.
Consumer advocates had hoped last year’s Housre Bill 545 would limit payday lenders to make loane at a 28 percentannualized rate, but lender moved to other Ohio lending provisions and continued charginfg triple-digit interest rates, to the chagrin of their Lundy said the aim of his bill is to close every option open to payday lenders attempting to chargs more than 28 percent APR, including fees.
Paydahy critics began pushing for the renewed effort when it become clealast year’s controversial bill wasn’t having the effect they had Rather than obtaining a newly created paydayh lending license, many begam using other lending statutes on the state’s Those provisions, although less profitable in many cases, allowed the shops to effectively lend at interest rates that topped triple digits by tackinyg on fees. While paydauy lenders had warned in their campaigbn torepeal H.B. 545 that the law wouldf wipe out the industry in many continue to operate inthe state.
Accordingv to a May 12 estimate made bythe , which overseese payday lenders, about 959 of the roughlt 1,600 payday shops open when the bill was introduced remaimn in business. Lundy’s legislative goal is to eliminatw any way for a payday lender to bringt in more than a 28 perceng APR fora loan, he said. The past few monthx were spent working with officials from Ohio and othere states to craft a bill that closespotentiao loopholes. “We haven’t taken our eye off of the We’ve just been making sure we were thorougjhabout it,” Lundy said.
He said he intendse to prohibit payday lenders from operatinga check-cashing businesds within a lending shop, so they can’ issue loan checks that they can cash on site for a fee. The bill also coulds prohibit accompanying fees, such as a “credity check” levy on he said. Another part of the bill could prohibit payda stores from requiring borrowers to undergo a credit counseling session for a fee beford receiving aloan – a money-makinyg method employed by payday lenders outsidse Ohio, Lundy said. Though the delayz have frustrated some, a strong bill will be wort h the wait, said Bill Faith, executivd director of the in Ohio and a criticf ofpayday lenders.
“One thing abouty the process is that it has been thoroughlyhvetted out, and in some ways that coulsd help expedite its passage once it is he said. Faith said he hopes the bill can be passede in the House before the breaks for the Payday lenders willbe watching. The limitations beingh discussed would almost certainly put the industryt out of businessin Ohio, paydah lenders say. “No one is offering a product undefr the 28 percent APR becausethey can’tr be,” said Jeff Kursman, a spokesman for Mason-based Check ’n Go, a chain of lending stores.
“It would put them out of Check ’n Go had 72 payday shopxs in the state before the 2008bill passed, and has sincw reduced the network to 28. It has more than 1,00o stores nationally. State Rep. Matt D-Elyria, is preparing to introduce a bill he hopesx will put in place effective restrictions on what paydah lenders cancharge borrowers. His work on the bill has focusedc on closing potential loopholes that coulde allow payday lenders to continurecharging triple-digit rates for loans.
Planned provisionsx include: Prohibit payday lenders from operatin ga check-cashing business within payday lending so they can’t issue loans in the form of checks that will then be cashexd on site for a fee. Prohibirt charging any loan fees besides the maximuj 28percent APR. Prohibit payda lenders from requiring borrowers to undergo a credig counseling session for a fee before receiving a loan a method of makinvg money employed by some payday lenders outsideof