After a year of evading promised reforms of an out-of-control payday lending industry, a divided House Republican Caucus pushed through House Bill (HB) 123 amid an ongoing FBI investigation into potential Republican pay-to-play tactics on their once-lauded reform legislation.
Former House Speaker Cliff Rosenberger resigned abruptly after announcing he had hired a criminal defense attorney to help manage an ongoing FBI inquiry into his official activity. Since then, reports have pointed to Rosenberger’s lavish international trips funded by payday lenders as a reason for Republicans stalling reform and the consequent FBI investigation.
“It seems consumers and families have continued to be financially handcuffed by out of control payday lenders because Republicans made promises to kill reform in exchange for favors from the industry,” said state Rep. Kathleen Clyde (D-Kent). “Reform is long overdue, but it’s troubling that it took an FBI investigation to push this bill to the floor while Ohio consumers were forced to pay the price for Republican inaction.”
The reform bill proposes a cap of 5 percent of consumers’ monthly income on payday loans while limiting annual interest rates to 28 percent and capping additional fees. Ohio consumers face some of the most egregious payday loan rates and terms in the nation, with some borrowers paying more than 500 percent in interest and fees on two-week loans after lenders exploited loopholes in a 2008 reform law.
“Pushing through payday lending reforms at the last minute under a cloud of suspicion won’t make an FBI investigation go away, and it won’t bring back the paychecks of families and consumers,” said House Assistant Minority Leader Rep. Nick Celebrezze (D-Parma)..
Reports indicate that some House Republicans, bitterly divided on the issue, have resorted to a fake letter writing campaign at the behest of payday lending lobbyists in order to muddy the waters on the now fast-tracked consumer protection bill.
“The delay of this important consumer protection legislation is further evidence that state government is not looking out for Ohio working families,” said state Rep. Kent Smith (D-Euclid). “While I was happy to support HB 123, I can’t help but wonder what ulterior motives slowed these overdue reforms.”
After passing the House, the bill moves to the Senate for consideration.