Major payday lending bill passes, heads to Kasich’s desk

A bill reining in COLUMBUS — payday lending in Ohio cleared its last legislative hurdle Tuesday and is heading to Gov. John Kasich’s desk.

The Ohio House, in a 61 to 24 vote, followed the recommendations of consumer advocates and House Bill 123’s sponsors and voted to agree with changes to the measure made by the Senate.

Kasich, a Republican like the majority in the General Assembly, hasn’t publicly said what he plans to do with the bill. A Kasich spokesman said it will be reviewed when it gets to the office.

H.B. 123 will get to his desk in the next several days, at which point he has 10 days to sign or veto it — or allow it to become law without his signature.

The payday loan industry opposes the legislation. It has

said many businesses will go under because they won’t be able to operate under the parameters in H.B. 123. They said they assume risk by loaning to people with bad credit.

The bill didn’t just sail through Tuesday, however. The floor debate started with Miamisburg Republican Rep. Niraj Antani objecting to the House even voting on the measure. The House had to vote on his objection, though only 15 members agreed with him.

“This day’s been a long time coming, for the last 10 years we’ve needed to address this issue,” said Rep. Kyle Koehler, a Springfield Republican sponsor of the bill, when asking his colleagues to vote for the Senate’s changes.

“I’ve seen a lot of bills come back from the Senate, and sometimes we all scratch our heads, as to how did they put that in,” Rep. Mark Ashford, a Toledo Democrat and the bill’s other primary sponsor. “But this is one of the few times I can say that the Senate made this bill a lot bigger, a lot stronger, and put some protections in for the borrowers in the state of Ohio.”

Opponents said the bill was overkill. They argued for their colleagues to turn down the Senate’s changes, which would set in motion a process that requires a committee of House and Senate members to negotiate on the bill.

Rep. Bill Seitz, a Cincinnati Republican, said he thought it’s unfair to prohibit payday stores from being able to charge interest and fees for the window of three business days that borrowers have to return the money without penalty if they don’t want the loan.

“Now certainly we should have done something about 591 percent, nobody denies

‘I’ve seen a lot of bills come back from the Senate, and sometimes we all scratch our heads, as to how did they put that in.’

Rep. Kyle Koehler R-Springfield

that,” he said. “But to go completely the other direction and require in the business of lending money to make interest-free, fee-free loans seems to me very unfair, if not an outright unconstitutional, regulatory infringement.”

Bill passed during an election year

The General Assembly’s adoption of H.B. 123 comes 16 months after it was introduced. The bill stagnated in a committee for more than a year, then was briskly passed. Its passage comes a few months before the Nov. 6 General Election, when many Republican lawmakers are up for re-election.

The bill initially appeared not to be moving out of committee from March 2017 through this spring. Then Cliff Rosenberger resigned as House speaker in April amid an FBI probe into his travels with payday lenders. Rosenberger maintains he’s done nothing wrong.

Shortly after Rosenberger’s departure, H.B. 123 flew out of committee and the House floor without any amendments, unusual for such a controversial measure.

In the Senate, it was amended to be friendlier to payday lenders, although the industry still opposes the bill.

Research by the Pew Charitable Trusts finds the average payday lending APR in Ohio is 591 percent, the nation’s highest. The industry disputes the figure.