Time to listen to voters on payday lenders

Too bad Ohio voters don’t require members of the General Assembly to prove they can read. Because, evidently, some legislators can’t.

In 2016, 2.84 million Ohioans (51 percent those voting) voted for Republican Donald J. Trump for president, outvoting 2.4 million others, who preferred Hillary Clinton. Accordingly, Ohio cast its electoral votes for Trump. No one doubts that. Facts are facts.

In 2014, 1.9 million Ohioans voted to re-elect Republican Gov. John R. Kasich, outvoting 1 million others, who preferred Democrat Ed FitzGerald. Accordingly, Ohio gave John Kasich a second term. No one doubts that. Facts are facts.

In 2008, nearly 3.4 million Ohioans (more than 63 percent of those voting) set the maximum interest rate that payday lenders may charge Ohioans at 28 percent. No one doubt that. Facts are facts – except to some General Assembly members, who have yet to follow the voters’ orders.

Reason for that end-run: Payday lenders found a way to flout voters’ will. Bottom line: With Statehouse enablers, payday lenders have told more than six in 10 Ohio voters to pound salt. And the legislature has been OK with that because it either thinks voters of Ohio didn’t mean what they said in 2008 — or that what voters say at elections doesn’t mean anything. (If that’s the case, no General Assembly member is entitled to his or her seat.)

Result: Short-term lenders are soaking Ohio bor- rowers with the highest interest rates in the nation, according to the Pew Charitable Trusts. But relief may be in sight. Now pending in Ohio’s House is House Bill 123, introduced almost a year ago by Rep. Kyle Koehler, a Springfield Republican, and Mike Ashford, a Toledo Democrat.

Their bill would cap, at 28 percent per annum, the interest rate on payday loans; limit monthly fees to 5 percent; permit fees only on the first $400 borrowed (i.e., a maximum of $20 per month); and ban monthly payments greater than 5 percent of a borrower’s monthly gross income.

The bill is assigned to the Ohio House’s Governmental Accountability and Oversight Committee. In testimony prepared for a hearing last week, a payday lender, Cheney Pruett, said HB 123 “attempts to undermine the principle of free-market enterprise under the guise of consumer protection.”

That’d be news to Ohio’s earliest voters. In a 1979 Akron Law Review article, Roger A. Yurchuck and James M. Ball reported that, “the general assembly of the Northwest Territory, of which Ohio was a part, fixed the maximum permissible contract rate of interest at six per cent. ... (and from) 1799 to 1849, the Ohio (state) laws in this area were amended on several occasions, but at all times the maximum contract rate of interest remained fixed at six per cent.”

If “free market” claims aren’t big enough fig leaves for Ohio legislators ducking HB 123, there’s also payday lenders’ claims that Ohio (and lower-income Ohioans) would suffer without high-interest payday loans. First off, HB 123 doesn’t ban such loans; it regulates them. Second, payday loans weren’t even legal in Ohio until 1995, when then-Gov. George Voinovich allowed payday lending to become legal without his signature. Third, numerous states ban payday lending altogether, including Pennsylvania and West Virginia.

Ohioans irked that the legislature has ignored their 2008 vote to reform payday lending might care to ask members of the House Governmental Accountability and Oversight Committee (see its website for contact data) this question: If the votes that gave them their $60,000-plus a year (legally part-time) Ohio House seats counted, why don’t the 3.4 million votes to reform payday lending also count?

Their bill would cap, at 28 percent per annum, the interest rate on payday loans; limit monthly fees to 5 percent; permit fees only on the first $400 borrowed; and ban monthly payments greater than 5 percent of a borrower’s monthly gross income.