Last week’s abrupt change of fortune for a long-stalled payday-lending bill in the Ohio House of Representatives is unquestionably a good thing. What the circumstances suggest about Ohio’s political process, though, is discouraging.
House Bill 123, which had been delayed or ignored by majority Republicans since it was introduced 13 months ago, suddenly passed the House Government Accountability and Oversight Committee without a single change on Wednesday, and it’s expected to pass the full House in May.
This happened just days after former House Speaker Cliff Rosenberger, who has controlled the bill’s fate, resigned suddenly. He did so after learning the FBI is investigating his joining in an expensive junket last year to England that included some payday-lending lobbyists.
Had Rosenberger been blocking the bill out of undue deference to payday lenders? He has said he has done nothing wrong and that he resigned only because the FBI investigation could be disruptive.
The messy situation raises questions, and Ohioans deserve answers. Two Democratic representatives from Columbus, David Leland and Kristin Boggs, have sent letters asking the legislative inspector general and Franklin County Prosecutor Ron O’Brien to investigate.
Yes, they have a partisan motivation for their request, but that doesn’t make it unreasonable. Voters are entitled to know more about this turmoil in a top state elected position. If Rosenberger truly hasn’t done anything wrong, he should be cleared.
In the meantime, advocates for consumers can cheer the likely passage of real payday-lending reform at long last.
Ohioans long have suffered some of the highest effective interest rates in the nation for short-term loans. Unreasonably short payoff times force borrowers to take out loan after loan to cover a balance due that mushrooms with fees and penalties. In the worst cases, the effective rate is close to 600 percent.
The bill that suddenly passed after Rosenberger’s departure would require short-term lenders to allow at least 180 days for repayment and would cap interest rates at 28 percent. Most important, it would eliminate a loophole that has allowed abusive payday lenders to ignore a 2008 law meant to achieve many of the same reforms.
We’ve been urging lawmakers to pass the bill since it was introduced, but lawmakers were unmoved. The clout of the payday-lending lobby, which contributes heavily to Ohio politicians, seemed insurmountable.
Last week, lawmakers still were considering some amendments that would have weakened the bill’s protections.
Then all of a sudden, the bill passed with nary a change.
What happened? It would be nice to think, as some legislators insist, that they finally tired of the payday-lending industry’s unwillingness to compromise. It had rejected the proposed amendment even though it was relatively industry-friendly.
Rep. Ryan Smith, R-Bidwell, complained that the Ohio Consumer Lenders Association "would’ve been happy to just put this thing on hold for another week and then another week... and call that progress."
Finally passing the bill, he said, was "just about doing the right thing."
Maybe. Or it might have been because Republicans could see that favoring payday lenders no longer is good for their political health.
Either way, it’s a win for Ohioans who need a short-term financial bridge — not a nightmare of ever-growing debt that they can’t escape.
— The Columbus Dispatch