Ohio Payday Loan Reform Supporters Get Green Light

Consumer advocates in Ohio were granted permission to start collecting signatures to get a constitutional amendment regarding payday loan reform on the ballot.

According to, the Ohio Ballot Board certified the "Short-Term Loan Consumer Protection Amendment" as a single ballot issue, giving Ohioans for Payday Loan Reform, a coalition of faith leaders and organizations that serve low-income residents, permission to start collecting signatures to put the measure on the ballot.

The coalition will need to collect more than 300,000 signatures to get the measure on the statewide ballot. The deadline for this year's ballot is July 4.

Carl Ruby, a Springfield pastor and coalition leader, said they will most likely aim to get the amendment on the ballot for November 2019.

"We've taken this step because the legislature has been so reluctant to move it forward," said Ruby. "Our preference is they would pass a bill that would address these measures. But if not, we will take it to the voters."

While Ohio voters overwhelmingly upheld a 2008 law aimed to regulate the industry and limit interest rates to 28 percent, lenders have been able to get around the regulation by registering under other state lending laws.

This new proposed amendment closely resembles House Bill 123, which was introduced last March. But the bill has been delayed until the House chooses a replacement for former House Speaker Cliff Rosenberger, who resigned in mid-April after the FBI started investigating a 2017 trip to London he took with lobbyists from the short-term loan industry.

The proposed amendment would cap interest rates at 28 percent, including fees and interest; limit monthly payments to 5 percent of the borrower's gross monthly income; limit monthly maintenance fees to the lesser of 5 percent of the principal or $25; restrict lenders to the following charges: interest, a monthly maintenance fee, one check collection charge of $20 and damages in a civil suit on a defaulted loan; and allow borrowers one business day to cancel the loan without penalty.

It's not surprising that payday and auto title lenders aren't in support of the bill, warning that it could force storefronts to close and leave many Ohioans without a way to borrow cash.

"The Ohio Consumer Lenders Association favors reform that curbs excesses without ending access to credit," association spokesman Patrick Crowley said in a statement. "This extreme ballot proposal will cause major economic hardships for hundreds of thousands of Ohioans who are unable to get loans from banks or credit unions."



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.