Senate Republicans expressed frustration because store owners still aren’t satisfied with the new payday lending bill, which is friendlier to lenders.
“You and your people have been involved in this bill for over a year since it was introduced,” Sen. Scott Oelslager, chairman of the Senate Finance Committee, told Ted Saunders, CEO of CheckSmart’s parent company, according to Cleveland.com. “So to sit there and say that you weren’t part of the process — to sit there and say that you were cut out — is ridiculous. Because the facts show otherwise.”
Oelslager added that he had asked the industry numerous times to meet with the Pew Charitable Trusts — which is advocating for changes to protect consumers — but the meeting never happened. Senate Republicans decided to move forward anyway, working with Pew to come up with a substitute version of House Bill 123, which is is expected to be up for a vote by the Senate Finance Committee today (July 10) at 9am. If it passes, the full Senate will vote on the legislation the same day.
Under substitute House Bill 123, the maximum loan limit would be $1,000, up from $500 in the original version of the bill; the cost of the loan — fees and interest — cannot exceed 60 percent of the loan’s original principal; the interest rate would be no more than 28 percent; there would be no loans under 90 days unless the monthly payment is not more than 7 percent of a borrower’s monthly net income or 6 percent of gross income; borrowers could not carry more than a $2,500 outstanding principal across several loans; lenders could charge a monthly maintenance fee that’s the lesser of 10 percent of the loan’s principal or $30; and for loans longer than 90 days, lenders would have to provide the consumers with a sample repayment schedule based on affordability.
In addition, it would prohibit harassing phone calls from lenders, as well as require the lender to provide loan cost information verbally and in writing.