The Ohio Senate is introducing changes to a payday lending crackdown that by a big margin. Supporters of the legislation say it will help shutdown predatory lending and a cycle of debt.
The Senate's raise the maximum payday loan amount to $1,000. The bill also on those loans at 7 percent of the borrower鈥檚 monthly income, and says total costs 鈥� meaning fees and interest rates 鈥� cannot be more than 60 percent of the original loan.
Ted Saunders, CEO of Community Choice Financial 鈥� the parent company of CheckSmart 鈥� says the changes end up hurting the payday lending industry while favoring credit unions.
鈥淵ou notice there鈥檚 no prohibition on charging customers any other fees if you鈥檙e a banker credit union, but I鈥檝e noticed in here that I, as a licensed check casher, if I want to deliver this loan in the form of a check, I鈥檓 capped at $10,鈥� Saunders says. 鈥淲hy me?鈥�
Supporters of the original, tougher bill, say they鈥檙e O.K. with these changes and still want to see the legislation move forward. HB 123, which passed the House by 71-17 in June, would have a strict 28 percent interest rate cap.
Ohio the highest payday lending interest rates in the country: Borrowers pay an average of 591 percent annual interest.
The Ohio Senate plans on voting the out of its chamber on Tuesday.
