Voters: Be Wary of Payday Issue

Cincinati Enquirer: Ohioans may have thought the payday lending issue was settled in May. That's when the General Assembly passed a strong reform bill that would, among other things, limit the interest on short-term loans to 28 percent annualized, compared with the prevalent industry charge of up to 391 APR. Lawmakers felt reform was necessary to solve the problem of cash-strapped Ohioans borrowing against their next paychecks, getting trapped in a "cycle of debt" with multiple loans and ever-mounting fees. Gov. Ted Strickland signed the measure, set to become law Sept. 1. But if the payday loan industry has its way, the reform could be undone this fall by voter approval of a ballot issue to repeal a key portion of the new law. Representatives of the lenders, some of whom say they will close up shop if the reform takes effect, are drafting a referendum to be voted on in the Nov. 4 election if advocates gather the needed 241,365 signatures. Their first proposed petition was rejected by Attorney General Nancy Rogers as misleading on several counts, not the least of which was that it didn't even mention the "most fundamental change" - doing away with the 28 percent interest cap. The lenders' committee then sued Rogers, challenging the constitutionality of her office's role in the referendum process. She threw out the second petition because its 17-page ballot "summary" was nearly as long as the proposed legislation itself. However, Rogers certified a third petition, which would repeal only one section of the reform, as fair and truthful language, although she added that it doesn't warn Ohioans asked to sign the petition about its "possible result that two conflicting laws might be in effect."

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