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Government & Politics

Against the Backdrop of a Scandal, Ohio Lawmakers Finally Move on Payday Lending

Photo of the committee hearing room
Karen Kasler

A bill to crack down on payday lending passed an Ohio House committee without any changes – a week after the House speaker resigned and a vote on it was halted. 

The committee hearing room was packed – with consumer advocates, payday lending representatives and interested onlookers -- and with questions and tension. Ted Saunders is the CEO of suburban Columbus based CheckSmart and heads the Ohio Consumer Lenders Association. He addressed the tension right away.

“(Neither) my company nor the trade association funded, attended, coordinated or endorsed any of the trips surrounding the scandal that resulted in the resignation of the speaker and has tangentially touched our industry,” says Saunders.

Rosenberger's Resignation
Just a week ago, a vote on a compromise on the bill had been stopped by some members of this same committee, which met just hours after Republican House Speaker Cliff Rosenberger of Clarksville resigned.

Sources say the FBI is asking about his international travel alongside title-lending lobbyists. But this time, the bill passed in its original form – though Republican Bill Seitz of Cincinnati proposed some changes that were rejected by fellow Cincinnati Republican Lou Blessing, the committee chair.

“After having discussed this bill with the sponsors, they both felt that they’d prefer to have this bill passed out cleanly with no amendments,” says Blessing.

All committee members but Seitz voted to pass the bill, which would impose strict 28 percent interest rate caps and make changes to a payday lending crackdown law that voters upheld a decade ago. And it’s a win for Republican Rep. Kyle Koehler of Springfield.

“The 2008 law was not workable," says Koehler. "That’s why people went through the loophole.”

Origins of the bill

'In American politics, it's a natural reaction whenever there's an event to run away from it as fast as possible.'

Koehler and Democratic Rep. Michael Ashford of Toledo had proposed the bill a year ago. Though there had been some interest initially, the bill had stalled, and recently Speaker Pro Tem Kirk Schuring of Canton announced he’d worked out a deal. Koehler says he’s not sure of the effect of the resignation of Rosenberger, but he’s happy with the committee’s nearly unanimous vote.

“I think it was a very crazy week last week," he says. "I think, I don’t know what to think. But I do know that these folks stood up today, and I can’t be more proud of them. I really can’t.”

Photo of Ted Saunders stands with other representatives
CheckSmart CEO Ted Saunders (right) stands with other representatives from the payday lending industry outside the committee room.

Saunders, the CEO of CheckSmart, says the speaker scandal appears to him to have played a role.

“I have no judgment on that – I don’t know what did or didn’t happen," says Saunders. "But I do know in American politics, it’s a natural reaction whenever there’s an event to run away from it as fast as possible. I mean, that’s just human nature and I can’t fault people for that.”

Advocates pushing the bill were very disappointed in the lack of a vote last week. Carl Ruby is a pastor in Springfield.

“I think having a week to think about it is helpful," says Ruby. "I think they’ve had months to think about this, so this bill has been out there for a long time for them to think about. We just appreciate the fact that they’ve chosen to act on it.”

Ruby is working with other advocates and faith leaders to put the bill before voters on the ballot this fall. He says even though this bill is headed to the full House for a vote, advocates ar still continuing with that plan.