The Ohio Senate is introducing changes to a payday lending crackdown that passed the House by a big margin. Supporters of the legislation say it will help shutdown predatory lending and a cycle of debt.
The Senate's changes raise the maximum payday loan amount to $1,000. The bill also caps the principal and fees on those loans at 7% of the borrower’s monthly income, and says total costs, meaning fees and interest rates, cannot be more than 60% of the original loan.
Ted Saunders is CEO of Community Choice Financial, the parent company of CheckSmart. He says the changes end up hurting the payday lending industry while favoring credit unions.
“You notice there’s no prohibition on charging customers any other fees if you’re a banker credit union but I’ve noticed in here that I as a licensed check casher if I want to deliver this loan in the form of a check I’m capped at $10 why me?” he said.
Supporters of the original, tougher bill, say they’re okay with these changes and still want to see the legislation move forward.
The Ohio Senate plans on voting the bill out of its chamber on Tuesday.