COLUMBUS (WCMH) — A bill that would cap interest rates by payday lending facilities, as well as the amount of the loan, has moved to the Ohio Senate Committee.
The bill would allow of loans of up to $500, cap payments at 5 percent of the customer’s monthly income, cap interest rates at 28 percent and $20 in monthly fees.
Payday lenders oppose the bill vehemently and claim it will cause them to go out of business removing access to credit to thousands of Ohioans.
Tuesday afternoon, the Senate Finance Committee will meet to hear several pieces of legislation, one of which is a bill to reform payday lending recently passed out of the House of Representatives.
There was stiff opposition to the bill prior to the vote and several Republican lawmakers urged their colleagues to vote ‘no’ on the bill.
The bill will take the next step in its legislative journey Tuesday as Senators will hear from the bill’s sponsors State Representative Kyle Koehler, a Republican, and Michael Ashford a Democrat.
Koehler says he expects the bill to change in the Senate and is open to working with them to make sure it is the best bill to address Ohioan’s needs.
The bill which has taken a year and a half to reach this point is linked, if only in subject matter, to the resignation of, and FBI investigation into, former Speaker of the House Cliff Rosenberger.
Questions over if the bill would be altered swirled as the Rosenberger resignation came about.
Plans to amend the bill were dropped and the bill was sent to the full chamber of the House to vote on as it was introduced.
Due to Rosenberger’s resignation, the bill languished for weeks until a new Speaker of the House was elected on June 6.
The next day the House of Representatives voted the bill out of the chamber and sent it to the Senate.
The bill is modeled after a similar law in Colorado that has not seen the kind of outcome lenders are warning of.