The Ohio House has passed controversial payday loan legislation meant to close loopholes those lenders use to charge high interest rates - as a reported probe into activities involving the former Speaker and payday lending lobbyists continues.
Republican Kyle Koehler says passage of the bill will help many Ohioans who tell him the interest they pay on their payday loans is so high that they can’t afford basic things like groceries.
“Another customer I met told me that she has paid $200 for four years out of her social security check for a $1200 loan," Koehler says.
Koehler notes that’s $9600 - eight times the original loan amount.
But fellow Republican Bill Seitz says people who use those loans want him to vote against the bill, which the industry says could shut down payday lending stores. He says it’s like borrowing $10 today and paying $11 back tomorrow and he used a reference from the 70’s Sitcom Sanford and Son to make his point.
“The APR on that one day loan is 3,650%. Oh my God. Elizabeth, I’m coming to join you. 3,650%? Oh My God. But actually, most of us would think that’s quite reasonable," Seitz says.
Seitz says the better thing to do would be to allow banks and credit unions to charge higher interest so they could afford to get into the short term loan business. But in the end, most lawmakers sided with Koehler. The bill passed the House 69-14. The bill now goes to the Ohio Senate. The bill came out of committee just after former Speaker Cliff Rosenberger resigned - reportedly related to an FBI inquiry into his travel with payday lending lobbyists.