Attorney general hopefuls both say no to payday lenders

Capital Bureau chief

Columbus -- The two major party candidates for Ohio Attorney General are united in their opposition to the payday lending industry.

Democratic state Treasurer Richard Cordray and Republican Mike Crites participated in a joint press conference Oct. 8.

"I'm actually appreciative of the chance to be here today with my fellow traveler and fellow sufferer in the Ohio Attorney General's race, Mike, and to be each holding an oar and rowing the boat in the same direction for the moment, "Cordray said. "I think this is a really important issue."

Crites added, "We sometimes, on the campaign trail, don't agree on some policy issues, but I think it's really important that you see both of your candidates, Republican and Democratic candidates for attorney general, are in lock step on this. We're in complete agreement that this is a must, that a 'yes' vote on this Issue 5 is absolutely essential for all residents of the state of Ohio."

Cordray and Crites joined former attorneys general Jim Petro and Betty Montgomery, both Republicans, during a press conference in Columbus solidifying their support for Issue 5 and urging Ohioans to pass the referendum on Nov. 4.

Lt. Gov. and former Attorney General Lee Fisher, a Democrat, added his support, via a statement released by the campaign later in the day.

House Bill 545 was signed by the governor in June. Among other provisions, it caps the interest rates charged on payday loans at 28 percent (compared to nearly 400 percent now) and prohibits lenders from adding additional fees, interest or costs.

Proponents of the new law believe the changes are needed to stop the proliferation of payday loan storefronts and protect residents who get trapped in lending cycles -- taking out one two-week payday loan after another and getting stuck with high fees and annual percentage rates.

Opponents have said the bill will devastate the payday loan industry, likely closing locations and costing 6,000-plus Ohioans their jobs. They also have questioned where people strapped for cash and facing emergencies would go for smaller, short-term loans.

The ballot issue, which has yet to be finalized, would be in the form of a referendum. Proponents of the legislation regulating payday lending activities would have to vote "yes" to retain the law as-is. Opponents of the law would have to vote "no" to overturn portions of the new law, including those related to the interest rates lenders are allowed to charge.

Both Cordray and Crites are urging "yes" votes on the issue, and both were critical of payday proponents' campaign literature, which they called misleading.

"That is exaggerated, misleading, downright false," Cordray said, in reference to claims that payday lending reform would lead to the closing of businesses and the loss of thousands of jobs. "According to the Ohio Department of Commerce, of the 1,378 ... payday lenders in Ohio, 702 have applied for or received licenses under the small loan act and 550 have sought an Ohio mortgage loan act license. They will be able to remain in business and employ people in Ohio -- they just won't be able to gouge people to this dramatic degree."

Crites added, "I think that some of these payday lenders are more concerned about lining their own pockets than they are in protecting consumers."

The only recent attorney general missing from the mix was Marc Dann, who was forced to resign earlier this year following a scandal that is still being investigated.

But Bill Faith, head of the Coalition on Homelessness and Housing in Ohio, was quick to point out Dann's contribution to the cause and efforts to pass regulations clamping down on payday lending.

"Marc Dann not only was for the bill, but he fought hard for the bill," Faith said. "He held public hearings (as attorney general) and he raised a lot of awareness about the issue."