After heated campaigns by committees on both sides of the issue, Ohio voters decided to uphold legislation that limits payday lending. A majority of 64 percent voted "yes" on Issue 5, which capped interest rates on short-term loans at 28 percent.
"Ohio voters stripped payday lenders of their permit to fleece working people," said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio and treasurer of the Vote YES on Issue 5 committee.
Faith said the Vote YES campaign was outspent by a ratio of 61-to-1 by opposing group Ohioans for Financial Freedom, which ran "one of the most deceptive ad campaigns in modern times," he said.
The ballot measure followed a controversial campaign to repeal House Bill 545, led by Ohioans for Financial Freedom, an organization funded by the payday lending industry.
The law, which went into effect in September, made illegal the common practice of charging $15 interest on a $100 loan, which amounts to an interest rate of 391 percent.
State lawmakers passed the bill to protect borrowers from what they say is predatory lending that traps consumers in a cycle of debt.
Proposals to limit payday lending in Ohio came soon after Congress passed a federal law in 2007 that capped short-term loans to military personnel at 36 percent.
Kim Norris, spokeswoman for Ohioans for Financial Freedom, argued that people need a reliable source of short-term loans. She said the legislation will drive lenders out of business and deprive Ohio of 6,000 jobs.
"We remain deeply concerned for our employees who rely on their jobs to support their families, and our customers," Norris said.
In late August, Ohioans for Financial Freedom submitted a petition with more than 422,000 signatures to overturn the law. But because of a paperwork omission by a contracted political consultant and other problems, the petition did not reach the required 244,366 valid signatures to put the issue on the ballot. However, Ohio law gave the organization a 10-day period to collect additional signatures, and on Oct. 23 the issue was added to the Nov. 4 ballot.
The payday lending issue also appeared on a ballot measure in Arizona, where voters decided to make it illegal to operate payday loan stores.
Collin Binkley can be reached at binkley.44@osu.edu.
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