On Election Day, I will be voting yes on Issue 5. A yes vote supports consumer protection legislation (House Bill 545) recently passed by the Ohio House and Senate. A yes vote means that I agree that the payday lending industry is in need of reform.
The Ohio Catholic Bishops have stated their support for initiatives that protect the working poor and all Ohio consumers from the spiraling indebtedness caused by payday lending. The Catholic Conference of Ohio believes House Bill 545 responsibly addresses this concern.
Today, many payday borrowers initially seeking one loan to tide them over until their next paycheck find
themselves unable to pay off their payday loan debt. Instead, they end up taking out loan after loan each pay period, stuck in a debt trap. The business model by payday lenders appears to encourage this cycle of debt and results in rates of 391% APR. The legislation passed by the Ohio Legislature would reduce the allowable APR to 28% and make other modifications in the law to protect consumers.
The payday lending industry argues that people use their product and services because they need it. I believe there must be a better way to provide needed credit than trap vulnerable consumers in a downward cycle of debt. House Bill 545 is a giant step toward doing just hat. That is why I am voting yes on Issue 5, and I ask that you do the same.