COLUMBUS, Ohio — The Northeast Ohio Republican leading the charge to crack down on Ohio’s payday loan lending industry has backed out of sponsoring legislation this session.
Rep. Marlene Anielski of Walton Hills told cleveland.com that reform is needed but she plans to spend her last two-year term in office focusing on her top priority, suicide prevention. Anielski’s son killed himself in 2010.
“This is a personal issue and a legacy project for me,” Anielski said in an email. “I understand both issues deserve significant attention and I believe I can effectively only truly focus on one at this time.”
Her Democratic co-sponsor, Rep. Michael Ashford, said he wants to go ahead with a bill but losing the Republican co-sponsor was a setback.
“Without Republicans’ support, this bill will go nowhere,” Ashford said.
Anielski surprised lobbyists and lawmakers last December when she announced she would introduce payday lending reform, weeks before the new legislative session began.
Republicans, which control both legislative chambers, have been hesitant to put restrictions on the industry since bipartisan reform passed in 2008.
That law capped annual percentage interest rates at 28 percent. But it has had little effect on average annual percentage rates because lenders registered to lend under other parts of state law.
Borrowers here on average pay an effective 591 percent annual percentage rate, according to research from the Pew Charitable Trusts. That’s because borrowers often can’t repay the loan when it’s first due and must roll it over. The average cost to borrow $300 in Ohio is $68 per two-week pay period, or $680 over five months — the highest in the nation.
Ashford said there’s a perception that payday loans are “an urban or black problem,” but borrowing is most common among white males age 25 to 44. About 1 in 10 Ohioans have taken out a payday loan, according to Pew.
Ashford said the industry should be held to the 28 percent APR, which voters approved in a referendum. He also said reforms in Colorado, which extended short-term loan periods from two weeks to six months, could be a guide for Ohio.
In response to Anielski’s December announcement, a payday loan industry spokesman said capping interest rates or repayment periods would cause lenders to close their doors.
“They always say that — we’ll go out of business,” Ashford said. “No, they won’t.”
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