Legislators pushing for payday lending reform


MARK: THE STATE SENATE SEEMS DETERMINED TO CHANGE AND PASS A PAYDAY LENDING REFORM BILL THIS WEEK BEFORE LAWMAKERS GO ON SUMMER BREAK. THANK YOU FOR STAYING WITH US AT 5:30. I’M MARK TAYLOR. KATIE: AND I’M KATIE FERRELL. KATIE: OUR OHIO STATEHOUSE NEWSROOM REPORTER JASON AUBRY BREAKS DOWN WHAT COULD BE COMING, AND WHY SOME THINK…THEY ARE MOVING TOO FAST AND MAKING A MISTAKE. JASON: JASON AUBRY: “ACCORDING TO WHAT HUFFMAN HAS TOLD LAWMAKERS HIS PLAN CALLS FOR THREE THINGS: STRENGTHENING CONSUMER PROTECTIONS, TIGHTENING LENDER REQUIREMENTS, AND ENHANCING LOAN SAFEGUARDS.” FIRST WE LOOK AT HIS CLAIM OF STRENGTHENING CONSUMER PROTECTIONS — HE WANTS TO HAVE THE LENDERS VERBALLY INFORM THE BORROWER THAT THEY MAY HAVE OTHER OPTIONS AVAILABLE, AND HE SAYS HE WILL CLOSE THE CREDIT SERVICE ORGANIZATION LOOPHOLE ALLOWING THEM TO OPERATE TODAY UNCHECKED. WHEN IT COMES TO TIGHTENING LENDER REQUIREMENTS, HE WANTS LENDERS TO PAY FOR A FINANCIAL LITERACY PROGRAM AND A DATABASE OF WHO HAS TAKEN THE COURSE. HE IS PROPOSING ANOTHER DATABASE FOR ENHANCING LOAN SAFEGUARDS. THAT DATABASE WILL TRACK WHO HAS BORROWED, WHEN THEY DID SO AND FOR HOW MUCH. THAT’S BECAUSE HIS PLAN SETS A MAXIMUM AMOUNT OF PRINCIPAL LOANED TO ONE PERSON AT ANY TIME AT $2,500 — WITH AN UNLIMITED NUMBER OF LOANS TO REACH THAT POINT. LENDER FEES WOULD BE USED TO PAY FOR THIS DATABASE, ACCORDING TO HUFFMAN’S PLAN. HE ALSO WANTS TO ALLOW ANYONE TO PAY OFF A LOAN AND TO BE ABLE TO DO SO EARLY IF THEY WANT. FINALLY HIS PLAN WILL NOT ALLOW INTEREST ONLY OR BALLOON PAYMENTS WHERE THE BORROWER COULD HAVE LOW MONTHLY PAYMENTS WITH ONE LARGE PAYMENT AT THE END OF THE TERM. WHILE ALL OF THAT MAY SOUND REASONABLE, HERE’S WHAT THE PEW CHARITABLE TRUSTS — WHO’S MISSION IS TO SERVE THE PUBLIC INTEREST — HAD TO SAY ABOUT THESE PROPOSALS. ALEX HOROWITZ, PEW CHARITABLE TRUSTS: “THOSE IDEAS HAVE FAILED IN OTHER STATES, SO PAYDAY LENDERS HAVE RECOMMENDED THOSE IDEAS BEFORE TO PROVIDE THE ILLUSION OF REFORM WHEN THERE’S BEEN A DEMAND FROM CITIZENS OF A STATE TO REIGN IN VERY HIGH COST LENDING THAT IS HARMING FAMILIES.” JASON AUBRY: “THE CITIZENS WHO HAVE BEEN PUSHING FOR THIS REFORM ARE LIVID OVER THE CHANGES HUFFMAN IS PROPOSING AND THEY HAVE VOWED TO PURSUE A BALLOT INITIATIVE IF LAWMAKERS CHANGE THE BILL. LOCAL 4 YOU AT THE STATEHOUSE, JASON AUBRY, NBC4.”

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