Payday Advance Industry to Put the Question to the Voters
June 4, 2008In wake of new Ohio law, payday lenders prepare a referendum to bring financial choice back to Ohio
Columbus, OH- Consumers should decide whether to have access to payday advance services, said the Community Financial Services Association of America (CFSA) as it announced a referendum to overturn the recently passed law effectively banning payday advances in Ohio.
"During the debate in the state legislature, consumers were left out of the equation," said D. Lynn DeVault, CFSA President. "We intend to give consumers a voice in the democratic process."
A recent Zogby International survey found 84% of likely voters in Ohio believe citizens should be free to make their own decisions about what kind of credit they can use, and 70% said the government should not be in the business of telling adults they cannot get a payday loan.
"We are confident that the citizens of Ohio will support consumer choice," said DeVault. "And we intend to devote the resources to make sure they understand what is at stake."
The Ohio law, signed by Governor Ted Strickland on Monday, imposes a 28 percent annual rate cap on payday advances. Under this rate cap, the current fee of $15 per $100 advanced would be reduced to less than 10 cents per day. The law takes effect 90 days after it was enacted. In response, many payday advance companies have announced that they will be closing stores in Ohio, putting as many as 6,000 jobs in jeopardy.
The referendum would repeal Substitute H.B. 545, which was signed by Governor Ted Strickland on June 2, 2008. The Reject H.B. 545 committee must collect 241,365 valid signatures before September 1st in order to qualify for this November's ballot. Voters will be asked to oppose enactment of the Sub. H.B. 545 as adopted by the General Assembly.
Independent research has shown that without the option of payday lending, consumers bounced more checks, filed for more bankruptcies, did not pay bills and even choose such dangerous options such as forgoing prescription medications.
"The hard-working people of Ohio were ignored during this legislative process," said DeVault. "We expect that the voices of consumers will be heard in November and payday advances will again be available to the people of Ohio in 2009," DeVault concluded.
About the Community Financial Services Association of America
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA's Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers. For information about CFSA, visit www.cfsa.net.
Visit CFSA's blog, the Payday Pundit, www.paydaypundit.org, for up-to-date news and research on the payday lending industry.
