The Ohio Coalition for Responsible Lending is a broad-based organization of non-profit, religious and civic organizations that have joined together to seek fair and just lending practices by payday lenders in Ohio.
The Ohio Coalition for Responsible Lending opposes unfair lending practices within the payday loan industry in Ohio!
About The Coalition
Background and History of the Ohio Coalition for Responsible Lending
Prepared by Thomas J. Allio Jr., chair OCRL
September,
2007
In
August of 2005, the Cleveland Diocesan Social Action Office and the
Catholic Conference of Ohio convened more than 35 faith based organizations,
anti-poverty groups, consumer and housing advocates, labor, credit unions
and banks for a briefing on efforts around the country to regulate payday
lending. The primary presenters included Brent Adams, writer of the proposed legislation for the successful Msgr. Jack Eagan Campaign for Payday Loan Reform in Illinois
; and Uriah King
of the Center for Responsible Lending. This convening was (in part)
catalyzed by the ground breaking work of Pat O’Bryan, executive director
of the Catholic Commission of Wayne, Ashland and Medina and attorney
Jim Callen, director of NEO Legal Aid Society. O’Bryan and Callen
witnessed the detrimental effects on payday lending in rural communities,
specifically Wooster, Ohio.
As
a result of this briefing, a state wide coalition was formed, initial
goals were established and committees were established. Thomas J. Allio
Jr, senior director of the Cleveland Diocesan Social Action Office was
named as convener. The initial name of the group was the Ohio Payday
Lending Coalition. For the next two years, the coalition researched
the best legislation nationally and formulated a framework for a bill.
Our legal team also researched existing Ohio Law and found it to be
totally lacking in basic protections to Ohio consumers.
Payday
lending did not exist in Ohio until 1995. At that time, the industry
was successful in passing an extremely friendly measure that served
their business interests. Early in our process, Representative Scott
Oeslager (R-51), the chief sponsor of Ohio’s “Lemon Law,” offered
wise counsel and support. Through the advice of the North Carolina
based Center for Responsible Lending, our Ohio coalition decided to
focus on a strategy of capping interest rates on payday loans and to
eliminate the debt trap that is part of the business model for the industry.
In
the Fall of 2006, the Talent-Nelson amendment was signed into law by
President George Bush as part of the 2007 Defense Authorization Act
(October 18, 2006). The measure placed a 36% cap on interest rates on
all small loans made to military personnel. The military actively
advocated this measure as a result of the proliferation of payday lenders
on or near bases and the detrimental impact such lenders were having
on military families. With the passage of Talent-Nelson, the newly named
Ohio Coalition for Responsible Lending (OCRL) decided to pursue a similar
legislative course for Ohio consumers. The consensus of opinion was
that “if it is good for our military personnel, it is good for all
Ohioans.” Also, during the Fall of 2006, the Coalition for Housing
and Homelessness in Ohio (COHHIO) emerged as a significant member of
OCRL. COHHIO has provided invaluable leadership in the areas of communications/media
and legislative advocacy.
In
February of 2007, the Ohio Coalition for Responsible Lending benefited
from a significant report co-authored by Policy Matters Ohio and the
Housing Research and Advocacy Center. Among other things, the report
chronicled the explosion in growth of the payday lending industry from
just 107 locations in 1996 to 1,562 locations in 2006. Furthermore,
the report documented that the highest concentrations of lenders are
actually in smaller Ohio Counties that tend to be more rural than urban.
By 2006, there were more payday lenders in Ohio than McDonalds, Burger
King and Wendy’s combined.
The
OCRL received a significant endorsement on May 7, 2007 when the 40,000
member BREAD organization, based in Columbus, decided to formally sign
onto the effort. BREAD made payday lending their top priority
for 2007. On May 14, 2007, Representative Bill Batchelder (R-69), a
30 year veteran of the Ohio General Assembly, agreed to be the chief
sponsor of legislation. Representative Batchelder is respected throughout
the state house as an expert on matters related to banking and credit
unions. He is known for his integrity and skill in fostering successful
bi-partisan efforts that serve the common good of all Ohioans. The OCRL
joined Representative Batchelder in a June 6, 2007 briefing at the Riffe
Center that was attended by 34 legislators or their aides. Many viewed
this as an unprecedented indication that the time for regulation had
arrived. In mid-September, Representative Bob Hagan (D60) joined Representative
Batchelder in the reform effort. A bill crafted with such unity from
otherwise disparate voices – a conservative Republican and a liberal
Democrat -- underscores the broad base of appeal the reform effort holds.
It
is also noteworthy that Representative Batchelder has teamed with Senator
Ray Miller (D-15) in ensuring that companion bills are introduced into
the legislature. Senator Miller has been a long time champion of reform.
On
June 27, 2007, the Catholic Bishops of Ohio unanimously agreed to support
legislation that regulates payday lending, as well as efforts that produce
more alternative products. In addition, the Bishops are supportive of
programs that promote greater financial education and literacy. Throughout
the past several months, the OCRL has also met with representatives
of the Governor’s Office, Treasurer, Commerce and Attorney General
to develop consensus and support for effective public policy that serves
the interests of Ohio consumers.
As
of February 13, 2008, 230 organizations have endorsed the efforts of
the Ohio Coalition for Responsible Lending. This represents a broad,
cross section of organizations throughout the state. On September
19, 2007, OCRL released a study that indicated that payday lending is
a $2.1 billion dollar business in Ohio; total fees charged to Ohioans
on loans was $318,760,000; average number of loans annually, per borrower
was 12.6; and the number of Ohio payday borrowers was 513,703.
In
late September, Representatives Batchelder and Hagan introduced legislation.
Among other protections, the bill includes limiting interest rates to
36% on small loans $800 or lower; prohibits a check cashing business
from making a loan to a borrower who has an outstanding loan with any
check cashing licensee; establishes a maximum number of loans per customer
within one calendar year; creates a linked deposit program that provides
incentives to banks to make small loans; creates a state wide data base;
expands the responsibilities of the consumer finance education board
to promote small loan counseling; and requires internet lenders, who
make small loans within the state, to be properly licensed under Ohio’s
lending guidelines.
More than 50 newspaper articles have been generated as a result of the advocacy of OCRL. A video has been produced and educational materials are available by calling 888-620-5280 or 614-280-1984.
