Bob Carroll

On Nov. 4, Ohio voters will have the choice to approve Section 3 of Ohio House Bill 545, a referendum that will determine the fate of the state payday loan industry. According to the bill, the annual percentage rate (APR) that would be charged would be capped at 28 percent.

“Our economy is tumbling around us and it started with reckless lending and credit,” said Suzanne Acker, Communication Director for the Coalition on Homelessness and Housing in Ohio (COHHIO). “That it exactly what payday lending is. It has hurt us as a state, as a nation, and a ‘yes’ vote stops this kind of predatory lending.”

But opposition to issue 5 asks voters to look deeper into the matter.

“Issue 5 is overkill and doesn’t need to be passed,” said State Rep. Tom Brinkman (R-Hamilton County).

Rep. Brinkman pressed that opponents of Issue 5 were worried about much more than the state’s payday loan businesses.

“The problem is that the government would keep a state database of any lender’s financial and credit information, and state employees have access to that information. What we’re concerned about is the invasion of personal records,” said Brinkman.

However, Acker said current legislation is only in place to help Ohio’s small loan industry.

“What issue 5 does is keep a portion of law that payday lenders want to repeal.” Acker said.

Under the new legislation, a $300 loan would have a two-week charge of around $18. Presently the payday loan industry APR stands at 391 percent. Therefore, a payday loan of $300 carries a charge of $45.

According to Brinkman, also the founder of the Coalition Opposed to Additional Spending and Taxes (COAST), the bill originally only restricted the payday APR, but since then the legislation has “gone too far.”

The bill now allows the state to know the financial background of any individual who takes out a payday loan. COAST has publicly endorsed a “no” vote on issue 5.

However, advocates of the bill argue that Issue 5 would help Ohioans leave a cycle of endless debt to payday loaners.

“Payday lending is simply a pattern of predatory lending that hurts so many Ohioans,” said Ohio Treasurer Richard Cordray. “It involves so many negatives that build up on a lender and makes it more difficult to leave the cycle. Issue 5 cleans up a mistake that was made in 1995.”

Cordray is referring to Ohio legislation passed in 1995, which said that because two-week payday loans are used for the occasional emergency, they should be exempted from any Ohio loan laws.

According to, lenders have traditionally argued that rates needed to be higher because it was just a two-week loan. With the state-granted exemption the APR was able to rise to the current 391 percentage rate.

However, those asking Ohio voters to vote “no” point out on their Web site,, that if Issue 5 is passed, the payday loan industry in Ohio will come to an end. According to the Web site, 6,000 jobs would be lost and the Ohio economy would lose $272.2 million from the small loan industry.

Acker was quick to point out what she believes to be another side of the issue.

“It’s an industry-driven referendum with our $220,000 in advertising versus their $20 million,” Acker said. “However, our early polling shows voters have said “yes” on issue 5 by a ratio of almost 2 to 1.”

Rep. Brinkman, an opponent to issue 5, firmly believed Ohio voters will vote down the issue.

“All of us should be against it,” Brinkman said. “Ohioans need to know what this bill will do, and I predict the vote is going to be no.”