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First, the revelation about Joyce Beatty. Then, the House speaker opts to accelerate needed legislation that would corral harmful lending
Published on Friday, Apr 11, 2008
During the past year, consumer advocates have pressed hard for changes in state law that would tighten payday regulations, among other things, lowering the high interest rates lenders charge on the short-term loans. Advocates have cited the harm from business practices that trap borrowers in a cycle of debt. The drive to cap interest rates, in particular, has drawn fierce resistance from the industry, which supports proposals that do not include rate caps.
The opposing bills, introduced in October in the House Financial Institutions, Real Estate and Securities Committee, have languished. Any coincidence that Husted's promise followed quickly on the heels of a report in the Cleveland Plain Dealer?
Among the staunch defenders of payday lenders has been Joyce Beatty, the Democratic leader in the Ohio House. In a column appearing in this newspaper last August, she argued the industry's cause, noting that other businesses (such as rent-to-own stores and tax preparers who make tax refund-anticipation loans) also thrived on high interest rates yet were not the target of legislation. She took a swipe at state Rep. William Batchelder, the Republican cosponsor of a bill that would cap interest rates on payday loans at 36 percent. She offered that she was not inclined to support ''any legislative agenda that I feel is solely for someone's political gain.''
On Tuesday, the Plain Dealer article disclosed that Otto Beatty Jr., Beatty's husband, registered in Virginia in January as a lobbyist with CheckSmart, a payday-lending company based in Dublin, Ohio.
Whatever credibility there was to Joyce Beatty's stance against reducing rate charges has evaporated with the disclosure. As the House minority leader, she needed to show better judgment than risk the perception of undue influence, direct or indirect, to stall legislation that goes against the interests of payday companies. Otto Beatty has a right to his business choices. Still, his lobbying for a lender whose 106 stores in Ohio could benefit from his wife's opposition and legislative influence is unseemly.
Joyce Beatty has said, correctly, that the two-week, high-interest loans have become ''a necessary evil'' for many Ohioans. Ohio permits lenders to charge an annual percentage rate up to 391 percent on these loans. Lowering the rate would make the necessary much less evil. Fortunately, Speaker Husted now has decided to advance the cause.
Get the full article here.
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