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House conservative backs reform effort while liberal does not
Published on Sunday, Jul 29, 2007
COLUMBUS: House Minority Leader Joyce Beatty has often been a powerful voice for the powerless.
Throughout her political career, the African-American Democrat from Columbus has vigorously worked for the poor, minorities and women.
So it was surprising to learn that Beatty is not among the growing number of legislators on both sides of the political aisle who have become more concerned and intently interested in further regulating the rapidly expanding payday-lending industry in Ohio.
In a study released in February, Policy Matters Ohio found the number of payday-lending stores grew from 107 in 1996 to 1,562 a decade later.
This expansion alone is not the problem, in the view of the churches, social services and other groups that have been working for reform.
Rather, critics of these cash-checking businesses believe the customers are trapped in a perpetual cycle of debt while subject to fees on loans over two weeks that in effect amount to a 391 percent annual rate.
The first-time borrower often needs to take out a second loan to repay the first, and so it goes.
Phil Betourne, who works at a grocery store in Canton, told this newspaper in May that he had 10 loans going simultaneously. He was losing his home.
Gail Meyers, a Columbus woman, borrowed $300 for some quick cash as she was settling in after a recent divorce. Two years later, after paying $2,100 in fees, Meyers finally paid off the original $300 loan.
Women, minorities and the working poor are obviously more susceptible to the lure of the short-term loan, which makes Beatty's position all the more perplexing.
The Policy Matters study noted that payday-lending stores have moved into rural areas and small towns, but Franklin County, from which Beatty hails, still leads the state in the number of check-cashing locations with 183. According to the Cleveland-based progressive think tank, 47.54 percent of those Franklin County payday-lending sites were in low- and moderate-income census tracts, and 9.8 percent were in predominantly African-American census tracts.
Beatty told the Columbus Dispatch last week she was not available to discuss the issue with this newspaper that she has talked to people in payday-store lines, and they have told her that banks will not lend them money or cash their checks.
This echoes the position taken by Darryl Dever, the lobbyist for the payday-lending industry in Ohio. Dever argues that the 391 percent annualized interest rate is deceiving because the loans are for two weeks, and the industry is filling a need in the community because cash-strapped people have no place else to go.
The payday-lending issue is complex, even more so politically.
Follow the political spectrum from Beatty to the other end, and standing on the far right edge, you will find, is state Rep. William Batchelder, R-Medina.
Batchelder is a conservative who believes in limited government and the open marketplace.
He left the House at the end of 1998 because of term limits, but he returned this year, and he would like to be speaker of the House, a historic post that eluded him in his earlier tenure.
Batchelder also happens to be the legislator leading the effort to address the payday-lending industry.
His motives may be pure, but there is a political angle that the canny veteran cannot be overlooking.
Payday-lending reform is the No. 1 issue on the religious reform agenda this year. Religious groups believe the practice amounts to usury and is a crime against society and God as ordained by the Bible.
Although the issue crosses the political spectrum, Batchelder's efforts are especially appealing to conservative Christian voters, whose support will be key to his becoming speaker.
Batchelder is expected to be challenged by a moderate Republican, which means it is crucial that he recruits, runs and elects conservative candidates for open seats in next year's GOP primary who will back him for the House's high post in 2009.
Batchelder's quest may hold a key to understanding Beatty's seemingly odd position on payday lending.
She also told the Dispatch that she has warned her Democratic members not to get involved in anything that might ‘‘help someone else with their leadership or political causes.‘‘
Even if it might help someone else a working poor person, a minority, a woman break the perpetual cycle of debt?
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
COLUMBUS: House Minority Leader Joyce Beatty has often been a powerful voice for the powerless.
Get the full article here.
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