Editorial: Crack Down on Abusive Lending

September 17, 2013
Cincinnati Enquirer 
payday lending news

This Cincinnati Enquirer editorial calls on regulators at the Ohio Department of Commerce "to step in, investigate, and then revoke the licenses of those businesses found to be evading payday lending laws." It also urges the state legislature to "specifically outlaw this new form of abusive lending." The editorial notes that auto-title loans appear to be little more than payday loans under a new name. They both carry excessively high interest rates, demand payback in a short period of time, and don't follow traditional loan-writing standards.

The practices of payday loan businesses prompted the legislature to enact restrictions on these lenders, including a cap of 28 percent on the annual percentage rate and a minimum payback term of 31 days. But a report by Policy Matters Ohio, a Columbus-based think tank, found that, despite that law, "payday lending in Ohio remains virtually unchanged." The editorial concludes by stating that Ohio Attorney General Mike DeWine, along with state regulators and lawmakers, "need to step up their vigilance on behalf of consumers. Enforce existing laws governing lending so businesses trying to evade them are shut down or penalized. Beef up existing legislation to specifically prohibit auto-title lending. These are abusive practices and they shouldn't be allowed in Ohio."

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