Critics in Ohio question payday lending signatures

[cashlenders]

COLUMBUS, Ohio - People gathering petition signatures in an effort to repeal Ohio's strict payday lending laws are misleading voters, critics said Tuesday.

In numerous cases, including several caught on audio tape, signature gatherers are telling voters that the repeal effort is intended to lower interest rates on payday loans, according to the Coalition for Responsible Lending.

At a news conference, the group presented firsthand accounts, affidavits and audio tapes of cases around the state where they said voters were misinformed by petition circulators seeking to repeal the restrictions in November. Two residents of a Cincinnati homeless shelter also said they were offered a dollar in cash to sign.

State law prohibits paying for signatures, as well as misrepresenting the purpose of a petition.

"At best, these petition gatherers were uninformed. At worst, they were careless and misleading," said coalition chairman Tom Allio. "Regardless, their actions are unacceptable and do not serve the best interests of the electorate."

Ohio's new payday lending law takes effect Sept. 1. It would lower the combined rate of interest and fees on loans taken against a future paycheck from 391 percent to 28 percent, and limit borrowers to four such loans a year.

On the audio tape released by the Coalition for Responsible Lending, a signature gatherer told coalition spokeswoman Sandy Theis the repeal was intended to lower interest rates on payday loans.

"So what would this do to the 391 percent APR?" asked Theis asked.
"This is going to regulate it to a 5 percent rate, give the people 30 days to pay back instead of the 7 to 14 days," said the petitioner, who declined to give his name.

He referred to payday lenders as "loan sharks," though he was working in favor of their issue.

State Rep. Bob Hagan, a Youngstown Democrat who co-sponsored the payday bill, described several similar pitches he heard in his hometown. He said circulators are being paid a dollar a signature.

"Just like some of the people who reached out for some of these loans, the people who are gathering some of these signatures are also desperate for their one dollar," he said.

Hagan's son, Jimmy, a sophomore at Oberlin College, detailed three incidents in which signature gatherers were unable to answer simple questions about the ballot issue or the repeal process in which they were participating.

"What I saw was a general aura of confusion that had been created for these petitioners, I assume by the payday lending industry," Jimmy Hagan said.

"And these petitioners were passing on their confusion to me, and to other voters."

Kim Norris, a spokeswoman for the industry-funded repeal effort, Ohioans for Financial Freedom, said the hundreds of circulators around the state have been extensively trained.

"If anyone has any actual evidence that something was said incorrectly, we ask that the circulator's name be obtained, and we will take swift action to investigate and remove the employee if necessary," she said.
The committee's lawyer, William Todd, sent a letter Tuesday seeking evidence of alleged election law violations to Bill Faith, executive director of the Coalition on Homeless and Housing in Ohio and a key proponent of the restrictions.

"Vague allegations of election law violations serve only to undermine the entire electoral process," he wrote.

Toledo City Councilman Frank Szollosi said a circulator told him the repeal would save 6,000 jobs. The industry believes all 6,000 payday lending store employees in Ohio could be out of work if the law is allowed to go into effect, Norris said.

When he asked for elaboration on the jobs, Szollosi said he was told by the circulator that the ballot issue "addresses the closure of the payday lending stores." Some citizens he spoke to interpreted that phrasing to mean petitioners are seeking to close payday lending stores statewide, rather than keep them open, Szollosi said.