Voting 'yes' on 5 upholds state law
By Dennis J. Willard
Beacon Journal Columbus Bureau
Published on Thursday, Oct 30, 2008
COLUMBUS: Issue 5 was brought to the ballot by the payday lending industry to repeal a law passed by Republicans and Democrats in the state legislature and signed by Gov. Ted Strickland that caps their allowable interest rates at 28 percent.
But there's a catch.
In order for the law to be repealed, the issue must fail.
In other words, more than 50 percent of the voters in Ohio must cast a ''no'' vote for the law to be removed from the books.
Jeff Ortega, a spokesman for Ohio Secretary of State Jennifer Brunner, said the issue is a referendum on an existing law so a ''no'' vote makes sense because voters are saying they do not want the law that was enacted.
Catherine Turcer, an Ohio Citizen Action spokeswoman, said she believes the secretary of state and the Ohio Ballot Board
that approved the language should have done the opposite.
Turcer said confused voters often play it safe by choosing ''no.''
''We want citizens to know what they are voting on so they can make a good and informed choice. Instead, this is confusing,'' Turcer said.
Kim Norris, spokeswoman for Ohioans for Financial Freedom funded primarily by payday lenders, said the issue is not confusing.
''It is clear that you are repealing a law, that you are saying no to the law that has been created,'' Norris said.
Since 1915, there have been 11 referendum votes on the statewide ballot and only one — to provide for a state prohibition on liquor and its enforcement — kept the law on the books.
All were presented to voters in the same manner as Issue 5, with a ''yes'' vote meaning the law would be maintained on the books and a ''no'' vote leading to a repeal.
The referendum language advises voters that approving Issue 5 would mean ''short term lenders'' are subject to lending no more than $500, giving borrowers at least 30 days to repay and charging no more than a 28 annual percentage rate (APR) on the loans.
By voting no, payday lending companies would continue to loan up to $800 with no minimum repayment period.
''Check cashing lenders could continue to charge rates and fees, resulting in a total charge for a loan that substantially exceeds an equivalent APR of 28 percent,'' the language notes.
This has been a key issue in the debate on payday lending.
Length of loans
Norris maintains the loans are for two weeks, and customers are charged $15 for every $100 borrowed,
She acknowledges this would be a 391 percent APR if the loans were for a year, but they are not.
Sandy Theis, a spokeswoman for Is 391% Too High, Vote Yes on Issue 5, said payday lending customers are often caught in a debt cycle for years, so the APR is more accurate than just $15 for a two-week loan.
''A yes vote is a vote for the new law. A yes vote is a vote for the lower interest rate,'' Theis stressed.
Theis said the issue is confusing to voters, and her organization believes if voters understand a ''yes'' vote will lower interest rates, the issue will pass.
According to the most recent finance reports, in 2008 the payday lending group has raised $15.9 million and spent $14.6 million, but those figures will rise and the total will not be known until post-election spending reports are filed.
The Vote Yes group reported raising $265,000 and spending $261,000.
With the bulk of the money going to television and radio advertising, the payday lenders are focusing their commercials on the projected loss of 6,000 jobs, ensuring customers have a place to turn for short-term loans and warning Ohioans their names will go into a government database if the law stays on the books.
Norris said her group has produced and aired ads that cite the 391 percent interest rate, but she said the majority of the commercials have focused on three issues.
''We have focused on what is important to all Ohioans, and that is jobs, privacy issues and credit options,'' Norris said.
Brunner's office certified the issue on Oct. 23, which meant votes were cast for or against the issue before the state knew if enough valid signatures had been collected.
State Issue 1 before voters Tuesday attempts to clarify some of the peculiarities in the initiative petition and referendum process, including changing the deadlines for turning over the required number of signatures.
Touting endorsements
Both sides are touting their endorsements.
The payday lending effort has the backing of the Ohio Chamber of Commerce and the Ohio Grocers Association, among others, and has been endorsed by the state's largest African-American newspaper.
Norris said the Call & Post editors understand that the current law will lead to 1,600 payday lenders closing across the state, and lawmakers and Strickland did not provide an alternative to borrow money for people who need cash on a short-term basis.
The Vote Yes endorsement includes a number of current and former statewide leaders, the Ohio Manufacturers' Association, the AARP Ohio, and a broad coalition of church groups, including two former antagonists: Tim Ahrens with the First Congregational Church of Christ in Columbus and the pastor he once filed a complaint against for allegedly mixing religion and politics, Rod Parsley of the World Harvest Church in Canal Winchester.
The Ohio Farm Bureau and the Ohio Farmers Union are also backing the Vote Yes organization.
The Farm Bureau recently criticized the payday lenders for using a farmer in their first commercial.
Dennis J. Willard can be reached at 614-224-1613 or
dwillard@thebeaconjournal.com.
COLUMBUS: Issue 5 was brought to the ballot by the payday lending industry to repeal a law passed by Republicans and Democrats in the state legislature and signed by Gov. Ted Strickland that caps their allowable interest rates at 28 percent.
But there's a catch.
In order for the law to be repealed, the issue must fail.
In other words, more than 50 percent of the voters in Ohio must cast a ''no'' vote for the law to be removed from the books.
Jeff Ortega, a spokesman for Ohio Secretary of State Jennifer Brunner, said the issue is a referendum on an existing law so a ''no'' vote makes sense because voters are saying they do not want the law that was enacted.
Catherine Turcer, an Ohio Citizen Action spokeswoman, said she believes the secretary of state and the Ohio Ballot Board
that approved the language should have done the opposite.
Turcer said confused voters often play it safe by choosing ''no.''
''We want citizens to know what they are voting on so they can make a good and informed choice. Instead, this is confusing,'' Turcer said.
Kim Norris, spokeswoman for Ohioans for Financial Freedom funded primarily by payday lenders, said the issue is not confusing.
''It is clear that you are repealing a law, that you are saying no to the law that has been created,'' Norris said.
Since 1915, there have been 11 referendum votes on the statewide ballot and only one — to provide for a state prohibition on liquor and its enforcement — kept the law on the books.
All were presented to voters in the same manner as Issue 5, with a ''yes'' vote meaning the law would be maintained on the books and a ''no'' vote leading to a repeal.
The referendum language advises voters that approving Issue 5 would mean ''short term lenders'' are subject to lending no more than $500, giving borrowers at least 30 days to repay and charging no more than a 28 annual percentage rate (APR) on the loans.
By voting no, payday lending companies would continue to loan up to $800 with no minimum repayment period.
''Check cashing lenders could continue to charge rates and fees, resulting in a total charge for a loan that substantially exceeds an equivalent APR of 28 percent,'' the language notes.
This has been a key issue in the debate on payday lending.
Length of loans
Norris maintains the loans are for two weeks, and customers are charged $15 for every $100 borrowed,
She acknowledges this would be a 391 percent APR if the loans were for a year, but they are not.
Sandy Theis, a spokeswoman for Is 391% Too High, Vote Yes on Issue 5, said payday lending customers are often caught in a debt cycle for years, so the APR is more accurate than just $15 for a two-week loan.
''A yes vote is a vote for the new law. A yes vote is a vote for the lower interest rate,'' Theis stressed.
Theis said the issue is confusing to voters, and her organization believes if voters understand a ''yes'' vote will lower interest rates, the issue will pass.
According to the most recent finance reports, in 2008 the payday lending group has raised $15.9 million and spent $14.6 million, but those figures will rise and the total will not be known until post-election spending reports are filed.
The Vote Yes group reported raising $265,000 and spending $261,000.
With the bulk of the money going to television and radio advertising, the payday lenders are focusing their commercials on the projected loss of 6,000 jobs, ensuring customers have a place to turn for short-term loans and warning Ohioans their names will go into a government database if the law stays on the books.
Norris said her group has produced and aired ads that cite the 391 percent interest rate, but she said the majority of the commercials have focused on three issues.
''We have focused on what is important to all Ohioans, and that is jobs, privacy issues and credit options,'' Norris said.
Brunner's office certified the issue on Oct. 23, which meant votes were cast for or against the issue before the state knew if enough valid signatures had been collected.
State Issue 1 before voters Tuesday attempts to clarify some of the peculiarities in the initiative petition and referendum process, including changing the deadlines for turning over the required number of signatures.
Touting endorsements
Both sides are touting their endorsements.
The payday lending effort has the backing of the Ohio Chamber of Commerce and the Ohio Grocers Association, among others, and has been endorsed by the state's largest African-American newspaper.
Norris said the Call & Post editors understand that the current law will lead to 1,600 payday lenders closing across the state, and lawmakers and Strickland did not provide an alternative to borrow money for people who need cash on a short-term basis.
The Vote Yes endorsement includes a number of current and former statewide leaders, the Ohio Manufacturers' Association, the AARP Ohio, and a broad coalition of church groups, including two former antagonists: Tim Ahrens with the First Congregational Church of Christ in Columbus and the pastor he once filed a complaint against for allegedly mixing religion and politics, Rod Parsley of the World Harvest Church in Canal Winchester.
The Ohio Farm Bureau and the Ohio Farmers Union are also backing the Vote Yes organization.
The Farm Bureau recently criticized the payday lenders for using a farmer in their first commercial.
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