Consumer Law

Ohio Payday Lenders Caught Lying in Ballot Initiative Signature Drive

By Christopher Peterson

by Christopher Peterson

Yesterday Ohio Public Radio ran a story exposing fraudulent ballot initiative practices used by the Ohio payday lending industry in its campaign to remove the state's new usury limit. The story, available here, features audio clips of paid signature gatherers falsely claiming that the proposed measure would lower interest rates, rather than raise them.  The story also reports that payday lending industry representatives have been paying homeless persons cash in exchange for signing the petitions needed to get the initiative on state ballots.

Consumer law and policy blog readers may recall that the Ohio Legislature recently re-imposed a traditional usury limit of 28% per annum on consumer loans made by non-depository lenders.  This traditional usury limit removed a payday lending authorization statute that had previously allowed interest rates of about 390%. Now Ohio payday lenders are putting all their financial muscle behind a last ditch effort to save Ohio's usurious lending industry.

Interestingly, a spokesperson for the industry refused to commit to removing signatures from ballot petitions that were obtained through fraudulent representations about the effect of the initiative.

Full post as published by CL&P Blog on August 13, 2008 (boomark / email).