Skip to main content

Catholics join call for payday loan reform

CLEVELAND, OH (Catholic Universe Bulletin) - The Catholic Conference of Ohio has joined the state’s religious leaders in a campaign for payday lending reform.

Speaking at a February 26 Ohio Coalition Responsible Lending news conference, six religious leaders urged Ohio voters to support House Bill 333 and to let their representatives know the bill should be enacted.

The bill remains in a house committee. There has been one public hearing on it, but there has been no movement to bring the bill up for a vote.

The proposed bill would cap what the group called the “exorbitant” 391 percent interest rate typically charged to some of the 300,000 Ohioans by the payday lending industry each year.

“More harm than good has come (from payday lending) for people in need of cash,” said Jim Tobin, associate director of the Catholic Conference of Ohio, the public policy arm for the state’s Catholic bishops.

He said the bishops are concerned for people caught in a “spiral of indebtedness.”

Rabbi Susan Stone, director of Cleveland’s Hebrew Free Loan Association described how the most financially vulnerable people don’t have access to traditional loans from banks.

The association works with hundreds of Greater Clevelanders daily to address what she called the payday lending “debt trap” as well as predatory lending practices.

“It’s expensive to be poor,” Rabbi Stone said.

The working poor, she explained, resort to high-interest payday loans, so called because they are made against a person’s next paycheck. At times, she continued, people are taking out additional short-term loans just to cover the payment of a previous loan.

Caps on interest

HB 333 is a bipartisan effort to address the high fees currently charged on payday loans. It is co-sponsored by Rep. William Batchelder (R-Medina) and Rep. Robert Hagan (D-Youngstown).

The bill would cap the annual interest rate on such loans at 36 percent. It would also promote consumer financial awareness education and would limit to six the number of payday loans any individual could take during a year.

Payday lenders have opposed the measure, citing the expense of processing and carrying such loans.

Two other payday lending reform bills are up for consideration, explained Tom Allio, director of the Cleveland Diocesan Social Action Office and chair of the Ohio Coalition for Responsible Lending. “House Bill 333 is the most comprehensive,” Allio said, during the news conference.

Craig Forbes, senior legislative aide to Rep. Chris Widener (R-Springfield), chair of the House Financial Institutions, Real Estate and Securities Committee where HB 333 remains, said there are no plans to bring the bill to the floor for a vote.

“We’re just waiting to see what the committee members have to say about this bill,” he said.

Batchelder, who joined the news conference, encouraged Ohio voters to contact their representatives to urge passage of the bill.

Taking a ‘Pledge’

Coalition statistics for 2006 showed that nearly 64,000 people within the eight-county Cleveland Diocese were involved in payday loans. Fees charged on these loans during 2006 totaled more than $64 million.

The coalition’s religious leaders urged members of Ohio’s faith community to go online to sign what they call their Faithful Pledge. The pledge denounces what coalition members call payday lending’s practice of “modern day usury.” The pledge can be found on OCRL’s Web site at www.ohiocoalitionforresponsible lending.org.

---

This story was made available to Catholic Online by permission of the Catholic Universe Bulletin (www.catholicuniversebulletin.org), official newspaper of the Diocese of Cleveland, Ohio.

Keywords:



NEWSLETTERS »

E-mail:       Zip Code: (ex. 90001)
Today's Headlines

Sign up for a roundup of the day's top stories. 5 days / week. See Sample

Rate This Article

Very Helpful Somewhat Helpful Not Helpful at All

Yes, I am Interested No, I am not Interested

Rate Article

0 Comments

Leave a Comment

Comments submitted must be civil, remain on-topic and not violate any laws including copyright. We reserve the right to delete any comments which are abusive, inappropriate or not constructive to the discussion.

Though we invite robust discussion, we reserve the right to not publish any comment which denigrates the human person, undermines marriage and the family, or advocates for positions which openly oppose the teaching of the Catholic Church.

This is a supervised forum and the Editors of Catholic Online retain the right to direct it.

We also reserve the right to block any commenter for repeated violations. Your email address is required to post, but it will not be published on the site.

We ask that you NOT post your comment more than once. Catholic Online is growing and our ability to review all comments sometimes results in a delay in their publication.

Send me important information from Catholic Online and it's partners. See Sample

Post Comment


Newsletter Sign Up

Daily Readings

Reading 1, Isaiah 7:10-14
Yahweh spoke to Ahaz again and said: Ask Yahweh your God for a ... Read More

Psalm, Psalms 24:1-2, 3-4, 5-6
[Psalm Of David] To Yahweh belong the earth and all it ... Read More

Gospel, Luke 1:26-38
In the sixth month the angel Gabriel was sent by God to a town ... Read More

Saint of the Day

December 20 Saint of the Day

St. Dominic of Silos
December 20: Benedictine abbot and defender of the faith. Born in Canas, ... Read More