Ohio payday lenders charging most in the country, so what are state legislators doing about it?
Running short on cash? You may be tempted to use a short-term loan place, but a new study found here in Ohio you'll pay way more for that loan, than anywhere else in the U.S.
News 5’s Lauren Wilson has spent all week learning about this issue and explains what the state's doing about it.
So far, she’s found only one state lawmaker who's on board.
“A spiral yeah, of you still being in poverty"
That's what Brenda Brown said she felt after using a payday loan service just one time years ago.
“I would feel ripped off now," she expressed.
That's because in some cases, Ohio lenders charged customers up to 591 percent.
Melanie Ross, Senior Advisor for NCA Financial Planners explains why she and other view this as problematic.
"It's in the lenders best interest, right there really diversifying their risk...They're preying on the people who have no other alternative."
It's something that's even caught the attention of national experts.
"One in 10 Ohio residents have used payday loans, so this is a major problem and it's draining money from Ohio as an economy," Alex Horowitz, a senior officer with Pew Charitable Trusts, said.
But is it ringing any bells from within our own state?
“Lenders are deemed to be acting within the law that's why it's so important that Ohio enacts reform."
Representative Marlene Anielski is trying to get out front on the issue, proposing legislation.
She couldn't meet for an interview but in an email, Anielski said, “the problem is statewide...and with news that Ohio has the nation's highest rates... reform is needed."
Anielski is taking notes from states which have faced similar challenges, like Colorado.
“Colorado has sensible regulations in place that's well balanced. So by setting sensible rate limits and requiring loans to have affordable payments, legislators could save Ohio residents a great deal of money," Horowitz said.
But when I talked to Patrick Crowley, spokesman for the Ohio Consumer Lenders Association representing all payday lenders in the state, he told me they plan to fight any possibility for reform.
“We don't think there needs to be reform. I mean the last time it was reformed was 08...it closed a few hundred stores, and put people out of work," Crowley said.
Even questioned the 591 percent interest rate found by the Pew Research study.
“I’m not going to confirm that that's accurate or say that that's accurate, I don't know, I don't think it is," he said.
In her email, Anielski said the legislation has already been drafted and she hopes to introduce it sometime in the near future. There's no word yet on when that will actually happen.
