SpringfieldNewsSun.com

Springfield, Ohio — Voters in Ohio sent a clear message to the payday lending industry Tues., Nov. 4, by upholding the law that caps interest rates on the short-term loans at 28 percent.

A yes vote on Issue 5 approved section 3 of House Bill 545 which reduces the interest rate on short term loans. The bill was sponsored by state Rep. Chris Widener, R-Springfield, who was elected to represent Ohio's 10th senate district Tuesday.

Statewide, the ballot initiative passed by a nearly two-to-one margin with 63.60 percent, or 3,080,333 voters, agreeing to retain the interest rate cap.

"This outcome will force us to close about 43 of our Cashland lending locations, leaving about 150 of our hard-working coworkers without jobs," said Daniel R. Feehan, president and chief executive officer of Cash America International, Inc. in a release.

Widener said job losses will not be as stark as payday lenders have suggested and many lenders have applied for licenses to continue business under the new regulation.

Cashland operates two stores in Springfield, 1010 N. Bechtle Ave. and 2050 E. Main St., and a store in Urbana at 776 Scioto St.

Mary Jackson, Cashland's senior vice president of government relations said the company has not compiled a list of locations to be closed.

The impending store closings are a result of the loss of income associated with the interest rate cap which will result in a loan fee of $1.08 per $100, according to Feehan.

"There is no way to sustain a viable store front business by offering small, short-term unsecured consumer credit at this rate," he added.

The Cashland locations that remain open, Jackson said, will offer a new short-term loan product with a 25 percent APR regulated by the state's mortgage loan act.

"This new loan product will have a credit check that will cost $10 and a loan initiation fee...The credit scoring model we will use will create less access to loans for people with lowers scores," Jackson added.

Most shops also will offer gold-buying and pawn lending services.

The concern for payday lenders is the loss of a service consumers indicated a need for, Jacskon said, adding most payday customers chose the loans in lieu of overdrawing a checking account or paying late fees to creditors.

Issue 5 supporters claimed the payday industry presented purposefully confusing language to make it easier for voters to unwittingly support the industry.

"I'm pleased that people found their way through the ballot language," Widener said, calling Issue 5 a purposeful and deceitful attempt to make it difficult for voters to understand the issue.

Contact this reporter at (937) 328-0371 or elroberts@coxohio.com.