Payday lenders are now pursuing a second potential ballot issue in the fall, and both would eliminate the new interest-rate cap signed into state law last month.

The first proposed referendum would allow voters to completely overturn House Bill 545. The second option would strip the bill of Section 3, the part that no longer allows payday lenders to charge an annualized interest rate of 391 percent ($15 per $100 on a two-week loan). The new law instead sets the rate at 28 percent.

Ohio's payday lenders, numbering more than 1,600, have argued that the new interest rate will drive most of them out of business. Supporters of the cap, however, argue that lenders trap people in a cycle of debt in which borrowers repeatedly need new loans to pay off old ones.

Kim Norris, spokeswoman for the Reject HB 545 Committee, said the new proposed referendum would allow consumers to choose from old loan options as well as new ones created by the new law. Critics say it would create legal confusion and lawsuits.

Before the issue goes to voters, interim Attorney General Nancy H. Rogers must certify a summary of the issue that the committee will put on its petitions. To get on the ballot, lenders must collect 241,365 valid signatures.

In June, Rogers rejected the lenders' first proposed summary, calling it too vague and inaccurate. Lenders then submitted a 17-page revised summary, and they also gave Rogers a new referendum that calls for a repeal of only part of the new law.

Rogers will rule on at least one summary this week.

"Because the attorney general has been extremely vague … the thought was that we'd provide an accurate summary of the bill and let consumers decide," Norris said.

Both Sen. Jeff Jacobson, R-Vandalia, and Rep. Christopher R. Widener, a Springfield Republican and sponsor of HB 545, have asked Rogers to reject the latest summary.

Jacobson called it a "half-baked attempt at half-repeal." Widener wrote: "In a third plea to continue preying on consumers, the payday-lending industry is proposing to sterilize" the new law

A fair overview of the proposal, Widener wrote, would say that interest rates on payday loans would not be reduced, lenders would not be required to follow fair debt-collections practices, and borrowers would not be protected by the Consumer Sales Practices Act.

Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio and a key proponent of the new law, also asked Rogers to reject the proposals.

"The industry is now using high-priced lawyers and misleading language to mask its efforts to legalize 391 percent interest," Faith wrote.

Norris responded: "It's clear Mr. Faith does not think Ohioans should have the opportunity to exercise one of our most democratic rights, and that's a right to vote."

Lenders' second proposed ballot issue would strip from a new law the reduction of their interest rate from 391 percent to 28 percent.

Source: http://www.columbusdispatch.com/