Posted November 6, 20127:39 am
Julie Robie, managing attorney of Legal Aid's consumer law practice group, authored this letter to the editor. It was published online today by The Plain Dealer:
Congratulations to Cleveland City Council for closing loopholes in the city's law governing payday lenders ("Cleveland City Council approves new restrictions on payday lenders," Oct. 22). This focus on consumer protection is critical during these troubling economic times, when people across our nation are struggling and need financial products that help rather than harm them.
The problems associated with payday lending extend well beyond the city of Cleveland's borders. Throughout Ohio, the payday loan industry has been evading the requirements of the 2008 Short-Term Loan Act, which limits the annual percentage rate on payday loans to 28 percent. Payday lenders have hidden behind the Ohio Mortgage Loan Act and continued to make loans at rates well above 200 percent, even though the Ohio legislature and voters have already rendered those loans illegal.
Last year, in the case of Ohio Neighborhood Finance Inc. DBA Cashland v. Scott, the Municipal Court in Elyria ruled that payday loans offered by Cashland are governed by the Short-Term Loan Act, not the Ohio Mortgage Loan Act. Cashland appealed the Scott decision to Ohio's 9th District Court of Appeals, where the case remains under consideration.
A favorable decision by the 9th District in Cashland v. Scott, affirming the lower court's decision, would be a significant step toward ensuring that all financial products offered to Ohio consumers comply with the law.
Julie K. Robie, Cleveland
Robie is the managing attorney of the consumer law practice group at the Legal Aid Society of Cleveland.