Ohio Attorney General Mike DeWine on Friday rejected petition language for a proposed constitutional amendment to cap payday loan interest rates.
DeWine’s office is the first stop in a long process to put an issue on the statewide ballot in Ohio. At this stage, DeWine does not judge the merit of the proposal, only that supporters’ summary of the measure, which will appear on petitions, accurately describes the proposed amendment.
DeWine found at least six instances where the summary did not match the proposed amendment.
“For these reasons, I am unable to certify the summary as a fair and truthful statement of the proposed amendment,” DeWine stated in a letter to petitioners.
Citizen-backed initiatives are commonly rejected on their first try. Nate Coffman, a petitioner and executive director of the Ohio CDC Association, said supporters will quickly correct the errors, collect another 1,000 signatures and resubmit language to the attorney general.
“Our enthusiasm is not deterred at all,” Coffman said.
The “Short-Term Loan Consumer Protection Amendment” would cap interest rates for short-term loans at 28 percent and allow lenders to charge a $5 fee for every $100 borrowed, up to $20. It would also extend the time to repay the loan without fees to 180 days.
A 2008 law to curb high interest rates failed to take hold because short-term lenders were able to register as a different type of lender in state law.
On average, Ohio borrowers pay an effective 591 percent interest rate, the highest in the nation, according to the Pew Charitable Trusts. Borrowers often can’t repay the loan when it’s first due and roll it into a new loan.
A bill introduced last year would cap interest rates and make other reforms to the industry. But the bill has failed to gain traction.
Coffman said ideally, the changes would be passed by the legislature.
“That would be nice, but I’m working, as is everyone, under the assumption that’s not going to happen,” Coffman said.
Once the measure is approved by DeWine’s office, the Ohio Ballot Board will decide whether it is one or multiple ballot issues. Then supporters will need to collect at least 305,591 signatures of registered Ohio voters, meeting a threshold in 44 of Ohio’s 88 counties. The deadline for the November ballot is July 4.