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Payday Loan Ban Passes Unanimously

Until the Ohio Supreme Court weighs in on the future of the payday loan industry in Ohio, Cleveland Heights is considering a ban on new lenders.

The Cleveland Heights City Council unanimously passed a ban on new unlicensed payday loan stores.

The ordinance approved Monday would ban new payday loan businesses that don't have a license under a state law. That law, Ohio's Short-Term Loan Act, makes pay-day loan terms more borrower-friendly and requires annual licensing for lenders.

According to the Columbus Dispatch, pay-day lenders have found a loophole by licensing under other similar laws that do not have the same protections.

"In my opinion, Payday lenders are predatory by nature," said Councilman Jason Stein. "They prey on those of us that have less. They prey on those of us that can least afford to be taken advantage of. 

"A moratorium is needed to send a message to these predatory businesses," he added. "The message is, 'Payday Lenders are not welcome in Cleveland Heights.' "

A court case before the Ohio Supreme court, Ohio Neighborhood Finance vs. Scott, will likely settle the matter. Cleveland Heights' moratorium is in effect until the Supreme Court ruling is reached, according to the proposed ordinance.

Existing payday loan businesses will not be affected by the moratorium. Lakewood recently enacted a similar ban.

Garry Kanter June 10, 2013 at 12:40 PM
Rent an office somewhere in CH, call yourself a Job Creator, and go cash that city check.
Charles Taylor June 10, 2013 at 09:21 PM
Right. I certainly get the cynicism, the City would do well to be transparent about why money goes to certain business concerns. What security is required and what restitution has the City received. There will be losers, of course, it how does the City protect our tax contributions. All said, however, this type of loan small and micro, can be a powerful engine for the directed growth of our communities' businesses and its more econically marginal citizens.
Garry Kanter June 10, 2013 at 09:27 PM
The city has no underwriting processes or controls, yet they lend $.
ChrisLC June 26, 2013 at 05:32 AM
I understand that there will be lots of those who disagree with me. I have some thoughts regarding this issue. I totally see no point to ban new or existing lenders unless they violate state’s law of course. See, the thing is, customers of payday loans went way out of control. They are the ones who need to be banned. First of all, people who turn to payday lenders are irresponsible for most of part. Oh, by the way, I once applied for http://northenloans.ca/payday-loans-newfoundland-and-labrador.html and guess what: I had no problems with these guys at all. As I paid back ON TIME. Sorry for caps, but it pissed m off when people complain about payday loans while using it incorrectly. Second of all, I agree that there has to be done something about interest rates…but again: no one forces you to apply for loans in a first place!

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