Payday Lending

Pending Actions 2010

On November 4, 2008, the Ohio voters voted by a margin of 64% to 36% to retain legislation that reforms payday lending (Issue 5). Since this passage, the majority of payday lenders shifted their practices in order to continue charging high interest fees. Currently, payday lenders are charging origination and check cashing fees, in addition to interest and other fees.  Some of these fees are assessed every week. The cost to the borrower often remains just as burdensome as before the Payday Reform Act was passed.

HB 486 prohibits payday lenders from charging a fee to cash the loan check that they just issued.  It prohibits payday lenders from charging an origination fee or a credit check fee more than once in a 90-day period. It also prohibits payday lenders from charging a fee to broker loans from another organization or a fee to act as a credit service organization on behalf of the borrower.

These provisions will help protect borrowers from excessive payday lending fees, while allowing lenders to maintain reasonable cost-of-business fees.

The bill passed the House on May 12, 2010 by a vote of 61-37. The bill now moves to the Senate.

Action Alert Supporting HB 486

The Catholic Conference of Ohio supports passage of HB 486.
Catholic Conference of Ohio Action Alert on Payday Lending April 23, 2010

Catholic Conference of Ohio's Position on Payday Lending Reform

On June 27, 2007 the Ohio Bishops went on record as supporting initiatives that protect the working poor and all Ohio consumers from the spiraling indebtedness caused by payday lending, and directed the Catholic Conference of Ohio’s Department on Social Concerns to study and recommend ways our church communities can help in the promotion of alternative lending programs, such as credit unions and small loans, as well as the creation and promotion of financial awareness education programs.

The Catholic Conference of Ohio supports reform of Ohio’s payday lending practices.  We support lending models that provide fair and helpful loans for persons in need.  It has come to our attention that the growing number of payday cash-advance programs in our state may be doing more harm than good for persons in need of short-term cash loans.

In the teachings of our faith we have many warnings about usury and exploitation of people.  Lending practices that, intentionally or unintentionally, take unfair advantage of one’s desperate circumstances are unjust. Catholic Social Teaching demands respect for the dignity of persons, preferential concern for the poor and vulnerable, and the pursuit of the common good.  These principles coupled with our teaching on economic justice animate our questioning of current payday lending practices.

Catholic Teaching on Usury

Usury is a scourge that is also a reality in our time and that has a stranglehold on many peoples' lives. Although the quest for equitable profit is acceptable in economic and financial activity, recourse to usury is to be morally condemned. Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them. This condemnation extends also to international economic relations, especially with regard to the situation in less advanced countries, which must never be made to suffer “abusive if not usurious financial systems.
Compendium of the Social Doctrine of the Church, Paragraph 341.

Compendium of the Social Doctrine of the Church. Chapter Seven, Economic Life. Pontifical Council for Peace and Justice, 2005.

Catechism of the Catholic Church. Seventh Commandment, You Shall Not Steal.

Educational Resources

2010 Payday Lending Poll Results. April 29, 2010

Catholic Conference of Ohio Action Alert on HB 486. April 23, 2010

Catholic Conference of Ohio Reflection Statement urging a yes vote on Issue 5. September 2008

Catholic Conference of Ohio's Statement of Concerns regarding Payday Lending, February 2008

Catholic Conference of Ohio Sign-On Statement of Concern, February 2008

Catholic Conference of Ohio Background Report on Payday Lending, June 27, 2007

Need More Information

Contact Jim Tobin 614-224-7147