Issue 5 is a referendum that would repeal a portion of House Bill 545, legislation passed earlier this year that imposes overbroad government regulations on the payday lending industry. Typically, payday loans – sometimes referred to as cash advances – occur when an individual uses a post-dated check as collateral for a short-term loan. Because some Ohioans do not have sufficient savings or disposable income to use as a safety net when unexpected expenses occur, a payday loan is often their most affordable option to cover these short-term expenses.

Under the referendum, the payday advance industry is asking voters to decide whether Section 3 of H.B. 545 should go into effect. Section 3 deletes the old provisions of the law regulating payday lenders in favor of the new provisions, which set a 28 percent annual percentage rate (APR) cap on the total fees and interest that could be charged borrowers. Expressed as a dollar amount, 28% APR for a loan of $100 returns only $1.08 for lenders.

No private sector business, including payday lenders, can account for and manage its risk, cover its operating expenses, and earn even a small profit under such conditions. As a result, if this section of the bill is allowed to take effect, it will make it impossible for these small employers to continue their operations in Ohio, leaving consumers with fewer and more expensive short-term loan options while placing 6,000 jobs at risk.

Repeal of Section 3 would also mean that the maximum loan amount would continue to be $800 and that there would continue to be no minimum repayment period.  Other sections of H.B. 545, which include provisions requiring borrowers to complete a financial literacy program prior to receiving a third loan, have already gone into effect and will not be impacted by the outcome of Issue 5.

A “NO” vote is a vote in favor of repealing Section 3 of House Bill 545, and means you want to permit check cashing lenders to continue to be able to offer short term loans as currently permitted.

A “YES” vote means you approve of Section 3 of House Bill 545 and want to limit the interest rate for short term loans to 28% APR.

Official Arguments
By law, the five-member Ohio Ballot Board designates a group of individuals to prepare and file arguments in support of or in opposition to each proposed constitutional amendment.  Click below to read the official arguments regarding State Issue 5.

Ballot Language
Read exactly what’s printed on the ballot regarding Issue 5:

Groups urging a “NO” vote on State Issue 5 include: Ohio Chamber of Commerce Coalition Opposed to Additional Spending and Taxes (COAST) Ohio Grocers Association Groups urging a “YES” vote on State Issue 5 include: Coalition on Homelessness and Housing in Ohio Ohio Farm Bureau Federation Ohio Manufacturers’ Association Ohio Roundtable