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by The editors

Monday June 08, 2009, 4:15 AM

Ohioans thundered in November against gouging by payday lenders, voting 2-to-1 to cap APRs on payday loans at 28 percent. But as an Elyria legislator said last week, the insatiably greedy lenders have found ways to thumb their noses at Ohio voters.

The legislator, Democratic Rep. Matt Lundy, aims to close the lenders’ loopholes. Among those backing his plan is the Coalition on Homelessness and Housing in Ohio (COHHIO), a sparkplug of 2008’s Ohio consumer push-back.

A bipartisan 2008 law capped the maximum annual percentage rate (APR) on Ohio payday loans at 28 percent. Before that, payday lenders could charge APRs as steep as 391 percent, thanks to 1995 legislation so seamy that then-Gov. George V. Voinovich let it slink into law without his signature.

Last November, via statewide referendum, payday lenders tried to overturn the 28 percent APR cap passed by a GOP-run Senate and a Democrat-run Ohio House. Instead, almost 3.4 million Ohio voters ratified the 28 percent limit. Their message: Lenders should follow the new law — or take a hike. Payday lenders did neither. Instead, they twisted two other Ohio laws (regulating mortgages and small loans) into cover for the same old gouging.

According to Cleveland’s Housing Research and Advocacy Center, interest and fees on a two-week, $100 loan can produce a 432 percent APR (under the small-loan law) or a 680 percent APR (under the mortgage law).

According to COHHIO, Lundy’s bill would cap APRs at 28 percent on all loans of less than $1,000 and less than 90 days and forbid lenders to charge a fee for cashing loan checks. The General Assembly should pass it, pronto.

In these hard times, more people than ever are using payday loans to keep bill collectors at bay. Quick money for people with bad credit has been praised by some as a lifeline for the poor and condemned by others as a money trap exploiting families in crisis. Several states have passed laws limiting interest rates, but there is one marketplace that seems to recognize no borders — the Internet.

Videographer Lagan Sebert has been tracing the many ways Americans have been ringing up record debt. For this story, Sebert first staked out a conference on Capitol Hill where online payday lenders and lobbyists honed their arguments to Congress against reform; then he traveled to a small town near the Virginia-North Carolina border to learn about the experiences of a man who one day googled “bad credit loans” and soon found himself in more trouble than he bargained for:

I know this isn’t exactly Roland Burris yelling at Chris Matthew or anything, but I do wish that our local news outlets–the Grown Up Important ones–would spend any meaningful time covering Springfield for something other than budget fights and corruption scandals.

Thankfully, there’s Progress Illinois, which has been keeping a close eye on the effort to reform the usurious payday lending industry. They’ve got some bad news for us today:

On Tuesday evening, the industry won out again as the House Executive Committee rejected Rep. Julie Hamos’ (D-Evanston) SB 1435, which would have established reasonable interest rate caps and fair finance charges on these largely-unregulated loans. Eight members of the committee voted “Present.” “It’s a big disappointment for those who have been working hard on the issue for years,” Hamos told us from the House floor yesterday.

A few years ago, her old car needed repairs which she couldn’t afford and, since she uses the car to take her epileptic daughter to the doctor, White became desperate.

“Things was tough. I needed money so, that’s what I had to do,” she said. “I wasn’t getting enough.”

White’s solution was one that over a million Americans have turned to: Advance America, the largest payday loan company in the United States.

It seems simple enough: Demonstrate that you have a job or a steady income, and Advance America will loan you money, for a fee of $15 per $100 borrowed.