Lucas County Common Pleas Court Judge Robert Christiansen wasn't thinking about the little guy when he struck down the city's law forbidding predatory lending practices. And when Ohio Attorney General Jim Petro joined the lawsuit against the city's ordinance, he didn't do so with ordinary Ohioans in mind either.
The judge said the state law already protects consumers and regulates lenders.
Maybe, but just not as well.
The issue comes down to protecting consumers or lenders. And no question about it: The court's summary judgment was issued with the lender in mind. Fortunately, Toledo Mayor Jack Ford intends to appeal. The city's nearly two-year-old law was written to minimize the chance of consumers' becoming victimized by lenders trying to get them to take loans they can't repay.
Predatory operations take advantage of consumers unschooled in their deceptive practices. They convince consumers to sign for high interest rate loans that require needless fees and prepayment penalties. Their unfair practices also include exaggerating a property's appraisal, increasing a borrower's income, tacking on balloon payments, and taking advantage of a person's age or physical or mental abilities.
The city's predatory lending law addressed those points, and none of them seems the least bit vague. But the American Financial Services Association of Washington, acting as a lobbyist for the lenders, asked the court to overturn the ordinance on the basis that it was vaguely written.
It's too bad Judge Christiansen decided the state law offers enough protection, and that the attorney general joined the cause on the pretense of avoiding a patchwork of local laws. Mr. Petro says he wants to strengthen the state law "to further protect Ohio citizens from predatory lenders." But where's the major push in Columbus to do so?
Ohio has more foreclosures on home loans than any other state. What better case could be made for a tougher, not weaker, predatory lending law?