LoanMax location at 2761 N. High St., Columbus, OH

In March 2017, one Democrat and one Republican introduced H.B. 123, a bill intended to close loopholes in a 2008 law that regulated payday lenders in Ohio. The bill, which languished in committee for over a year, was finally voted out of committee this April.

The media has dutifully stenographed each new twist in the bill’s progress and a prevailing narrative has emerged: there was some kind of dramatic schism within the payday lobby. Now they have divided into two camps: one that welcomes modest payday loan regulation and one that is dead set against it. Their impasse, compounded by the legislature’s general dysfunction, has imperiled the prospects of short-term lending reform. Andy Chow of WOSU ran a piece titled “As Ohio House Turmoil Continues, What Will Happen with Ohio’s Payday Lending Bill?”

For a variety of reasons, I think that both factions oppose all reform and that they have engaged in a carefully crafted performance, to suggest gridlock and disagreement, where there is in fact, near perfect harmony. In professional wrestling parlance, this practice of manufactured drama, where heroes and “heels” square off against each other in meticulously scripted conflicts, while carefully maintaining the fourth wall is called kayfabe.

Though it’s less clear who the heels and heroes are, the antagonists in the drama have used the media to draw the battle lines and define the teams. In this corner, we have team Rosenberger and allies, accused by many of stalling the progress of H.B. 123, and assumed to be in the pocket of Select Management Resources (SMR). SMR is the parent company of LoanMax, the title loan company whose lobbyists, Steve Dimon and Leslie Gaines, accompanied Cliff Rosenberger on his now-infamous trip to the United Kingdom. SMR appears to oppose all short-term lending reform. Ryan Smith, the newly elected House Speaker, has taken a pro-reform stance in the media, even though he was Rosenberger’s preferred successor. Rosenberger stands accused (by the other side) of serious tampering with H.B. 123.

And in this corner, we have Team Householder and allies, aligned with the “pro-reform” side. The “pro-reform” lobby is spearheaded by the Ohio Consumer Lenders Association (OCLA) and many of its members employ Neil Clark or Jeff Jacobson as lobbyists. Jacobson got burned in a pay-for-play scandal that enveloped Householder aides in the 2000s. Those same aides ran attack ads against Householder and his proxy candidates in the primaries this year, as reported previously by Plunderbund. Neil Clark is the spokesperson for ECOT. Householder and ECOT’s interests are often promoted by the conservative politics blog 3rd Rail Politics. 3rd Rail has taken a break from crudely photoshopping Ryan Smith’s head into movie posters to counter to Smith’s accusations that Householder is to blame for the gridlock.

Smith has accused Larry Householder and his allies of using “appalling” tactics were aimed to prevent him from ascending to the speakership, including threats, bullying and extortion. The Householder coalition says that his claims are untrue and that it was, in fact, Rosenberger who was using strong-arm tactics to sideline H.B. 123. In response to allegations that the payday lending industry was stalling the bill, OCLA claims to have sent a letter to Rep. Niraj Antani claiming that Rosenberger “was telling members and editorial boards that he favored reform while telling certain lobbyists and their clients that he would prevent any reform from taking place on his watch.” Around that same time they sent the letter, President of the OCLA, Ted Saunders, published an Op-Ed in the Akron Beacon-Journal, with knives out for “out-of-state lenders” (SMR is based in Georgia) and Ryan Smith.

The Antani letter made it clear that OCLA favored the process as it was run under Bill Seitz, which allowed for extensive “interested party” meetings, but others have denigrated that process as a stall tactic. OCLA claimed that negotiations were humming along until Rosenberger removed Seitz as the point person on the bill and handed it off to Kirk Schuring. The Antani letter curiously made reference to “three renegade members” of the payday lending industry and also claimed that the OCLA “successfully encouraged the resignation of the ringleader company (Select Management) from OCLA” upon learning of the London trip.

Plunderbund contacted the OCLA’s media spokesperson, Pat Crowley, to request the names of the “three renegade members” of the short-term loan industry. Despite having a pleasant phone conversation and a follow up with Mr. Crowley via email, the OCLA has declined to provide the names of these companies. Per an archived version of the OCLA’s member companies page, it appears that as recently as June 29, 2017, both LoanMax and TMX Finance were members of the OCLA, but they are not currently listed on the OCLA website.

If the OCLA was really so “appalled” (their own term from the letter) at the London trip, it is not clear why they wouldn’t name and shame the industry members who jeopardized their compromise bill. For his part, Kyle Koehler, the Republican co-sponsor of H.B. 123 denies the OCLA’s claims that it was working toward a compromise, saying the OCLA “only complained about the bill, claiming it would shut down payday lending.” He also stated that negotiations only began to progress after Seitz was removed from the bill and Schuring was installed.

Carl Ruby, a faith leader and consumer advocate associated with Ohioans for Payday Lending Reform (OPLR), the coalition leading the charge for reform, has backed up Koehler’s take. Ruby told that OCLA “wanted to do something about financial literacy without doing anything to address the annual percentage rate. Anything that didn’t substantially lower costs was unacceptable to those of us who are advocating for lending reform.”

My hot take on this imbroglio is that to whatever extent there is “real” conflict it’s a turf dispute, an extension of the same proxy war we saw play out in the Republican primaries, and the rest is a slick production. For what it’s worth, the OCLA spokesperson (the aforementioned Pat Crowley) is a veteran, award-winning journalist and his media relations company Strategic Advisers LLC boasts that their agency “has a great understanding of journalism, newsrooms, and how stories are distributed through today’s news-media and social-media outlets.”

I don’t trust the prevailing narrative because I don’t believe that the payday lending industry would voluntarily undergo regulation in the current political climate. Rod Aycox, the CEO of SMR donated $1 million to Trump’s Inauguration Fund. With Mick Mulvaney installed as the head of the Consumer Protection Finance Bureau (CFPB), the chances of short-term lending reform at the federal level are less than zero.

That only leaves the possibility of regulation at the state level. Support for payday lending reform is strong in Ohio; a recent Pew Charitable Trusts poll found that 78% of Ohioans favored more regulation for payday loans. On May 29, Ohioans for Payday Lending Reform obtained permission from the Ohio Ballot Board to move forward with signature gathering to put a “Short-Term Loan Consumer Protection Amendment” up for a direct vote on the statewide ballot.  As a forthcoming investigative series will demonstrate, these consumer advocates are likely to face a gauntlet of political dirty tricks on their path to lending reform. Already the infighting between these two “factions” has cast a pall on the legislation. Conveniently for payday lenders, the discussion has focused on the interparty drama and flawed process, not the substance of the bill, which could bring real relief to poor Ohioans trapped in a cycle of debt.

A forthcoming investigative series will focus on the tactics that payday lenders have deployed in other states that were contemplating reforms and the seedier side of the payday lending world.

Danielle Harlow is a Social Scientist living in Columbus, OH, who won a game of Jeopardy! once. Follow her on twitter at @tiberisdonors.