(Source: Jim Siegel The Columbus Dispatch, Ohio (MCT) — Passage of a bill that would eliminate Ohio’s cap on credit-card interest rates for in-state banks could help prompt Columbus-based Huntington Bancshares to expand in central Ohio.
Two small Ohio banks currently issue credit cards, including Credit First National Association in Brook Park, which issues cards for Firestone Complete Auto Care and testified in favor of the bill.
But several Statehouse sources have told The Dispatch that Huntington officials have been quietly supportive of House Bill 322, and passing it could mean jobs for a Columbus region where the bank already employs 8,100 people. Huntington representatives did not testify on the bill, which has been introduced repeatedly for a number of General Assemblies.
The bill passed the House in late March and could see Senate action as early as this week. It would allow Ohio-chartered financial institutions to charge the same interest and fees that out-of-state banks now charge Ohio customers. Ohio’s credit-card cap is 25 percent.
Ohio-based banks have been at a competitive disadvantage because credit-card issuers based in other states can ignore Ohio’s interest-rate limit. Most of the nation’s largest card issuers are based in states with no usury limits and largely deregulated consumer-credit markets.
“It doesn’t protect us as much as maybe is perceived and is a little bit of an obstacle to job creation,” Kenny McDonald said of Ohio’s credit-card cap.
McDonald is the chief economic officer for Columbus 2020, an economic-development organization for the 11-county region. He said he has had no specific talks with Huntington or any bank about jobs opportunities related to the bill. But in trying to add to the 69,000 financial-services industry jobs already
in the region, McDonald said, the bill would remove a disadvantage Ohio has compared with other states, 31 of which have passed similar laws.
“We think it would make Ohio more attractive to put those servicing operations here if we didn’t have this (credit limit),” he said. “If we change this, it would be something we’d take on our travels around the country and make people aware of it.”
Huntington spokesman Matthew Samson declined to comment specifically on the ties between the bank’s plans and passage of the bill, but he noted the bank is working to develop its own line of credit cards for both consumer and business customers by mid-2013. The bank does not currently offer a credit card.
“Huntington is deeply committed to Ohio,” he said. “We’re headquartered here, and we look first to Ohio for any opportunity to expand our business.”
The bank is supporting passage of the bill, Samson said, because it makes Ohio more competitive in attracting investments. Statehouse sources say the bank is concerned it could face a competitive disadvantage if it puts credit-card operations here that must abide by an interest-rate cap that other banks do not. Out-of-state banks could charge any interest rate, but Ohio banks could not.
Consumer advocates don’t like the proposal but say it is unlikely to have any real negative impact on customers because the vast majority of credit cards already are not subject to an interest-rate limit. Credit-card experts question whether it will have much positive impact for Ohio because most major card issuers already have established themselves in favorable states.
Lawmakers are likely to alter the bill to ensure it applies only to credit-card rates, said Sen. Jim Hughes, R-Columbus, chairman of the Senate Financial Institutions Committee.
“I like that there’s a possibility of jobs in doing this,” he said. Asked about Huntington, Hughes said: “I’m not at liberty to discuss that.”
©2012 The Columbus Dispatch (Columbus, Ohio)
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