Controversial bill on the state’s payday lending industry
Ohio Gov. Ted Strickland has signed a controversial bill on the state’s payday lending industry. House Bill 545 caps the annual percentage rate on payday loans in the state at 28 percent, down from the 391 percent maximum currently permitted. Among other provisions, the bill also limits consumer borrowing at $500 or 25 percent of base monthly pay per loan, restricts borrowing to four times per calendar year and extends the term of a loan to 31 days from 14 days. According to Business First of Columbus, The legislation’s 90-day window closes at the end of August, when some of the more than 1,600 payday lending shops in the state already have indicated they’re planning to shut down. Lenders have said that among the law’s provisions, the new APR cap could hurt the industry by making their short-term loans unprofitable. H.B. 545, which was introduced in the House April 29, cleared the Ohio Senate May 14. Let’s hope Ohio has not overreached causing pain for their own constituents.