Ohio is one of several states seeking to gain more regulation over the maverick world of Payday Loans. Essentially the Ohio legislature has mandated that a cap of $3 per $100 be placed on repayment terms of cash advance loans.New restrictions are in place for the payday loan industry. A bill in Ohio was recently passed that will put new limits on payday loans. The law, which is effective September 1, 2008, would limit the allowable annual interest rate on payday loans in Ohio to 28%. This is a pretty low rate if you are familiar with payday loans and their outrageous APRs.
Payday lending offices usually charge about $15 for every $100 borrowed on a two-week loan, which comes out to an annual interest rate of 391%. The bill also means a borrower is only allowed four payday loans per year, with a maximum loan amount of $500, much less than the current limit of $5000. Obviously this bill would put a nice dent in the payday loan industry in Ohio.
Full Story Here: http://www.news-herald.com/site/news.cfm?newsid=19763311&BRD=1698&PAG=461&dept_id=21849&rfi=6
But the industry is not taking these attacks lightly. Ohio payday lenders can start collecting signatures for a ballot referendum that, if approved in November, would let them continue charging the same interest rate as they do today.
To be continued.
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