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Concert for a Cure
Payday lending legislation passes another hurdle
Thursday, May 15, 2008
COLUMBUS — The Ohio Senate passed legislation on Wednesday, May 14, that would create one of the nation's strictest laws governing payday lending.
The bill limits borrowers to four short-term loans a year and caps annual interest rates at 28 percent.
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Payday lenders generally charge about $15 for every $100 borrowed on a two-week loan, which would be the equivalent of a 391 percent annual interest rate.
Republican Senate President Bill Harris said consumers also wouldn't be able to borrow more than $500 per loan, or 25 percent of a consumer's base monthly pay — whichever is less. Industry representatives said the legislation would put payday lenders out of business.
House lawmakers approved the restrictions last month. The House must now approve the Senate's changes before sending the bill to Gov. Ted Strickland for enactment.
