Gov. John Kasich signs payday loan reforms into law

Gov. John Kasich signed into law on Monday a controversial bill that promises to reform the payday lending industry in Ohio.

The new law is expected to lower costs for the roughly 1 million Ohioans who take out the high-cost loans each year. But major players in the industry warned that the law will force them out of business.

Related: Big money, political muscle on display in payday lending clash

State Rep. Kyle Koehler, R-Springfield, a driving force for House Bill 123, said “We are excited that we finally brought real payday lending reform to the state of Ohio after ten long years of unlicensed payday lenders operating through the loophole and taking advantage of borrowers in Ohio.”

The new law will cap interest rates at 28 percent annual interest and a maximum monthly fee of 10 percent capped at $30; close loopholes that allowed companies to issue loans through other sections of state law; limit monthly repayments on short-term loans to no more than 6 percent of the borrower’s gross monthly income.

Advocates for the changes say it’ll save Ohioans more than $75 million a year in excessive fees.

The bill faced a huge battle in the General Assembly and is linked to the sudden resignation of former House speaker Cliff Rosenberger. The Clarksville Republican stepped down in April after acknowledging he was under federal investigation. The FBI, which is looking at Rosenberger’s international travel with payday lenders, raided his home and storage unit in May.

Related: Payday lender made 3 international trips with ex-House speaker

House Bill 123 was among nine bills signed into law by Kasich on Monday without a public ceremony.

He also signed measures that will allocate money for new voting machines, require drivers to move over when passing waste collection trucks, and allow restaurant owners to decide whether to let dogs on their outdoor patios.

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