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Ohio law cracking down on payday loan industry takes effect

April 27, 2019 GMT

COLUMBUS, Ohio (AP) — A new law cracking down on what were some of the nation’s highest payday loan rates has taken effect in Ohio.

Signed in July by then-Gov. John Kasich (KAY’-sik), the law took effect Saturday.

It caps interest rates and limits fees charged by the short-term lending industry. It also bars loans with terms of less than 30 days. Payments on loans of 90 days or less can’t exceed 7 percent of a borrower’s monthly net income, or 6 percent of the gross income.

Fees and interest can’t be more than 60 percent of the loan’s original principal amount under the new rules.

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The payday lending industry has warned the law will put them out of business and leave those without traditional banking options without access to credit in emergencies.