COLUMBUS — The Ohio Senate has passed legislation 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.
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 says 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 say the legislation would put payday lenders out of business.
House lawmakers overwhelmingly approved the restrictions late last month.
The House must now approve changes made by the Senate before sending the bill to the governor for enactment.