COLUMBUS — Gov. Ted Strickland has signed a bill that puts new restrictions on the payday lending industry.
The law signed Monday limits borrowers to four short-term loans a year and caps annual interest rates at 28 percent. The state Legislature passed the bill last month over the objections of industry leaders.
“This is a good day for families across Ohio who struggle to make ends meet,’’ state Rep. Matt Lundy, D-Elyria, said. “We could not let payday lenders continue to milk hard-working Ohioans for every dime at their time of financial difficulty. The cycle of debt must end, and this is a great first step to doing just that.
“I look forward now to working with financial institutions, churches and nonprofits to create common-sense, low-interest alternatives that will help families in their time of need, but not take advantage of bad financial situations.’’
Payday lenders had charged about $15 for every $100 borrowed on a two-week loan, which works out to an annual interest rate of 391 percent.
Industry leaders argue that the law will force them to close offices and lay off workers.
Strickland, a Democrat, along with Republican lawmakers, says that the loans have trapped customers in a cycle of debt.