Monday, November 19, 2018 Elyria 35°
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New law limits payday lending loans

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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.

 



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