Ohio State Senator Calls for Payday Loans to be Scaled Back
By J.J. CameronPayday Loan Writer
In what is almost becoming a pattern, another legislature has called for a regulation on the payday loan industry in his state. In this case, a bill sponsored by Democratic Sen. Ray Miller of Ohio calls for a lower interest rate, lower fees, a shorter loan term and a ban on payday loans used toto pay off other loans. It also would require the state to create a database to monitor payday loan activity statewide.
“The real financial success of payday lenders depends on their ability to convert occasional users into chronic borrowers,” Miller said in a statement. “The key then is to establish barriers to user dependency.”
Ohio, with 1,383 payday loan stores, is third in the county in number of stores, after California and Tennessee. About 15 states have banned payday lenders or imposed interest-rate caps that ward them off.
In Ohio, payday lenders can loan up to $800 for terms of up to six months. Interest is capped at 5 percent per month on the principal amount borrowed on a faxless payday loan, and loan origination fees are capped at $5 for every $50 loaned. State law forbids payday lenders from making loans to pay off an existing loan from that company. (more…)
