Gov. Kasich Signs Updated Payday Lending Restrictions
Gov. John Kasich has signed into law a proposal cracking down on Ohio's short-term lending industry.
The bill approved by the Republican governor on Monday caps interest rates and limits fees on such loans. 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.
Ohio has some of the highest payday loan rates in the nation, according to Pew Charitable Trusts, which pushed legislators to pass the reforms. Ohio Consumer Lending Association and other industry groups say the bill will wipe out payday lending storefronts.
The Ohio House last week approved a Senate version of the bill that added restrictions over the payday lending industry's objections.
Payday lending reform had been stuck in the legislature for a year, and was further bogged down by the resignation of House Speaker Cliff Rosenberger, who was the subject of an FBI probe into his relationship with payday lending lobbyists. After the election of House Speaker Ryan Smith, the House quickly took up the measures.