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Ohio Bill Would Cap Short-Term Loan Interest Rates
By: Associated Press
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COLUMBUS, Ohio (AP) – A bipartisan bill introduced in the Ohio House seeks to cap interest on short-term loans at a 28 percent annual percentage rate.
Cleveland.com reports that the bill would limit payday loan lenders from charging more than 28 percent interest plus monthly fees of 5 percent on the first $400 loaned, or a maximum of $20.
The legislation also would prohibit charging monthly payments exceeding 5 percent of a borrower’s gross monthly income.
A law passed in 2008 capped annual percentage interest rates at 28 percent. But it had little effect because lenders registered to lend under other parts of state law.
An Ohio Consumer Lender’s Association spokesman says any new legislation that imposes restrictive caps will harm consumers by eliminating credit options.