Ohio capped the rates at 28% and the people voted down payday lending last November. No longer will anyone charge more than 28% annual interest on a loan. Now, there is a payday loan alternative.
Some feel as if the people had finally spoken, but this doesn’t mean they got it right. I’m sure many issues were initially not popular before they become law. For example, it took seventy years for women’s activist to finally get the vote. Today, this would be an abomination.
Now, I’m not saying that payday lending and women’s right to vote is the same type of issue, but the popular thing is not always the right thing to do.
Fortunately, for Ohio lenders, they can still charge an orgination fee between $15-30 and, in some cases, a $10 credit investigation fee. If the borrower wants his or her money “on the spot”, they will have to pay a 3-5% check cashing fee to get it.
Call a a loophole or call it following the letter of the law, we’ll see how this will unfold in Ohio. For the record, the interest rates were capped, not the APRs. These two items are not the same thing.
