In Ohio a bill was passed to cap interest rates. Fortunately, for short term lenders, this cap does not apply to annual percentage rates.
Lenders, formerly offering payday loans, are offering loans under two seperate laws that allow for certain fees to be charged in connection with a loan. These fees range from 15-25 dollars for loans up to $500 and 30-40 dollars for loans $500 to $1000. If the borrower wants the money immediately, they can pay a check cashing fee to the lender.
Jim Siegel of the Ohio Dispatch writes in his article titled, Agency suggests it can’t stop lenders from using older statute.
“The Ohio Department of Commerce told state legislators yesterday that if
they think there is a problem with new payday-lending regulations, the fix needs
to come from the General Assembly.”
Let’s face it, 28% is never going to work. Lenders need a way to add more fees. The cost of doing business in this industry is just too hight.