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Published: Monday, July 30, 2018 @ 4:32 PM
Updated: Monday, July 30, 2018 @ 4:32 PM
By: Laura A. Bischoff - Columbus Bureau
Columbus — Gov. John Kasich signed into law on Monday a controversial bill that promises to reform the payday lending industry in Ohio.
The new law is expected to lower costs for the roughly 1 million Ohioans who take out the high-cost loans each year. But major players in the industry warned that the law will force them out of business.
State Rep. Kyle Koehler, R-Springfield, a driving force for House Bill 123, said “We are excited that we finally brought real payday lending reform to the state of Ohio after ten long years of unlicensed payday lenders operating through the loophole and taking advantage of borrowers in Ohio.”
The new law will cap interest rates at 28 percent annual interest and a maximum monthly fee of 10 percent capped at $30; close loopholes that allowed companies to issue loans through other sections of state law; limit monthly repayments on short-term loans to no more than 6 percent of the borrower’s gross monthly income.
Advocates for the changes say it’ll save Ohioans more than $75 million a year in excessive fees.
The bill faced a huge battle in the General Assembly and is linked to the sudden resignation of former House speaker Cliff Rosenberger. The Clarksville Republican stepped down in April after acknowledging he was under federal investigation. The FBI, which is looking at Rosenberger’s international travel with payday lenders, raided his home and storage unit in May.
House Bill 123 was among nine bills signed into law by Kasich on Monday without a public ceremony.