Why state lawmakers are trying to reform payday loans
CLEVELAND, Ohio -- Two state lawmakers are looking to reform the payday lending industry in Ohio.
Springfield Republican Rep. Kyle Koehler and Toledo Democrat Rep. Michael Ashford introduced a bill this week that would cap interest on short-term loans at a 28 percent annual percentage rate.
The current effective annual percentage rate for payday loans in Ohio is a whopping 591-percent, according to research from the Pew Charitable Trusts. It's one of the highest rates in the nation.
Under the proposal, monthly fees would also be capped at 5 percent of the first $400 loaned with a maximum of $20. Payday loan lenders would also be prohibited from charging monthly payments exceeding 5 percent of a borrower's gross monthly income.
Read more: http://www.cleveland.com/metro/index.ssf/2017/03/why_state_lawmakers_are_trying.html