Short-term loan act was smoke and mirrors

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Two weeks ago, the Ohio Supreme Court decided in Ohio Neighborhood Finance, Inc., v. Scott that lenders are not obligated to make payday loans under the Short-Term Loan Act, which restricted fees, and instead may lend under the Small Loan and Second Mortgage Acts, which permit significantly higher fees. The Short-Term Loan Act was passed for the supposed purpose of controlling payday loans, but not one loan has been made under the 2008 law.

The problem is, as the court concluded, ...

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19
JUN
1

Social Issues

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Court closes payday-loan loophole

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Ohio’s check cashing businesses found a loophole almost immediately in the Short-Term Loan Act, passed in June 2008, which placed limitations on short term loans known as payday loans.

Payday lending consists of small loans with big interest rates and lots of fees, and it’s big business. According to the Coalition on Homelessness and Housing in Ohio, in 2006 there were 183 payday lenders in Franklin County alone that generated over $37 million in fees. The average borrower takes out 12 ...

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18
OCT
0

Social Issues

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