Summary
A study by a liberal public policy group shows that Ohio payday lenders have been able to successfully circumvent a law designed to put them out of business.
Analysis
A study by Policy Matters Ohio, a liberal public policy group, shows that Ohio payday lenders have been able to successfully and legally circumvent a law passed to restrict their annual interest rates to 28%. Through a variety of strategies, over half of the number of payday lender locations have survived despite passage of this new law.
Payday lending companies have re-registered and obtained licenses as other types of financial institutions under Ohio law. Payday lenders have also been able to legally charge origination fees for their loans. Another technique utilized is to issue a loan via a check to the customer and then charge a check cashing fee to cash the check.
The Democrat led Ohio House is holding hearings and likely to pass a bill to tighten up these restrictions. However, any bill will likely stall in the GOP led Ohio Senate.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
