 Posted: Wed May 21, 2008 8:43 am Subject: Ohio Senate Approves PDL Bill - Next Step Gov. signs bill |
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Looks like PDL and IPDL will be a past in Ohio next week.
All that stands between Ohio's 1,600 payday lenders and the end of their current existence is the signature of Gov. Ted Strickland.
The pen should hit the paper on House Bill 545 next week, a Strickland spokesman said. The law would take effect 90 days later.
The House approved a final version of the bill yesterday by a 70-24 vote. The measure would slash payday-lending interest rates from the current 391 annual percentage rate ($15 per $100 on a two-week loan) to 28 percent ($1.08 per $100). It also would limit borrowers to four loans per year, require that loan terms be at least 31 days, and ban Internet payday lending.
Three payday lending companies -- Cash America, Advance America and Check Into Cash -- have said they plan to close their Ohio stores once the law takes effect. However, Dollar Financial Corp. announced yesterday that it expects to keep its 21 Ohio stores open by offering other financial services.
Although the payday industry employs about 6,000 in Ohio, bill supporters are not mourning the loss of the stores.
"The statistics show that it's a product that consumers in Ohio, frankly, just cannot handle in any circumstances," said Rep. Christopher R. Widener, R-Springfield, who sponsored the bill.
Debt problems, fueled by subprime and adjustable-rate mortgages and payday loans, have sent "shock waves through our economy," said House Speaker Jon Husted, R-Kettering. Lawmakers need to adjust the system after a move to more credit access in the 1990s, he said.
"Some people shouldn't get access to credit, because they've demonstrated that they can't handle it," he said, adding, "Like Congress, for example."
The Ohio Coalition for Responsible Lending successfully argued that the two-week loan model is inherently flawed, trapping too many borrowers in a debt cycle in which they need new loans to pay off old ones.
source: http://www.dispatchpolitics.com/live/content/local_news/stories/2008/0 5/21/leg21.ART_ART_05-21-08_B5_RRA8S40.html?adsec=politics&sid=101
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Ryan_N
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