Ohio lawmaker vows reform of payday loans, costliest in US
COLUMBUS (AP) — An Ohio state lawmaker is vowing to work on payday lending reform early next year after a research group found such loans more expensive in the Buckeye State than anywhere else in the country.
Rep. Marlene Anielski, a Walton Hills Republican, told Cleveland.com she’ll look at rates and repayment periods that are workable for lenders and fair to borrowers while also giving consumers wide access to credit.
“It’s time to close those loopholes because they impact a wide cross-section of Ohioans – rural, urban, white, black, veterans and others,” Anielski said.
About 10 percent of Ohioans take out payday loans, according to Pew Charitable Trusts. A $300 payday loan in the state costs on average $680 in interest over five months. At an annual rate in effect of 591 percent, Ohioans on average pay more than borrowers in any other state, the research group says.
A payday loan, or a cash advance, is generally $500 or less. Borrowers provide a personal check dated on their next payday for the full balance or give the lender permission to debit their bank accounts.
The total includes charges often ranging from $15 to $30 per $100 borrowed. Interest-only payments, sometimes referred to as “rollovers,” are common.