Payday-loan law takes effect

Associated Press

COLUMBUS

A new law cracking down on what were some of the nation’s highest payday loan rates has taken effect in Ohio.

Signed in July by then-Gov. John Kasich, the law took effect Saturday.

It caps interest rates and limits fees charged by the short-term lending industry. It also bars loans with terms of less than 30 days. Payments on loans of 90 days or less can’t exceed 7 percent of a borrower’s monthly net income, or 6 percent of the gross income.

Fees and interest can’t be more than 60 percent of the loan’s original principal amount under the new rules.

The payday lending industry has warned the law will put them out of business and leave those without traditional banking options without access to credit in emergencies.