Vision Credit Education, Inc.

Consumers in Ohio are losing a source of predatory lending, thanks to a 28 percent interest cap approved by the state House and Senate. Governor Ted Strickland has promised to sign the bill, signaling an end to triple digit lending.

Lawmakers approved the bill with strong bipartison support. There was substantial interest in approving the bill, with a number of consumer groups and religious organizations pushing for rate caps.

The Center for Responsible Lending estimates that $210 million per year will be saved by Ohio residents. This is an estimate of the total fees paid by payday loan borrowers, which accounts for exorbitant fees that can reach 400% APR.

Payday lending routinely carries rates that are double what most loan sharks charge. Loan sharking is illegal, yet many states still allow the predatory lending that occurs with payday loan outlets.

With this new legislation, Ohio residents are now unable to take out these predatory loans. Some consumers simply just don’t understand the consequences of a loan with such terms. It is important to protect them from those looking to cheat them during their most vulnerable financial situation.

Ohio residents that feel they need a payday loan should consider one of the many more attractive alternatives. These can include:

• payday loan product through a credit union (usually capped at 15%)
• lower interest loan through bank or credit union
• get help through credit counseling
• higher interest loan through finance company

Kicking out high interest payday lenders serves as a major victory for consumers. This bill will save many consumers hundreds or thousands of dollars in abusive fees.