COLUMBUS, Ohio. (Legal Newsline) – Ohio Attorney General Richard Cordray on Wednesday sent written testimony to a state legislative committee in support of legislation that would close the existing payday lending loopholes.
The letter, which was sent to the Ohio House Financial Institutions, Real Estate and Securities Committee, supports House Bill 209, legislation that would amend current law to cap loans under $1,000 at a 28 percent interest rate.
“This loophole has inadvertently allowed payday lenders to continue to target many of our state’s most vulnerable consumers,” Cordray said in the letter.
Cordray said his office has received complaints targeting payday lenders that are charging fees and interest rates which add up to an annual percentage rate in excess of 300 percent.
Cordray said if the bill passes, the new law will amend both the Small Loan Act and the Second Mortgage Loan Act.
“Secondly and perhaps most importantly, H.B. 209 prohibits payday lenders from charging fees to process their own checks or money orders and from requiring borrowers to redeem their instruments with the payday lender,” he said.
Cordray added that H.B. 209 will expand the authority of his office to prosecute violations of the new law under the Consumer Sales Practices Act.
“The Attorney General’s Office will have explicit statutory authority through these provisions to go after unlicensed lenders, including internet payday lenders,” he said.