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Fedor Applauds Passage of Payday Lending Reform Legislation
State Rep. Teresa Fedor (D-Toledo) last week announced the
approval of House Bill (HB) 123 by the Ohio House,
legislation which reforms short-term small loan and mortgage
loan laws in Ohio. More than one million Ohioans have taken
out short-term loans in the last decade, many repaying more
than double the principal borrowed in interest and fees
alone.
“Short term loans are important for many hardworking
families across our state. Payday lenders are taking
advantage of people by trapping them in a vicious cycle of
debt that they can’t get out of, when all they needed was
money to be able to survive,” said Fedor. “With this
legislation, lending will be fair, interest rates will be
controlled and people won’t be preyed upon when they need a
loan to just put food on the table or pay bills.”
HB 123 would allow short-term lenders to charge a maximum
interest rate of 28 percent plus a maintenance free of up to
20 dollars. Additionally, the legislation would give
borrowers extended time to repay their loans in affordable
installments, not to exceed 5 percent of the borrower’s
paycheck, rather than in the current two week timeframe.
“The bottom line is this is about consumer protection. House
bill 123 strikes a balance between protecting people in
tough economic situations and ensuring payday lenders can
remain in business,” remarked Fedor.
Contrary to what the payday lenders have told consumers,
thousands of Ohioans who utilize short-term loans every day
will still have access to these service- just with more
protections to ensure they do not get taken advantage of.
The bill now goes to the Senate for consideration.
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