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Ohio lawmakers approve payday lending cap

In a move that could gut Ohio's payday lending industry, the Ohio Senate on Wednesday approved a bill that caps the annual rate for payday loans at 28 percent. The Ohio House voted in favor of the measure, HB 545, two weeks ago.

The move will drastically reduce the amount of interest payday lenders can charge in Ohio; under current law, they can charge up to 391 percent.

The Community Financial Services Association of America, a payday lending trade group, said in a news release that the cap would drive the industry out of the state.

"Operating under HB 545 is not feasible," said D. Lynn DeVault, president of the Washington, D.C.-based association. "Our member companies say they expect stores to close and jobs to be lost."

One of the companies most seriously affected would be Check 'n Go, headquartered in Mason. The chain, owned by CNG Financial, operates 1,350 stores in 30 states, including 21 in the Tri-State.

The Senate is asking lenders to create a new business model that would allow for small-denomination, short-term loans in the state, DeVault said, adding that companies were "not hopeful" that could be accomplished.