Senator Thomas Comments on Passage of Payday Lending Reform Bill
July 10, 2018
Today, state Senator Cecil Thomas (D-Cincinnati) supported the passage of Substitute House Bill 123 to reform Ohio’s payday lending industry.
“The passage of Sub. HB 123 finally achieves what the voters in Ohio overwhelmingly approved in 2008,” said Senator Thomas. “Making these changes is much needed and it’s the right thing to do in order to protect the Ohioans who turn to payday loans at their most vulnerable times. This bill is a long overdue compromise.”
According to the Pew Charitable Trusts, one in 10 Ohioans have used a payday loan. Ohioans currently pay the highest interest rate in the country on payday loans with the average borrower charged an annual percentage rate of 591%. According to Pew, Ohio consumers will save tens of millions of dollars per year under Sub. HB 123.
As passed by the Senate, Sub. HB 123 would:
Allow loans of up to $1,000.
Cap monthly payments for up to 90-day loans to 6% of a borrower’s monthly gross income or 7% of their monthly net income.
Limit the total cost of any loan to 60% of the loan’s original principal, which includes a maximum 28% interest rate and all fees.
Prohibit a borrower from having more than $2,500 total loans at one time.