The battle between the Ohio government and short term lenders rages on, as short term loan companies search for ways to circumvent restrictive lending provisions, the Columbus Dispatch reports.
Passed in 2008, the Short Term Loan Act aimed to make short term lending
"less onerous," the news source explains. The website Debt Consolidation Short term Loan (DCPL) adds that prior to the act, interest rates could reach as high as 300 percent per year. The new legislation cut that figure to 28 percent. What's more, the amount of short term loans taken out in a single year was reduced to four, and consumers are only allowed to have one outstanding loan at a time. A "cooling off" period was also introduced, requiring 90 days between loan approvals. Other provisions include the fact that loans cannot exceed $500, and they must have a repayment period of 31 days. However, some lenders have found loopholes in the act, DCPL notes. By applying for licenses under other laws, such as the Ohio Mortgage Loan Act and the Small Loan Act, short term lenders are still able to charge higher interest rates - up to 200 percent.