Ohio House Bill 545 Means the End of High Interest Pay Day Loans

Ohio's House Bill 545, if made into law, would force payday lenders to lower the APR (annual percentage rate) from 391 percent to 28 percent. Bill 545 states that the maximum amount for a payday loan would be set at $500.00, and that the time of 2 weeks would be extended to 31 days in which to pay off the loan. Furthermore, clientele that uses the service would be subject to only four loans per year.

Payday stated that the majority of their clients consist of the working poor, and low income borrowers that have difficulty in obtaining loans or borrowing money. The fee that they charge is $15.00 per $100.00 for a two week loan. If the APR was reduced to 28 percent, the rate would amount to about $1.50 per $100.00 borrowed. This lower rate of interest would force the payday loans to close their doors. Not only would this increase the unemployment rate in Ohio, but would force the low income borrowers to seek even more risky means of obtaining loans, such as seeking loans from unlicensed on-line companies such as those found in Mexico.

In retaliation to HB 545, approximately 2,500 people protested outside of the State House in Columbus Ohio. Many of the protesters held signs that read "Save Our Job" or "Vote No on HB545". When interviewed, some of the protesters stated that if the payday loans were forced to close then they would loose their jobs, and that there were over 1,600 payday loan companies in Ohio; if these companies were forced to close, then over 6,000 more people would be added to the unemployment lines.