Co-Authors: Shawn Judge, Of Counsel, Isaac Wiles, Mark Troutman, Partner, Isaac Wiles and Gregory Travalio, Of Counsel, Isaac Wiles,
Critics have long argued for consumer protection against the excesses of the industry. They assert that the danger of payday loans is not only in the high interest rates and fees charges by lenders, but also in the fact that borrowers are often not fully informed of these charges, do not understand how these charges can add up if loans are extended, and do not recognize the dangers of becoming immersed in a never-ending cycle of increasing debt to payday lenders,” the authors explain.
Ohio has tried to regulate the payday loan industry previously in 1995 and 2008, and went for a third attempt in 2018. On October 29, 2018, the Fairness in Lending Act became law, targeting the loopholes that enabled the payday industry to continue working normally.
Ohio is now one of the states with the strictest laws regulating payday lenders however, it is unlikely all the loopholes have been filled in.
“The success or failure of Ohio’s regulations and their effect on consumers will inform whether the state’s newest payday laws provide a template or a cautionary tale for other states seeking to step into the regulatory gap in the wake of federal withdrawal,” the authors conclude.
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