The first license under a new Ohio law that regulates payday lenders was issued last week.
SCIL Inc., which operates Speedy Cash storefronts, was awarded the license under the Short Term Loan Act — a law that resulted from a bill sponsored last year by state Rep. Kyle Koehler, R-Springfield.
“One of the biggest arguments against payday lending reform was that if we imposed actual fairness constraints on lenders, they would shut down and leave Ohio. Instead, what we see is the first license being issued in the 11 long years since the legislature first tried to address payday lending,” Koehler said.
Koehler and joint sponsor state Rep. Michael Ashford, D-Toledo, introduced the bill to close loopholes and clarify statutes regulating the payday lending industry, including the Short-Term Loan Act, to ensure payday lenders are operating under intended guidelines.
The law prohibits borrowers from owing more than $2,500 in outstanding principal at a time from multiple payday lenders while continuing to protect them from unscrupulous lending practices. The law limits monthly maintenance fees to either 10 percent of the principal or $30, whichever is less, and caps the overall fees for a loan at 60 percent of the principal, according to a news release from Koehler’s office.
Further licenses will be issued by the Ohio Department of Commerce as applications are processed, the release says.
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