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Voters in Ohio keep payday loan cap at 28
CLEVELAND, Ohio (11/7/08)--Ohio residents voted Tuesday to uphold Issue 5, a referendum to uphold a law that limits payday loan interest rates in the state at 28%. The law had been challenged by the payday lending industry. About 64% of voters were in favor of keeping the cap. Issue 5 limits payday loans to $500, and lenders are required to give borrowers 30 days to repay the loans. Borrowers are allowed only four payday loans per year. A state database also will be created so that lenders will not unknowingly grant more payday loans beyond a consumer’s limit (News Now Nov. 5). Issue 5 was backed by the Center for Responsible Lending of Durham, N.C. The Ohio Credit Union League didn’t advocate a position on the bill because it doesn’t directly affect credit unions. However, some credit unions were supportive of the measure. If Issue 5 hadn’t passed, payday lenders would have been allowed to charge borrowers 391% interest rates.
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