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COLUMBUS, Ohio (BP) вЂ” OhioвЂ™s new law regulating payday lending is an important advance, but the church plays a vital role in helping people who often become casualties of the predatory industry, Southern Baptist pastor David Gray says.
Gov. John Kasich signed into law July 30 what some advocates have described as a model for the country in addressing abuses by lenders who often draw poor people into a debt trap by charging exorbitant, and often misleading, interest rates.
In the industry, a lender may portray an interest rate as 15 percent, but it actually is only for a two-week period until a personвЂ™s next payday. The annual interest rate in payday lending typically is about 400 percent, making it extremely difficult for a borrower to repay the loan.
The new Ohio measure says a loan of no more than $1,000 can be made for 30 days to two months, but a loan for less than 90 days cannot surpass a monthly payment of more than seven percent of a borrowerвЂ™s net income per month, according to The Columbus (Ohio) Dispatch. (more…)