From the moment it officially joined as one of the United States, Ohio has been a leader of American industry, innovation, and finance. From Cincinnati to Toledo, from Cleveland to Columbus, and every point in between… Ohio has been the heart of the Heartland, and has lead the way for a nation.
This includes the industry of private lending. Not only for the availability and diversity of loans (payday loans, car title loans, personal loans, paycheck advances) but also for the oversight and regulation of these loans. Without being unduly restrictive on businesses, Ohio government has also made all the right moves to protect their citizens.
Ohio – A Land of Firsts
Ohio is the Birthplace of Presidents, it’s the heart of America. It’s also the home of innovation. The airplane was invented here, as was the electric starter engine, the gas mask, the cash register, and the pop top soda can.
Cincinnati had not only the country’s first professional baseball club, but also the first ambulance service and professional fire department. Akron was the first city to ever use police cars. Cleveland was the first city in the world to be entirely lit with electric lights. It was also home to the first traffic light.
Ohio is the birthplace of world-changing ideas. It has a proud, rich history that extends into the world of finance. For many years, Ohio has been one of the strongholds for private lending in America.
Payday Loans in Ohio
In 2008, Ohio legislators became alarmed at the vast number of payday loan companies operating in the state. At the time, there were more storefront lenders than the top three fast food chain locations combined! Wanting to protect their citizenry, the Short Term Loan Act was passed. It was quickly ratified by voters and turned into the law of the land.
The Short Term Loan Act (STLA) set a hard limit for the total amount of the loan at $500, capped interest rates at 28% APR. It set boundaries for the length of the loan, and how many loans could be taken out. There was also the necessity for a written loan agreement or contract between the borrower and lender, a common practice for many lenders that was still skirted by some.
It was, and remains, one of the strongest attempts at regulating payday loans. Unsurprisingly, it did not have a sharp impact on the legitimate lenders of Ohio. Nor did it affect the robust Ohio economy.
The complete listing of the many rules and regulations governing payday lenders is available here.
Ohio Still Leading the Way
By stepping forward in a timely manner to protect its citizens and their businesses, Ohio assured the continued growth of state revenue. The immediate aftermath showed no losses. The state was ranked #2 in the nation for best climate for businesses, and #10 for tax systems friendly towards businesses.
And did the STLA destroy payday loans? Not at all, as there are still thousands of lending business operating in the Buckeye State. They provide a safety net for working class Ohioans who don’t have the collateral or credit score needed to get help from a mainstream bank.