Politics & Government

Payday Loan Ban Passes Unanimously

Until the Ohio Supreme Court weighs in on the future of the payday loan industry in Ohio, Cleveland Heights is considering a ban on new lenders.

The Cleveland Heights City Council unanimously passed a ban on new unlicensed payday loan stores.

The ordinance approved Monday would ban new payday loan businesses that don't have a license under a state law. That law, Ohio's Short-Term Loan Act, makes pay-day loan terms more borrower-friendly and requires annual licensing for lenders.

According to the Columbus Dispatch, pay-day lenders have found a loophole by licensing under other similar laws that do not have the same protections.

"In my opinion, Payday lenders are predatory by nature," said Councilman Jason Stein. "They prey on those of us that have less. They prey on those of us that can least afford to be taken advantage of. 

"A moratorium is needed to send a message to these predatory businesses," he added. "The message is, 'Payday Lenders are not welcome in Cleveland Heights.' "

A court case before the Ohio Supreme court, Ohio Neighborhood Finance vs. Scott, will likely settle the matter. Cleveland Heights' moratorium is in effect until the Supreme Court ruling is reached, according to the proposed ordinance.

Existing payday loan businesses will not be affected by the moratorium. Lakewood recently enacted a similar ban.


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