State Democrats call for vote on payday lending interest rate cap bill

4/10/2008

COLUMBUS House Democrats are calling for a vote on a bill that would place a cap on payday lending interest rates.

The Democrats made their call for a 36-percent rate cap in a letter sent Thursday to House Speaker Jon Husted. Previously they had called for general reform of the industry.

Payday lenders charge an average 391 percent annual rate. Activists and some lawmakers say their business model is built on trapping people in a cycle of debt.

Lenders say they serve an important role by giving borrowers a quick access to cash before a paycheck comes in.

Husted said Wednesday that momentum was growing for a rate cap but did not say whether he was contemplating a specific cap.