Legal Aid Argues Before the Ohio Supreme Court

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On December 10, 2013, Cleveland Legal Aid attorney Julie Robie argued before the Supreme Court of Ohio that the payday loan industry should not be allowed to continue evading Ohio law. Ever since Ohio’s Short Term Loan Act was passed in 2008 to limit payday loan APRs to 28% and restrict other loan features, not a single lender has complied with that law, instead misusing other lending licenses to continue charging triple digit APRs on payday loans.

In the case of Cashland v. Scott, Ms. Robie told the Supreme Court Justices that “short-term loans are not legal in Ohio unless they comply with the Short Term Loan Act.” In addition to capping APRs, the Short Term Loan Act caps loan size at $500 and requires lenders to give borrowers at least 31 days to repay. The Ohio legislature specifically provided for payday lenders operating under the pre-2008 law to become licensed under the Short Term Loan Act and, Ms. Robie said, prohibited lenders from trying to circumvent the law. “The Short Term Loan Act, by the plain language of that law, applies both to lenders who are licensed and those required to be licensed,” Ms. Robie told the Court.

The Court’s decision is expected to determine how and whether payday lenders will continue to operate in Ohio.

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