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COLUMBUS, Ohio (AP) – A new law cracking down on some of the country's highest payday loan rates came into effect in Ohio.
Signed in July by the then government. John Kasich (KAY's -sik), the law came into effect Saturday.
It caps interest rates and limits the fees charged by the credit sector in the short term. It also prohibits loans of less than 30 days duration. Loan payments of 90 days or less can not exceed 7% of a borrower's monthly net income, or 6% of gross income.
Fees and interest can not exceed 60% of the initial capital of the loan under the new rules.
The payday loan industry warned that the law would put them on the sidelines and leave those who did not have access to traditional banking options without access to credit in an emergency.
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