Officials in Lakewood, Ohio, say that many payday lenders are exploiting “loopholes” in the 2008 Short-Term Lending Act, which otherwise caps the interest rates that these lenders can charge.
The Lakewood City Council voted Oct. 7 to renew an existing ban on cash-advance businesses setting up shop locally. "If there’s an argument that these things are illegal, then we don’t want them opening up," said Kevin Butler, the city’s law director. He noted that Lakewood is still waiting for a ruling by the Ohio Supreme Court on whether such businesses are legal. The two short-term lenders existing in Lakewood have been grandfathered in.