Ohio's Supreme Court will hear a payday lending case that could close the licensing loophole used by businesses to charge exorbitant interest. In November, an appellate court ruled that Ohio Neighborhood Finance wrongly used a mortgage lending license to circumvent the 28 percent annual interest rate ceiling set by the state's 2008 Short Term Lending Act. The high court's ruling in Ohio Neighborhood Finance vs. Scott could either force lenders to use the short-term lending license to issue payday loans, or make the statute essentially toothless. In 2009, Ohio Neighborhood Finance -- which operates Cashland stores for Cash America -- sued Rodney Scott for failing to pay back a two-week $500 loan that carried a total 245 percent APR. A magistrate in Elyria Municipal Court ruled that the lender had improperly issued a payday loan under the state's Mortgage Lending Act instead of the Short-Term Lending Act. While Cashland could still sue Scott for the debt, it would have to settle for 8 percent interest -- a default interest rate set by state law for loans not otherwise exempted. When Ohio Neighborhood Finance appealed, Ohio's 9th District Court of Appeals upheld the Elyria court decision.