Imagine taking out an interest loan with 500 percent interest. It's happening in Ohio everyday.
On Saturday, a new law goes into effect that takes aim at those payday loans.
Some politicians argue payday loan operations exploit the poor and disadvantaged, offering them loans that have annual interest rates as high as 600 percent, which is the highest in the county.
Currently, payday lenders operate under a section of state law for credit service organizations, making them brokers not lenders.
It's been this way for a decade, but last year former Governor John Kasich signed a law that changes that, and it goes into effect on April 27.
Here are a few changes going into effect:
- Loans cannot be higher than $1,000.
- Loan durations can't be longer than one year.
- You have three business days to change your mind and return the money without fines and fees.