COLUMBUS, Ohio (AP) — In a victory for payday lenders, the Ohio Supreme Court has ruled that a two-week loan to an Elyria man that imposed more than 235-percent interest is not prohibited under Ohio’s mortgage lending laws.
In a unanimous decision Wednesday, the court sent Rodney Scott’s case against Ohio Neighborhood Finance, owner of Cashland stores, back to the trial court for further proceedings.
The high-stakes case was closely watched by both lenders and consumer groups.
Advocates for Scott sought to close a lending loophole that has allowed payday-style loans to continue as interest-bearing mortgage loans despite a state crackdown on predatory short-term lending passed in 2008.
A lower court ruled Ohio lawmakers intended the 2008 law to prohibit payday loans. Justices ruled Wednesday that the law doesn’t have that effect.