Cash America to close up to 139 locations in Ohio

The bill, which passed Ohio Senate Wednesday and was previously approved by the Ohio House, would limit short-term, or "payday" lending in the state. Gov. Ted Strickland has not yet signed the bill, which must be reconciled between the Senate and House versions, but supports the law, which would limit borrowers to four short-term loans a year and cap annual interest rates at 28 percent.

Payday lenders generally charge about $15 for every $100 borrowed on a two-week loan, which would be the equivalent of a 391 percent annual interest rate.

The bill would also limit loan amounts to $500 per loan, or 25 percent of a consumer's base monthly pay -whichever is less.

Cash America said the provisions of the law would reduce its ability to generate revenue.

The company said it will keep its stores in Ohio open until the law becomes effective, which could be as early as August.

Because of the expected closures, Cash America now expects fiscal 2008 earnings to range between $2.85 and $3.00 per share. It previously estimated it would earn between $3.00 and $3.15 per share.

On Wednesday night, competitor Advance America, Cash Advance Centers Inc., which also offers payday loans, said it might close its 246 centers in Ohio because of the legislation as well.

Shares of Cash America International fell $1.55, or 4.2 percent, to $36.25 in premarket trading, from their close at $36.80 in Wednesday's regular session.