Dollar Financial not to close Ohio shops

By Supantha Mukherjee

BANGALORE (Reuters) - U.S. payday lender Dollar Financial Corp (DLLR.O: Quote, Profile, Research, Stock Buzz) said it does not plan to close shops in Ohio, where recent legislation significantly capped interest on such loans, and was planning to expand in Europe.

"All our stores in Ohio are multiline...meaning payday lending is just one of a set of eight or nine products," Chief Executive Jeff Weiss said in an interview with Reuters.

The company's Ohio stores will remain profitable even if they do not offer any payday loan product, he said.

Last week, Ohio passed a bill effectively capping the interest rate on payday loans at 28 percent.

Such loans, which tide over borrowers for short periods, carry effective annual interest rates that can top 300 percent.

Following the legislation, at least two payday lenders, Cash America International Inc (CSH.N: Quote, Profile, Research, Stock Buzz) and Advance America Cash Advance Centers Inc (AEA.N: Quote, Profile, Research, Stock Buzz), said they would close their lending operations in the state.

John Rowan, an analyst at Sidoti & Co, said Dollar Financial doesn't need to close its shops in Ohio as the company is better diversified than others.

Dollar Financial provides check cashing, short-term consumer loans, Western Union money orders and money transfers as well as other conveniences such as utility bill payments, currency exchange and tax preparation.