As Reported by the House Financial Institutions Committee 1
122nd General Assembly 4
Regular Session Sub. H. B. No. 522 5
1997-1998 6
REPRESENTATIVES SCHULER-GARCIA-MOTTLEY-MILLER-SALERNO- 8
VERICH-WILSON-HOUSEHOLDER-HAINES-MYERS 9
11
A B I L L
To amend sections 1155.08, 1163.11, 1322.01, 13
1322.02, 1322.03, 1322.04, 1322.10, and 1322.101, 14
to enact new section 1322.05, and to repeal 16
section 1322.05 of the Revised Code to modify the 18
registration requirements of mortgage brokers; to 20
require that mortgage loans be originated from a 21
location at which the mortgage broker 22
registration certificate is maintained; to 23
require that a mortgage broker business location 24
be in this state; to eliminate the net worth 25
requirements of mortgage brokers and to 27
substitute certain surety bond requirements; to 28
specify fines to be charged for a violation of a 29
law or rule adopted under the Mortgage Broker 30
Law; to eliminate the requirement that the board 32
of directors or auditing committee of a savings 33
and loan association or savings bank attest to 34
the contents of annual and semiannual reports 36
filed with the Superintendent of Financial 37
Institutions; and to eliminate the requirement 38
that a savings and loan association or savings 39
bank publish its annual statement of assets and 40
liabilities in a local newspaper. 42
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 44
Section 1. That sections 1155.08, 1163.11, 1322.01, 46
2
1322.02, 1322.03, 1322.04, 1322.10, and 1322.101 be amended and 48
new section 1322.05 of the Revised Code be enacted to read as 50
follows:
Sec. 1155.08. (A)(1) The annual and semiannual reports 59
required from a building SAVINGS and loan association by section 60
1155.07 of the Revised Code shall be in such A form and contain 62
such information as THAT is prescribed by the superintendent of 64
building and loan associations. They shall be sworn to by the 66
managing officer of the association to the best of his knowledge 68
and belief, and their correctness may be attested to by at least 69
three of its directors or an auditing committee appointed by its
board of directors FINANCIAL INSTITUTIONS. The original annual 70
and semiannual reports shall be filed with the superintendent 72
within thirty days after the close of the respective half year. 73
The annual statement of assets and liabilities shall be published 74
in a newspaper or periodical, regularly issued and of general 75
circulation in the county in which such association is located. 76
A
(2) A copy of the ANNUAL statement as published OF 79
CONDITION shall be available for public inspection on demand at 81
the association's place of business.
(B) All monthly reports which may be required by the 83
superintendent shall be filed by the tenth day of the succeeding 84
month. 85
(C) When an association is in process of liquidation, the 87
liquidating officers shall make all reports to the superintendent 88
that are required by law from solvent associations. 89
Sec. 1163.11. (A)(1) The annual and semiannual reports 98
required from a savings bank by section 1163.09 of the Revised 99
Code shall be in a form and contain information that is 100
prescribed by the superintendent of savings banks, they shall be 101
sworn to by the managing officer of the savings bank to the best 102
of his knowledge and belief, and their correctness may be 104
attested to by at least three of its directors or an auditing 105
3
committee appointed by its board of directors FINANCIAL
INSTITUTIONS. The original annual and semiannual reports shall 107
be filed with the superintendent within thirty days after the 108
close of the respective half year. The annual statement of 109
assets and liabilities shall be published in a newspaper or 110
periodical, regularly issued and of general circulation in the 111
county in which the savings bank is located. A 112
(2) A copy of the ANNUAL statement as published OF 116
CONDITION shall be available for public inspection on demand at 117
the savings bank's place of business. 118
(B) All monthly reports that may be required by the 120
superintendent shall be filed by the tenth day of the succeeding 121
month. 122
(C) When a savings bank is in process of liquidation, the 124
liquidating officers shall make all reports to the superintendent 125
that are required by law from solvent savings banks. 126
Sec. 1322.01. As used in sections 1322.01 to 1322.12 of 135
the Revised Code:
(A) "Buyer" means an individual who is solicited to 137
purchase or who purchases the services of a mortgage broker for 138
purposes other than obtaining a business loan as described in 139
division (B)(6) of section 1343.01 of the Revised Code. 140
(B) "Consumer reporting agency" has the same meaning as in 142
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 143
1681a, as amended. 144
(C) "Mortgage" means any indebtedness secured by a deed of 146
trust, security deed, or other lien on real property. 147
(D) "Mortgage banker" means any person that makes, 149
services, or buys and sells mortgage loans, and is approved as a 150
direct endorsement lender REQUIRED TO SUBMIT AUDITED FINANCIAL 153
STATEMENTS TO, AND IS SUBJECT TO A POSSIBLE AUDIT by, the United 156
States department of housing and urban development, the United 157
States department of veterans affairs, the federal national 158
mortgage association, the federal home loan mortgage corporation, 159
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OR the government national mortgage association, or an approved 160
correspondent with the United States department of housing and 161
urban development.
(E) "Mortgage broker" means a person that, in the regular 163
course of business, holds himself, herself, or itself THAT PERSON 165
out as being able to assist a buyer in obtaining a mortgage and 166
charges or receives money or other valuable consideration readily 168
convertible into money for providing this assistance. "Mortgage 169
broker" does not include any of the following: 170
(1) A person that makes or collects loans, to the extent 172
these activities are subject to licensure or registration by this 173
state; 174
(2) A lender approved by the United States secretary of 176
housing and urban development for participation in a mortgage 177
insurance program under the "National Housing Act," 48 Stat. 1246 178
(1934), 12 U.S.C.A. 1701, as amended; 179
(3) A bank, savings bank, or savings and loan association, 181
or a subsidiary or an affiliate of a bank, savings bank, or 182
savings and loan association. For purposes of division (E)(3) of 184
this section, "affiliate" has the same meaning as in division (A) 185
of section 1101.01 of the Revised Code, and "bank," as used in 186
division (A) of section 1101.01 of the Revised Code, is deemed to 187
include a savings bank or savings and loan association. 188
(4) A credit union organized and qualified under Chapter 190
1733. of the Revised Code or the "Federal Credit Union Act," 84 191
Stat. 994 (1970), 12 U.S.C.A. 1751, as amended; 192
(5) A budget and debt counseling service, as defined in 194
division (D) of section 2716.03 of the Revised Code, provided 195
that the service is a nonprofit organization exempt from taxation 196
under section 501(c)(3) of the "Internal Revenue Code of 1986," 197
100 Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service 198
is in compliance with Chapter 4710. of the Revised Code; 199
(6) A consumer reporting agency that is in substantial 201
compliance with the "Fair Credit Reporting Act," 84 Stat. 1128, 202
5
15 U.S.C.A. 1681a, as amended; 203
(7) A mortgage banker; 205
(8) Any political subdivision, or any governmental or 207
other public entity, corporation, or agency, in or of the United 208
States or any state of the United States; 209
(9) A college or university, or controlled entity of a 211
college or university, as defined in section 1713.05 of the 212
Revised Code. 213
(F) "Registrant" means any person that has been issued a 216
certificate of registration under sections 1322.01 to 1322.12 of 217
the Revised Code. 218
(G) "Superintendent of financial institutions" includes 220
the deputy superintendent for consumer finance as provided in 221
section 1181.21 of the Revised Code. 222
Sec. 1322.02. (A) No person, on the person's own behalf 231
or on behalf of any other person, shall act as a mortgage broker 234
without first having obtained a certificate of registration from 235
the superintendent of financial institutions for the person's 236
main office and for every other office to be maintained by the 238
person for the transaction of business as a mortgage broker in 239
this state. A REGISTRANT SHALL MAINTAIN AN OFFICE LOCATION IN 241
THIS STATE FOR THE TRANSACTION OF BUSINESS AS A MORTGAGE BROKER 243
IN THIS STATE.
(B) NO REGISTRANT OR EMPLOYEE OF A REGISTRANT SHALL 245
ORIGINATE A MORTGAGE LOAN, UNLESS THE MORTGAGE LOAN IS ORIGINATED 246
AT A LOCATION WHERE THE REGISTRANT'S CERTIFICATE OF REGISTRATION 247
IS MAINTAINED, AND WHERE THE REGISTRANT OR THE EMPLOYEE OF THE 248
REGISTRANT REGULARLY TRANSACTS MORTGAGE BROKER BUSINESS. 249
(C) NO PERSON SHALL ORIGINATE MORTGAGE LOANS FOR A 252
REGISTRANT, UNLESS THAT PERSON IS AN EMPLOYEE OF THE REGISTRANT. 253
(D) AS USED IN THIS SECTION: 255
(1) "EMPLOYEE" MEANS A PERSON WHO MAY BE REQUIRED OR 257
DIRECTED BY A REGISTRANT TO ORIGINATE MORTGAGE LOANS IN 258
CONSIDERATION OF DIRECT OR INDIRECT GAIN OR PROFIT. "EMPLOYEE" 259
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DOES NOT INCLUDE AN INDEPENDENT CONTRACTOR OR ANY PERSON WHO HAS 260
A SIMILAR EMPLOYMENT RELATIONSHIP WITH A MORTGAGE BROKER. 261
(2) "ORIGINATE" MEANS ANY OF THE FOLLOWING: 263
(a) TO NEGOTIATE OR ARRANGE, OR TO OFFER TO NEGOTIATE OR 266
ARRANGE, A MORTGAGE LOAN BETWEEN A PERSON THAT MAKES OR FUNDS
MORTGAGE LOANS AND A BUYER; 267
(b) TO ISSUE A COMMITMENT FOR A MORTGAGE LOAN TO A BUYER; 270
(c) TO PLACE, ASSIST IN PLACEMENT, OR FIND A MORTGAGE LOAN 273
FOR A BUYER.
Sec. 1322.03. (A) An application for a certificate of 283
registration as a mortgage broker shall be in writing, under 284
oath, and in the form prescribed by the superintendent of 285
financial institutions. The application shall be accompanied by 287
an application fee of three hundred fifty dollars for each
location of an office to be maintained by the applicant IN 288
ACCORDANCE WITH DIVISION (A) OF SECTION 1322.02 OF THE REVISED 289
CODE and shall provide all of the following: 290
(1) The location or locations where the business is to be 292
transacted and whether any location is a residence. If any 293
location where the business is to be transacted is a residence, 294
the application shall be accompanied by a certified copy of a 295
zoning permit authorizing the use of the residence for commercial 296
purposes, or shall be accompanied by a written opinion or other 297
document issued by the county or political subdivision where the 298
residence is located certifying that the use of the residence to 299
transact business as a mortgage broker is not prohibited by the 300
county or political subdivision. THE APPLICATION ALSO SHALL BE 302
ACCOMPANIED BY A PHOTOGRAPH OF EACH LOCATION AT WHICH THE 303
BUSINESS WILL BE TRANSACTED.
(2)(a) In the case of a sole proprietor, the name and 305
address of the sole proprietor; 306
(b) In the case of a partnership, the name and address of 309
each partner;
(c) In the case of a corporation, the name and address of 312
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each shareholder owning five per cent or more of the corporation; 313
(d) IN THE CASE OF ANY OTHER ENTITY, THE NAME AND ADDRESS 316
OF ANY PERSON THAT OWNS FIVE PER CENT OR MORE OF THE ENTITY THAT 317
WILL TRANSACT BUSINESS AS A MORTGAGE BROKER.
(3)(a) If the applicant is a partnership, the applicant 319
shall designate one of the partners named in the application 322
pursuant to division (A)(2)(b) of this section as responsible for 323
managing the operations of the location or locations where THE 324
business is to be transacted.
(b) If the applicant is a corporation, the applicant shall 327
designate one of the shareholders named in the application 329
pursuant to division (A)(2)(c) of this section as responsible for 330
managing the operations of the location or locations where THE 331
business is to be transacted.
(c) IF THE APPLICANT IS ANY OTHER ENTITY, THE APPLICANT 334
SHALL DESIGNATE A NATURAL PERSON THAT OWNS FIVE PER CENT OR MORE 335
OF THE ENTITY THAT WILL TRANSACT BUSINESS AS A MORTGAGE BROKER AS 336
RESPONSIBLE FOR MANAGING THE OPERATIONS OF THE LOCATION OR 337
LOCATIONS WHERE THE BUSINESS IS TO BE TRANSACTED. 338
(4) Evidence that at least one of the following applies to 340
the sole proprietor, partner, or shareholder, OR NATURAL PERSON 342
designated on the application pursuant to division (A)(3) of this 343
section as responsible for managing the operations of the 345
location or locations where the business is to be transacted: 346
(a) The EXCEPT AS PROVIDED IN DIVISION (D)(2) OF THIS 348
SECTION, THE sole proprietor, partner, or shareholder, OR NATURAL 350
PERSON has earned at least an associate's ASSOCIATE degree in an 351
area relating to finance, banking, or business administration, 352
and the degree was earned at an accredited college or university, 353
including an accredited community or technical college. 354
(b) The sole proprietor, partner, or shareholder, OR 356
NATURAL PERSON possesses at least three years of experience in 358
the mortgage and lending field, which experience may include 359
employment with or as a mortgage broker or with a financial 361
8
institution, mortgage lending institution, or other lending 362
institution, or possesses at least three years of other
experience RELATED SPECIFICALLY TO THE BUSINESS OF MORTGAGE LOANS 363
that the superintendent determines meets the requirements of 364
division (A)(4)(b) of this section. Evidence of experience 366
submitted with the application may include letters of employment 367
from present or prior employers. 368
(5) Evidence of compliance with the financial SURETY BOND 370
requirements of section 1322.05 of the Revised Code and with 372
sections 1322.01 to 1322.12 of the Revised Code; 373
(6) In the case of a foreign corporation, evidence that it 375
maintains a license pursuant to Chapter 1703. of the Revised Code 376
to transact business in this state; 377
(7) A statement that the applicant has not been convicted 379
of or pleaded guilty to a criminal offense, the violation of 380
which is a felony, or any criminal offense involving fraud; 381
(8) Any further information that the superintendent 383
requires. 384
(B) Upon the filing of the application and payment of the 386
application fee, the superintendent shall investigate the 387
applicant. If, in order to issue a certificate of registration 388
to an applicant, investigation by the superintendent outside this 390
state is necessary, the superintendent may require the applicant 391
to advance sufficient funds to pay the actual expenses of the 392
investigation, if it appears that these expenses will exceed 393
three hundred fifty dollars. The superintendent shall provide 394
the applicant with an itemized statement of the actual expenses 395
that the applicant is required to pay. 396
(C) All funds advanced and application and renewal fees 398
paid to the superintendent under this section and section 1322.04 400
of the Revised Code shall be paid by the superintendent to the 401
treasurer of state to the credit of the consumer finance fund 403
created in section 1321.21 of the Revised Code.
(D)(1) Division (A)(4) of this section does not apply to 406
9
any registrant that, on the effective date of this amendment 408
MARCH 4, 1996, is registered AS A MORTGAGE BROKER under sections 409
1322.01 to 1322.12 of the Revised Code under a certificate of 411
registration issued pursuant to those sections prior to the 413
effective date of this amendment MARCH 4, 1996, provided that the 415
certificate of registration is not surrendered by the registrant 416
or revoked or refused renewal by the superintendent of consumer 418
finance FINANCIAL INSTITUTIONS at any time after the effective 420
date of this amendment MARCH 4, 1996. 421
(2) EXCEPT AS PROVIDED IN DIVISION (D)(3) OF THIS SECTION, 424
ON AND AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, EVIDENCE OF 425
EDUCATION PROVIDED IN DIVISION (A)(4)(a) OF THIS SECTION SHALL 427
NOT BE ACCEPTED ON AN APPLICATION OF A PERSON APPLYING AS A NEW 428
APPLICANT FOR A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER. 430
HOWEVER, ON AND AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, A 431
PERSON WHO, PRIOR TO THAT DATE, SUBMITTED EVIDENCE OF EDUCATION 432
AS PROVIDED FOR IN DIVISION (A)(4)(a) OF THIS SECTION MAY RENEW A 434
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER, PROVIDED THAT 435
THE PERSON IS REGISTERED ON THAT DATE AS A MORTGAGE BROKER 436
PURSUANT TO SECTION 1322.04 OF THE REVISED CODE, AND A 438
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER IS NOT 439
SURRENDERED BY THE PERSON OR REVOKED OR REFUSED RENEWAL BY THE 440
SUPERINTENDENT AT ANY TIME AFTER THAT DATE. 441
(3) FOR A PERIOD ENDING THREE YEARS AFTER THE EFFECTIVE 443
DATE OF THIS AMENDMENT, EVIDENCE THAT THE PERSON DESIGNATED AS 444
RESPONSIBLE FOR MANAGING THE OPERATION OF A LOCATION OR LOCATIONS 445
WHERE BUSINESS IS OR WILL BE TRANSACTED MEETS THE EDUCATIONAL 446
REQUIREMENTS SPECIFIED IN DIVISION (A)(4)(a) OF THIS SECTION 447
SHALL BE ACCEPTABLE ON AN APPLICATION FOR A CERTIFICATE OF 448
REGISTRATION AS A MORTGAGE BROKER, IF THE SUPERINTENDENT 449
DETERMINES THAT BOTH OF THE FOLLOWING APPLY: 450
(a) PRIOR TO THE EFFECTIVE DATE OF THIS AMENDMENT, THE 453
PERSON WAS DESIGNATED PURSUANT TO DIVISION (A)(3) OF THIS SECTION 454
AS RESPONSIBLE FOR MANAGING THE OPERATIONS OF A LOCATION OR 455
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LOCATIONS WHERE A REGISTRANT'S BUSINESS WAS TRANSACTED, HAVING 456
MET THE EDUCATIONAL REQUIREMENTS PROVIDED IN DIVISION (A)(4)(a) 457
OF THIS SECTION; 458
(b) THE PERSON IS DESIGNATED AS RESPONSIBLE FOR MANAGING 461
THE OPERATIONS OF AN ENTITY DESCRIBED IN DIVISION (A)(2) OF THIS 462
SECTION WHERE THE MORTGAGE BROKER BUSINESS IS OR WILL BE 463
TRANSACTED.
Sec. 1322.04. (A) Upon the conclusion of the 472
investigation required under division (B) of section 1322.03 of 473
the Revised Code, the superintendent of financial institutions 475
shall issue a certificate of registration to the applicant if the 477
superintendent finds that the following conditions are met: 478
(1) The application is accompanied by the application fee 480
of three hundred fifty dollars for each location of an office to 481
be maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF 482
SECTION 1322.02 OF THE REVISED CODE and complies with division 483
(A) of section 1322.03 of the Revised Code. 484
(2) If the application is for a location that is a 486
residence, that the applicant has obtained a valid zoning permit 487
authorizing the use of the residence for commercial purposes, or 488
has obtained a valid written opinion or other document issued by 490
the county or political subdivision where the residence is 491
located certifying that the use of the residence to transact 492
business as a mortgage broker is not prohibited by the county or 493
political subdivision. THE APPLICATION ALSO IS ACCOMPANIED BY A 494
PHOTOGRAPH OF EACH LOCATION AT WHICH THE MORTGAGE BROKER'S 495
BUSINESS WILL BE TRANSACTED. 496
(3)(a) The sole proprietor, partner, or shareholder, OR 499
NATURAL PERSON designated on the application, pursuant to 501
division (A)(3) of section 1322.03 of the Revised Code, as 502
responsible for managing the operation of the location or 504
locations where THE business is to be transacted meets the 506
educational or experience requirements described PROVIDED in 507
division (A)(4) of section 1322.03 of the Revised Code. 508
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(b) IF A PARTNER, SHAREHOLDER, OR NATURAL PERSON 511
DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE 513
REVISED CODE CEASES TO BE RESPONSIBLE FOR MANAGING THE OPERATION 516
OF THE LOCATION OR LOCATIONS WHERE THE BUSINESS IS TO BE 517
TRANSACTED, THE APPLICANT SHALL COMPLY WITH THE REQUIREMENTS THAT 518
APPLY TO A REGISTRANT UNDER DIVISION (E) OF THIS SECTION. 519
(4) In the case of a foreign corporation, the applicant 521
maintains a license pursuant to Chapter 1703. of the Revised Code 522
to transact business in this state. 523
(5) The applicant complies with the financial SURETY BOND 525
requirements of section 1322.05 of the Revised Code. 527
(6) The applicant complies with sections 1322.01 to 529
1322.12 of the Revised Code. 530
(7) The applicant has not pleaded guilty to or been 532
convicted of a criminal offense, the violation of which is a 533
felony, or any criminal offense involving fraud. 534
(8) The applicant's financial responsibility, experience, 536
character, and general fitness command the confidence of the 537
public and warrant the belief that the business will be operated 538
honestly and fairly in compliance with the purposes of sections 539
1322.01 to 1322.12 of the Revised Code. 540
For purposes of determining whether an applicant that is a 542
partnership or, corporation, OR OTHER ENTITY has met the 544
conditions set forth in division (A)(8) of this section, the 546
superintendent shall determine which partners or, shareholders, 547
OR PERSONS named in the application pursuant to division (A)(2) 549
of section 1322.03 of the Revised Code must meet the conditions 551
set forth in division (A)(8) of this section. This determination 552
shall be based on the extent and nature of the partner's or, 553
shareholder's, OR PERSON'S ownership interest in the partnership 555
or, corporation, OR ENTITY that is the applicant. 556
(B) The certificate of registration issued pursuant to 558
division (A) of this section may be renewed annually on or before 559
the thirtieth day of April upon payment of a renewal fee of three 560
12
hundred fifty dollars for each location of an office to be 561
maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF 562
SECTION 1322.02 OF THE REVISED CODE and a finding by the 563
superintendent that the applicant meets the conditions set forth 564
in divisions (A)(2) to (8) of this section and that the 565
applicant's certificate of registration is not subject to an 566
order of suspension or revocation by the superintendent. If a 567
renewal fee is submitted to RECEIVED BY the superintendent after 569
the thirtieth day of April but prior to the first day of June, 571
the fee shall be accompanied by a late renewal fee of one hundred 572
dollars for each location of an office maintained by the
applicant for which the renewal fee is late, THE CERTIFICATE OF 573
REGISTRATION SHALL NOT BE CONSIDERED RENEWED, AND THE APPLICANT 575
SHALL CEASE ACTIVITY AS A MORTGAGE BROKER AND APPLY FOR A 576
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER. 577
(C) No application, OR renewal, or late renewal fee 579
required by division (A) or (B) of this section shall be returned 581
after a certificate of registration has been issued or renewed by 582
the superintendent.
(D) Division (A)(3) of this section does not apply to any 585
registrant that, on the effective date of this amendment MARCH 4, 587
1996, is registered AS A MORTGAGE BROKER under sections 1322.01 588
to 1322.12 of the Revised Code under a certificate of 589
registration issued pursuant to those sections prior to the 591
effective date of this amendment MARCH 4, 1996, provided that the 593
certificate of registration is not surrendered by the registrant 594
or revoked or refused renewal by the superintendent of consumer 596
finance FINANCIAL INSTITUTIONS at any time after the effective 598
date of this amendment MARCH 4, 1996. 599
(E) IF A PARTNER, SHAREHOLDER, OR NATURAL PERSON 601
DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE 603
REVISED CODE IS NO LONGER RESPONSIBLE FOR MANAGING THE OPERATION 605
OF THE LOCATION OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED, 606
THE REGISTRANT SHALL DO ALL OF THE FOLLOWING: 608
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(1) DESIGNATE ANOTHER PARTNER, SHAREHOLDER, OR NATURAL 611
PERSON AS RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION 613
OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED;
(2) WITHIN TEN DAYS AFTER THE DESIGNATION DESCRIBED IN 616
DIVISION (E)(1) OF THIS SECTION, NOTIFY THE SUPERINTENDENT IN 618
WRITING OF THE DESIGNATION; 619
(3) SUBMIT ANY ADDITIONAL INFORMATION THAT THE 622
SUPERINTENDENT REQUIRES TO ESTABLISH THAT THE NEWLY DESIGNATED 623
PARTNER, SHAREHOLDER, OR NATURAL PERSON COMPLIES WITH THE
EXPERIENCE REQUIREMENTS SET FORTH IN DIVISION (A)(4)(b) OF 625
SECTION 1322.03 OF THE REVISED CODE. 627
Sec. 1322.05. (A) NO REGISTRANT SHALL CONDUCT BUSINESS IN 630
THIS STATE, UNLESS THE REGISTRANT HAS OBTAINED A CORPORATE SURETY 632
BOND ISSUED BY A BONDING COMPANY OR INSURANCE COMPANY AUTHORIZED 633
TO DO BUSINESS IN THIS STATE. THE BOND SHALL BE IN FAVOR OF THE 634
SUPERINTENDENT OF FINANCIAL INSTITUTIONS AND IN THE PRINCIPAL SUM 635
OF AT LEAST TWENTY-FIVE THOUSAND DOLLARS AND AN ADDITIONAL 636
PRINCIPAL SUM OF FIVE THOUSAND DOLLARS FOR EACH LOCATION, IN 637
EXCESS OF ONE, AT WHICH THE REGISTRANT CONDUCTS BUSINESS. A COPY 638
OF THE BOND SHALL BE FILED WITH THE SUPERINTENDENT. THE PROCEEDS 639
OF THE BOND SHALL CONSTITUTE A TRUST FUND FOR THE EXCLUSIVE 640
BENEFIT OF ANY PERSON INJURED BY A VIOLATION OF ANY PROVISION OF 641
SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE. 643
(B) THE REGISTRANT SHALL GIVE NOTICE TO THE SUPERINTENDENT 646
BY CERTIFIED MAIL OF ANY ACTION THAT IS BROUGHT AGAINST THE 647
REGISTRANT AND OF ANY JUDGMENT THAT IS ENTERED AGAINST THE 648
REGISTRANT BY A PERSON INJURED BY A VIOLATION OF ANY PROVISION OF 649
SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE. THE NOTICE 652
SHALL PROVIDE DETAILS SUFFICIENT TO IDENTIFY THE ACTION OR 653
JUDGMENT, AND SHALL BE FILED WITH THE SUPERINTENDENT WITHIN TEN 654
DAYS AFTER THE COMMENCEMENT OF THE ACTION OR NOTICE TO THE 655
REGISTRANT OF ENTRY OF A JUDGMENT. THE CORPORATE SURETY, WITHIN 656
TEN DAYS AFTER IT PAYS ANY CLAIM OR JUDGMENT, SHALL GIVE NOTICE 657
TO THE SUPERINTENDENT BY CERTIFIED MAIL OF THE PAYMENT, WITH 658
14
DETAILS SUFFICIENT TO IDENTIFY THE PERSON AND THE CLAIM OR 659
JUDGMENT PAID. 660
(C) WHENEVER THE PRINCIPAL SUM OF THE CORPORATE SURETY 663
BOND IS REDUCED BY ONE OR MORE RECOVERIES OR PAYMENTS, THE 664
REGISTRANT SHALL FURNISH A NEW OR ADDITIONAL BOND UNDER THIS 665
SECTION, SO THAT THE TOTAL OR AGGREGATE PRINCIPAL SUM OF THE BOND 666
OR BONDS EQUALS THE SUM REQUIRED BY THIS SECTION, OR SHALL 667
FURNISH AN ENDORSEMENT EXECUTED BY THE CORPORATE SURETY 668
REINSTATING THE BOND TO THE REQUIRED PRINCIPAL SUM OF IT. 669
(D) THE LIABILITY OF THE CORPORATE SURETY ON THE BOND TO 672
THE SUPERINTENDENT AND TO ANY PERSON INJURED BY A VIOLATION OF 673
ANY PROVISION OF SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE 676
SHALL NOT BE AFFECTED IN ANY WAY BY ANY MISREPRESENTATION, BREACH 677
OF WARRANTY, OR FAILURE TO PAY THE PREMIUM, BY ANY ACT OR 678
OMISSION UPON THE PART OF THE REGISTRANT, BY THE INSOLVENCY OR 679
BANKRUPTCY OF THE REGISTRANT, OR BY THE INSOLVENCY OF THE 680
REGISTRANT'S ESTATE. THE LIABILITY FOR ANY ACT OR OMISSION THAT 681
OCCURS DURING THE TERM OF THE CORPORATE SURETY BOND SHALL BE 682
MAINTAINED AND IN EFFECT FOR AT LEAST TWO YEARS AFTER THE DATE ON 683
WHICH THE CORPORATE SURETY BOND IS TERMINATED OR CANCELED. 684
(E) THE CORPORATE SURETY BOND SHALL NOT BE CANCELED BY THE 687
REGISTRANT OR THE CORPORATE SURETY EXCEPT UPON NOTICE TO THE 688
SUPERINTENDENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THE 689
CANCELLATION SHALL NOT BE EFFECTIVE PRIOR TO THIRTY DAYS AFTER 690
THE SUPERINTENDENT RECEIVES THE NOTICE. 691
(F) NO REGISTRANT SHALL FAIL TO COMPLY WITH THIS SECTION. 695
Sec. 1322.10. (A) After notice and opportunity for a 704
hearing conducted in accordance with Chapter 119. of the Revised 705
Code, the superintendent of financial institutions may suspend DO 707
THE FOLLOWING:
(1) SUSPEND, revoke, or refuse to issue or renew a 709
certificate of registration if the superintendent finds a 712
violation of division (B) of section 1322.02 OR 1322.06, or 714
section 1322.05, 1322.07, 1322.08, or 1322.09 of the Revised Code 715
15
or the rules adopted thereunder UNDER THOSE SECTIONS; 716
(2) IMPOSE A FINE OF NOT MORE THAN ONE THOUSAND DOLLARS, 719
FOR EACH DAY A VIOLATION OF A LAW OR RULE IS COMMITTED, REPEATED, 720
OR CONTINUED. IF THE REGISTRANT ENGAGES IN A PATTERN OF REPEATED 721
VIOLATIONS OF A LAW OR RULE, THE SUPERINTENDENT MAY IMPOSE A FINE 722
OF NOT MORE THAN TWO THOUSAND DOLLARS FOR EACH DAY THE VIOLATION 723
IS COMMITTED, REPEATED, OR CONTINUED. ALL FINES COLLECTED 725
PURSUANT TO THIS DIVISION SHALL BE PAID TO THE TREASURER OF STATE 727
TO THE CREDIT OF THE CONSUMER FINANCE FUND CREATED IN SECTION 728
1321.21 OF THE REVISED CODE. IN DETERMINING THE AMOUNT OF A FINE 729
TO BE IMPOSED PURSUANT TO THIS DIVISION, THE SUPERINTENDENT SHALL 731
CONSIDER ALL OF THE FOLLOWING: 732
(a) THE SERIOUSNESS OF THE VIOLATION; 735
(b) THE REGISTRANT'S GOOD FAITH EFFORTS TO PREVENT THE 738
VIOLATION;
(c) THE REGISTRANT'S HISTORY REGARDING VIOLATIONS AND 741
COMPLIANCE WITH DIVISION ORDERS;
(d) THE REGISTRANT'S FINANCIAL RESOURCES; 744
(e) ANY OTHER MATTERS THE SUPERINTENDENT CONSIDERS 747
APPROPRIATE IN ENFORCING SECTIONS 1322.01 TO 1322.12 OF THE 748
REVISED CODE.
(B) The superintendent may investigate alleged violations 750
of section 1322.01 to 1322.12 of the Revised Code, or the rules 751
adopted thereunder, UNDER THOSE SECTIONS or complaints concerning 753
any such violation. The superintendent may make application to 754
the court of common pleas for an order enjoining any such 755
violation, and, upon a showing by the superintendent that a 756
person has committed, or is about to commit, such a violation, 757
the court shall grant an injunction, restraining order, or other 758
appropriate relief.
(C) In conducting any investigation pursuant to this 760
section, the superintendent may compel, by subpoena, witnesses, 761
to testify in relation to any matter over which the 762
superintendent has jurisdiction, and may require the production 763
16
of any book, record, or other document pertaining to such THAT 764
matter. If a person fails to file any statement or report, obey 765
any subpoena, give testimony, produce any book, record, or other 766
document as required by such a subpoena, or permit photocopying 767
of any book, record, or other document subpoenaed, the court of 768
common pleas of any county in this state, upon application made 769
to it by the superintendent, shall compel obedience by attachment 770
proceedings for contempt, as in the case of disobedience of the 771
requirements of a subpoena issued from the court or a refusal to 772
testify therein. 773
(D) If the superintendent determines that a person is 775
engaged in, or is believed to be engaged in, activities that may 776
constitute a violation of sections 1322.01 to 1322.12 of the 777
Revised Code, the superintendent may, after notice and a hearing 778
conducted in accordance with Chapter 119. of the Revised Code, 779
MAY issue a cease and desist order. Such an order shall be 780
enforceable in the court of common pleas. 781
Sec. 1322.101. On receipt of a notice pursuant to section 791
2301.373 of the Revised Code, the division of consumer finance
FINANCIAL INSTITUTIONS shall comply with that section with 793
respect to a certificate issued pursuant to this chapter.
Section 2. That existing sections 1155.08, 1163.11, 795
1322.01, 1322.02, 1322.03, 1322.04, 1322.10, and 1322.101 and 797
section 1322.05 of the Revised Code are hereby repealed. 798