As Passed by the House 1
122nd General Assembly 4
Regular Session Am. Sub. H. B. No. 522 5
1997-1998 6
REPRESENTATIVES SCHULER-GARCIA-MOTTLEY-MILLER-SALERNO-VERICH- 8
WILSON-HOUSEHOLDER-HAINES-MYERS-TERWILLEGER-REID-MOTTL- 9
KASPUTIS-PERZ-JAMES-CORE-PADGETT-OLMAN-BUCHY-WACHTMANN 10
12
A B I L L
To amend sections 1155.08, 1163.11, 1322.01, 14
1322.02, 1322.03, 1322.04, 1322.10, and 1322.101, 15
to enact new section 1322.05, and to repeal 17
section 1322.05 of the Revised Code to modify the 19
registration requirements of mortgage brokers; to 21
require that mortgage loans be originated from a 22
location at which the mortgage broker 23
registration certificate is maintained; to 24
require that a mortgage broker business location 25
be in this state; to eliminate the net worth 26
requirements of mortgage brokers and to 28
substitute certain surety bond requirements; to 29
specify fines to be charged for a violation of a 30
law or rule adopted under the Mortgage Broker 31
Law; to eliminate the requirement that the board 33
of directors or auditing committee of a savings 34
and loan association or savings bank attest to 35
the contents of annual and semiannual reports 37
filed with the Superintendent of Financial 38
Institutions; and to eliminate the requirement 39
that a savings and loan association or savings 40
bank publish its annual statement of assets and 41
liabilities in a local newspaper. 43
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 45
2
Section 1. That sections 1155.08, 1163.11, 1322.01, 47
1322.02, 1322.03, 1322.04, 1322.10, and 1322.101 be amended and 49
new section 1322.05 of the Revised Code be enacted to read as 51
follows:
Sec. 1155.08. (A)(1) The annual and semiannual reports 60
required from a building SAVINGS and loan association by section 61
1155.07 of the Revised Code shall be in such A form and contain 63
such information as THAT is prescribed by the superintendent of 65
building and loan associations. They shall be sworn to by the 67
managing officer of the association to the best of his knowledge 69
and belief, and their correctness may be attested to by at least 70
three of its directors or an auditing committee appointed by its
board of directors FINANCIAL INSTITUTIONS. The original annual 71
and semiannual reports shall be filed with the superintendent 73
within thirty days after the close of the respective half year. 74
The annual statement of assets and liabilities shall be published 75
in a newspaper or periodical, regularly issued and of general 76
circulation in the county in which such association is located. 77
A
(2) A copy of the ANNUAL statement as published OF 80
CONDITION shall be available for public inspection on demand at 82
the association's place of business.
(B) All monthly reports which may be required by the 84
superintendent shall be filed by the tenth day of the succeeding 85
month. 86
(C) When an association is in process of liquidation, the 88
liquidating officers shall make all reports to the superintendent 89
that are required by law from solvent associations. 90
Sec. 1163.11. (A)(1) The annual and semiannual reports 99
required from a savings bank by section 1163.09 of the Revised 100
Code shall be in a form and contain information that is 101
prescribed by the superintendent of savings banks, they shall be 102
sworn to by the managing officer of the savings bank to the best 103
of his knowledge and belief, and their correctness may be 105
3
attested to by at least three of its directors or an auditing 106
committee appointed by its board of directors FINANCIAL
INSTITUTIONS. The original annual and semiannual reports shall 108
be filed with the superintendent within thirty days after the 109
close of the respective half year. The annual statement of 110
assets and liabilities shall be published in a newspaper or 111
periodical, regularly issued and of general circulation in the 112
county in which the savings bank is located. A 113
(2) A copy of the ANNUAL statement as published OF 117
CONDITION shall be available for public inspection on demand at 118
the savings bank's place of business. 119
(B) All monthly reports that may be required by the 121
superintendent shall be filed by the tenth day of the succeeding 122
month. 123
(C) When a savings bank is in process of liquidation, the 125
liquidating officers shall make all reports to the superintendent 126
that are required by law from solvent savings banks. 127
Sec. 1322.01. As used in sections 1322.01 to 1322.12 of 136
the Revised Code:
(A) "Buyer" means an individual who is solicited to 138
purchase or who purchases the services of a mortgage broker for 139
purposes other than obtaining a business loan as described in 140
division (B)(6) of section 1343.01 of the Revised Code. 141
(B) "Consumer reporting agency" has the same meaning as in 143
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 144
1681a, as amended. 145
(C) "Mortgage" means any indebtedness secured by a deed of 147
trust, security deed, or other lien on real property. 148
(D) "Mortgage banker" means any person that makes, 150
services, or buys and sells mortgage loans, and is approved as a 151
direct endorsement lender REQUIRED TO SUBMIT AUDITED FINANCIAL 154
STATEMENTS TO, AND IS SUBJECT TO A POSSIBLE AUDIT by, the United 157
States department of housing and urban development, the United 158
States department of veterans affairs, the federal national 159
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mortgage association, the federal home loan mortgage corporation, 160
OR the government national mortgage association, or an approved 161
correspondent with the United States department of housing and 162
urban development.
(E) "Mortgage broker" means a person that, in the regular 164
course of business, holds himself, herself, or itself THAT PERSON 166
out as being able to assist a buyer in obtaining a mortgage and 167
charges or receives money or other valuable consideration readily 169
convertible into money for providing this assistance. "Mortgage 170
broker" does not include any of the following: 171
(1) A person that makes or collects loans, to the extent 173
these activities are subject to licensure or registration by this 174
state; 175
(2) A lender approved by the United States secretary of 177
housing and urban development for participation in a mortgage 178
insurance program under the "National Housing Act," 48 Stat. 1246 179
(1934), 12 U.S.C.A. 1701, as amended; 180
(3) A bank, savings bank, or savings and loan association, 182
or a subsidiary or an affiliate of a bank, savings bank, or 183
savings and loan association. For purposes of division (E)(3) of 185
this section, "affiliate" has the same meaning as in division (A) 186
of section 1101.01 of the Revised Code, and "bank," as used in 187
division (A) of section 1101.01 of the Revised Code, is deemed to 188
include a savings bank or savings and loan association. 189
(4) A credit union organized and qualified under Chapter 191
1733. of the Revised Code or the "Federal Credit Union Act," 84 192
Stat. 994 (1970), 12 U.S.C.A. 1751, as amended; 193
(5) A budget and debt counseling service, as defined in 195
division (D) of section 2716.03 of the Revised Code, provided 196
that the service is a nonprofit organization exempt from taxation 197
under section 501(c)(3) of the "Internal Revenue Code of 1986," 198
100 Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service 199
is in compliance with Chapter 4710. of the Revised Code; 200
(6) A consumer reporting agency that is in substantial 202
5
compliance with the "Fair Credit Reporting Act," 84 Stat. 1128, 203
15 U.S.C.A. 1681a, as amended; 204
(7) A mortgage banker; 206
(8) Any political subdivision, or any governmental or 208
other public entity, corporation, or agency, in or of the United 209
States or any state of the United States; 210
(9) A college or university, or controlled entity of a 212
college or university, as defined in section 1713.05 of the 213
Revised Code. 214
(F) "Registrant" means any person that has been issued a 217
certificate of registration under sections 1322.01 to 1322.12 of 218
the Revised Code. 219
(G) "Superintendent of financial institutions" includes 221
the deputy superintendent for consumer finance as provided in 222
section 1181.21 of the Revised Code. 223
Sec. 1322.02. (A) No person, on the person's own behalf 232
or on behalf of any other person, shall act as a mortgage broker 235
without first having obtained a certificate of registration from 236
the superintendent of financial institutions for the person's 237
main office and for every other office to be maintained by the 239
person for the transaction of business as a mortgage broker in 240
this state. A REGISTRANT SHALL MAINTAIN AN OFFICE LOCATION IN 242
THIS STATE FOR THE TRANSACTION OF BUSINESS AS A MORTGAGE BROKER 244
IN THIS STATE.
(B) NO REGISTRANT OR EMPLOYEE OF A REGISTRANT SHALL 246
ORIGINATE A MORTGAGE LOAN, UNLESS THE MORTGAGE LOAN IS ORIGINATED 247
AT A LOCATION WHERE THE REGISTRANT'S CERTIFICATE OF REGISTRATION 248
IS MAINTAINED, AND WHERE THE REGISTRANT OR THE EMPLOYEE OF THE 249
REGISTRANT REGULARLY TRANSACTS MORTGAGE BROKER BUSINESS. 250
(C) NO PERSON SHALL ORIGINATE MORTGAGE LOANS FOR A 253
REGISTRANT, UNLESS THAT PERSON IS AN EMPLOYEE OF THE REGISTRANT. 254
(D) AS USED IN THIS SECTION: 256
(1) "EMPLOYEE" MEANS A PERSON WHO MAY BE REQUIRED OR 258
DIRECTED BY A REGISTRANT TO ORIGINATE MORTGAGE LOANS IN 259
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CONSIDERATION OF DIRECT OR INDIRECT GAIN OR PROFIT. "EMPLOYEE" 260
DOES NOT INCLUDE AN INDEPENDENT CONTRACTOR OR ANY PERSON WHO HAS 261
A SIMILAR EMPLOYMENT RELATIONSHIP WITH A MORTGAGE BROKER. 262
(2) "ORIGINATE" MEANS ANY OF THE FOLLOWING: 264
(a) TO NEGOTIATE OR ARRANGE, OR TO OFFER TO NEGOTIATE OR 267
ARRANGE, A MORTGAGE LOAN BETWEEN A PERSON THAT MAKES OR FUNDS
MORTGAGE LOANS AND A BUYER; 268
(b) TO ISSUE A COMMITMENT FOR A MORTGAGE LOAN TO A BUYER; 271
(c) TO PLACE, ASSIST IN PLACEMENT, OR FIND A MORTGAGE LOAN 274
FOR A BUYER.
Sec. 1322.03. (A) An application for a certificate of 284
registration as a mortgage broker shall be in writing, under 285
oath, and in the form prescribed by the superintendent of 286
financial institutions. The application shall be accompanied by 288
an application fee of three hundred fifty dollars for each
location of an office to be maintained by the applicant IN 289
ACCORDANCE WITH DIVISION (A) OF SECTION 1322.02 OF THE REVISED 290
CODE and shall provide all of the following: 291
(1) The location or locations where the business is to be 293
transacted and whether any location is a residence. If any 294
location where the business is to be transacted is a residence, 295
the application shall be accompanied by a certified copy of a 296
zoning permit authorizing the use of the residence for commercial 297
purposes, or shall be accompanied by a written opinion or other 298
document issued by the county or political subdivision where the 299
residence is located certifying that the use of the residence to 300
transact business as a mortgage broker is not prohibited by the 301
county or political subdivision. THE APPLICATION ALSO SHALL BE 303
ACCOMPANIED BY A PHOTOGRAPH OF EACH LOCATION AT WHICH THE 304
BUSINESS WILL BE TRANSACTED.
(2)(a) In the case of a sole proprietor, the name and 306
address of the sole proprietor; 307
(b) In the case of a partnership, the name and address of 310
each partner;
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(c) In the case of a corporation, the name and address of 313
each shareholder owning five per cent or more of the corporation; 314
(d) IN THE CASE OF ANY OTHER ENTITY, THE NAME AND ADDRESS 317
OF ANY PERSON THAT OWNS FIVE PER CENT OR MORE OF THE ENTITY THAT 318
WILL TRANSACT BUSINESS AS A MORTGAGE BROKER.
(3)(a) If the applicant is a partnership, the applicant 320
shall designate one of the partners named in the application 323
pursuant to division (A)(2)(b) of this section as responsible for 324
managing the operations of the location or locations where THE 325
business is to be transacted.
(b) If the applicant is a corporation, the applicant shall 328
designate one of the shareholders named in the application 330
pursuant to division (A)(2)(c) of this section as responsible for 331
managing the operations of the location or locations where THE 332
business is to be transacted.
(c) IF THE APPLICANT IS ANY OTHER ENTITY, THE APPLICANT 335
SHALL DESIGNATE A NATURAL PERSON THAT OWNS FIVE PER CENT OR MORE 336
OF THE ENTITY THAT WILL TRANSACT BUSINESS AS A MORTGAGE BROKER AS 337
RESPONSIBLE FOR MANAGING THE OPERATIONS OF THE LOCATION OR 338
LOCATIONS WHERE THE BUSINESS IS TO BE TRANSACTED. 339
(4) Evidence that at least one of the following applies to 341
the sole proprietor, partner, or shareholder, OR NATURAL PERSON 343
designated on the application pursuant to division (A)(3) of this 344
section as responsible for managing the operations of the 346
location or locations where the business is to be transacted: 347
(a) The EXCEPT AS PROVIDED IN DIVISION (D)(2) OF THIS 349
SECTION, THE sole proprietor, partner, or shareholder, OR NATURAL 351
PERSON has earned at least an associate's ASSOCIATE degree in an 352
area relating to finance, banking, or business administration, 353
and the degree was earned at an accredited college or university, 354
including an accredited community or technical college. 355
(b) The sole proprietor, partner, or shareholder, OR 357
NATURAL PERSON possesses at least three years of experience in 359
the mortgage and lending field, which experience may include 360
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employment with or as a mortgage broker or with a financial 362
institution, mortgage lending institution, or other lending 363
institution, or possesses at least three years of other
experience RELATED SPECIFICALLY TO THE BUSINESS OF MORTGAGE LOANS 364
that the superintendent determines meets the requirements of 365
division (A)(4)(b) of this section. Evidence of experience 367
submitted with the application may include letters of employment 368
from present or prior employers. 369
(5) Evidence of compliance with the financial SURETY BOND 371
requirements of section 1322.05 of the Revised Code and with 373
sections 1322.01 to 1322.12 of the Revised Code; 374
(6) In the case of a foreign corporation, evidence that it 376
maintains a license pursuant to Chapter 1703. of the Revised Code 377
to transact business in this state; 378
(7) A statement that the applicant has not been convicted 380
of or pleaded guilty to a criminal offense, the violation of 381
which is a felony, or any criminal offense involving fraud; 382
(8) Any further information that the superintendent 384
requires. 385
(B) Upon the filing of the application and payment of the 387
application fee, the superintendent shall investigate the 388
applicant. If, in order to issue a certificate of registration 389
to an applicant, investigation by the superintendent outside this 391
state is necessary, the superintendent may require the applicant 392
to advance sufficient funds to pay the actual expenses of the 393
investigation, if it appears that these expenses will exceed 394
three hundred fifty dollars. The superintendent shall provide 395
the applicant with an itemized statement of the actual expenses 396
that the applicant is required to pay. 397
(C) All funds advanced and application and renewal fees 399
paid to the superintendent under this section and section 1322.04 401
of the Revised Code shall be paid by the superintendent to the 402
treasurer of state to the credit of the consumer finance fund 404
created in section 1321.21 of the Revised Code.
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(D)(1) Division (A)(4) of this section does not apply to 407
any registrant that, on the effective date of this amendment 409
MARCH 4, 1996, is registered AS A MORTGAGE BROKER under sections 410
1322.01 to 1322.12 of the Revised Code under a certificate of 412
registration issued pursuant to those sections prior to the 414
effective date of this amendment MARCH 4, 1996, provided that the 416
certificate of registration is not surrendered by the registrant 417
or revoked or refused renewal by the superintendent of consumer 419
finance FINANCIAL INSTITUTIONS at any time after the effective 421
date of this amendment MARCH 4, 1996. 422
(2) EXCEPT AS PROVIDED IN DIVISION (D)(3) OF THIS SECTION, 425
ON AND AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, EVIDENCE OF 426
EDUCATION PROVIDED IN DIVISION (A)(4)(a) OF THIS SECTION SHALL 428
NOT BE ACCEPTED ON AN APPLICATION OF A PERSON APPLYING AS A NEW 429
APPLICANT FOR A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER. 431
HOWEVER, ON AND AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, A 432
PERSON WHO, PRIOR TO THAT DATE, SUBMITTED EVIDENCE OF EDUCATION 433
AS PROVIDED FOR IN DIVISION (A)(4)(a) OF THIS SECTION MAY RENEW A 435
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER, PROVIDED THAT 436
THE PERSON IS REGISTERED ON THAT DATE AS A MORTGAGE BROKER 437
PURSUANT TO SECTION 1322.04 OF THE REVISED CODE, AND A 439
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER IS NOT 440
SURRENDERED BY THE PERSON OR REVOKED OR REFUSED RENEWAL BY THE 441
SUPERINTENDENT AT ANY TIME AFTER THAT DATE. 442
(3) FOR A PERIOD ENDING THREE YEARS AFTER THE EFFECTIVE 444
DATE OF THIS AMENDMENT, EVIDENCE THAT THE PERSON DESIGNATED AS 445
RESPONSIBLE FOR MANAGING THE OPERATION OF A LOCATION OR LOCATIONS 446
WHERE BUSINESS IS OR WILL BE TRANSACTED MEETS THE EDUCATIONAL 447
REQUIREMENTS SPECIFIED IN DIVISION (A)(4)(a) OF THIS SECTION 448
SHALL BE ACCEPTABLE ON AN APPLICATION FOR A CERTIFICATE OF 449
REGISTRATION AS A MORTGAGE BROKER, IF THE SUPERINTENDENT 450
DETERMINES THAT BOTH OF THE FOLLOWING APPLY: 451
(a) PRIOR TO THE EFFECTIVE DATE OF THIS AMENDMENT, THE 454
PERSON WAS DESIGNATED PURSUANT TO DIVISION (A)(3) OF THIS SECTION 455
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AS RESPONSIBLE FOR MANAGING THE OPERATIONS OF A LOCATION OR 456
LOCATIONS WHERE A REGISTRANT'S BUSINESS WAS TRANSACTED, HAVING 457
MET THE EDUCATIONAL REQUIREMENTS PROVIDED IN DIVISION (A)(4)(a) 458
OF THIS SECTION; 459
(b) THE PERSON IS DESIGNATED AS RESPONSIBLE FOR MANAGING 462
THE OPERATIONS OF AN ENTITY DESCRIBED IN DIVISION (A)(2) OF THIS 463
SECTION WHERE THE MORTGAGE BROKER BUSINESS IS OR WILL BE 464
TRANSACTED.
Sec. 1322.04. (A) Upon the conclusion of the 473
investigation required under division (B) of section 1322.03 of 474
the Revised Code, the superintendent of financial institutions 476
shall issue a certificate of registration to the applicant if the 478
superintendent finds that the following conditions are met: 479
(1) The application is accompanied by the application fee 481
of three hundred fifty dollars for each location of an office to 482
be maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF 483
SECTION 1322.02 OF THE REVISED CODE and complies with division 484
(A) of section 1322.03 of the Revised Code. 485
(2) If the application is for a location that is a 487
residence, that the applicant has obtained a valid zoning permit 488
authorizing the use of the residence for commercial purposes, or 489
has obtained a valid written opinion or other document issued by 491
the county or political subdivision where the residence is 492
located certifying that the use of the residence to transact 493
business as a mortgage broker is not prohibited by the county or 494
political subdivision. THE APPLICATION ALSO IS ACCOMPANIED BY A 495
PHOTOGRAPH OF EACH LOCATION AT WHICH THE MORTGAGE BROKER'S 496
BUSINESS WILL BE TRANSACTED. 497
(3)(a) The sole proprietor, partner, or shareholder, OR 500
NATURAL PERSON designated on the application, pursuant to 502
division (A)(3) of section 1322.03 of the Revised Code, as 503
responsible for managing the operation of the location or 505
locations where THE business is to be transacted meets the 507
educational or experience requirements described PROVIDED in 508
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division (A)(4) of section 1322.03 of the Revised Code. 509
(b) IF A PARTNER, SHAREHOLDER, OR NATURAL PERSON 512
DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE 514
REVISED CODE CEASES TO BE RESPONSIBLE FOR MANAGING THE OPERATION 517
OF THE LOCATION OR LOCATIONS WHERE THE BUSINESS IS TO BE 518
TRANSACTED, THE APPLICANT SHALL COMPLY WITH THE REQUIREMENTS THAT 519
APPLY TO A REGISTRANT UNDER DIVISION (E) OF THIS SECTION. 520
(4) In the case of a foreign corporation, the applicant 522
maintains a license pursuant to Chapter 1703. of the Revised Code 523
to transact business in this state. 524
(5) The applicant complies with the financial SURETY BOND 526
requirements of section 1322.05 of the Revised Code. 528
(6) The applicant complies with sections 1322.01 to 530
1322.12 of the Revised Code. 531
(7) The applicant has not pleaded guilty to or been 533
convicted of a criminal offense, the violation of which is a 534
felony, or any criminal offense involving fraud. 535
(8) The applicant's financial responsibility, experience, 537
character, and general fitness command the confidence of the 538
public and warrant the belief that the business will be operated 539
honestly and fairly in compliance with the purposes of sections 540
1322.01 to 1322.12 of the Revised Code. 541
For purposes of determining whether an applicant that is a 543
partnership or, corporation, OR OTHER ENTITY has met the 545
conditions set forth in division (A)(8) of this section, the 547
superintendent shall determine which partners or, shareholders, 548
OR PERSONS named in the application pursuant to division (A)(2) 550
of section 1322.03 of the Revised Code must meet the conditions 552
set forth in division (A)(8) of this section. This determination 553
shall be based on the extent and nature of the partner's or, 554
shareholder's, OR PERSON'S ownership interest in the partnership 556
or, corporation, OR ENTITY that is the applicant. 557
(B) The certificate of registration issued pursuant to 559
division (A) of this section may be renewed annually on or before 560
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the thirtieth day of April upon payment of a renewal fee of three 561
hundred fifty dollars for each location of an office to be 562
maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF 563
SECTION 1322.02 OF THE REVISED CODE and a finding by the 564
superintendent that the applicant meets the conditions set forth 565
in divisions (A)(2) to (8) of this section and that the 566
applicant's certificate of registration is not subject to an 567
order of suspension or revocation by the superintendent. If a 568
renewal fee is submitted to RECEIVED BY the superintendent after 570
the thirtieth day of April but prior to the first day of June, 572
the fee shall be accompanied by a late renewal fee of one hundred 573
dollars for each location of an office maintained by the
applicant for which the renewal fee is late, THE CERTIFICATE OF 574
REGISTRATION SHALL NOT BE CONSIDERED RENEWED, AND THE APPLICANT 576
SHALL CEASE ACTIVITY AS A MORTGAGE BROKER AND APPLY FOR A 577
CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER. 578
(C) No application, OR renewal, or late renewal fee 580
required by division (A) or (B) of this section shall be returned 582
after a certificate of registration has been issued or renewed by 583
the superintendent.
(D) Division (A)(3) of this section does not apply to any 586
registrant that, on the effective date of this amendment MARCH 4, 588
1996, is registered AS A MORTGAGE BROKER under sections 1322.01 589
to 1322.12 of the Revised Code under a certificate of 590
registration issued pursuant to those sections prior to the 592
effective date of this amendment MARCH 4, 1996, provided that the 594
certificate of registration is not surrendered by the registrant 595
or revoked or refused renewal by the superintendent of consumer 597
finance FINANCIAL INSTITUTIONS at any time after the effective 599
date of this amendment MARCH 4, 1996. 600
(E) IF A PARTNER, SHAREHOLDER, OR NATURAL PERSON 602
DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE 604
REVISED CODE IS NO LONGER RESPONSIBLE FOR MANAGING THE OPERATION 606
OF THE LOCATION OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED, 607
13
THE REGISTRANT SHALL DO ALL OF THE FOLLOWING: 609
(1) DESIGNATE ANOTHER PARTNER, SHAREHOLDER, OR NATURAL 612
PERSON AS RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION 614
OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED;
(2) WITHIN TEN DAYS AFTER THE DESIGNATION DESCRIBED IN 617
DIVISION (E)(1) OF THIS SECTION, NOTIFY THE SUPERINTENDENT IN 619
WRITING OF THE DESIGNATION; 620
(3) SUBMIT ANY ADDITIONAL INFORMATION THAT THE 623
SUPERINTENDENT REQUIRES TO ESTABLISH THAT THE NEWLY DESIGNATED 624
PARTNER, SHAREHOLDER, OR NATURAL PERSON COMPLIES WITH THE
EXPERIENCE REQUIREMENTS SET FORTH IN DIVISION (A)(4)(b) OF 626
SECTION 1322.03 OF THE REVISED CODE. 628
Sec. 1322.05. (A) NO REGISTRANT SHALL CONDUCT BUSINESS IN 631
THIS STATE, UNLESS THE REGISTRANT HAS OBTAINED A CORPORATE SURETY 633
BOND ISSUED BY A BONDING COMPANY OR INSURANCE COMPANY AUTHORIZED 634
TO DO BUSINESS IN THIS STATE. THE BOND SHALL BE IN FAVOR OF THE 635
SUPERINTENDENT OF FINANCIAL INSTITUTIONS AND IN THE PRINCIPAL SUM 636
OF AT LEAST TWENTY-FIVE THOUSAND DOLLARS AND AN ADDITIONAL 637
PRINCIPAL SUM OF FIVE THOUSAND DOLLARS FOR EACH LOCATION, IN 638
EXCESS OF ONE, AT WHICH THE REGISTRANT CONDUCTS BUSINESS. A COPY 639
OF THE BOND SHALL BE FILED WITH THE SUPERINTENDENT. THE PROCEEDS 640
OF THE BOND SHALL CONSTITUTE A TRUST FUND FOR THE EXCLUSIVE 641
BENEFIT OF ANY PERSON INJURED BY A VIOLATION OF ANY PROVISION OF 642
SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE. 644
(B) THE REGISTRANT SHALL GIVE NOTICE TO THE SUPERINTENDENT 647
BY CERTIFIED MAIL OF ANY ACTION THAT IS BROUGHT AGAINST THE 648
REGISTRANT AND OF ANY JUDGMENT THAT IS ENTERED AGAINST THE 649
REGISTRANT BY A PERSON INJURED BY A VIOLATION OF ANY PROVISION OF 650
SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE. THE NOTICE 653
SHALL PROVIDE DETAILS SUFFICIENT TO IDENTIFY THE ACTION OR 654
JUDGMENT, AND SHALL BE FILED WITH THE SUPERINTENDENT WITHIN TEN 655
DAYS AFTER THE COMMENCEMENT OF THE ACTION OR NOTICE TO THE 656
REGISTRANT OF ENTRY OF A JUDGMENT. THE CORPORATE SURETY, WITHIN 657
TEN DAYS AFTER IT PAYS ANY CLAIM OR JUDGMENT, SHALL GIVE NOTICE 658
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TO THE SUPERINTENDENT BY CERTIFIED MAIL OF THE PAYMENT, WITH 659
DETAILS SUFFICIENT TO IDENTIFY THE PERSON AND THE CLAIM OR 660
JUDGMENT PAID. 661
(C) WHENEVER THE PRINCIPAL SUM OF THE CORPORATE SURETY 664
BOND IS REDUCED BY ONE OR MORE RECOVERIES OR PAYMENTS, THE 665
REGISTRANT SHALL FURNISH A NEW OR ADDITIONAL BOND UNDER THIS 666
SECTION, SO THAT THE TOTAL OR AGGREGATE PRINCIPAL SUM OF THE BOND 667
OR BONDS EQUALS THE SUM REQUIRED BY THIS SECTION, OR SHALL 668
FURNISH AN ENDORSEMENT EXECUTED BY THE CORPORATE SURETY 669
REINSTATING THE BOND TO THE REQUIRED PRINCIPAL SUM OF IT. 670
(D) THE LIABILITY OF THE CORPORATE SURETY ON THE BOND TO 673
THE SUPERINTENDENT AND TO ANY PERSON INJURED BY A VIOLATION OF 674
ANY PROVISION OF SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE 677
SHALL NOT BE AFFECTED IN ANY WAY BY ANY MISREPRESENTATION, BREACH 678
OF WARRANTY, OR FAILURE TO PAY THE PREMIUM, BY ANY ACT OR 679
OMISSION UPON THE PART OF THE REGISTRANT, BY THE INSOLVENCY OR 680
BANKRUPTCY OF THE REGISTRANT, OR BY THE INSOLVENCY OF THE 681
REGISTRANT'S ESTATE. THE LIABILITY FOR ANY ACT OR OMISSION THAT 682
OCCURS DURING THE TERM OF THE CORPORATE SURETY BOND SHALL BE 683
MAINTAINED AND IN EFFECT FOR AT LEAST TWO YEARS AFTER THE DATE ON 684
WHICH THE CORPORATE SURETY BOND IS TERMINATED OR CANCELED. 685
(E) THE CORPORATE SURETY BOND SHALL NOT BE CANCELED BY THE 688
REGISTRANT OR THE CORPORATE SURETY EXCEPT UPON NOTICE TO THE 689
SUPERINTENDENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THE 690
CANCELLATION SHALL NOT BE EFFECTIVE PRIOR TO THIRTY DAYS AFTER 691
THE SUPERINTENDENT RECEIVES THE NOTICE. 692
(F) NO REGISTRANT SHALL FAIL TO COMPLY WITH THIS SECTION. 696
Sec. 1322.10. (A) After notice and opportunity for a 705
hearing conducted in accordance with Chapter 119. of the Revised 706
Code, the superintendent of financial institutions may suspend DO 708
THE FOLLOWING:
(1) SUSPEND, revoke, or refuse to issue or renew a 710
certificate of registration if the superintendent finds a 713
violation of division (B) of section 1322.02 OR 1322.06, or 715
15
section 1322.05, 1322.07, 1322.08, or 1322.09 of the Revised Code 716
or the rules adopted thereunder UNDER THOSE SECTIONS; 717
(2) IMPOSE A FINE OF NOT MORE THAN ONE THOUSAND DOLLARS, 720
FOR EACH DAY A VIOLATION OF A LAW OR RULE IS COMMITTED, REPEATED, 721
OR CONTINUED. IF THE REGISTRANT ENGAGES IN A PATTERN OF REPEATED 722
VIOLATIONS OF A LAW OR RULE, THE SUPERINTENDENT MAY IMPOSE A FINE 723
OF NOT MORE THAN TWO THOUSAND DOLLARS FOR EACH DAY THE VIOLATION 724
IS COMMITTED, REPEATED, OR CONTINUED. ALL FINES COLLECTED 726
PURSUANT TO THIS DIVISION SHALL BE PAID TO THE TREASURER OF STATE 728
TO THE CREDIT OF THE CONSUMER FINANCE FUND CREATED IN SECTION 729
1321.21 OF THE REVISED CODE. IN DETERMINING THE AMOUNT OF A FINE 730
TO BE IMPOSED PURSUANT TO THIS DIVISION, THE SUPERINTENDENT SHALL 732
CONSIDER ALL OF THE FOLLOWING: 733
(a) THE SERIOUSNESS OF THE VIOLATION; 736
(b) THE REGISTRANT'S GOOD FAITH EFFORTS TO PREVENT THE 739
VIOLATION;
(c) THE REGISTRANT'S HISTORY REGARDING VIOLATIONS AND 742
COMPLIANCE WITH DIVISION ORDERS;
(d) THE REGISTRANT'S FINANCIAL RESOURCES; 745
(e) ANY OTHER MATTERS THE SUPERINTENDENT CONSIDERS 748
APPROPRIATE IN ENFORCING SECTIONS 1322.01 TO 1322.12 OF THE 749
REVISED CODE.
(B) The superintendent may investigate alleged violations 751
of section 1322.01 to 1322.12 of the Revised Code, or the rules 752
adopted thereunder, UNDER THOSE SECTIONS or complaints concerning 754
any such violation. The superintendent may make application to 755
the court of common pleas for an order enjoining any such 756
violation, and, upon a showing by the superintendent that a 757
person has committed, or is about to commit, such a violation, 758
the court shall grant an injunction, restraining order, or other 759
appropriate relief.
(C) In conducting any investigation pursuant to this 761
section, the superintendent may compel, by subpoena, witnesses, 762
to testify in relation to any matter over which the 763
16
superintendent has jurisdiction, and may require the production 764
of any book, record, or other document pertaining to such THAT 765
matter. If a person fails to file any statement or report, obey 766
any subpoena, give testimony, produce any book, record, or other 767
document as required by such a subpoena, or permit photocopying 768
of any book, record, or other document subpoenaed, the court of 769
common pleas of any county in this state, upon application made 770
to it by the superintendent, shall compel obedience by attachment 771
proceedings for contempt, as in the case of disobedience of the 772
requirements of a subpoena issued from the court or a refusal to 773
testify therein. 774
(D) If the superintendent determines that a person is 776
engaged in, or is believed to be engaged in, activities that may 777
constitute a violation of sections 1322.01 to 1322.12 of the 778
Revised Code, the superintendent may, after notice and a hearing 779
conducted in accordance with Chapter 119. of the Revised Code, 780
MAY issue a cease and desist order. Such an order shall be 781
enforceable in the court of common pleas. 782
Sec. 1322.101. On receipt of a notice pursuant to section 792
2301.373 of the Revised Code, the division of consumer finance
FINANCIAL INSTITUTIONS shall comply with that section with 794
respect to a certificate issued pursuant to this chapter.
Section 2. That existing sections 1155.08, 1163.11, 796
1322.01, 1322.02, 1322.03, 1322.04, 1322.10, and 1322.101 and 798
section 1322.05 of the Revised Code are hereby repealed. 799