REPRESENTATIVES Salerno, Willamowski, Latta, Manning, Fessler, Flowers, Collier, Schmidt, Reidelbach, Barrett, Coates, Rhine, Blasdel, Sulzer

To amend section 1317.08 of the Revised Code to

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eliminate, in the purchase, assignment, or transfer

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of a retail installment contract the prohibition

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against a retail seller, receiving in excess of 2%

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of the principal balance on that contract, and to

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eliminate related provisions.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 1317.08 of the Revised Code be	7
amended to read as follows:	8

Sec. 1317.08. (A)(1) No retail installment contract that	9
evidences an indebtedness greater than that allowed under sections	10
1317.06, 1317.061, 1317.062, and 1317.07 of the Revised Code, and	11
no retail installment contract in connection with which any charge	12
prohibited by sections 1317.01 to 1317.11 of the Revised Code has	13
been contracted for or received, shall be enforceable with respect	14
to that excess indebtedness or charge against any retail buyer or	15
any other person who as surety, indorser, guarantor, or otherwise	16
is liable on the obligation created by any retail buyer on any	17
retail installment contract, and no.	18

(2) No security interest created by any such retail	19
installment contract described in division (A)(1) of this section	20
that is greater than that allowed under sections 1317.06, 1317.07,	21
and 1317.071 of the Revised Code shall be enforceable with respect	22
to that excess security interest against any retail buyer or any	23
of the aforementioned persons described in division (A)(1) of this	24
section, in default under the terms of the retail installment	25
contract. In	26

(B) In order for a retail buyer, or any of the aforementioned	27
persons described in division (A)(1) of this section that is	28
liable on the retail buyer's obligation, to avail the retail buyer	29
or other person of this section, the retail buyer or other person	30
must prove that the retail seller or the holder of the retail	31
installment contract has been notified in writing of the	32
overcharge and has failed within ten days of such notification to	33
advise the retail buyer of a full credit, or the retail buyer or	34
other person must prove that the overcharge has been willful. A	35
correction of any overcharge within sixty days of the date of	36
making of the retail installment contract is conclusive proof of	37
lack of willfulness. This	38

(C) This section applies to cases in which recovery is	39
sought from the retail seller or holder of the retail installment	40
contract.	41

(D) If charges greater in amount than those provided for in	42
sections 1317.01 to 1317.11 of the Revised Code are contracted for	43
or received by the retail seller or the retail seller's agent,	44
assignee, or successor in interest, the retail buyer or the retail	45
buyer's assignee or successor in interest may recover the total	46
amount of finance charges paid to the retail seller or the retail	47
seller's agent, assignee, or successor in interest, in excess of	48
the interest rate that otherwise would apply under section 1343.01	49
of the Revised Code.	50

No person shall enter into any agreement with any retail	51
seller regarding the purchase, assignment, or transfer of any	52
retail installment contract whereby the retail seller shall	53
receive or retain, directly or indirectly, any benefit from or	54
part of any amount collected or received, or to be collected or	55
received, from any retail buyer as a finance charge or as the cost	56
of insurance or other benefits to the retail buyer, in excess of	57
two per cent of the principal balance of the retail installment	58
contract. No person shall, directly or indirectly, pay to the	59
retail seller, and no retail seller shall, directly or indirectly,	60
receive or retain any part of the amount collected, or to be	61
collected, as a finance charge or retail buyer's cost of insurance	62
or other benefits on any retail installment contract purchased,	63
assigned, or transferred from the retail seller, in excess of two	64
per cent of the principal balance of the retail installment	65
contract, provided this paragraph does not apply in case of a bona	66
fide sale of a retail installment contract, if, as part of the	67
consideration for such sale and purchase, the retail seller agrees	68
to act, and does act, as agent for the purchaser in making	69
collection of all amounts due on and otherwise completely	70
servicing the retail installment contract, including billing,	71
posting, and maintaining complete records applicable thereto.	72

Compensation received by the retail seller as commission	73
received by the retail seller from an insurance company as its	74
licensed agent, is not a benefit received by the retail seller out	75
of the insurance charge to the retail buyer under the installment	76
contract. Any sale, assignment, or transfer of a retail	77
installment contract in violation of this section is void. Except	78
as specifically limited by this paragraph all instruments that are	79
a part of a retail installment contract are freely assignable and	80
transferable.	81

Section 2. That existing section 1317.08 of the Revised Code	82
is hereby repealed.	83