REPRESENTATIVES Blasdel, Salerno, Carmichael, DeWine, Raga, Hoops, Metelsky, Schaffer, G. Smith, Allen, Webster, Collier, Reidelbach, Seitz, Ogg, Olman, Schmidt, Carano, Roman, Hagan, Latell, Schneider, Jolivette, Faber, Lendrum, White, Calvert, Setzer, Reinhard, Sulzer, Flowers, Hughes, Evans, Schuring, Niehaus, Widowfield, Williams, Trakas

To enact section 1.63 of the Revised Code to state the

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intent of the General Assembly on the relationship

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of state and local laws regarding the regulation of

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loans and other forms of credit, and to establish

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the Predatory Lending Study Committee to report to

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the General Assembly about predatory lending

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practices in mortgage lending or origination.

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

Section 1. That section 1.63 of the Revised Code be enacted	8
to read as follows:	9

Sec. 1.63. (A) The state solely shall regulate the business	10
of originating, granting, servicing, and collecting loans and	11
other forms of credit in the state and the manner in which any	12
such business is conducted, and this regulation shall be in lieu	13
of all other regulation of such activities by any municipal	14
corporation or other political subdivision.	15

(B) Any ordinance, resolution, regulation, or other action	16
by a municipal corporation or other political subdivision to	17
regulate, directly or indirectly, the origination, granting,	18
servicing, or collection of loans or other forms of credit	19
constitutes a conflict with the Revised Code, including, but not	20
limited to, Titles XI, XIII, XVII, and XLVII, and with the uniform	21
operation throughout the state of lending and other credit	22
provisions, and is preempted.	23

(C) Any ordinance, resolution, regulation, or other action	24
by a municipal corporation or other political subdivision	25
constitutes a conflict with the Revised Code, including, but not	26
limited to, Titles XI, XIII, XVII, and XLVII, and is preempted, if	27
the ordinance, resolution, regulation, or other action does either	28
of the following:	29

(1) Disqualifies a person, or its subsidiaries or	30
affiliates, from doing business with such municipal corporation or	31
other political subdivision based upon the acts or practices of	32
such person, or its subsidiaries or affiliates, as an originator,	33
grantor, servicer, or collector of loans or other forms of credit;	34

(2) Imposes reporting requirements or other obligations upon	35
a person, or its subsidiaries or affiliates, based upon such	36
person's, or its subsidiaries' or affiliates', acts or practices	37
as an originator, grantor, servicer, or collector of loans or	38
other forms of credit.	39

(D) If any provision of this section, or any application of	40
any provision of this section, is for any reason held to be	41
illegal or invalid, the illegality or invalidity shall not affect	42
any legal and valid provision or application of this section, and	43
the provisions and applications of this section shall be	44
severable.	45

Section 2. (A) The provisions of the Revised Code, including,	46
but not limited to, Titles XI, XIII, XVII, and XLVII, relating to	47
the origination, granting, servicing, and collection of loans and	48
other forms of credit prescribe rules of conduct upon citizens	49
generally, comprise a comprehensive regulatory framework intended	50
to operate uniformly throughout the state under the same	51
circumstances and conditions, and constitute general laws within	52
the meaning of Section 3 of Article XVIII of the Ohio	53
Constitution.	54

(B) The provisions of the Revised Code, including, but not	55
limited to, Titles XI, XIII, XVII, and XLVII, relating to the	56
origination, granting, servicing, and collection of loans and	57
other forms of credit have been enacted in furtherance of the	58
police powers of the state.	59

(C) Silence in the Revised Code, including, but not limited	60
to, Titles XI, XIII, XVII, and XLVII, with respect to any act or	61
practice in the origination, granting, servicing, or collection of	62
loans or other forms of credit shall not be interpreted to mean	63
that the state has not completely occupied the field or has only	64
set minimum standards in its regulation of lending and other	65
credit activities.	66

(D) It is the intent of the General Assembly to entirely	67
preempt municipal corporations and other political subdivisions	68
from the regulation and licensing of lending and other credit	69
activities.	70

Section 3. (A) The enactment of section 1.63 of the Revised	71
Code by this act is intended as a clarification of existing law	72
and not as a substantive change in the law.	73

(B) The enactment of section 1.63 of the Revised Code by this	74
act expresses the legislative intent of the General Assembly	75
currently and at the time of the original enactment of the	76
provisions of the Revised Code, including, but not limited to,	77
Titles XI, XIII, XVII, and XLVII, relating to the origination,	78
granting, servicing, and collection of loans and other forms of	79
credit.	80

Section 4. (A) There is hereby created the Predatory Lending	81
Study Committee, which shall conduct a thorough investigation of	82
the impact of predatory lending practices on the citizens and	83
communities of Ohio. These predatory lending practices include,	84
but are not limited to, loan flipping, balloon payments,	85
origination fees, prepayment penalties, single premium credit	86
insurance, packing unnecessary insurance coverages, lending	87
without due regard to ability to pay, lending without due regard	88
to tangible benefits to consumers, payments to home improvement	89
contractors, foreclosure rates, appropriateness of subprime loans	90
for customer populations, collusion among occupations related to	91
real estate loans, and equity stripping. As part of its	92
investigation, the Study Committee shall identify and evaluate	93
current state and federal laws, rules, and regulations that	94
address fraud, misrepresentation, and other deceptive practices in	95
mortgage lending or origination. The Study Committee also shall	96
evaluate the effectiveness of Am. Sub. S.B. 76 of the 124th	97
General Assembly in deterring these practices and shall make	98
recommendations it determines necessary to achieve that	99
deterrence.	100

(B) The Study Committee shall consist of thirteen members as	101
follows:	102

(1) Three members of the Senate appointed by the President	103
of the Senate, two of whom are members of the majority party, and	104
one of whom is a member of the minority party;	105

(2) Three members of the House of Representatives appointed	106
by the Speaker of the House of Representatives, two of whom are	107
members of the majority party, and one of whom is a member of the	108
minority party;	109

(3) The Director of the Department of Commerce or the	110
Director's designee;	111

(4) Three members representing consumer advocacy	112
organizations, two of whom shall be appointed by the President of	113
the Senate, and one of whom shall be appointed by the Speaker of	114
the House of Representatives;	115

(5) Three members representing the lending community, two of	116
whom shall be appointed by the Speaker of the House of	117
Representatives, and one of whom shall be appointed by the	118
President of the Senate.	119

(C) (1) The Director of the Department of Commerce or the	120
Director's designee on the Study Committee shall serve as	121
chairperson of the Study Committee.	122

(2) Members of the Study Committee shall serve without	123
compensation or reimbursement.	124

(3) Vacancies on the Study Committee shall be filled in the	125
same manner as the original appointment.	126

(D) The Department of Commerce shall provide necessary	127
staff, facilities, supplies, and services to the Study Committee.	128

(E) The Study Committee shall meet initially within sixty	129
days after the appointments to the Study Committee at the call of	130
the chairperson and shall meet at least every ninety days	131
thereafter at the call of the chairperson until the Study	132
Committee submits the report described in division (F) of this	133
section. The chairperson shall consider holding some regional	134
public hearings to ensure that perspectives from throughout the	135
state are presented to the Study Committee.	136

(F) The Study Committee shall publish its findings in a	137
report and submit the report to the Governor, the Speaker and the	138
Minority Leader of the House of Representatives, and the President	139
and Minority Leader of the Senate not later than December 31,	140
2003. Included in the report shall be recommendations on	141
legislation related to predatory lending to be enacted by the	142
General Assembly. Upon submission of the report, the Study	143
Committee shall cease to exist.	144