SENATORS Harris, Carey, Hottinger

To amend sections 1309.613, 1309.625, 1349.99,

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2716.03, 2716.11, and 4710.01, to enact new

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sections 4710.02, 4710.03, and 4710.99 and

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sections 1329.71, 1349.45, and 4710.04, and to

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repeal sections 4710.02, 4710.03, and 4710.99 of

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the Revised Code to modify the Secured

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Transactions Law relating to notice of the

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location for the disposition of collateral that is

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given to certain persons and to reduce the amount

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of damages recoverable by a debtor or secondary

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obligor in an action against a person found in

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violation of the Secured Transactions Law;

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relative to property subject to garnishment held

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by a judgment debtor's employer or another person;

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relative to engaging in the business of debt

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adjusting for debtors, to specify contribution

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limits and auditing and insurance coverage duties,

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to require timely disbursement of debtor funds,

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and to provide penalties, including a criminal

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penalty, for a violation; to eliminate previous

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provisions regulating entities engaging in the

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business of debt pooling; and to prohibit the

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unauthorized use of the name or logo of a

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financial institution in connection with the sale

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or advertising of any product or service if such

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use is misleading or deceptive.

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

Section 1. That sections 1309.613, 1309.625, 1349.99,	27
2716.03, 2716.11, and 4710.01 be amended and new sections 4710.02,	28
4710.03, and 4710.99 and sections 1329.71, 1349.45, and 4710.04 of	29
the Revised Code be enacted to read as follows:	30

Sec. 1309.613.  (A) Except in a consumer-goods transaction,	31
all of the following rules apply to a notification of disposition	32
of collateral and to a disposition of collateral:	33

(1) The contents of a notification of disposition are	34
sufficient if the notification:	35

(a) Describes the debtor and the secured party;

36

(b) Describes the collateral that is the subject of the	37
intended disposition;	38

(c) States the method of intended disposition;

39

(d) States that the debtor is entitled to an accounting of	40
the unpaid indebtedness and states the charge, if any, for an	41
accounting; and	42

(e) States the time and place, by identifying the place of	43
business or address or by providing other information that, in	44
each case, reasonably describes the location, of a public	45
disposition or the time after which any other disposition is to be	46
made.	47

(2) Whether the contents of a notification that lacks any of	48
the information specified in division (A)(1) of this section are	49
nevertheless sufficient is a question of fact.	50

(3) The contents of a notification providing substantially	51
the information specified in division (A)(1) of this section are	52
sufficient, even if the notification includes:	53

(a) Information not specified by that division; or

54

(b) Minor errors that are not seriously misleading.

55

(4) A particular phrasing of the notification is not	56
required.	57

(B) The following form of notification and the form appearing	58
in division (B) of section 1309.614 of the Revised Code, when	59
completed, each provides sufficient information:	60

"NOTIFICATION OF DISPOSITION OF COLLATERAL

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To: (Name of debtor, obligor, or other person to whom the	62
notification is sent)	63

From: (Name, address, and telephone number of secured party)

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Name of Debtor(s): (Include only if debtor(s) are not an	65
addressee)	66

(FOR A PUBLIC DISPOSITION:)

67

We will sell (or lease or license, as applicable) the	68
(describe collateral) to the highest qualified bidder in public as	69
follows:	70

Day and Date:.............

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Time:.....................

72

Place:....................

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(FOR A PRIVATE DISPOSITION:)

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We will sell (or lease or license, as applicable) the	75
(describe collateral) privately sometime after (day and date).	76

You are entitled to an accounting of the unpaid indebtedness	77
secured by the property that we intend to sell (or lease or	78
license, as applicable) (for a charge of $.........). You may	79
request an accounting by calling us at (telephone number)."	80

Sec. 1309.625.  (A) If it is established that a secured party	81
is not proceeding in accordance with this chapter, a court may	82
order or restrain collection, enforcement, or disposition of	83
collateral on appropriate terms and conditions.	84

(B) Subject to divisions (C), (D), and (F) of this section, a	85
person is liable for damages in the amount of any loss caused by a	86
failure to comply with this chapter. Loss caused by a failure to	87
comply may include loss resulting from the debtor's inability to	88
obtain, or increased costs of, alternative financing.	89

(C) Except as provided in section 1309.628 of the Revised	90
Code:	91

(1) A person who, at the time of the failure, was a debtor,	92
was an obligor, or held a security interest in or other lien on	93
the collateral may recover damages under division (B) of this	94
section for its loss; and	95

(2) If the collateral is consumer goods, a person who was a	96
debtor or a secondary obligor at the time a secured party failed	97
to comply with sections 1309.601 to 1309.628 of the Revised Code	98
may recover for that failure in any event an amount not less than	99
the credit service charge plus ten per cent of the principal	100
amount of the obligation or the time-price differential plus ten	101
per cent of the cash price;.	102

(D) A debtor whose deficiency is eliminated under section	103
1309.626 of the Revised Code may recover damages for the loss of	104
any surplus. However, a debtor or secondary obligor whose	105
deficiency is eliminated or reduced under section 1309.626 of the	106
Revised Code may not recover otherwise under division (B) of this	107
section for noncompliance with sections 1309.601 to 1309.628 of	108
the Revised Code relating to collection, enforcement, disposition,	109
or acceptance. Regardless of whether the debtor's or secondary	110
obligor's deficiency is eliminated or reduced under section	111
1309.626 of the Revised Code, any damages recovered by the debtor	112
or secondary obligor under division (C) of this section shall be	113
reduced by the amount that the sum of the secured obligation,	114
expenses, and attorney's fees exceeds the proceeds of collection,	115
enforcement, disposition, or acceptance.	116

(E) In addition to any damages recoverable under division (B)	117
of this section, the debtor, consumer obligor, or person named as	118
a debtor in a filed record, as applicable, may recover five	119
hundred dollars in each case from a person that:	120

(1) Fails to comply with section 1309.208 of the Revised	121
Code;	122

(2) Fails to comply with section 1309.209 of the Revised	123
Code;	124

(3) Files a record that the person is not entitled to file	125
under division (A) of section 1309.509 of the Revised Code;	126

(4) Fails to cause the secured party of record to file or	127
send a termination statement as required by division (A) or (C) of	128
section 1309.513 of the Revised Code;	129

(5) Fails to comply with division (B)(1) of section 1309.616	130
of the Revised Code and whose failure is part of a pattern, or	131
consistent with a practice, of noncompliance; or	132

(6) Fails to comply with division (B)(2) of section 1309.616	133
of the Revised Code.	134

(F) A debtor or consumer obligor may recover damages under	135
division (B) of this section and, in addition, five hundred	136
dollars in each case from a person who, without reasonable cause,	137
fails to comply with a request under section 1309.210 of the	138
Revised Code. A recipient of a request under section 1309.210 of	139
the Revised Code who never claimed an interest in the collateral	140
or obligations that are the subject of a request under that	141
section has a reasonable excuse for failure to comply with the	142
request within the meaning of this division.	143

(G) If a secured party fails to comply with a request	144
regarding a list of collateral or a statement of account under	145
section 1309.210 of the Revised Code, the secured party may claim	146
a security interest only as shown in the list or statement	147
included in the request as against a person who is reasonably	148
misled by the failure.	149

Sec. 1329.71.  (A) As used in this section, "financial	150
institution" means any bank, savings and loan association, savings	151
bank, or credit union; any affiliate or subsidiary of a bank,	152
savings and loan association, savings bank, or credit union; or	153
any registrant as defined in section 1321.51 of the Revised Code.	154

(B) Any financial institution may proceed by suit to enjoin	155
the use of the financial institution's name or logo in connection	156
with the sale, offering for sale, distribution, or advertising of	157
any product or service without the express written consent of the	158
financial institution, if such use is misleading or deceptive as	159
to the source of origin or sponsorship of, or the affiliation	160
with, the product or service. Any court of competent jurisdiction	161
may grant injunctions to restrain such use as the court considers	162
just and reasonable and may require the defendants to pay to the	163
financial institution all profits derived from and all damages	164
suffered by reason of the wrongful use of the name or logo.	165

(C) Notwithstanding division (B) of this section, the only	166
remedies that are available for the wrongful use of a financial	167
institution's name or logo by a registrant or licensee under	168
sections 1322.01 to 1322.12 of the Revised Code are those set	169
forth in section 1322.10 of the Revised Code or otherwise provided	170
by statute or common law.	171

(D) The provisions of this section are not intended to be	172
exclusive remedies and do not preclude the use of any other remedy	173
provided by law.	174

Sec. 1349.45.  (A) As used in this section, "financial	175
institution" means any bank, savings and loan association, savings	176
bank, or credit union; any affiliate or subsidiary of a bank,	177
savings and loan association, savings bank, or credit union; or	178
any registrant as defined in section 1321.51 of the Revised Code.	179

(B) No person shall use the name or logo of any financial	180
institution in connection with the sale, offering for sale,	181
distribution, or advertising of any product or service without the	182
express written consent of the financial institution, if such use	183
is misleading or deceptive as to the source of origin or	184
sponsorship of, or the affiliation with, the product or service.	185

Sec. 1349.99. (A) Whoever violates section 1349.06 or 1349.17	186
of the Revised Code is guilty of a minor misdemeanor.	187

(B)(1) Whoever violates section 1349.45 of the Revised Code	188
is guilty of a misdemeanor of the first degree.	189

(2) Notwithstanding division (B)(1) of this section, the only	190
remedies that are available for a violation of section 1349.45 of	191
the Revised Code by a registrant or licensee under sections	192
1322.01 to 1322.12 of the Revised Code are those set forth in	193
section 1322.10 of the Revised Code or otherwise provided by	194
statute or common law.	195

(3) The provisions of division (B) of this section are not	196
intended to be exclusive remedies and do not preclude the use of	197
any other remedy provided by law.	198

Sec. 2716.03.  (A) Subject to the limitation on the	199
commencement of proceedings contained in division (B) of section	200
124.10 of the Revised Code, a proceeding in garnishment of	201
personal earnings may be commenced after a judgment has been	202
obtained by a judgment creditor by the filing of an affidavit in	203
writing made by the judgment creditor or the judgment creditor's	204
attorney setting forth all of the following:	205

(1) The name of the judgment debtor whose personal earnings	206
the judgment creditor seeks to garnish;	207

(2) That the affiant has good reason to believe and does	208
believe that the person, partnership, limited liability company,	209
or corporation named in the affidavit as the garnishee is an	210
employer of the judgment debtor who hasmay have personal earnings	211
of the judgment debtor that are not exempt under section 2329.66	212
of the Revised Code;	213

(3) That the demand in writing, as required by section	214
2716.02 of the Revised Code, has been made;	215

(4) That the payment demanded in the notice required by	216
section 2716.02 of the Revised Code has not been made, and a	217
sufficient portion of the payment demanded has not been made to	218
prevent the garnishment of personal earnings as described in	219
section 2716.02 of the Revised Code;	220

(5) That the affiant has no knowledge of any application by	221
the judgment debtor for the appointment of a trustee so as to	222
preclude the garnishment of the judgment debtor's personal	223
earnings;	224

(6) That the affiant has no knowledge that the debt to which	225
the affidavit pertains is the subject of a debt scheduling	226
agreement of a nature that precludes the garnishment of the	227
personal earnings of the judgment debtor under division (B) of	228
this section.	229

(B) No proceeding in garnishment of personal earnings shall	230
be brought against a judgment debtor for the collection of a debt	231
that is the subject of an agreement for debt scheduling between	232
the judgment debtor and a budget and debt counseling service,	233
unless any payment to be made by the judgment debtor, or by a	234
budget and debt counseling service to the judgment creditor under	235
the agreement for debt scheduling between the judgment debtor and	236
the budget and debt counseling service, is due and unpaid for more	237
than forty-five days after the date on which the payment became	238
due, or unless the judgment creditor previously was notified by	239
the service that the debt scheduling agreement between the	240
judgment debtor and the service was terminated.	241

(C) Upon a court's issuance of an order of garnishment of	242
personal earnings following a judgment creditor's filing of an	243
affidavit under this section and compliance with section 2716.04	244
of the Revised Code, the garnishee and the judgment debtor shall	245
be notified of the proceeding in garnishment of personal earnings	246
in accordance with sections 2716.05 and 2716.06 of the Revised	247
Code.	248

(D) As used in this chapter:

249

(1) A "budget and debt counseling service" or "service" means	250
a corporation organized under Chapter 1702. of the Revised Code	251
for the purpose of counseling consumers with respect to their	252
financial obligations and assisting them in dealing with their	253
creditors.	254

(2) "Debt scheduling" means counseling and assistance	255
provided to a consumer by a budget and debt counseling service	256
under all of the following circumstances:	257

(a) The counseling and assistance is manifested in an	258
agreement between the consumer and the service under which the	259
consumer regularly pays that portion of the consumer's income to	260
the service that has been determined not to be required for the	261
maintenance of health or the essentials of life.	262

(b) The payments are made to the service until the debts of	263
the consumer that are the subject of the agreement are fully	264
retired.	265

(c) The service has sent written notice, by certified mail,	266
return receipt requested, or by regular mail evidenced by a	267
properly completed and stamped certificate of mailing by regular	268
mail, to the creditors of the consumer that are disclosed by the	269
consumer to the service. The notice shall contain all of the	270
following:	271

(i) A statement of the consumer's intent to participate in	272
debt scheduling;	273

(ii) A summary of the consumer's income, proposed itemized	274
budget, schedule of creditors, and proposed debt retirement plan;	275

(iii) A statement of the particular creditor's duty to	276
respond, in writing, to the service regarding the consumer's	277
participation in debt scheduling within fifteen days after	278
receiving the notice.	279

(d) The debts of the consumer that are the subject of the	280
agreement for debt scheduling are determined as follows:	281

(i) Any debt owed to a creditor that was notified of the	282
consumer's intent to participate is a subject of the agreement if	283
the creditor responds to the service and enters into an agreement	284
with the service, pursuant to which the creditor agrees not to	285
attempt to collect the debts of the consumer as long as the	286
consumer regularly pays to the service the amount previously	287
agreed upon by the service and the consumer, and no payment to be	288
made by the judgment debtor to the service or by the service to	289
the creditor is due and unpaid for more than forty-five days after	290
the date on which the payment became due, as long as the debt	291
scheduling agreement between the consumer and the service has not	292
been terminated, and as long as the service regularly pays to the	293
creditor a mutually acceptable amount that is either the amount	294
agreed upon by the service and the creditor on the date they	295
entered into their original agreement or an amount agreed upon by	296
both the service and the creditor on a date after the date of the	297
original agreement.	298

(ii) Any debt owed to a creditor that was notified of the	299
consumer's intent to participate is a subject of the agreement if	300
the creditor does not respond to the service and state the	301
creditor's objection, in writing, to the consumer's participation	302
in debt scheduling within fifteen days after receiving notice of	303
the consumer's intention to do so; however, no debt that is	304
subject to a lien or security interest of any type, other than a	305
judgment lien or execution lien, shall be a subject of the	306
agreement unless the creditor specifically assents, in writing, to	307
the debt being a subject of the agreement. The creditor shall be	308
considered to have entered into an agreement of the type described	309
in division (D)(2)(d)(i) of this section, and the amount to be	310
regularly paid by the service to the creditor shall be an amount	311
determined to be reasonable by the service or an amount agreed	312
upon by both the service and the creditor on a date after the	313
expiration of the fifteen-day period.	314

(iii) Any debt owed to a creditor that was not notified of	315
the consumer's intent to participate, or a debt owed to a creditor	316
that was notified of the consumer's intent to participate and that	317
responded to the service and stated its objection, in writing, to	318
the consumer's participation in debt scheduling within fifteen	319
days after receiving notice of the consumer's intention to do so,	320
is not a subject of the agreement.	321

(e) The service agrees that, if the consumer fails to make a	322
payment under the agreement within forty-five days of its due date	323
or if the agreement is terminated, the service will notify each	324
creditor that is owed a debt that is subject to the agreement of	325
the failure or termination by regular mail within two business	326
days of the failure or termination, and the service provides that	327
notice in accordance with the agreement.	328

Sec. 2716.11.  A proceeding for garnishment of property,	329
other than personal earnings, may be commenced after a judgment	330
has been obtained by a judgment creditor by the filing of an	331
affidavit in writing made by the judgment creditor or the judgment	332
creditor's attorney setting forth all of the following:	333

(A) The name of the judgment debtor whose property, other	334
than personal earnings, the judgment creditor seeks to garnish;	335

(B) That the affiant has good reason to believe and does	336
believe that the person named in the affidavit as the garnishee	337
hasmay have property, other than personal earnings, of the	338
judgment debtor that is not exempt under the law of this state or	339
the United States;	340

(C) A description of the property.

341

Sec. 4710.01.  As used in sections 4710.01, 4710.02, and	342
4710.99 of the Revised Codethis chapter:	343

(A) "Person" includes individuals, partnerships,	344
associations, and corporations, trusts, and other legal entities.	345

(B) "Debt pooling companyadjusting" means any person doing	346
business as ain debt adjusting, budget counseling, debt	347
management, prorating, or debt pooling service, or holding itself	348
oneself out, by words of similar import, as providing services to	349
debtors in the management of their debts, and contracting with a	350
debtor for a fee or other thing of value;to do either of the	351
following:	352

(1) To effect the adjustment, compromise, or discharge of any	353
account, note, or other indebtedness of the debtor;	354

(2) To receive from the debtor and disburse to histhe	355
debtor's creditors any money or other thing of value.	356

(C) "Resides" means to live in a particular place on a	357
temporary or a permanent basis.	358

Sec. 4710.02.  (A) Subject to division (C) of this section, a	359
person engaged in debt adjusting shall do both of the following:	360

(1) Unless specifically instructed otherwise by a debtor,	361
disburse to the appropriate creditors all funds received from the	362
debtor, less any contributions not prohibited by division (B) of	363
this section, within thirty days of receipt of the funds from the	364
debtor;	365

(2) Maintain a separate trust account for the receipt of any	366
funds from debtors and the disbursement of the funds to creditors	367
on behalf of the debtors.	368

(B) If contributions for engaging in debt adjusting are	369
accepted, directly or indirectly, no person engaged in debt	370
adjusting shall do any of the following:	371

(1) Accept a contribution exceeding seventy-five dollars from	372
a debtor residing in this state for an initial consultation or	373
initial set up;	374

(2) Accept a consultation contribution exceeding one hundred	375
dollars per calendar year from a debtor residing in this state;	376

(3) Accept a periodic contribution from a debtor residing in	377
this state, which contribution exceeds eight and one-half per cent	378
of the amount paid by the debtor each month for distribution to	379
the debtor's creditors or thirty dollars, whichever is greater.	380

(C) Division (A) or (B) of this section does not prohibit a	381
person engaged in debt adjusting for a debtor who is residing in	382
this state from charging the debtor a reasonable fee for	383
insufficient funds transactions that is in addition to	384
contributions not prohibited by division (B) of this section.	385

(D) Any person that engages in debt adjusting, annually,	386
shall arrange for and undergo an audit conducted by an	387
independent, third party, certified public accountant of the	388
person's business, including any trust funds deposited and	389
distributed to creditors on behalf of debtors. Both of the	390
following apply to an audit described in this division:	391

(1) The person shall file the results of the audit and the	392
auditor's opinion with the consumer protection division of the	393
attorney general.	394

(2) The attorney general shall make available a summary of	395
the results of the audit and the auditor's opinion upon written	396
request of a person and payment of a fee not exceeding the cost of	397
copying the summary and opinion.	398

(E) A person engaged in debt adjusting shall obtain and	399
maintain at all times insurance coverage for employee dishonesty,	400
depositor's forgery, and computer fraud in the amount of ten per	401
cent of the monthly average for the immediate preceding six months	402
of the aggregate amount of all deposits made with the person by	403
all debtors. The insurance coverage shall comply with all of the	404
following:	405

(1) The insurance coverage is not less than one hundred	406
thousand dollars.	407

(2) The insurance coverage includes a deductible that does	408
not exceed ten per cent of the face amount of the policy coverage.	409

(3) The insurance coverage is issued by an insurer rated at	410
least A- or its equivalent by a nationally recognized rating	411
organization.	412

(4) The insurance coverage provides that thirty days advance	413
written notice be given to the consumer protection division of the	414
attorney general before coverage is terminated.	415

(F)(1) No person engaged in debt adjusting shall fail to	416
comply with division (A) of this section or shall violate division	417
(B) of this section.	418

(2) No person engaged in debt adjusting shall fail to comply	419
with divisions (D) and (E) of this section.	420

Sec. 4710.03. Nothing in this chapter applies to any of the	421
following:	422

(A) The federal national mortgage association; the federal	423
home loan mortgage corporation; a bank, bank holding company,	424
trust company, savings and loan association, credit union, savings	425
bank, or credit card bank, that is regulated by the office of the	426
comptroller of currency, office of thrift supervision, federal	427
reserve, federal deposit insurance corporation, national credit	428
union administration, or division of financial institutions; or to	429
subsidiaries of any of these entities;	430

(B) Debt adjusting incurred in the practice of law in this	431
state;	432

(C) A person that incidentally engages in debt adjusting to	433
adjust the indebtedness owed to that person;	434

(D) A registrant as defined in section 1321.51 of the Revised	435
Code;	436

(E) A registrant or licensee as both are defined in section	437
1322.01 of the Revised Code.	438

Sec. 4710.04.  (A) Any violation of division (F)(1) of	439
section 4710.02 of the Revised Code is deemed an unfair or	440
deceptive act or practice in violation of section 1345.02 of the	441
Revised Code. A person injured by a violation of that division has	442
a cause of action and is entitled to the same relief available to	443
a consumer under section 1345.09 of the Revised Code, and all the	444
powers and remedies available to the attorney general to enforce	445
sections 1345.01 to 1345.13 of the Revised Code are available to	446
the attorney general to enforce division (F)(1) of section 4710.02	447
of the Revised Code.	448

(B) Any person who violates division (F)(2) of section	449
4710.02 of the Revised Code, in addition to the penalties imposed	450
by section 4710.99 of the Revised Code, shall be fined not more	451
than ten thousand dollars for each violation.	452

Sec. 4710.99.  Whoever violates division (F) of section	453
4710.02 of the Revised Code is guilty of a misdemeanor of the	454
third degree for a first offense and a misdemeanor of the second	455
degree for any subsequent offense.	456

Section 2. That existing sections 1309.613, 1309.625,	457
1349.99, 2716.03, 2716.11, and 4710.01 and sections        Sec. 4710.02. ,	458
Sec. 4710.03. , and        Sec. 4710.99.  of the Revised Code are hereby repealed.	459

Section 3.  Section 2716.03 of the Revised Code is presented	460
in this act as a composite of the section as amended by both Am.	461
Sub. S.B. 144 and Am. Sub. S.B. 170 of the 122nd General Assembly.	462
The General Assembly, applying the principle stated in division	463
(B) of section 1.52 of the Revised Code that amendments are to be	464
harmonized if reasonably capable of simultaneous operation, finds	465
that the composite is the resulting version of the section in	466
effect prior to the effective date of the section as presented in	467
this act.	468