As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 209

Representative Lundy 

Cosponsors: Representatives Foley, Murray, Hagan, Phillips, Skindell, Stewart, Harris, Fende, Newcomb, Okey, Celeste, Harwood 

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A BILL

To amend sections 1315.26, 1321.02, 1321.12, 1321.13,

1

1321.131, 1321.14, 1321.15, 1321.44, 1321.52,

2

1321.53, 1321.551, 1321.56, 1321.57, 1321.571,

3

1321.59, 1321.99, 1322.01, 1343.01, 1345.01,

4

4710.02, 4712.01, and 4712.07 and to enact

5

sections 1321.011, 1321.542, 1321.591, 1321.61,

6

and 1351.031 of the Revised Code to establish

7

various consumer protections regarding small and

8

short-term loans.

9

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

Section 1. That sections 1315.26, 1321.02, 1321.12, 1321.13,	10
1321.131, 1321.14, 1321.15, 1321.44, 1321.52, 1321.53, 1321.551,	11
1321.56, 1321.57, 1321.571, 1321.59, 1321.99, 1322.01, 1343.01,	12
1345.01, 4710.02, 4712.01, and 4712.07 be amended and sections	13
1321.011, 1321.542, 1321.591, 1321.61, and 1351.031 of the	14
Revised Code be enacted to read as follows:	15

Sec. 1315.26.  (A) No check-cashing business shall charge	16
check-cashing fees or other check-cashing charges in an amount	17
that exceeds three per cent of the face amount of the check for	18
cashing checks issued by this state, a state agency, a political	19
subdivision of this state, or the United States.	20

(B) Each check-cashing business shall conspicuously post and	21
at all times display in every business location a schedule of its	22
fees and charges for all services permitted under sections 1315.21	23
to 1315.28 of the Revised Code.	24

(C) No check-cashing business shall charge or receive a fee	25
for cashing a proceeds check or money order disbursed to fund a	26
loan made by the licensee or an affiliate of the licensee.	27

Sec. 1321.011. A violation of section 1321.02, 1321.11,	28
1321.12, 1321.13, 1321.14, 1321.15, or 1321.17 of the Revised	29
Code may be enforced pursuant section 1321.61 of the Revised	30
Code when the violation involves a loan of one thousand dollars or	31
less.	32

Sec. 1321.02.  No person shall engage in the business of	33
lending money, credit, or choses in action in amounts of five	34
thousand dollars or less, orand thereby exact, contract for, or	35
receive, directly or indirectly, on or in connection with any such	36
loan, any interest and charges that in the aggregate are greater	37
than the interest and charges that the lender would be permitted	38
to charge for a loan of money if the lender were not a licensee,	39
without first having obtained a license from the division of	40
financial institutions under sections 1321.01 to 1321.19 of the	41
Revised Code. No person not located in Ohio shall make a loan	42
under sections 1321.01 to 1321.19 of the Revised Code to a	43
borrower in Ohio from an office not located in Ohio. Nothing in	44
this section prohibits a business not located or licensed in Ohio	45
from lending funds to Ohio borrowers who physically visit the	46
out-of-state office of the business and obtain the disbursement of	47
loan funds at that location.	48

Sections 1321.01 to 1321.19 of the Revised Code do not apply	49
to any person doing business under and as permitted by any law of	50
this state, another state, or the United States relating to banks,	51
savings banks, savings societies, trust companies, credit unions,	52
savings and loan associations substantially all the business of	53
which is confined to loans on real estate mortgages and evidences	54
of their own indebtedness; to registrants conducting business	55
pursuant to sections 1321.51 to 1321.60 of the Revised Code; to	56
persons making loans that constitute business loans as described	57
in division (B)(5) of section 1343.01 of the Revised Code, except	58
as provided in division (B) of section 1321.12 of the Revised	59
Code; to licensees conducting business pursuant to sections	60
1321.71 to 1321.83 of the Revised Code; to licensees doing	61
business pursuant to sections 1321.35 to 1321.48 of the Revised	62
Code; or to any entity who is licensed pursuant to Title XXXIX of	63
the Revised Code, who makes advances or loans to any person who	64
is licensed to sell insurance pursuant to that Title, and who is	65
authorized in writing by that entity to sell insurance. No person	66
engaged in the business of selling tangible goods or services	67
related thereto may receive or retain a license under sections	68
1321.01 to 1321.19 of the Revised Code for such place of	69
business.	70

The first paragraph of this section applies to any person,	71
who by any device, subterfuge, or pretense, charges, contracts	72
for, or receives greater interest, consideration, or charges than	73
that authorized by this section for any such loan or use of money	74
or for any such loan, use, or sale of credit, or who for a fee or	75
any manner of compensation arranges or offers to find or arrange	76
for another person to make any such loan, use, or sale of credit.	77
This section does not preclude the acquiring, directly or	78
indirectly, by purchase or discount, of a bona fide obligation for	79
goods or services when such obligation is payable directly to the	80
person who provided the goods or services.	81

Any contract of loan in the making or collection of which an	82
act is done by the lender that violates this section is void and	83
the lender has no right to collect, receive, or retain any	84
principal, interest, or charges.	85

Sec. 1321.12. (A) No licensee shall conduct the business of	86
making loans under sections 1321.01 to 1321.19 of the Revised	87
Code, within any office, room, or place of business in which any	88
other business is solicited or engaged in, or in association or	89
conjunction therewith, if the division of financial institutions	90
finds, after hearing, that the other business is of such nature	91
that such conduct tends to conceal evasion of those sections or of	92
the rules made under those sections and orders the licensee in	93
writing to desist from the conduct. For purposes of this division,	94
"other business" includes any business conducted by a person who	95
is registered or is required to be registered as a credit services	96
organization under section 4712.02 of the Revised Code, licensed	97
as a check-cashing business under section 1315.22 of the Revised	98
Code, engaged in the practice of debt adjusting pursuant to	99
Chapter 4710. of the Revised Code, or is a lessor as defined in	100
section 1351.01 of the Revised Code.	101

(B) No licensee or affiliate of a licensee shall make any	102
business loan of five thousand dollars or less at the licensee's	103
authorized place of business in this state that does not conform	104
with the interest and fee limitations in sections 1321.13 to	105
1321.16 of the Revised Code.	106

(C) No licensee shall conduct the business of making loans	107
under sections 1321.01 to 1321.19 of the Revised Code, under any	108
other name, or at any other place of business within this state	109
than that named in the license.	110

(D) No licensee shall take a lien upon real estate as	111
security for any loan made under those sections except such lien	112
as is created upon the filing or recording of a certificate of	113
judgment.	114

(E) No licensee shall use unfair, deceptive, or	115
unconscionable means to collect or attempt to collect any claim.	116
Without limiting the general application of the foregoing, the	117
conduct described in divisions (A) to (G) of section 1321.591 of	118
the Revised Code is deemed to violate this section.	119

Sec. 1321.13.  (A) Notwithstanding any other provisions of	120
the Revised Code other than division (C) of section 1321.15 of the	121
Revised Code, a licensee may contract for and receive interest,	122
calculated according to the actuarial method, at a rate or rates	123
not exceeding twenty-eight per cent per year on that portion of	124
the unpaid principal balance of the loan not exceeding one	125
thousand dollars and twenty-two per cent per year on any part of	126
the unpaid principal balance exceeding one thousand dollars. A	127
licensee may contract for and receive interest at the single	128
annual rate that would earn the same total interest at maturity of	129
the loan, when the loan is paid according to its agreed terms, as	130
would be earned by the application of the graduated rates set	131
forth in this division. Loans may be interest-bearing or	132
precomputed.	133

(B) For purposes of computation of time on interest-bearing	134
and precomputed loans, including, but not limited to, the	135
calculation of interest, a month is considered one-twelfth of a	136
year, and a day is considered one three hundred sixty-fifth of a	137
year when calculation is made for a fraction of a month. A year is	138
as defined in section 1.44 of the Revised Code. A month is that	139
period described in section 1.45 of the Revised Code.	140

(C) With respect to interest-bearing loans:

141

(1) Interest shall be computed on unpaid principal balances	142
outstanding from time to time, for the time outstanding. Each	143
payment shall be applied first to unpaid charges and fees, then to	144
interest, and the remainder to the unpaid principal balance.	145
However, if the amount of the payment is insufficient to pay the	146
accumulated interest, the unpaid interest continues to accumulate	147
to be paid from the proceeds of subsequent payments and is not	148
added to the principal balance. If the maturity of the loan is	149
accelerated for any reason and judgment is entered, the licensee	150
may thereafter charge the same rate or rates of interest as	151
provided in the loan contract.	152

(2) Interest shall not be compounded. However, if part or all	153
of the consideration for a new loan contract is the unpaid	154
principal balance of a prior loan, then the principal amount	155
payable under the new loan contract may include any unpaid	156
interest that has accrued. The resulting loan contract shall be	157
deemed a new and separate loan transaction for purposes of this	158
section. The unpaid principal balance of a precomputed loan is the	159
balance due after refund or credit of unearned interest as	160
provided in division (D)(3) of this section.	161

(D) With respect to precomputed loans:

162

(1) Loans shall be repayable in substantially equal and	163
consecutive monthly installments of principal and interest	164
combined, except that the first installment period may exceed one	165
month by not more than fifteen days, and the first installment	166
payment amount may be larger than the remaining payments by the	167
amount of interest charged for the extra days; and provided	168
further that monthly installment payment dates may be omitted to	169
accommodate borrowers with seasonal income.	170

(2) Payments may be applied to the combined total of	171
principal and precomputed interest until maturity of the loan. A	172
licensee may charge interest after the original or deferred	173
maturity of a precomputed loan at the rate or rates provided in	174
division (A) of this section on all unpaid principal balances for	175
the time outstanding.	176

(3) When any loan contract is paid in full by cash, renewal,	177
refinancing, or a new loan, one month or more before the final	178
installment due date, the licensee shall refund, or credit the	179
borrower with, the total of the applicable charges for all fully	180
unexpired installment periods, as originally scheduled or as	181
deferred, that follow the day of prepayment. If the prepayment is	182
made other than on a scheduled installment installment due date,	183
the nearest scheduled due date shall be used in such computation.	184
If the prepayment occurs prior to the first installment due date,	185
the licensee may retain one-thirtieth of the applicable charge for	186
a first installment period of one month for each day from date of	187
loan to date of prepayment, and shall refund, or credit the	188
borrower with, the balance of the total interest contracted for.	189
If the maturity of the loan is accelerated for any reason and	190
judgment is entered, the licensee shall credit the borrower with	191
the same refund as if prepayment in full had been made on the date	192
the judgment is entered and may thereafter convert the loan to an	193
interest-bearing loan at the same rate or rates of interest as	194
provided in the loan contract. If the maturity of the loan is	195
accelerated for any reason, the licensee may convert the loan to	196
an interest-bearing loan at the same rate or rates of interest as	197
provided in the loan contract, provided the licensee credits the	198
borrower with the same refund on the precomputed loan as if	199
prepayment in full had been made on the date of the conversion.	200

(4) If the parties agree in writing, either in the loan	201
contract or in a subsequent agreement, to a deferment of wholly	202
unpaid installments, a licensee may grant a deferment and may	203
collect a deferment charge as provided in this section. A	204
deferment postpones the scheduled due date of the earliest unpaid	205
installment and all subsequent installments as originally	206
scheduled, or as previously deferred, for a period equal to the	207
deferment period. The deferment period is that period during which	208
no installment is scheduled to be paid by reason of the deferment.	209
The deferment charge for a one-month period may not exceed the	210
applicable charge for the installment period immediately following	211
the due date of the last undeferred installment. A proportionate	212
charge may be made for deferment for periods of more or less than	213
one month. A deferment charge is earned prorata during the	214
deferment period and is fully earned on the last day of the	215
deferment period. If a loan is prepaid in full during a deferment	216
period, the licensee shall make, or credit to the borrower, a	217
refund of the unearned deferment charge in addition to any other	218
refund or credit made for prepayment of the loan in full.	219

(E) A licensee, at the request of the borrower, may obtain,	220
on one or more borrowers, credit life insurance, credit accident	221
and health insurance, and unemployment insurance. The premium or	222
identifiable charge for the insurance may be included in the	223
principal amount of the loan and may not exceed the premium rate	224
filed by the insurer with the superintendent of insurance and not	225
disapproved by himthe superintendent. If a licensee obtains the	226
insurance at the request of the borrower, the borrower shall have	227
the right to cancel the insurance for a period of twenty-five days	228
after the loan is made. If the borrower chooses to cancel the	229
insurance, the borrower shall give the licensee written notice of	230
this choice and shall return all of the policies or certificates	231
of insurance or notices of proposed insurance to the licensee	232
during such period, and the full premium or identifiable charge	233
for the insurance shall be refunded to the borrower by the	234
licensee. If the borrower requests, in the notice to cancel the	235
insurance, that this refund be applied to reduce the balance of a	236
precomputed loan, the licensee shall credit the amount of the	237
refund plus the amount of interest applicable to the refund to the	238
loan balance.	239

(F) A licensee may require the borrower to provide insurance	240
or a loss payable endorsement covering reasonable risks of loss,	241
damage, and destruction of property used as security for the loan	242
and with the consent of the borrower such insurance may cover	243
property other than that which is security for the loan. The	244
amount and term of required property insurance shall be reasonable	245
in relation to the amount and term of the loan contract and the	246
type and value of the security, and the insurance shall be	247
procured in accordance with the insurance laws of this state. The	248
purchase of this insurance through the licensee or an agent or	249
broker designated by the licensee shall not be a condition	250
precedent to the granting of the loan. If the borrower purchases	251
the insurance from or through the licensee or from another source,	252
the premium may be included in the principal amount of the loan.	253

(G) In addition to the interest and charges provided for by	254
this section, no further or other amount shall be charged,	255
received, or required by the licensee, except the amounts of fees	256
authorized by law to record, file, or release security interests	257
on a loan and fees for credit reports, which amounts may be	258
included in the principal amount of the loan or collected at any	259
time after the loan is made, and except costs and disbursements to	260
which the licensee may become entitled by law in connection with	261
any suit to collect a loan or any lawful activity to realize on a	262
security interest after default.	263

(H) If the loan contract or security instrument contains	264
covenants by the borrower to perform certain duties pertaining to	265
insuring or preserving security and the licensee pursuant to the	266
loan contract or security instrument pays for performance of the	267
duties on behalf of the borrower, the licensee may add the amounts	268
paid to the unpaid principal balance of the loan or collect them	269
separately. A charge for interest may be made for sums advanced	270
not exceeding the rate of interest permitted by division (A) of	271
this section. Within a reasonable time after advancing a sum, the	272
licensee shall notify the borrower in writing of the amount	273
advanced, any interest charged with respect to the amount	274
advanced, any revised payment schedule, and shall include a brief	275
description of the reason for the advance.	276

(I) A licensee may charge and receive loan origination	277
charges not exceeding the following:	278

(1) On loans in the principal amount of five hundred dollars	279
of less, the greater of fifteen dollars or one per cent of the	280
principal amount of the loan and, on each refinancing made more	281
than six months after the original loan and any previous	282
refinancing, not exceeding fifteen dollars;	283

(2) On all other loans, the greater of thirty dollars or one	284
percent of the principal amount of the loan and, on each	285
refinancing, not exceeding thirty dollars. Loan origination	286
charges may be paid by the borrower at the time of the loan or may	287
be included in the principal amount of the loan.	288

(J) A licensee may charge and receive check collection	289
charges not greater than twenty dollars plus any amount passed on	290
from other financial institutions for each check, negotiable order	291
of withdrawal, share draft, or other negotiable instrument	292
returned or dishonored for any reason.	293

(K) If the loan contract so provides, a licensee may collect	294
a default charge on any installment not paid in full within ten	295
days after its due date. For this purpose, all installments are	296
considered paid in the order in which they become due. Any amounts	297
applied to an outstanding loan balance as a result of voluntary	298
release of a security interest, sale of security on the loan, or	299
cancellation of insurance shall be considered payments on the	300
loan, unless the parties otherwise agree in writing at the time	301
the amounts are applied. The amount of the default charge shall	302
not exceed the greater of five per cent of the scheduled	303
installment or five dollars.	304

(L) With respect to a loan it has made under sections 1321.01	305
to 1321.19 of the Revised Code, a licensee may not do any of the	306
following:	307

(1) Charge or receive a fee for cashing a proceeds check or	308
money order disbursed to fund the loan;	309

(2) Require a borrower to cash a proceeds check or money	310
order disbursed to fund the loan at the place of business of the	311
licensee, an affiliate of the licensee, or any specified third	312
party;	313

(3) Seek or obtain directly or indirectly compensation from	314
any affiliate or third party that provides check-cashing services	315
to cash a proceeds check or money order disbursed to fund the loan	316
by the licensee.	317

Sec. 1321.131.  As an alternative to the interest permitted	318
in division (A) of section 1321.13 and in division (B) of section	319
1321.16 of the Revised Code, a licensee may contract for and	320
receive interest at any rate or rates agreed upon or consented to	321
by the parties to the loan contract or open-end loan agreement,	322
but not exceeding an annual percentage rate of twenty-five per	323
cent.	324

Nothing in this section shall be construed to permit a	325
licensee to contract for or receive an annual percentage rate that	326
is greater than what is permitted in division (C) of section	327
1321.15 of the Revised Code for loans described in that division.	328

Sec. 1321.14. (A) Licensees under section 1321.01 of the	329
Revised Code shall:	330

(A)(1) At the time any interest-bearing or precomputed loan	331
is made, deliver to the borrower or, if there are two or more	332
borrowers, to one of them, a statement in the English language	333
disclosing in clear and distinct terms the amount and date of the	334
loan, a schedule of payments or a description thereof, the type of	335
the security, if any, for the loan, the name and address of the	336
licensed office and of each borrower, and the agreed rate of	337
interest, or in lieu thereof, a copy of the instrument evidencing	338
the debt signed by the borrower;	339

(B)(2) For each payment made on account of any such	340
interest-bearing or precomputed loan, give to the person making it	341
a receipt if requested;	342

(C)(3) Permit payment to be made in advance in any amount on	343
any contract of loan at any time, but the licensee may apply the	344
payment first to all interest and charges due up to the date of	345
the payment;	346

(D)(4) Upon repayment of the loan in full, mark plainly every	347
obligation signed by any obligor, or a copy of the signed	348
obligation, "paid" or "canceled" and return it and any pledge to	349
the borrower or, if there are two or more borrowers, to one of	350
them; provided that a continuing obligation in whole or in part is	351
not repayment in full thereof.	352

(B) No licensee shall take any note or promise to pay in	353
which blanks are left to be filled in after execution.	354

(C) Any licensee or other person who willfully violates	355
section 1321.13 or division (C) of section 1321.15 of the Revised	356
Code shall forfeit to the borrower twice the amount of interest	357
contracted for. The maximum rate of interest applicable to any	358
loan transaction that does not comply with all provisions of	359
section 1321.13 of the Revised Code shall be the rate that would	360
be applicable in the absence of sections 1321.01 to 1321.19 of the	361
Revised Code.	362

(D) No licensee shall pledge or hypothecate any note or	363
security given by any borrower except with a person residing or	364
maintaining a place of business in this state or with a bank	365
authorized to transact business in this state, under an agreement	366
permitting the division of financial institutions to examine the	367
papers so hypothecated.	368

(E) The tender by the borrower, or at the borrower's request,	369
of an amount equal to the unpaid balance less the required rebate	370
on a precomputed loan shall be accepted by the licensee in full	371
payment of the loan obligation.	372

(F) A licensee shall not, directly or indirectly, make any	373
payment, or cause to be made any payment, whether in cash or	374
otherwise, to a dealer in tangible goods or services, or to a	375
retail seller as defined in section 1317.01 of the Revised Code,	376
in connection with the making of a loan to a customer, patron, or	377
other person who has done, or is doing, business with the dealer	378
in tangible goods or services, or the retail seller. This section	379
does not prohibit bona fide advertising practices involving only	380
the borrowers.	381

Sec. 1321.15.  (A) No licensee shall knowingly induce or	382
permit any person, jointly or severally, to be obligated, directly	383
or contingently or both, under more than one contract of loan at	384
the same time for the purpose or with the result of obtaining a	385
higher rate of interest or greater charges than would otherwise be	386
permitted upon a single loan made under sections 1321.01 to	387
1321.19 of the Revised Code.	388

(B) No licensee shall charge, contract for, or receive,	389
directly or indirectly, interest and charges greater than such	390
licensee would be permitted to charge, contract for, or receive	391
without a license under sections 1321.01 to 1321.19 of the Revised	392
Code on any part of an indebtedness for one or more than one loan	393
of money if the amount of such indebtedness is in excess of five	394
thousand dollars.	395

(C)(1) No licensee shall make a loan of one thousand dollars	396
or less under sections 1321.01 to 1321.19 of the Revised Code	397
that will obligate the borrower to pay an annual percentage rate	398
for the loan that exceeds twenty-eight per cent, as calculated in	399
compliance with the "Truth in Lending Act," 82 Stat. 149 (1980),	400
15 U.S.C. 1606, unless one of the following applies:	401

(a) The term of the loan is greater than three months.

402

(b) The loan contract requires the borrower to repay the loan	403
in three or more monthly installments of substantially equal	404
amounts.	405

(2) Any loan made by a licensee that meets the requirements	406
of division (C)(1)(a) or (b) of this section shall be subject to	407
section 1321.13 of the Revised Code.	408

(D) For the purpose of the limitations set forth in this	409
section, the amount of any such indebtedness shall be determined	410
by including the entire obligation of any person to the licensee	411
for principal, direct or contingent or both, as borrower,	412
indorser, guarantor, surety for, or otherwise, whether incurred or	413
subsisting under one or more than one contract of loan, except	414
that any contract of indorsement, guaranty, or suretyship that	415
does not obligate the indorser, guarantor, or surety for any	416
charges in excess of eight per cent per annum, is not included in	417
such entire obligation. If a licensee acquires, directly or	418
indirectly, by purchase or discount, bona fide obligations for	419
goods or services owed by the person who received such goods or	420
services to the person who provided such goods or services, then	421
the amount of such purchased or discounted indebtedness to the	422
licensee shall not be included in computing the aggregate	423
indebtedness of such borrower to the licensee for the purpose of	424
the prohibitions set forth in this section.	425

Sec. 1321.44. (A) A violation of section 1321.41section	426
1321.36, 1321.39, 1321.40, 1321.41, or 1321.45 of the Revised	427
Code is deemed an unfair or deceptive act or practice in	428
violation of section 1345.02 of the Revised Code. A borrower	429
injured by a violation of section 1321.41 of the Revised Code	430
shall have a cause of action and be entitled to the same relief	431
available to a consumer under section 1345.09 of the Revised	432
Code, and all powers and remedies available to the attorney	433
general to enforce sections 1345.01 to 1345.13 of the Revised	434
Code are available to the attorney general to enforce section	435
1321.41 of the Revised Code.	436

(B) The superintendent of financial institutions or a	437
borrower may bring directly an action to enjoin a violation of	438
sections 1321.35 to 1321.48 of the Revised Code. The prosecuting	439
attorney of the county in which the action may be brought may	440
bring an action to enjoin a violation of sections 1321.35 to	441
1321.48 of the Revised Code only if the prosecuting attorney first	442
presents any evidence of the violation to the attorney general	443
and, within a reasonable period of time, the attorney general has	444
not agreed to bring the action.	445

(C) The superintendent may initiate criminal proceedings	446
under sections 1321.35 to 1321.48 of the Revised Code by	447
presenting any evidence of criminal violation to the prosecuting	448
attorney of the county in which the offense may be prosecuted. If	449
the prosecuting attorney does not prosecute the violations, or at	450
the request of the prosecuting attorney, the superintendent shall	451
present any evidence of criminal violations to the attorney	452
general, who may proceed in the prosecution with all the rights,	453
privileges, and powers conferred by law on prosecuting attorneys,	454
including the power to appear before grand juries and to	455
interrogate witnesses before such grand juries. These powers of	456
the attorney general are in addition to any other applicable	457
powers of the attorney general.	458

(D) The prosecuting attorney of the county in which an	459
alleged offense may be prosecuted may initiate criminal	460
proceedings under sections 1321.35 to 1321.48 of the Revised Code.	461

(E) In order to initiate criminal proceedings under sections	462
1321.35 to 1321.48 of the Revised Code, the attorney general first	463
shall present any evidence of criminal violations to the	464
prosecuting attorney of the county in which the alleged offense	465
may be prosecuted. If, within a reasonable period of time, the	466
prosecuting attorney has not agreed to prosecute the violations,	467
the attorney general may proceed in the prosecution with all the	468
rights, privileges, and powers described in division (B) of this	469
section.	470

(F) When a judgment under this section becomes final, the	471
clerk of court shall mail a copy of the judgment, including	472
supporting opinions, to the superintendentmay be enforced	473
pursuant to section 1321.61 of the Revised Code.	474

Sec. 1321.52.  (A)(1) No person, on that person's own behalf	475
or on behalf of any other person, shall do either of the following	476
without having first obtained a certificate of registration from	477
the division of financial institutions:	478

(a) Advertise, solicit, or hold out that the person is	479
engaged in the business of making loans secured by a mortgage on a	480
borrower's real estate which is other than a first lien on the	481
real estate;	482

(b) Engage in the business of lending or collecting the	483
person's own or another person's money, credit, or choses in	484
action for such loans.	485

(2) Each person issued a certificate is subject to all the	486
rules prescribed under sections 1321.51 to 1321.60 of the Revised	487
Code.	488

(B) All loans made to persons who at the time are residents	489
of this state are considered as made within this state and subject	490
to the laws of this state, regardless of any statement in the	491
contract or note to the contrary.	492

(C) A registrant may make unsecured loans, loans secured by a	493
mortgage on a borrower's real estate which is a first lien or	494
other than a first lien on the real estate, loans secured by other	495
than real estate, and loans secured by any combination of	496
mortgages and security interests, on terms and conditions provided	497
by sections 1321.51 to 1321.60 of the Revised Code.	498

(D)(1) If a lender that is subject to sections 1321.51 to	499
1321.60 of the Revised Code makes a loan in violation of division	500
(A)(1) of this section, the lender has no right to collect,	501
receive, or retain any interest or charges on that loan.	502

(2) If a registrant applies to the division for a renewal of	503
the registrant's certificate after the date required by division	504
(A)(4) of section 1321.53 of the Revised Code, but prior to the	505
first day of August of that year, and the division approves the	506
application, division (D)(1) of this section does not apply with	507
respect to any loan made by the registrant while the registrant's	508
certificate was expired.	509

(E) No person not located in Ohio shall make a loan under	510
sections 1321.51 to 1321.60 of the Revised Code to a borrower in	511
Ohio from an office not located in Ohio. Nothing in this section	512
prohibits a business not located or licensed in Ohio from lending	513
funds to Ohio borrowers who physically visit the out-of-state	514
office of the business and obtain the disbursement of loan funds	515
at that location.	516

Sec. 1321.53.  (A)(1) An application for a certificate of	517
registration under sections 1321.51 to 1321.60 of the Revised Code	518
shall contain an undertaking by the applicant to abide by those	519
sections. The application shall be in writing, under oath, and in	520
the form prescribed by the division of financial institutions,	521
shall give the location where the business is to be conducted and	522
the names and addresses of the partners, officers, or trustees of	523
the applicant, and shall contain any further relevant information	524
that the division may require. Applicants that are foreign	525
corporations shall obtain and maintain a license pursuant to	526
Chapter 1703. of the Revised Code before a certificate is issued	527
or renewed.	528

(2) Upon the filing of the application and the payment by the	529
applicant of two hundred dollars as an investigation fee and an	530
annual registration fee as determined by the superintendent of	531
financial institutions pursuant to section 1321.20 of the Revised	532
Code, the division shall investigate the relevant facts. If the	533
application involves investigation outside this state, the	534
applicant may be required by the division to advance sufficient	535
funds to pay any of the actual expenses of such investigation,	536
when it appears that these expenses will exceed two hundred	537
dollars. An itemized statement of any of these expenses which the	538
applicant is required to pay shall be furnished the applicant by	539
the division. No certificate shall be issued unless the fees have	540
been submitted to the division, and no registration fee or	541
investigation fee will be returned after a certificate has been	542
issued.	543

(3) If an application for a certificate of registration does	544
not contain all of the information required under division (A)(1)	545
of this section, and if such information is not submitted to the	546
division within ninety days after the application is filed, the	547
superintendent may consider the application withdrawn and may	548
retain the investigation fee.	549

(4) If the division finds that the financial responsibility,	550
experience, character, and general fitness of the applicant are	551
such as to command the confidence of the public and to warrant the	552
belief that the business will be operated honestly and fairly in	553
compliance with and within the purposes of sections 1321.51 to	554
1321.60 of the Revised Code, and that the applicant has the net	555
worth and assets required by division (B) of this section, the	556
division shall thereupon issue a certificate to the applicant. The	557
certificate shall expire on the first day of July next after its	558
issue, and on the first day of July in each succeeding year,	559
unless renewed by payment of an annual fee, and any assessment, as	560
determined by the superintendent pursuant to section 1321.20 of	561
the Revised Code, on or before the last day of June of each year.	562
No other fee or assessment shall be required of a registrant by	563
the state or any political subdivision of the state.	564

If the division does not so find, it shall enter an order	565
denying the application, and forthwith notify the applicant of the	566
denial, the grounds for the denial, and the applicant's reasonable	567
opportunity to be heard on the action in accordance with Chapter	568
119. of the Revised Code. In the event of denial, the division	569
shall return the registration fee but retain the investigation	570
fee.	571

(5) If there is a change of ten per cent or more in the	572
ownership of a registrant, the division may make any investigation	573
necessary to determine whether any fact or condition exists that,	574
if it had existed at the time of the original application for a	575
certificate of registration, the fact or condition would have	576
warranted the division to deny the application under division	577
(A)(4) of this section. If such a fact or condition is found, the	578
division may, in accordance with Chapter 119. of the Revised Code,	579
revoke the registrant's certificate.	580

(B) Each registrant that engages in lending under sections	581
1321.51 to 1321.60 of the Revised Code shall maintain both of the	582
following:	583

(1) A net worth of at least fifty thousand dollars;

584

(2) For each certificate of registration, assets of at least	585
fifty thousand dollars either in use or readily available for use	586
in the conduct of the business.	587

(C) Not more than one place of business shall be maintained	588
under the same certificate, but the division may issue additional	589
certificates to the same registrant upon compliance with sections	590
1321.51 to 1321.60 of the Revised Code, governing the issuance of	591
a single certificate. No change in the place of business of a	592
registrant to a location outside the original municipal	593
corporation shall be permitted under the same certificate without	594
the approval of a new application, the payment of the registration	595
fee as determined by the superintendent pursuant to section	596
1321.20 of the Revised Code and, if required by the	597
superintendent, the payment of an investigation fee of two hundred	598
dollars. When a registrant wishes to change its place of business	599
within the same municipal corporation, it shall give written	600
notice of the change in advance to the division, which shall	601
provide a certificate for the new address without cost. If a	602
registrant changes its name, prior to making loans under the new	603
name it shall give written notice of the change to the division,	604
which shall provide a certificate in the new name without cost.	605
Sections 1321.51 to 1321.60 of the Revised Code do not limit the	606
loans of any registrant to residents of the community in which the	607
registrant's place of business is situated. Each certificate shall	608
be kept conspicuously posted in the place of business of the	609
registrant and is not transferable or assignable.	610

(D) Sections 1321.51 to 1321.60 of the Revised Code do not	611
apply to any of the following:	612

(1) Persons lawfully doing business under the authority of	613
any law of this state, another state, or the United States	614
relating to banks, savings banks, trust companies, savings and	615
loan associations, or credit unions;	616

(2) Life, property, or casualty insurance companies licensed	617
to do business in this state;	618

(3) Any person that is a lender making a loan pursuant to	619
sections 1321.01 to 1321.19 of the Revised Code or a business loan	620
as described in division (B)(6)(5) of section 1343.01 of the	621
Revised Code;	622

(4) Any governmental agency or instrumentality, or any entity	623
included under division (B)(3) of section 1343.01 of the Revised	624
Code.	625

(E) No person engaged in the business of selling tangible	626
goods or services related to tangible goods may receive or retain	627
a certificate under sections 1321.51 to 1321.60 of the Revised	628
Code for such place of business.	629

Sec. 1321.542.  A violation of section 1321.52, 1321.551,	630
1321.56, 1321.57, 1321.571, 1321.59, 1321.591, or 1321.60 of the	631
Revised Code may be enforced pursuant to section 1321.61 of the	632
Revised Code when the violation involves a loan of one thousand	633
dollars or less.	634

Sec. 1321.551.  No registrant shall conduct the business of	635
making loans under sections 1321.51 to 1321.60 of the Revised Code	636
in any office, room, or place of business in which any other	637
business is solicited or engaged in, or in association or	638
conjunction with any other such business, if the superintendent of	639
financial institutions finds, pursuant to a hearing conducted in	640
accordance with Chapter 119. of the Revised Code, that the other	641
business is of such a nature that the conduct tends to conceal	642
evasion of sections 1321.51 to 1321.60 of the Revised Code or of	643
the rules adopted under those sections, and orders the registrant	644
in writing to desist from the conduct. For purposes of this	645
section, "other business" includes any business conducted by a	646
person who is registered or is required to be registered as a	647
credit services organization under section 4712.02 of the Revised	648
Code, licensed as a check-cashing business under section 1315.22	649
of the Revised Code, engaged in the practice of debt adjusting	650
pursuant to Chapter 4710. of the Revised Code, or is a lessor as	651
defined in section 1351.01 of the Revised Code.	652

Sec. 1321.56.  Any person who willfully violates section	653
1321.57 or division (E) of section 1321.59 of the Revised Code	654
shall forfeit to the borrower the amount of interest paid by the	655
borrower. The maximum rate of interest applicable to any loan	656
transaction that does not comply with section 1321.57 of the	657
Revised Code shall be the rate that would be applicable in the	658
absence of sections 1321.51 to 1321.60 of the Revised Code.	659

Sec. 1321.57.  (A) Notwithstanding any other provisions of	660
the Revised Code other than division (E) of section 1321.59 of the	661
Revised Code, a registrant may contract for and receive interest,	662
calculated according to the actuarial method, at a rate or rates	663
not exceeding twenty-one per cent per year on the unpaid principal	664
balances of the loan. Loans may be interest-bearing or	665
precomputed.	666

(B) For purposes of computation of time on interest-bearing	667
and precomputed loans, including, but not limited to, the	668
calculation of interest, a month is considered one-twelfth of a	669
year, and a day is considered one three hundred sixty-fifth of a	670
year when calculation is made for a fraction of a month. A year is	671
as defined in section 1.44 of the Revised Code. A month is that	672
period described in section 1.45 of the Revised Code.	673
Alternatively, a registrant may consider a day as one three	674
hundred sixtieth of a year and each month as having thirty days.	675

(C) With respect to interest-bearing loans:

676

(1)(a) Interest shall be computed on unpaid principal	677
balances outstanding from time to time, for the time outstanding.	678

(b) As an alternative to the method of computing interest set	679
forth in division (C)(1)(a) of this section, a registrant may	680
charge and collect interest for the first installment period based	681
on elapsed time from the date of the loan to the first scheduled	682
payment due date, and for each succeeding installment period from	683
the scheduled payment due date to the next scheduled payment due	684
date, regardless of the date or dates the payments are actually	685
made.	686

(c) Whether a registrant computes interest pursuant to	687
division (C)(1)(a) or (b) of this section, each payment shall be	688
applied first to unpaid charges, then to interest, and the	689
remainder to the unpaid principal balance. However, if the amount	690
of the payment is insufficient to pay the accumulated interest,	691
the unpaid interest continues to accumulate to be paid from the	692
proceeds of subsequent payments and is not added to the principal	693
balance.	694

(2) Interest shall not be compounded, collected, or paid in	695
advance. However, both of the following apply:	696

(a) Interest may be charged to extend the first monthly	697
installment period by not more than fifteen days, and the interest	698
charged for the extension may be added to the principal amount of	699
the loan.	700

(b) If part or all of the consideration for a new loan	701
contract is the unpaid principal balance of a prior loan, the	702
principal amount payable under the new loan contract may include	703
any unpaid interest that has accrued. The resulting loan contract	704
shall be deemed a new and separate loan transaction for purposes	705
of this section. The unpaid principal balance of a precomputed	706
loan is the balance due after refund or credit of unearned	707
interest as provided in division (D)(3) of this section.	708

(D) With respect to precomputed loans:

709

(1) Loans shall be repayable in monthly installments of	710
principal and interest combined, except that the first installment	711
period may exceed one month by not more than fifteen days, and the	712
first installment payment amount may be larger than the remaining	713
payments by the amount of interest charged for the extra days; and	714
provided further that monthly installment payment dates may be	715
omitted to accommodate borrowers with seasonal income.	716

(2) Payments may be applied to the combined total of	717
principal and precomputed interest until maturity of the loan. A	718
registrant may charge interest after the original or deferred	719
maturity of a precomputed loan at the rate specified in division	720
(A) of this section on all unpaid principal balances for the time	721
outstanding.	722

(3) When any loan contract is paid in full by cash, renewal,	723
refinancing, or a new loan, one month or more before the final	724
installment due date, the registrant shall refund, or credit the	725
borrower with, the total of the applicable charges for all fully	726
unexpired installment periods, as originally scheduled or as	727
deferred, that follow the day of prepayment. If the prepayment is	728
made other than on a scheduled installment due date, the nearest	729
scheduled installment due date shall be used in such computation.	730
If the prepayment occurs prior to the first installment due date,	731
the registrant may retain one-thirtieth of the applicable charge	732
for a first installment period of one month for each day from date	733
of loan to date of prepayment, and shall refund, or credit the	734
borrower with, the balance of the total interest contracted for.	735
If the maturity of the loan is accelerated for any reason and	736
judgment is entered, the registrant shall credit the borrower with	737
the same refund as if prepayment in full had been made on the date	738
the judgment is entered.	739

(4) If the parties agree in writing, either in the loan	740
contract or in a subsequent agreement, to a deferment of wholly	741
unpaid installments, a registrant may grant a deferment and may	742
collect a deferment charge as provided in this section. A	743
deferment postpones the scheduled due date of the earliest unpaid	744
installment and all subsequent installments as originally	745
scheduled, or as previously deferred, for a period equal to the	746
deferment period. The deferment period is that period during which	747
no installment is scheduled to be paid by reason of the deferment.	748
The deferment charge for a one-month period may not exceed the	749
applicable charge for the installment period immediately following	750
the due date of the last undeferred installment. A proportionate	751
charge may be made for deferment for periods of more or less than	752
one month. A deferment charge is earned pro rata during the	753
deferment period and is fully earned on the last day of the	754
deferment period. If a loan is prepaid in full during a deferment	755
period, the registrant shall make, or credit to the borrower, a	756
refund of the unearned deferment charge in addition to any other	757
refund or credit made for prepayment of the loan in full.	758

(E) A registrant, at the request of the borrower, may obtain,	759
on one or more borrowers, credit life insurance, credit accident	760
and health insurance, and unemployment insurance. The premium or	761
identifiable charge for the insurance may be included in the	762
principal amount of the loan and may not exceed the premium rate	763
filed by the insurer with the superintendent of insurance and not	764
disapproved by the superintendent. If a registrant obtains the	765
insurance at the request of the borrower, the borrower shall have	766
the right to cancel the insurance for a period of twenty-five days	767
after the loan is made. If the borrower chooses to cancel the	768
insurance, the borrower shall give the registrant written notice	769
of this choice and shall return all of the policies or	770
certificates of insurance or notices of proposed insurance to the	771
registrant during such period, and the full premium or	772
identifiable charge for the insurance shall be refunded to the	773
borrower by the registrant. If the borrower requests, in the	774
notice to cancel the insurance, that this refund be applied to	775
reduce the balance of a precomputed loan, the registrant shall	776
credit the amount of the refund plus the amount of interest	777
applicable to the refund to the loan balance.	778

If the registrant obtains the insurance at the request of the	779
borrower, the registrant shall not charge or collect interest on	780
any insured amount that remains unpaid after the insured	781
borrower's date of death.	782

(F) A registrant may require the borrower to provide	783
insurance or a loss payable endorsement covering reasonable risks	784
of loss, damage, and destruction of property used as security for	785
the loan and with the consent of the borrower such insurance may	786
cover property other than that which is security for the loan. The	787
amount and term of required property insurance shall be reasonable	788
in relation to the amount and term of the loan contract and the	789
type and value of the security, and the insurance shall be	790
procured in accordance with the insurance laws of this state. The	791
purchase of this insurance through the registrant or an agent or	792
broker designated by the registrant shall not be a condition	793
precedent to the granting of the loan. If the borrower purchases	794
the insurance from or through the registrant or from another	795
source, the premium may be included in the principal amount of the	796
loan.	797

(G) On loans secured by an interest in real estate, all of	798
the following apply:	799

(1) A registrant may charge and receive up to two points, and	800
a prepayment penalty not in excess of one per cent of the original	801
principal amount of the loan. Points may be paid by the borrower	802
at the time of the loan or may be included in the principal amount	803
of the loan. On a refinancing, a registrant may not charge under	804
division (G)(1) of this section either of the following:	805

(a) Points on the portion of the principal amount that is	806
applied to the unpaid principal amount of the refinanced loan, if	807
the refinancing occurs within one year after the date of the	808
refinanced loan on which points were charged;	809

(b) A prepayment penalty.

810

(2) As an alternative to the prepayment penalty described in	811
division (G)(1) of this section, a registrant may contract for,	812
charge, and receive the prepayment penalty described in division	813
(G)(2) of this section for the prepayment of a loan prior to two	814
years after the date the loan contract is executed. This	815
prepayment penalty shall not exceed two per cent of the original	816
principal amount of the loan if the loan is paid in full prior to	817
one year after the date the loan contract is executed. The penalty	818
shall not exceed one per cent of the original principal amount of	819
the loan if the loan is paid in full at any time from one year,	820
but prior to two years, after the date the loan contract is	821
executed. A registrant shall not charge or receive a prepayment	822
penalty under division (G)(2) of this section if any of the	823
following applies:	824

(a) The loan is a refinancing by the same registrant or a	825
registrant to whom the loan has been assigned;	826

(b) The loan is paid in full as a result of the sale of the	827
real estate that secures the loan;	828

(c) The loan is paid in full with the proceeds of an	829
insurance claim against an insurance policy that insures the life	830
of the borrower or an insurance policy that covers loss, damage,	831
or destruction of the real estate that secures the loan.	832

(3) Division (G) of this section is not a limitation on	833
discount points or other charges for purposes of section 501(b)(4)	834
of the "Depository Institutions Deregulation and Monetary Control	835
Act of 1980," 94 Stat. 161, 12 U.S.C.A. 1735f-7 note.	836

(H)(1) In addition to the interest and charges provided for	837
by this section, no further or other amount, whether in the form	838
of broker fees, placement fees, or any other fees whatsoever,	839
shall be charged or, received, or required by the registrant,	840
except costs and disbursements in connection with any suit to	841
collect a loan or any lawful activity to realize on a security	842
interest or mortgage after default, including reasonable attorney	843
fees incurred by the registrant as a result of the suit or	844
activity and to which the registrant becomes entitled by law, and	845
except the following additional charges which may be included in	846
the principal amount of the loan or collected at any time after	847
the loan is made:	848

(a) The amounts of fees authorized by law to record, file, or	849
release security interests and mortgages on a loan;	850

(b) With respect to a loan secured by an interest in real	851
estate, the following closing costs, if they are bona fide,	852
reasonable in amount, and not for the purpose of circumvention or	853
evasion of this section:	854

(i) Fees or premiums for title examination, abstract of	855
title, title insurance, surveys, title endorsements, title	856
binders, title commitments, home inspections, or pest inspections;	857
settlement or closing costs; courier fees; and any federally	858
mandated flood plain certification fee;	859

(ii) If not paid to the registrant, an employee of the	860
registrant, or a person related to the registrant, fees for	861
preparation of a mortgage, settlement statement, or other	862
documents, fees for notarizing mortgages and other documents,	863
appraisal fees, and fees for any federally mandated inspection of	864
home improvement work financed by a second mortgage loan;	865

(c) Fees for credit investigations not exceeding ten dollars.

866

(2) Division (H)(1) of this section does not limit the rights	867
of registrants to engage in other transactions with borrowers,	868
provided the transactions are not a condition of the loan.	869

(I) If the loan contract or security instrument contains	870
covenants by the borrower to perform certain duties pertaining to	871
insuring or preserving security and the registrant pursuant to the	872
loan contract or security instrument pays for performance of the	873
duties on behalf of the borrower, the registrant may add the	874
amounts paid to the unpaid principal balance of the loan or	875
collect them separately. A charge for interest may be made for	876
sums advanced not exceeding the rate of interest permitted by	877
division (A) of this section. Within a reasonable time after	878
advancing a sum, the registrant shall notify the borrower in	879
writing of the amount advanced, any interest charged with respect	880
to the amount advanced, any revised payment schedule, and shall	881
include a brief description of the reason for the advance.	882

(J)(1) In addition to points authorized under division (G) of	883
this section, a registrant may charge and receive the following:	884

(a) With respect to secured loans: if the principal amount of	885
the loan is less than five hundred dollars, loan origination	886
charges not exceeding fifteen dollars; if the principal amount of	887
the loan is at least five hundred dollars but less than one	888
thousand dollars, loan origination charges not exceeding thirty	889
dollars; if the principal amount of the loan is at least one	890
thousand dollars but less than two thousand dollars, loan	891
origination charges not exceeding one hundred dollars; if the	892
principal amount of the loan is at least two thousand dollars but	893
less than five thousand dollars, loan origination charges not	894
exceeding two hundred dollars; and if the principal amount of the	895
loan is at least five thousand dollars, loan origination charges	896
not exceeding the greater of two hundred fifty dollars or one per	897
cent of the principal amount of the loan.	898

(b) With respect to unsecured loans: if the principal amount	899
of the loan is less than five hundred dollars, loan origination	900
charges not exceeding fifteen dollars; if the principal amount of	901
the loan is at least five hundred dollars but less than one	902
thousand dollars, loan origination charges not exceeding thirty	903
dollars; if the principal amount of the loan is at least one	904
thousand dollars but less than five thousand dollars, loan	905
origination charges not exceeding one hundred dollars; and if the	906
principal amount of the loan is at least five thousand dollars,	907
loan origination charges not exceeding the greater of two hundred	908
fifty dollars or one per cent of the principal amount of the loan.	909

(2) If a refinancing occurs within ninety days after the date	910
of the refinanced loan, a registrant may not impose loan	911
origination charges on the portion of the principal amount that is	912
applied to the unpaid principal amount of the refinanced loan.	913

(3) Loan origination charges may be paid by the borrower at	914
the time of the loan or may be included in the principal amount of	915
the loan.	916

(K) A registrant may charge and receive check collection	917
charges not greater than twenty dollars plus any amount passed on	918
from other financial institutions for each check, negotiable order	919
of withdrawal, share draft, or other negotiable instrument	920
returned or dishonored for any reason.	921

(L) If the loan contract so provides, a registrant may	922
collect a default charge on any installment not paid in full	923
within ten days after its due date. For this purpose, all	924
installments are considered paid in the order in which they become	925
due. Any amounts applied to an outstanding loan balance as a	926
result of voluntary release of a security interest, sale of	927
security on the loan, or cancellation of insurance shall be	928
considered payments on the loan, unless the parties otherwise	929
agree in writing at the time the amounts are applied. The amount	930
of the default charge shall not exceed the greater of five per	931
cent of the scheduled installment or fifteen dollars.	932

(M) With respect to a loan it has made under sections 1321.51	933
to 1321.60 of the Revised Code, a registrant may not do any of the	934
following:	935

(1) Charge or receive a fee for cashing a proceeds check or	936
money order disbursed to fund the loan;	937

(2) Require a borrower to cash a proceeds check or money	938
order disbursed to fund the loan at the place of business of the	939
registrant, an affiliate of the registrant, or any specified third	940
party;	941

(3) Seek or obtain directly or indirectly compensation from	942
any affiliate or third party that provides check-cashing services	943
to cash a proceeds check or money order disbursed to fund the loan	944
by the registrant.	945

Sec. 1321.571.  As an alternative to the interest permitted	946
in division (A) of section 1321.57 and in division (B) of section	947
1321.58 of the Revised Code, a registrant may contract for and	948
receive interest at any rate or rates agreed upon or consented to	949
by the parties to the loan contract or open-end loan agreement,	950
but not exceeding an annual percentage rate of twenty-five per	951
cent.	952

Nothing in this section shall be construed to permit a	953
licensee to contract for or receive an annual percentage rate that	954
is greater than what is permitted in division (E) of section	955
1321.59 of the Revised Code for loans described in that division.	956

Sec. 1321.59.  (A) No registrant under sections 1321.51 to	957
1321.60 of the Revised Code shall permit any borrower to be	958
indebted for a loan made under sections 1321.51 to 1321.60 of the	959
Revised Code at any time while the borrower is also indebted to an	960
affiliate or agent of the registrant for a loan made under	961
sections 1321.01 to 1321.19 of the Revised Code for the purpose or	962
with the result of obtaining greater charges than otherwise would	963
be permitted by sections 1321.51 to 1321.60 of the Revised Code.	964

(B) No registrant shall induce or permit any person to become	965
obligated to the registrant under sections 1321.51 to 1321.60 of	966
the Revised Code, directly or contingently, or both, under more	967
than one contract of loan at the same time for the purpose or with	968
the result of obtaining greater charges than would otherwise be	969
permitted by sections 1321.51 to 1321.60 of the Revised Code.	970

(C) No registrant shall refuse to provide information	971
regarding the amount required to pay in full a loan under sections	972
1321.51 to 1321.60 of the Revised Code when requested by the	973
borrower or by another person designated in writing by the	974
borrower.	975

(D) On any loan or application for a loan under sections	976
1321.51 to 1321.60 of the Revised Code secured by a mortgage on a	977
borrower's real estate which is other than a first lien on the	978
real estate, no person shall pay or receive, directly or	979
indirectly, fees or any other type of compensation for services of	980
a broker that, in the aggregate, exceed the lesser of one thousand	981
dollars or one per cent of the principal amount of the loan.	982

(E)(1) No registrant shall make a loan of one thousand	983
dollars or less under sections 1321.51 to 1321.60 of the Revised	984
Code that will obligate the borrower to pay an annual percentage	985
rate for the loan that exceeds twenty-eight per cent, as	986
calculated in compliance with the "Truth in Lending Act," 82	987
Stat. 149 (1980), 15 U.S.C. 1606, unless one of the following	988
applies:	989

(a) The term of loan is greater than three months.

990

(b) The loan contract requires the borrower to repay the loan	991
in three or more monthly installments of substantially equal	992
amounts.	993

(2) Any loan made by a registrant that meets the requirements	994
of division (E)(1)(a) or (b) of this section shall be subject to	995
section 1321.57 of the Revised Code.	996

Sec. 1321.591. No registrant or licensee shall use unfair,	997
deceptive, or unconscionable means to collect or attempt to	998
collect any claim. Without limiting the general application of the	999
foregoing, the following conduct is deemed to violate this	1000
section:	1001

(A) The collection of or the attempt to collect any interest	1002
or other charge, fee, or expense incidental to the principal	1003
obligation unless such interest or incidental fee, charge, or	1004
expense is expressly authorized by the agreement creating the	1005
obligation and by law.	1006

(B) Any communication with a consumer whenever it is known	1007
that the consumer is represented by an attorney and the attorney's	1008
name and address are known, or could be easily ascertained, unless	1009
the attorney fails to answer correspondence, return telephone	1010
calls or discuss the obligation in question, or unless the	1011
attorney consents to direct communication with the consumer.	1012

(C) Placing a telephone call or otherwise communicating by	1013
telephone with a consumer or third party, at any place, including	1014
a place of employment, falsely stating that the call is urgent or	1015
an emergency.	1016

(D) Using profane or obscene language or language that is	1017
intended to unreasonably abuse the listener or reader.	1018

(E) Placing telephone calls without disclosure of the	1019
caller's identity and with the intent to annoy, harass, or	1020
threaten any person at the number called.	1021

(F) Causing expense to any person in the form of long	1022
distance telephone tolls, text messaging fees, or other charges	1023
incurred by a form of communication, by concealment of the true	1024
purpose of the communication.	1025

(G) Causing a telephone to ring or engaging any person in	1026
telephone conversation repeatedly or continuously, or at unusual	1027
times, or at times known to be inconvenient, with the intent to	1028
annoy, abuse, oppress, or threaten any person at the called	1029
number.	1030

Sec. 1321.61. (A) As used in this section, "violation" means	1031
either of the following:	1032

(1) A violation of section 1321.02, 1321.11, 1321.12,	1033
1321.13, 1321.14, 1321.15, 1321.17, 1321.52, 1321.551, 1321.56,	1034
1321.57, 1321.571, 1321.59, 1321.591, or 1321.60 of the Revised	1035
Code when the violation involves a loan of one thousand dollars	1036
or less;	1037

(2) A violation of section 1321.36, 1321.39, 1321.40,	1038
1321.41, or 1321.45 of the Revised Code.	1039

(B) A violation is deemed an unfair or deceptive act or	1040
practice that violates section 1345.02 of the Revised Code. A	1041
borrower injured by a violation shall have a cause of action and	1042
be entitled to the same relief available to a consumer under	1043
section 1345.09 of the Revised Code, and all powers and remedies	1044
available to the attorney general to enforce sections 1345.01 to	1045
1345.13 of the Revised Code are available to the attorney general	1046
to take enforcement action regarding a violation.	1047

(C) The superintendent of financial institutions or a	1048
borrower may bring directly an action to enjoin a violation. The	1049
prosecuting attorney of the county in which the action may be	1050
brought may bring an action to enjoin a violation only if the	1051
prosecuting attorney first presents any evidence of the violation	1052
to the attorney general and, within a reasonable period of time,	1053
the attorney general has not agreed to bring the action.	1054

(D) The superintendent may initiate criminal proceedings for	1055
a violation by presenting any evidence of a criminal offense to	1056
the prosecuting attorney of the county in which the offense may be	1057
prosecuted. If the prosecuting attorney does not prosecute the	1058
violation, or at the request of the prosecuting attorney, the	1059
superintendent shall present any evidence of criminal offenses to	1060
the attorney general, who may proceed in the prosecution with all	1061
the rights, privileges, and powers conferred by law on prosecuting	1062
attorneys, including the power to appear before grand juries and	1063
to interrogate witnesses before such grand juries. These powers of	1064
the attorney general are in addition to any other applicable	1065
powers of the attorney general.	1066

(E) The prosecuting attorney of the county in which an	1067
alleged offense may be prosecuted may initiate criminal	1068
proceedings for a violation.	1069

(F) In order to initiate criminal proceedings for a	1070
violation, the attorney general first shall present any evidence	1071
of a criminal offense to the prosecuting attorney of the county in	1072
which the alleged offense may be prosecuted. If, within a	1073
reasonable period of time, the prosecuting attorney has not agreed	1074
to prosecute the violation, the attorney general may proceed in	1075
the prosecution with all the rights, privileges, and powers	1076
described in division (C) of this section.	1077

(G) When a judgment under this section becomes final, the	1078
clerk of court shall mail a copy of the judgment, including	1079
supporting opinions, to the superintendent.	1080

Sec. 1321.99.  (A) Whoever violates section 1321.02 of the	1081
Revised Code is guilty of a felony of the fifth degree.	1082

(B) Whoever violates section 1321.13 of the Revised Code	1083
shall be fined not less than one hundred nor more than five	1084
hundred dollars or imprisoned not more than six months, or both.	1085

(C) Whoever violates section 1321.14 of the Revised Code	1086
shall be fined not less than fifty nor more than two hundred	1087
dollars for a first offense; for a second offense such person	1088
shall be fined not less than two hundred nor more than five	1089
hundred dollars and imprisoned for not more than six months.	1090

(D) Whoever willfully violates division (C) of section	1091
1321.15 or section 1321.57, 1321.58, 1321.59, or 1321.60 of the	1092
Revised Code shall be fined not less than onefive hundred nor	1093
more than five hundredone thousand dollars.	1094

(E) Whoever violates section 1321.52 of the Revised Code is	1095
guilty of a felony of the fifth degree.	1096

(F) Whoever violates division (A) of section 1321.73 of the	1097
Revised Code shall be fined not more than five hundred dollars or	1098
imprisoned not more than six months, or both.	1099

(G) Whoever violates section 1321.41 of the Revised Code is	1100
guilty of a misdemeanor of the first degree.	1101

Sec. 1322.01.  As used in sections 1322.01 to 1322.12 of the	1102
Revised Code:	1103

(A) "Buyer" means an individual who is solicited to purchase	1104
or who purchases the services of a mortgage broker for purposes	1105
other than obtaining a business loan as described in division	1106
(B)(6)(5) of section 1343.01 of the Revised Code.	1107

(B) "Consumer reporting agency" has the same meaning as in	1108
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a,	1109
as amended.	1110

(C) "Employee" means an individual for whom a mortgage	1111
broker, in addition to providing a wage or salary, pays social	1112
security and unemployment taxes, provides workers' compensation	1113
coverage, and withholds local, state, and federal income taxes.	1114
"Employee" also includes any shareholder, member, or partner of a	1115
registrant who acts as a loan officer or operations manager of the	1116
registrant, but for whom the registrant is prevented by law from	1117
making income tax withholdings.	1118

(D) "Licensee" means any person that has been issued a loan	1119
officer license under sections 1322.01 to 1322.12 of the Revised	1120
Code.	1121

(E) "Loan officer" means an employee who originates mortgage	1122
loans in consideration of direct or indirect gain, profit, fees,	1123
or charges. "Loan officer" also includes an employee who solicits	1124
financial and mortgage information from the public for sale to	1125
another mortgage broker.	1126

(F) "Mortgage" means any indebtedness secured by a deed of	1127
trust, security deed, or other lien on real property.	1128

(G) "Mortgage broker" means any of the following:

1129

(1) A person that holds that person out as being able to	1130
assist a buyer in obtaining a mortgage and charges or receives	1131
from either the buyer or lender money or other valuable	1132
consideration readily convertible into money for providing this	1133
assistance;	1134

(2) A person that solicits financial and mortgage information	1135
from the public, provides that information to a mortgage broker,	1136
and charges or receives from the mortgage broker money or other	1137
valuable consideration readily convertible into money for	1138
providing the information;	1139

(3) A person engaged in table-funding or warehouse-lending	1140
mortgage loans that are first lien mortgage loans.	1141

(H) "Operations manager" means the individual responsible for	1142
the everyday operations, compliance requirements, and management	1143
of a mortgage broker business.	1144

(I) "Originate" means to do any of the following:

1145

(1) Negotiate or arrange, or offer to negotiate or arrange, a	1146
mortgage loan between a person that makes or funds mortgage loans	1147
and a buyer;	1148

(2) Issue a commitment for a mortgage loan to a buyer;

1149

(3) Place, assist in placement, or find a mortgage loan for a	1150
buyer.	1151

(J) "Registrant" means any person that has been issued a	1152
mortgage broker certificate of registration under sections 1322.01	1153
to 1322.12 of the Revised Code.	1154

(K) "Superintendent of financial institutions" includes the	1155
deputy superintendent for consumer finance as provided in section	1156
1181.21 of the Revised Code.	1157

(L) "Table-funding mortgage loan" means a mortgage loan	1158
transaction in which the mortgage is initially payable to the	1159
mortgage broker, the mortgage broker does not use the mortgage	1160
broker's own funds to fund the transaction, and, by the terms of	1161
the mortgage or other agreement, the mortgage is simultaneously	1162
assigned to another person.	1163

(M) "Warehouse-lending mortgage loan" means a mortgage loan	1164
transaction in which the mortgage is initially payable to the	1165
mortgage broker, the mortgage broker uses the mortgage broker's	1166
own funds to fund the transaction, and the mortgage is sold or	1167
assigned before the mortgage broker receives a scheduled payment	1168
on the mortgage.	1169

Sec. 1343.01.  (A) The parties to a bond, bill, promissory	1170
note, or other instrument of writing for the forbearance or	1171
payment of money at any future time, may stipulate therein for the	1172
payment of interest upon the amount thereof at any rate not	1173
exceeding eight per cent per annum payable annually, except as	1174
authorized in division (B) of this section.	1175

(B) Any party may agree to pay a rate of interest in excess	1176
of the maximum rate provided in division (A) of this section when:	1177

(1) The original amount of the principal indebtedness	1178
stipulated in the bond, bill, promissory note, or other instrument	1179
of writing exceeds one hundred thousand dollars;	1180

(2) The payment is to a broker or dealer registered under the	1181
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78A, as	1182
amended, for carrying a debit balance in an account for a customer	1183
if such debit balance is payable on demand and secured by stocks,	1184
bonds or other securities;	1185

(3) The instrument evidences a loan secured by a mortgage or	1186
deed of trust on real estate where the loan has been approved,	1187
insured, guaranteed, purchased, or for which an offer or	1188
commitment to insure, guarantee, or purchase has been received, in	1189
whole or in part, by the federal government or any agency or	1190
instrumentality thereof, the federal national mortgage	1191
association, the federal home loan mortgage corporation, or the	1192
farmers home administration, all of which is authorized pursuant	1193
to the "National Housing Act," 12. U.S.C. 1701; the "Serviceman's	1194
Readjustment Act," 38 U.S.C. 1801; the "Federal Home Loan Bank	1195
Act," 12 U.S.C. 1421; and the "Rural Housing Act," 42 U.S.C. 1471,	1196
amendments thereto, reenactments thereof, enactments parallel	1197
thereto, or in substitution therefor, or regulations issued	1198
thereunder; or by the state or any agency or instrumentality	1199
thereof authorized pursuant to Chapter 122. of the Revised Code,	1200
or rules issued thereunder.	1201

(4) The instrument evidences a loan secured by a mortgage,	1202
deed of trust, or land installment contract on real estate which	1203
does not otherwise qualify for exemption from the provisions of	1204
this section, except that such rate of interest shall not exceed	1205
eight per cent in excess of the discount rate on ninety-day	1206
commercial paper in effect at the federal reserve bank in the	1207
fourth federal reserve district at the time the mortgage, deed of	1208
trust, or land installment contract is executed.	1209

(5) The instrument is payable on demand or in one installment	1210
and is not secured by household furnishings or other goods used	1211
for personal, family, or household purposes.	1212

(6)(a) The loan is a business loan to a business association	1213
or partnership, a person owning and operating a business as a sole	1214
proprietor; any persons owning and operating a business as joint	1215
venturers, joint tenants, or tenants in common; any limited	1216
partnership; or any trustee owning or operating a business or	1217
whose beneficiaries own or operate a business, except that:	1218

(i) Any loan which is secured by an assignment of an	1219
individual obligor's salary, wages, commissions, or other	1220
compensation for services or by histhe individual obligor's	1221
household furniture or other goods used for histhe individual	1222
obligor's personal, family, or household purposes shall be deemed	1223
not a loan within the meaning of division (B)(6)(5) of this	1224
section;	1225

(ii) Any loan which otherwise qualifies as a business loan	1226
within the meaning of division (B)(6)(5) of this section shall not	1227
be deemed disqualified because of the inclusion, with other	1228
security consisting of business assets of any such obligor, of	1229
real estate occupied by an individual obligor solely as histhe	1230
individual obligor's residence.	1231

(b) As used in division (B)(6)(5)(a) of this section,	1232
"business" means a commercial, agricultural, or industrial	1233
enterprise which is carried on for the purpose of investment or	1234
profit. "Business" does not mean the ownership or maintenance of	1235
real estate occupied by an individual obligor solely as histhe	1236
individual obligor's residence.	1237

Sec. 1345.01.  As used in sections 1345.01 to 1345.13 of the	1238
Revised Code:	1239

(A) "Consumer transaction" means a sale, lease, assignment,	1240
award by chance, or other transfer of an item of goods, a service,	1241
a franchise, or an intangible, to an individual for purposes that	1242
are primarily personal, family, or household, or solicitation to	1243
supply any of these things. "Consumer transaction" does not	1244
include transactions between persons, defined in sections 4905.03	1245
and 5725.01 of the Revised Code, and their customers, except for	1246
transactions involving a loan made pursuant to sections 1321.35 to	1247
1321.48 of the Revised Code, transactions involving a loan of one	1248
thousand dollars or less made pursuant to sections 1321.01 to	1249
1321.19 or 1321.51 to 1321.60 of the Revised Code, and	1250
transactions in connection with residential mortgages between	1251
loan officers, mortgage brokers, or nonbank mortgage lenders and	1252
their customers;. "Consumer transaction" does not include	1253
transactions between certified public accountants or public	1254
accountants and their clients; transactions between attorneys,	1255
physicians, or dentists and their clients or patients; and	1256
transactions between veterinarians and their patients that	1257
pertain to medical treatment but not ancillary services.	1258

(B) "Person" includes an individual, corporation, government,	1259
governmental subdivision or agency, business trust, estate, trust,	1260
partnership, association, cooperative, or other legal entity.	1261

(C) "Supplier" means a seller, lessor, assignor, franchisor,	1262
or other person engaged in the business of effecting or soliciting	1263
consumer transactions, whether or not the person deals directly	1264
with the consumer. If the consumer transaction is in connection	1265
with a residential mortgage, "supplier" does not include an	1266
assignee or purchaser of the loan for value, except as otherwise	1267
provided in section 1345.091 of the Revised Code. For purposes of	1268
this division, in a consumer transaction in connection with a	1269
residential mortgage, "seller" means a loan officer, mortgage	1270
broker, or nonbank mortgage lender.	1271

(D) "Consumer" means a person who engages in a consumer	1272
transaction with a supplier.	1273

(E) "Knowledge" means actual awareness, but such actual	1274
awareness may be inferred where objective manifestations indicate	1275
that the individual involved acted with such awareness.	1276

(F) "Natural gas service" means the sale of natural gas,	1277
exclusive of any distribution or ancillary service.	1278

(G) "Public telecommunications service" means the	1279
transmission by electromagnetic or other means, other than by a	1280
telephone company as defined in section 4927.01 of the Revised	1281
Code, of signs, signals, writings, images, sounds, messages, or	1282
data originating in this state regardless of actual call routing.	1283
"Public telecommunications service" excludes a system, including	1284
its construction, maintenance, or operation, for the provision of	1285
telecommunications service, or any portion of such service, by any	1286
entity for the sole and exclusive use of that entity, its parent,	1287
a subsidiary, or an affiliated entity, and not for resale,	1288
directly or indirectly; the provision of terminal equipment used	1289
to originate telecommunications service; broadcast transmission by	1290
radio, television, or satellite broadcast stations regulated by	1291
the federal government; or cable television service.	1292

(H) "Loan officer" has the same meaning as in section 1322.01	1293
of the Revised Code, except that it does not include an employee	1294
of a bank, savings bank, savings and loan association, credit	1295
union, or credit union service organization organized under the	1296
laws of this state, another state, or the United States; an	1297
employee of a subsidiary of such a bank, savings bank, savings and	1298
loan association, or credit union; or an employee of an affiliate	1299
that (1) controls, is controlled by, or is under common control	1300
with, such a bank, savings bank, savings and loan association, or	1301
credit union and (2) is subject to examination, supervision, and	1302
regulation, including with respect to the affiliate's compliance	1303
with applicable consumer protection requirements, by the board of	1304
governors of the federal reserve system, the comptroller of the	1305
currency, the office of thrift supervision, the federal deposit	1306
insurance corporation, or the national credit union	1307
administration.	1308

(I) "Residential mortgage" or "mortgage" means an obligation	1309
to pay a sum of money evidenced by a note and secured by a lien	1310
upon real property located within this state containing two or	1311
fewer residential units or on which two or fewer residential units	1312
are to be constructed and includes such an obligation on a	1313
residential condominium or cooperative unit.	1314

(J) "Mortgage broker" has the same meaning as in section	1315
1322.01 of the Revised Code, except that it does not include a	1316
bank, savings bank, savings and loan association, credit union, or	1317
credit union service organization organized under the laws of this	1318
state, another state, or the United States; a subsidiary of such a	1319
bank, savings bank, savings and loan association, or credit union;	1320
an affiliate that (1) controls, is controlled by, or is under	1321
common control with, such a bank, savings bank, savings and loan	1322
association, or credit union and (2) is subject to examination,	1323
supervision, and regulation, including with respect to the	1324
affiliate's compliance with applicable consumer protection	1325
requirements, by the board of governors of the federal reserve	1326
system, the comptroller of the currency, the office of thrift	1327
supervision, the federal deposit insurance corporation, or the	1328
national credit union administration; or an employee of any such	1329
entity.	1330

(K) "Nonbank mortgage lender" means any person that engages	1331
in a consumer transaction in connection with a residential	1332
mortgage, except for a bank, savings bank, savings and loan	1333
association, credit union, or credit union service organization	1334
organized under the laws of this state, another state, or the	1335
United States; a subsidiary of such a bank, savings bank, savings	1336
and loan association, or credit union; or an affiliate that (1)	1337
controls, is controlled by, or is under common control with, such	1338
a bank, savings bank, savings and loan association, or credit	1339
union and (2) is subject to examination, supervision, and	1340
regulation, including with respect to the affiliate's compliance	1341
with applicable consumer protection requirements, by the board of	1342
governors of the federal reserve system, the comptroller of the	1343
currency, the office of thrift supervision, the federal deposit	1344
insurance corporation, or the national credit union	1345
administration.	1346

(L) For purposes of divisions (H), (J), and (K) of this	1347
section:	1348

(1) "Control" of another entity means ownership, control, or	1349
power to vote twenty-five per cent or more of the outstanding	1350
shares of any class of voting securities of the other entity,	1351
directly or indirectly or acting through one or more other	1352
persons.	1353

(2) "Credit union service organization" means a CUSO as	1354
defined in 12 C.F.R. 702.2.	1355

Sec. 1351.031. No lessor shall engage, directly or	1356
indirectly, in any fraudulent or deceptive act, practice, or	1357
course of business in connection with a lease-purchase agreement,	1358
including knowingly acting in or abetting a scheme to create an	1359
evasion of restrictions on fees or charges as set forth in Chapter	1360
1321. of the Revised Code.	1361

Sec. 4710.02.  (A) Subject to division (C) of this section, a	1362
person engaged in debt adjusting shall do all of the following:	1363

(1) Unless specifically instructed otherwise by a debtor,	1364
disburse to the appropriate creditors all funds received from the	1365
debtor, less any contributions not prohibited by division (B) of	1366
this section, within thirty days of receipt of the funds from the	1367
debtor;	1368

(2) Maintain a separate trust account for the receipt of any	1369
funds from debtors and the disbursement of the funds to creditors	1370
on behalf of the debtors;	1371

(3) Charge or accept only reasonable fees or contributions in	1372
accordance with division (B) of this section;	1373

(4) Establish and implement a policy that allows for the	1374
waiver or discontinuation of fees or contributions not prohibited	1375
by division (B) of this section if the debtor is unable to pay	1376
such fees or contributions.	1377

(B) If fees or contributions for providing debt adjusting	1378
services are charged or accepted, directly or indirectly, no	1379
person providing or engaged in debt adjusting shall do any of the	1380
following:	1381

(1) Charge or accept a fee or contribution exceeding	1382
seventy-five dollars from a debtor residing in this state for an	1383
initial consultation or initial set up of a debt management plan	1384
or similar plan;	1385

(2) Charge or accept consultation fees or contributions	1386
exceeding one hundred dollars per calendar year from a debtor	1387
residing in this state;	1388

(3) Charge or accept a periodic fee or contribution from a	1389
debtor residing in this state for administering a debt management	1390
plan or similar plan, which fee or contribution exceeds eight and	1391
one-half per cent of the amount paid by the debtor each month for	1392
distribution to the debtor's creditors or thirty dollars,	1393
whichever is greater.	1394

(4) Engage, directly or indirectly, in any fraudulent or	1395
deceptive act, practice, or course of business in connection with	1396
the offer, sale or provision of debt adjusting services,	1397
including, but not limited to, knowingly acting in or abetting a	1398
scheme to create an evasion of restrictions on fees or charges as	1399
set forth in Chapter 1321. of the Revised Code.	1400

(C) Division (A) or (B) of this section does not prohibit a	1401
person engaged in debt adjusting for a debtor who is residing in	1402
this state from charging the debtor a reasonable fee for	1403
insufficient funds transactions that is in addition to fees or	1404
contributions not prohibited by division (B) of this section.	1405

(D) Any person that engages in debt adjusting, annually,	1406
shall arrange for and undergo an audit conducted by an	1407
independent, third party, certified public accountant of the	1408
person's business, including any trust funds deposited and	1409
distributed to creditors on behalf of debtors. Both of the	1410
following apply to an audit described in this division:	1411

(1) The person shall file the results of the audit and the	1412
auditor's opinion with the consumer protection division of the	1413
attorney general.	1414

(2) The attorney general shall make available a summary of	1415
the results of the audit and the auditor's opinion upon written	1416
request of a person and payment of a fee not exceeding the cost of	1417
copying the summary and opinion.	1418

(E) A person engaged in debt adjusting shall obtain and	1419
maintain at all times insurance coverage for employee dishonesty,	1420
depositor's forgery, and computer fraud in the amount of ten per	1421
cent of the monthly average for the immediate preceding six months	1422
of the aggregate amount of all deposits made with the person by	1423
all debtors. The insurance coverage shall comply with all of the	1424
following:	1425

(1) The insurance coverage is not less than one hundred	1426
thousand dollars.	1427

(2) The insurance coverage includes a deductible that does	1428
not exceed ten per cent of the face amount of the policy coverage.	1429

(3) The insurance coverage is issued by an insurer rated at	1430
least A- or its equivalent by a nationally recognized rating	1431
organization.	1432

(4) The insurance coverage provides that thirty days advance	1433
written notice be given to the consumer protection division of the	1434
attorney general before coverage is terminated.	1435

(F)(1) No person engaged in debt adjusting shall fail to	1436
comply with division (A) of this section or shall violate division	1437
(B) of this section.	1438

(2) No person engaged in debt adjusting shall fail to comply	1439
with divisions (D) and (E) of this section.	1440

Sec. 4712.01.  As used in sections 4712.01 to 4712.14 of the	1441
Revised Code:	1442

(A) "Buyer" means an individual who is solicited to purchase	1443
or who purchases the services of a credit services organization	1444
for purposes other than obtaining a business loan as described in	1445
division (B)(6)(5) of section 1343.01 of the Revised Code.	1446

(B) "Consumer reporting agency" has the same meaning as in	1447
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a,	1448
as amended.	1449

(C)(1) "Credit services organization" means any person that,	1450
in return for the payment of money or other valuable consideration	1451
readily convertible into money for the following services, sells,	1452
provides, or performs, or represents that the person can or will	1453
sell, provide, or perform, one or more of the following services:	1454

(a) Improving a buyer's credit record, history, or rating;

1455

(b) Obtaining an extension of credit by others for a buyer;

1456

(c) Providing advice or assistance to a buyer in connection	1457
with division (C)(1)(a) or (b) of this section;	1458

(d) Removing adverse credit information that is accurate and	1459
not obsolete from the buyer's credit record, history, or rating;	1460

(e) Altering the buyer's identification to prevent the	1461
display of the buyer's credit record, history, or rating.	1462

(2) "Credit services organization" does not include any of	1463
the following:	1464

(a) A person that makes or collects loans, to the extent	1465
these activities are subject to licensure or registration by this	1466
state;	1467

(b) A mortgage broker, as defined in section 1322.01 of the	1468
Revised Code, that holds a valid certificate of registration under	1469
sections 1322.01 to 1322.12 of the Revised Code;	1470

(c) A lender approved by the United States secretary of	1471
housing and urban development for participation in a mortgage	1472
insurance program under the "National Housing Act," 48 Stat. 1246	1473
(1934), 12 U.S.C.A. 1701, as amended;	1474

(d) A bank, savings bank, or savings and loan association, or	1475
a subsidiary or an affiliate of a bank, savings bank, or savings	1476
and loan association. For purposes of division (C)(2)(d) of this	1477
section, "affiliate" has the same meaning as in division (A) of	1478
section 1101.01 of the Revised Code and "bank," as used in	1479
division (A) of section 1101.01 of the Revised Code, is deemed to	1480
include a savings bank or savings and loan association.	1481

(e) A credit union organized and qualified under Chapter	1482
1733. of the Revised Code or the "Federal Credit Union Act," 84	1483
Stat. 994 (1970), 12 U.S.C.A. 1751, as amended;	1484

(f) A budget and debt counseling service, as defined in	1485
division (D) of section 2716.03 of the Revised Code, provided that	1486
the service is a nonprofit organization exempt from taxation under	1487
section 501(c)(3) of the "Internal Revenue Code of 1986," 100	1488
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service is	1489
in compliance with Chapter 4710. of the Revised Code;	1490

(g) A consumer reporting agency that is in substantial	1491
compliance with the "Fair Credit Reporting Act," 84 Stat. 1128, 15	1492
U.S.C.A. 1681a, as amended.	1493

(h) A mortgage banker;

1494

(i) Any political subdivision, or any governmental or other	1495
public entity, corporation, or agency, in or of the United States	1496
or any state of the United States;	1497

(j) A college or university, or controlled entity of a	1498
college or university, as defined in section 1713.05 of the	1499
Revised Code;	1500

(k) A motor vehicle dealer licensed pursuant to Chapter 4517.	1501
of the Revised Code acting within the scope and authority of that	1502
license or a motor vehicle auction owner licensed pursuant to	1503
Chapters 4517. and 4707. of the Revised Code acting within the	1504
scope and authority of that license.	1505

(D) "Extension of credit" means the right to defer payment of	1506
debt, or to incur debt and defer its payment, offered or granted	1507
primarily for personal, family, or household purposes. "Extension	1508
of credit" does not include a mortgage.	1509

(E) "Mortgage" means any indebtedness secured by a deed of	1510
trust, security deed, or other lien on real property.	1511

(F) "Mortgage banker" means any person that makes, services,	1512
or buys and sells mortgage loans and is approved by the United	1513
States department of housing and urban development, the United	1514
States department of veterans affairs, the federal national	1515
mortgage association, or the federal home loan mortgage	1516
corporation.	1517

(G) "Superintendent of financial institutions" includes the	1518
deputy superintendent for consumer finance as provided in section	1519
1181.21 of the Revised Code.	1520

Sec. 4712.07.  No credit services organization, salesperson,	1521
agent, or representative of a credit services organization, or	1522
independent contractor that sells or attempts to sell the services	1523
of a credit services organization shall do any of the following:	1524

(A) Charge or receive directly or indirectly from a buyer	1525
money or other consideration readily convertible into money until	1526
all services the organization has agreed to perform for the buyer	1527
are completed within the time periods described in division (A)(3)	1528
of section 4712.05 of the Revised Code.	1529

(B) Charge or receive directly or indirectly from a buyer	1530
money or other consideration readily convertible into money for	1531
the referral of the buyer to a person that makes an extension of	1532
credit or to a consumer reporting agency, except when credit has	1533
actually been extended as a result of that referral;	1534

(C) Make or use a false or misleading representation in the	1535
offer or sale of the services of the organization, including	1536
either of the following:	1537

(1) Guarantying or otherwise stating that the organization is	1538
able to delete an adverse credit history, unless the	1539
representation clearly discloses that this can be done only if the	1540
credit history is inaccurate or obsolete;	1541

(2) Guarantying or otherwise stating that the organization is	1542
able to obtain an extension of credit regardless of the buyer's	1543
previous credit problems or credit history, unless the	1544
representation clearly discloses the eligibility requirements for	1545
obtaining an extension of credit.	1546

(D) Engage, directly or indirectly, in an unconscionable,	1547
unfair, or deceptive act or practice, as those terms are used and	1548
defined in Chapter 1345. of the Revised Code, in connection with	1549
the offer or sale of the services of a credit services	1550
organization;	1551

(E)(1) Make or advise a buyer to make a false or misleading	1552
statement concerning the buyer's creditworthiness, identification,	1553
credit standing, or credit capacity to any of the following:	1554

(a) A consumer reporting agency;

1555

(b) A person that has made an extension of credit to the	1556
buyer;	1557

(c) A person to which the buyer is applying for an extension	1558
of credit.	1559

(2) Division (E)(1) of this section applies to any statement	1560
that the organization, salesperson, agent, representative, or	1561
independent contractor knows or should know to be false or	1562
misleading through the exercise of reasonable care.	1563

(F) Advertise or cause to be advertised, in any manner, the	1564
services of a credit services organization without being	1565
registered with the division of financial institutions;	1566

(G) Fail to maintain a statutory agent as required under	1567
division (E) of section 4712.02 of the Revised Code;	1568

(H) Transfer or assign a certificate of registration issued	1569
by the division pursuant to section 4712.02 of the Revised Code;	1570

(I) Submit the buyer's disputes to a consumer reporting	1571
agency without the buyer's knowledge as evidenced by positive	1572
identification, including the buyer's correct current residence	1573
address, and written authorization personally signed by the buyer;	1574

(J) Fail to maintain, for a period of time as determined by	1575
the superintendent of financial institutions, all of the	1576
following:	1577

(1) A log of all contracts;

1578

(2) Copies of each contract;

1579

(3) Documentation that substantiates the validity of the	1580
representation made pursuant to division (A)(5) of section 4712.05	1581
of the Revised Code;	1582

(4) Any other record specified by the superintendent.

1583

(K) Contact a consumer reporting agency, by telephone or	1584
otherwise, for the purpose of submitting or obtaining information	1585
relative to any buyer, and state or imply that he or she is the	1586
buyer or the buyer's attorney, guardian, or other legal	1587
representative;	1588

(L) Engage, directly or indirectly, in any fraudulent or	1589
deceptive act, practice, or course of business in connection with	1590
the offer or sale of the services of a credit services	1591
organization, including knowingly acting in or abetting a scheme	1592
to create an evasion of restrictions on fees or charges as set	1593
forth in Chapter 1321. of the Revised Code.	1594

Section 2. That existing sections 1315.26, 1321.02, 1321.12,	1595
1321.13, 1321.131, 1321.14, 1321.15, 1321.44, 1321.52, 1321.53,	1596
1321.551, 1321.56, 1321.57, 1321.571, 1321.59, 1321.99, 1322.01,	1597
1343.01, 1345.01, 4710.02, 4712.01, and 4712.07 of the Revised	1598
Code are hereby repealed.	1599

Section 3.  Section 1321.14 of the Revised Code is presented	1600
in this act as a composite of the section as amended by both Am.	1601
Sub. S.B. 293 and Sub. H.B. 495 of the 121st General Assembly.	1602
The General Assembly, applying the principle stated in division	1603
(B) of section 1.52 of the Revised Code that amendments are to be	1604
harmonized if reasonably capable of simultaneous operation, finds	1605
that the composite is the resulting version of the section in	1606
effect prior to the effective date of the section as presented in	1607
this act.	1608