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H. B. No. 358 As IntroducedAs Introduced
127th General Assembly | Regular Session | 2007-2008 |
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Cosponsors:
Representatives Barrett, Bolon, Celeste, Chandler, Dyer, Fende, Harwood, Heard, Luckie, Mallory, Williams, B.
A BILL
To amend sections 1315.39, 1315.40, 1315.41, and
1343.01 of the Revised Code to modify the
provisions for making a loan under the
Check-Cashing Business Loan law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1315.39, 1315.40, 1315.41, and
1343.01 of the Revised Code be amended to read as follows:
Sec. 1315.39. (A) A check-cashing business
licensed under
sections 1315.35 to 1315.44 of the Revised
Code may engage in the
business of making loans provided
that each loan meets all of the
following conditions:
(1)(A) The total amount of the loan does not exceed eight
hundred dollars.
(2)(B) The duration of the loan does not exceed six
months.
(3)(C) The interest on the loan is calculated in compliance
with, and
does not exceed the amount permitted by, division (B) of
this section 2905.22 of the Revised Code and is calculated
to
include any loan origination fee and all other fees and charges
contracted for under the loan contract.
(4)(D) The loan is made pursuant to a written loan contract
that
sets forth the terms and conditions of the loan,
and
discloses in
a clear and concise manner all of the following:
(a)(1) The total amount of fees and charges the
borrower will
be
required to pay in connection with the loan
pursuant to the
loan
contract;
(b)(2) The rate of interest contracted for under the
loan
contract, calculated both as an annual percentage rate
based
solely on the principal of the loan and as an annual
percentage
rate based on the sum of the principal of the loan
and the loan
origination fee, check collection charge, and all
other fees or
charges contracted for under the loan contract;
(c)(3) The total amount of each payment, when each
payment is
due, and the total number of payments that the
borrower will be
required to make under the loan contract;
(d)(4) A statement, printed in boldface type of the
minimum
size
of ten points, as follows: "WARNING: The rate of
interest
charged
on this loan is higher than the average rate of interest
charged
by financial institutions on substantially similar
loans."
(5)(E) The loan is not being made to a borrower for purposes
of
retiring an existing loan between the check-cashing business
and
that
borrower, which existing loan was made pursuant to
sections
1315.35 to 1315.44
of the Revised Code.
(B) A check-cashing business may contract for
and receive
interest at a rate of five per cent per month or
fraction of a
month on the unpaid principal of a loan made under
sections
1315.35 to 1315.44 of the Revised
Code. Any unearned interest
shall not be deducted from the proceeds
of the loan or paid in
advance, and interest shall be computed on the unpaid
balance and
shall not be compounded. If, after the first
month of the loan
contract, the loan is paid in full before the
final date on which
payment is due on the loan pursuant to the
loan contract, the
licensee shall refund or credit the borrower
with the amount of
the unearned interest for the unexpired
period of the loan
contract that follows the date of the
borrower's payment in full.
Sec. 1315.40. In addition to the interest authorized to be
contracted for
and received pursuant to
section 1315.39 of the
Revised Code, a
check-cashing business licensed pursuant to
sections 1315.35 to 1315.44 of the
Revised Code may charge,
collect,
and receive the following fees and charges in connection
with a
loan made under sections 1315.35 to 1315.44 of the
Revised
Code:
(A) Loan origination fees not exceeding an amount equal to
five
dollars per fifty dollars up to five hundred dollars of the
amount of the loan and three dollars and seventy-five cents per
fifty dollars of the amount of the loan between five hundred one
and eight hundred dollars;
(B) Check One check collection charges charge per loan not
exceeding an amount equal to
twenty dollars plus any amount passed
on from other financial institutions for each check, negotiable
order of withdrawal, share draft, or other negotiable instrument
returned or dishonored for any reason, provided that the terms
and
conditions upon which check collection charges will be
charged to
the borrower are set forth in the written loan
contract described
in division
(A)(4)(D) of section 1315.39 of the Revised Code;
(C)(B) Damages, costs, and disbursements to which the
check-cashing
business may become entitled to by law in connection
with any civil action to
collect a loan after default.
Sec. 1315.41. No check-cashing business licensed pursuant to
sections 1315.35
to 1315.44 of the Revised Code shall do any of
the following:
(A) Violate section 1315.36 of the Revised Code;
(B) Make a loan that does not comply with division (A) of
section 1315.39 of
the Revised Code;
(C) Charge, collect, or receive, directly or indirectly, any
additional fees
or charges in connection with a loan, other than
fees and charges permitted by
sections 1315.39 and 1315.40 of the
Revised Code and costs or
disbursements to which the check-cashing
business may become
entitled to by law in connection with any
civil action to
collect a loan
after default;
(D) Collect treble damages pursuant to division
(A)(1)(b)(ii)
of section 2307.61 of the Revised Code in
connection with any
civil action to collect a loan after a default due to a
check,
negotiable order of withdrawal, share draft, or other negotiable
instrument that was returned or dishonored for insufficient funds;
(E) Make a loan to a borrower if there exists an outstanding
loan
between the check-cashing business and that borrower and if
the outstanding loan
was made pursuant to sections 1315.35 to
1315.43 of the
Revised
Code;
(F) Accept a check or other method of access to a deposit
account maintained by the borrower, or the title of a vehicle as
security for the obligation.
Sec. 1343.01. (A) The parties to a bond, bill, promissory
note, or other instrument of writing for the forbearance or
payment of money at any future time, may stipulate therein for
the
payment of interest upon the amount thereof at any rate not
exceeding eight per cent per annum payable annually, except as
authorized in division (B) of this section.
(B) Any party may agree to pay a rate of interest in
excess
of the maximum rate provided in division (A) of this
section when:
(1) The original amount of the principal indebtedness
stipulated in the bond, bill, promissory note, or other
instrument
of writing exceeds one hundred thousand dollars;
(2) The payment is to a broker or dealer registered under
the
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C.
78A, as
amended, for carrying a debit balance in an account for a
customer
if such debit balance is payable on demand and secured
by stocks,
bonds or other securities;
(3) The instrument evidences a loan secured by a mortgage
or
deed of trust on real estate where the loan has been approved,
insured, guaranteed, purchased, or for which an offer or
commitment to insure, guarantee, or purchase has been received,
in
whole or in part, by the federal government or any agency or
instrumentality thereof, the federal national mortgage
association, the federal home loan mortgage corporation, or the
farmers home administration, all of which is authorized pursuant
to the "National Housing Act," 12. U.S.C. 1701; the "Serviceman's
Readjustment Act," 38 U.S.C. 1801; the "Federal Home Loan Bank
Act," 12 U.S.C. 1421; and the "Rural Housing Act," 42 U.S.C.
1471,
amendments thereto, reenactments thereof, enactments
parallel
thereto, or in substitution therefor, or regulations
issued
thereunder; or by the state or any agency or
instrumentality
thereof authorized pursuant to Chapter 122. of
the Revised Code,
or rules issued thereunder.
(4) The instrument evidences a loan secured by a mortgage,
deed of trust, or land installment contract on real estate which
does not otherwise qualify for exemption from the provisions of
this section, except that such rate of interest shall not exceed
eight per cent in excess of the discount rate on ninety-day
commercial paper in effect at the federal reserve bank in the
fourth federal reserve district at the time the mortgage, deed of
trust, or land installment contract is executed.
(5) The instrument is payable on demand or in one
installment
and is not secured by household furnishings or other
goods used
for personal, family, or household purposes, or the instrument is
payable in any number of installments and is a written loan
contract made under sections 1315.35 to 1315.44 of the Revised
Code.
(6)(a) The loan is a business loan to a business
association
or partnership, a person owning and operating a
business as a sole
proprietor; any persons owning and operating a
business as joint
venturers, joint tenants, or tenants in common;
any limited
partnership; or any trustee owning or operating a
business or
whose beneficiaries own or operate a business, except
that:
(i) Any loan which is secured by an assignment of an
individual obligor's salary, wages, commissions, or other
compensation for services or by his the individual obligor's
household furniture or other goods used for his the individual
obligor's personal, family, or household purposes shall
be deemed
not a loan within the meaning of division (B)(6) of
this section;
(ii) Any loan which otherwise qualifies as a business loan
within the meaning of division (B)(6) of this section shall not
be
deemed disqualified because of the inclusion, with other
security
consisting of business assets of any such obligor, of
real estate
occupied by an individual obligor solely as his the
individual
obligor's residence.
(b) As used in division (B)(6)(a) of this section,
"business"
means a commercial, agricultural, or industrial
enterprise which
is carried on for the purpose of investment or
profit. "Business"
does not mean the ownership or maintenance of
real estate occupied
by an individual obligor solely as his the
individual obligor's
residence.
Section 2. That existing sections 1315.39, 1315.40, 1315.41,
and 1343.01 of the Revised Code are hereby repealed.
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