To amend sections 1315.35, 1315.39, 1315.40, and 1315.41 of the Revised Code to modify the provisions for making a loan under the check cashing loan act.

Section 1. That sections 1315.35, 1315.39, 1315.40, and 1315.41 of the Revised Code be amended to read as follows:

Sec. 1315.35.  As used in sections 1315.35 to 1315.44 of the Revised Code:

(A) "Check-cashing business" has the meaning set forth in section 1315.21 of the Revised Code.

(B) "Interest" means all charges payable directly or indirectly by a borrower to a check-cashing business licensed pursuant to sections 1315.35 to 1315.44 of the Revised Code as a condition to a loan, but does not include loan origination including fees, check collection charges, or other fees or charges specifically authorized by law service charges, renewal charges, credit insurance premiums, and any ancillary product sold as a condition to a loan made pursuant to sections 1315.35 to 1315.44 of the Revised Code.

(C) "Annual percentage rate" has the same meaning as in the "Truth in Lending Act," 82 Stat. 149 (1980), 15 U.S.C. 1606, as implemented by regulations of the board of governors of the federal reserve system. All fees and charges, except those authorized under section 1315.40 of the Revised Code, shall be included in the computation of the annual percentage rate. Fees and charges for single premium credit insurance and other ancillary products sold in connection with the credit transaction shall be included in the calculation of the annual percentage rate.

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

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) The total amount of the loan does not exceed eight hundred dollars.

(2) The duration of the loan does not exceed six months.

(3) The interest on the loan is calculated in compliance with 15 U.S.C. 1606, and does not exceed the amount permitted by, division (B) of this section an annual percentage rate greater than thirty-six per cent.

(4) 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) 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) 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) 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) 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."

(e) Any disclosures required under the "Truth in Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1601, et seq.

(5) The loan is not being made to a borrower for purposes of retiring, renewing, repaying, or refinancing 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 not deduct any unearned interest shall not be deducted from the proceeds of the loan or paid in advance a loan made pursuant to section 1315.35 to 1315.44 of the Revised Code, 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 collection charges 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) 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) Require the borrower to waive the borrower's right to legal recourse under any otherwise applicable provision of state or federal law;

(G) Require the borrower to submit to arbitration or impose onerous legal notice provisions in the case of a dispute;

(H) Demand unreasonable notice from the borrower as a condition for legal action;

(I) 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;

(J) Require the borrower to establish an allotment to repay an obligation as a condition for a loan;

(K) Prohibit a borrower from prepaying a loan or charge a penalty or fee for prepaying all or part of a loan.

Section 2. That existing sections 1315.35, 1315.39, 1315.40, and 1315.41 of the Revised Code are hereby repealed.