To amend sections 1315.22, 1315.35, 1315.37, 1315.39, 1315.40, and 1315.41 and to enact section 1315.45 of the Revised Code to prohibit check-cashing businesses from making loans to a customer who has an outstanding loan with another licensee, to create a statewide database of open loans at check-cashing licensees, and to change the permitted interest rate, fees, and duration of such loans.

Section 1. That sections 1315.22, 1315.35, 1315.37, 1315.39, 1315.40, and 1315.41 be amended and section 1315.45 of the Revised Code be enacted to read as follows:

Sec. 1315.22.  (A) No person, on and after January 1, 1993, shall operate a check-cashing business without first obtaining a license from the superintendent of financial institutions.

(B) Application for an original license required under this section or a renewal license required under section 1315.23 of the Revised Code shall be in writing, under oath, and in the form prescribed by the superintendent. The application shall contain the following information:

(1)(a) If the applicant is an individual, the individual's exact name and residence address;

(b) If the applicant is a partnership, the exact name and residence address of each member of the partnership;

(c) If the applicant is a corporation or association, the exact name and residence address of each director and principal officer of the corporation or association.

(2) The complete address of the principal office or offices from which the business is to be conducted, showing the street and number, if any, and the municipal corporation and county;

(3) Any other pertinent information that the superintendent requires.

(C) For purposes of division (B) of this section, an applicant shall not use a post-office box address as the only address for the applicant's residence or principal office or offices.

(D) Application for a license shall be accompanied by an initial, nonrefundable investigation fee not to exceed two hundred fifty three hundred dollars, except if the applicant's principal place of business is located outside this state, in which case the initial, nonrefundable investigation fee shall not exceed one thousand dollars. The applicant also shall pay an annual license fee for each business location not to exceed five hundred of one thousand dollars, except that applications for original licenses issued on or after the first day of July for any year shall be accompanied by an annual fee not to exceed two hundred fifty of five hundred dollars. All fees paid to the superintendent pursuant to this division shall be deposited by the superintendent into the state treasury to the credit of the consumer finance fund.

Sec. 1315.35.  As used in sections 1315.35 to 1315.44 1315.45 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 fees, check collection charges, or other fees or charges specifically authorized by law.

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

(D) "Loan" means the unsecured lending of money or extension of credit to a borrower, or on behalf of the borrower, by a person engaged in the business of check cashing, in exchange for money. A loan includes, but is not limited to, an arrangement between a check-cashing business and its customer, whereby the check-cashing business agrees to withhold depositing a check with a financial institution for any duration from the day the customer presents the check for cash to the check-cashing business.

Sec. 1315.37.  (A) Application for an original or renewal license to make loans pursuant to sections 1315.35 to 1315.44 of the Revised Code shall be in writing, under oath, and in the form prescribed by the superintendent of financial institutions, and shall contain the name and address of the applicant, the approximate location where the business of making loans is to be conducted, and any further information as the superintendent requires. At the time of making an application for an original license, the applicant shall pay to the superintendent a nonrefundable investigation fee of two three hundred dollars. No investigation fee or any portion thereof shall be refunded after an original license has been issued. The application for an original or renewal license shall be accompanied by an original or renewal license fee for each business location not to exceed five hundred of one thousand dollars, except that applications for original licenses issued on or after the first day of July for any year shall be accompanied by an original license fee not to exceed two hundred fifty of five hundred dollars. All fees paid to the superintendent pursuant to this division shall be deposited into the state treasury to the credit of the consumer finance fund.

(B) Upon the filing of an application for an original or renewal license and the payment of fees in accordance with division (A) of this section, the superintendent shall investigate the facts concerning the applicant and the requirements provided by this division. The superintendent shall approve an application and issue an original or renewal license to the applicant if the superintendent finds all of the following:

(1) The applicant is licensed in good standing pursuant to sections 1315.21 to 1315.30 of the Revised Code.

(2) The financial responsibility, experience, reputation, and general fitness of the applicant are such as to warrant the belief that the business of making loans will be operated lawfully, honestly, and fairly under sections 1315.35 to 1315.44 of the Revised Code and within the purposes of those sections; that the applicant has fully complied with those sections and any rule or order adopted or issued pursuant to section 1315.43 of the Revised Code; and that the applicant is qualified to engage in the business of making loans under sections 1315.35 to 1315.44 of the Revised Code.

(3) The applicant is financially sound and has a net worth of not less than one two hundred thousand dollars. The applicant's net worth shall be computed according to generally accepted accounting principles.

(4) The applicant has never had revoked a license to make loans under sections 1315.35 to 1315.44 of the Revised Code or to do business under sections 1315.21 to 1315.30 of the Revised Code.

(C) If the superintendent finds that the applicant does not meet the requirements of division (B) of this section, the superintendent shall issue an order denying the application for an original or renewal license and giving the applicant an opportunity for a hearing on the denial in accordance with Chapter 119. of the Revised Code. The superintendent shall notify the applicant of the denial, the grounds for the denial, and the applicant's opportunity for a hearing. If the application is denied, the superintendent shall return the annual license fee but shall retain the investigation fee.

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 thirty-one days.

(3) The interest on the loan is calculated in compliance with, and does not exceed the amount permitted by, division (B) of this section.

(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."

(5) 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.

(6) The borrower does not have an outstanding loan with any check-cashing business licensed under sections 1315.35 to 1315.44 of the Revised Code, or has not terminated such a loan on the same business day.

(7) The written loan contract includes a clause that permits the borrower to rescind the loan agreement without cost to the borrower and for any reason if the borrower, not later than the close of business on the business day following the date the loan was transacted, either delivers to the check-cashing business cash in an amount equal to the amount the borrower received if the borrower received cash in the transaction, or if a check was received by the borrower, that check is returned to the check-cashing business. The check-cashing business shall return to the borrower the check received from the borrower in the transaction and any service fee paid by the borrower.

(B) A check-cashing business may contract for and receive interest at a rate of five three 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.

(C) A check-cashing business shall verify a customer's eligibility to enter into a loan by accessing a statewide database pursuant to section 1315.45 of the Revised Code, when implemented by the superintendent, or by the customer's signed written verification prior to implementation of the database.

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 three per cent 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 in addition to any interest permitted under section 1315.39 of the Revised Code;

(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) 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 or any other check-cashing business licensed under sections 1315.35 to 1315.44 and that borrower and if the outstanding loan was made pursuant to sections 1315.35 to 1315.43 of the Revised Code.

Sec. 1315.45. (A) The superintendent shall make a statewide common database, as implemented by the superintendent, accessible at all times to check-cashing businesses licensed under this chapter and to the superintendent through an internet connection. Licensees shall use the database to determine if a customer has an open loan with any check-cashing business licensed under sections 1315.35 to 1315.44 of the Revised Code. Licensees shall submit the required data in a format as the superintendent prescribes by rule, and verify eligibility before entering into each loan transaction.

(B) The superintendent shall adopt rules to administer and enforce this section and to ensure that the database is used by licensees in accordance with this section, including:

(1) A rule requiring that data are retained in the database only as required to ensure licensee compliance with this section;

(2) A rule requiring that identifying customer information is deleted from the database on a regular and routine basis, after the customer transaction is closed;

(3) A rule authorizing the archiving of deleted data, should the superintendent determine that archiving is necessary for the enforcement of this section;

(4) A rule prohibiting the database from ranking the credit worthiness of a consumer and limiting the database to only advice on a customer's eligibility or ineligibility for a loan based on the provisions of this chapter;

(5) A rule requiring that data collected pursuant to this section be used only as prescribed in this section and for no other purpose;

(6) A rule authorizing a fee per transaction for data required to be submitted.

(C) The database operator, whether the superintendent or a third party selected by the superintendent pursuant to Chapter 125. of the Revised Code, shall do all of the following:

(1) Establish and maintain a process for responding to transaction verification requests due to technical difficulties with the database that prevent the licensee from accessing the database through the internet;

(2) Provide accurate and secure receipt, transmission, and storage of customer data;

(3) Designate a transaction as closed within one business day of receiving notification from a licensee;

(4) Take all reasonable measures to ensure the confidentiality of the database and to prevent identity theft.

(D) A check-cashing business may rely on the information contained in the database as accurate and is not subject to any administrative penalty or civil liability as a result of relying on inaccurate information contained in the database.

(E) With respect to the database prescribed in division (A) of this section, any information submitted for incorporation into the database, information in the database itself, or archived information as maintained by the superintendent pursuant to this section, is not public record under section 149.43 of the Revised Code.

(F) If approved by the superintendent, the database operator may impose a per transaction fee for the actual costs of entering, accessing, and maintaining data in the database. The fee shall be payable to the database operator in a manner prescribed by the superintendent. A licensee may charge a customer all or part of the fee, but may not charge a customer any other fee except as authorized in section 1315.40 of the Revised Code.

Section 2. That existing sections 1315.22, 1315.35, 1315.37, 1315.39, 1315.40, and 1315.41 of the Revised Code are hereby repealed.

Section 3. On or before January 1, 2008, the Superintendent of Financial Institutions shall develop, implement, and maintain a statewide common database in accordance with section 1315.45 of the Revised Code, as enacted by this act.