As Introduced

136th General Assembly

Regular Session S. B. No. 269

2025-2026

Senator Lang

To amend sections 1321.02, 1321.07, and 1321.141 of the Revised Code for the purpose of revising the Small Loan Act.

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

Section 1. That sections 1321.02, 1321.07, and 1321.141 of the Revised Code be amended to read as follows:

Sec. 1321.02. (A) No person shall engage in the business of lending money, credit, or choses in action in amounts of five thousand dollars or less, or and exact, contract for, or receive, directly or indirectly, on or in connection with any such loan, any interest and charges that in the aggregate are greater than the interest and charges that the lender would be permitted to charge for a loan of money if the lender were not a licensee, without first having obtained a license from the division of financial institutions under sections 1321.01 to 1321.19 of the Revised Code.

(B) Sections 1321.01 to 1321.19 of the Revised Code do not apply to any person doing business under and as permitted by any law of this state, another state, or the United States relating to banks, savings banks, savings societies, trust companies, credit unions, savings and loan associations substantially all the business of which is confined to loans on real estate mortgages and evidences of their own indebtedness; to registrants conducting business pursuant to sections 1321.51 to 1321.60 of the Revised Code; to licensees conducting business pursuant to sections 1321.62 to 1321.702 of the Revised Code; to licensees conducting business pursuant to sections 1321.71 to 1321.83 of the Revised Code; to licensees doing business pursuant to sections 1321.35 to 1321.48 of the Revised Code; to registrants conducting business as mortgage lenders under Chapter 1322. of the Revised Code; or to any entity who is licensed pursuant to Title XXXIX of the Revised Code, who makes advances or loans to any person who is licensed to sell insurance pursuant to that Title, and who is authorized in writing by that entity to sell insurance.

(C) Sections 1321.01 to 1321.19 of the Revised Code do not apply to loans made or credit extended by entities exempt under division (B) of this section or to a person that solicits, arranges, finds, or brokers loans made or credit extended by such exempt entities.

(D) No person engaged in the business of selling tangible goods or services related thereto may receive or retain a license under sections 1321.01 to 1321.19 of the Revised Code for such place of business.

The first paragraph (E)(1) Division (A) of this section applies to any person, who by any device, subterfuge, or pretense, charges, contracts for, or receives greater interest, consideration, or charges than that authorized by this section without a license for any such loan or use of money or for any such loan, use, or sale of credit, in the amount of five thousand dollars or less, or who for a fee or any manner of compensation arranges or offers to find or arrange for another a licensee or a person that is required to be licensed under this section to make any such loan, use, or sale of credit described in division (A) of this section.

(2) This section does not preclude the acquiring, directly or indirectly, by purchase or discount, of a bona fide obligation for goods or services when such obligation is payable directly to the person who provided the goods or services.

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

Sec. 1321.07. (A) At least once each year the division of financial institutions shall make an examination of the business, loans, books, papers, and records of each licensee so far as they pertain to the licensed business, and it may make such an examination more frequently if it is necessary for the proper administration of sections 1321.01 to 1321.19 of the Revised Code.

For the purpose of discovering violations, the division may at any time investigate the business and examine the books, accounts, papers, and records used therein, of:

(A)(1) Licensees;

(B)(2) Other persons engaged in the business described in division (A) of section 1321.02 of the Revised Code or participating in such business as principal, agent, broker, or otherwise;

(C)(3) Any person whom the division has reasonable cause to believe has violated, is violating, or is about to violate sections 1321.01 to 1321.19 of the Revised Code, whether or not the person claims to act under such sections. For the purpose of this section, any person who advertises, solicits, or holds self out as willing to make, find, or arrange for another a licensee or for a person that is required to be licensed under section 1321.02 of the Revised Code to make loan transactions in the amount or of the value of five thousand dollars or less, is presumed to be engaged in the business described in the first paragraph division (A) of section 1321.02 of the Revised Code.

(B)(1) For the purpose of this section, the division shall have and be given free access to the offices and places of business, files, safes, and vaults of all such persons, and may require the attendance of, and examine under oath, any person relative to such loans or such business or to the subject matter of any examination, investigation, or hearing. The division may require the attendance of such witnesses and the production of such books, records, and papers, as may be required either by the division or by any party to a hearing before the division, and for that purpose may issue a subpoena for any witness or a subpoena duces tecum, to compel the production of any books, records, or papers, directed to the sheriff of the county where such witness resides or is found, which shall be served and returned in the same manner as a subpoena in criminal cases is served and returned.

(2) The fees of the sheriff shall be the same as that allowed in the court of common pleas in criminal cases. Witnesses shall be paid the fees and mileage provided for under section 119.094 of the Revised Code. Fees and mileage shall be paid from the funds of the division. No witness subpoenaed at the instance of parties other than the division is entitled to compensation from the state for attendance or travel unless the division certifies that the witness' testimony was material to the subject matter of the hearing.

(C) If any person fails to file any statement or report, or fails to obey any subpoena, or to give testimony, or to answer questions, or to produce any books, records, documents, accounts, or papers as required by the division under sections 1321.01 to 1321.19 of the Revised Code, any court of common pleas, upon application made to it and upon proof being made of such failure, may make an order awarding process of subpoena or subpoena duces tecum out of the court for such witness to appear and testify before the division, and may make an order that any person give testimony and answer questions as required, and produce books, records, documents, accounts, or papers as required. Upon filing such order with the clerk of the court of common pleas, the clerk shall, under the seal of the court, issue process of subpoena to appear before the division at a time and place named therein, and so from day to day until the examination of such person is completed. The subpoena may contain a direction that such witness bring to such examination any books, records, documents, accounts, or papers therein mentioned, and the clerk shall issue, under the seal of the court, such other or further orders in reference to the examination, appearance, and production of books, records, documents, accounts, or papers as the court directs. If any person so summoned by subpoena issued by the clerk fails to obey the subpoena or to answer any directions therein, or to give testimony, or to answer questions as required, or to produce any books, records, documents, accounts, or papers as required, or if any such person fails to obey any order, the court, on motion supported by proof, may order an attachment for contempt to be issued against any person charged with disobeying any order or injunction issued out of the court of common pleas under sections 1321.01 to 1321.19 of the Revised Code. If the person so offending is brought before the court by virtue of such attachment, and if upon a hearing such disobedience appears, the court may order the offender to be committed and kept in close custody until the further order of the court.

Sec. 1321.141. (A) A licensee shall not make a loan under sections 1321.01 to 1321.19 of the Revised Code that meets either of the following conditions:

(1) The amount of the loan is one thousand dollars or less.

(2) The loan has a duration of one year or less.

(B) A licensee shall not engage in any act or practice to evade the requirement of division (A) of this section, including by assisting a borrower to obtain a loan from a licensee or a person that is required to be licensed under section 1321.02 of the Revised Code on terms that would be prohibited by that division division (A) of this section.

(C) No licensee shall fail to comply with this section.

Section 2. That existing sections 1321.02, 1321.07, and 1321.141 of the Revised Code are hereby repealed.

Section 3. Section 1321.02 of the Revised Code is presented in this act as a composite of the section as amended by both H.B. 199 and S.B. 24 of the 132nd General Assembly. The General Assembly, applying the principle stated in division (B) of section 1.52 of the Revised Code that amendments are to be harmonized if reasonably capable of simultaneous operation, finds that the composite is the resulting version of the section in effect prior to the effective date of the section as presented in this act.