sb456_00

As Introduced

136th General Assembly

Regular Session S. B. No. 456

2025-2026

To amend sections 1321.02, 1321.62, 1321.63, 1321.631, 1321.632, 1321.64, 1321.643, 1321.644, 1321.65, 1321.651, 1321.66, 1321.663, 1321.665, 1321.666, 1321.67, 1321.673, 1321.674, 1321.69, 1321.691, 1321.70, and 1321.701; to amend, for the purpose of adopting a new section number as indicated in parentheses, section 1321.702 (1321.703); and to enact new section 1321.702 of the Revised Code to make various changes to the consumer installment loan law.

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

Section 1. That sections 1321.02, 1321.62, 1321.63, 1321.631, 1321.632, 1321.64, 1321.643, 1321.644, 1321.65, 1321.651, 1321.66, 1321.663, 1321.665, 1321.666, 1321.67, 1321.673, 1321.674, 1321.69, 1321.691, 1321.70, and 1321.701 be amended; section 1321.702 (1321.703) be amended for the purpose of adopting a new section number as indicated in parentheses; and new section 1321.702 of the Revised Code be enacted to read as follows:

Sec. 1321.02. No person shall engage in the business of lending money, credit, or choses in action in amounts of five thousand dollars or less, or 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.

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~~ 1321.703 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. 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 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 for any such loan or use of money or for any such loan, use, or sale of credit, or who for a fee or any manner of compensation arranges or offers to find or arrange for another person to make any such loan, use, or sale of credit. 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.

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. 1321.62. As used in sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code:

(A) "Actuarial method" means the method of allocating payments made on a loan between the principal amount and interest whereby a payment is applied first to the accumulated interest and the remainder to the unpaid principal amount.

(B) "Advertisement" and "advertising" mean all material printed, published, displayed, distributed, or broadcast, and all material displayed or distributed over the internet, telephone, facsimile, or other electronic transmission, for the purposes of obtaining applications for loans.

(C) "Affiliation" and "affiliated with" mean controlled by or under common control with another person or enterprise either directly or indirectly through one or more intermediaries.

(D) "Annual percentage rate" means the ratio of the interest on a loan to the unpaid principal balances on the loan for any period of time, expressed on an annual basis.

(E) "Applicable charge" means the amount of interest attributable to each monthly installment period of the loan contract, computed as if each installment period were one month and any charge for extending the first installment period beyond one month is ignored. In the case of loans originally scheduled to be repaid in sixty-one months or less, "applicable charge" for any installment period means that proportion of the total interest contracted for, as the balance scheduled to be outstanding during that period bears to the sum of all of the periodic balances, all determined according to the payment schedule originally contracted for. In all other cases, "applicable charge" for any installment period is that which would have been made for such period had the loan been made on an interest-bearing basis, based upon the assumption that all payments were made according to schedule.

(F) "Assets" means properties of value that are owned by the applicant or licensee, including cash on hand and in depository institutions, readily marketable securities, accounts receivable less allowances for uncollectible accounts, and real estate less liens and depreciation. "Assets" does not mean office premises, leasehold improvements, office furniture, fixtures, and equipment, or intangible assets.

(G) "Closed-end loan" means any extension of credit other than an open-end loan.

(H) "Collecting" and "collected" means the servicing of a loan or receipt of payments from a borrower for a loan made pursuant to sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(I) "Consumer report" and "consumer reporting agency" have the same meanings as in the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C. 1681a, as amended.

(J) "Control person" means a person that, in the determination of the superintendent of financial institutions, has the authority to direct and control the operations of the applicant.

(K) "Depository institution" has the same meaning as in section 3 of the "Federal Deposit Insurance Act," 64 Stat. 873, 12 U.S.C. 1813, and includes any credit union.

(L) "Direct mail" means a loan arranged via an application through the mail or internet where the loan proceeds are delivered through the mail or electronic transmission to the benefit of a borrower. A loan is not made by "direct mail" if it is facilitated by face-to-face, personal contact in this state between the lender, lender's employee or agent, or lender's attorney and the borrower or borrower's agent.

(M) "Federal banking agency" means the board of governors of the federal reserve system, the comptroller of the currency, the national credit union administration, and the federal deposit insurance corporation.

(N) "Final entry on a loan" means, as to a particular lender, the latter of the date the loan is paid in full, deemed uncollectible, assigned to another licensee or exempt entity and all records are transferred to the new lender, or discharged or otherwise settled by an order terminating litigation governing the loan transaction.

(O) "Interest" means all charges payable directly or indirectly by a borrower to a licensee as a condition to a loan or an application for a loan, however denominated, but does not include default charges, deferment charges, insurance charges or premiums, court costs, loan origination charges, check collection charges, credit investigation charges, credit line charges, points, or other fees and charges specifically authorized by law.

(P) "Interest-bearing loan" means a loan in which the debt is expressed as the principal amount and interest is computed, charged, and collected on unpaid principal balances outstanding from time to time.

(Q) "Instrument" means a personal check or authorization to transfer or withdraw funds from an account that is signed by the borrower and made payable to a person subject to sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(R) "License" means a license issued under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(S) "Licensee" means any person that has been issued a license.

(T) "Loan agreement" means one or more promises, promissory notes, agreements, undertakings, security agreements, or other documents or commitments, or any combination of these documents or commitments, pursuant to which a licensee loans or delays, or agrees to loan or delay, repayment of money, goods, or anything of value, or otherwise extends credit or makes a financial accommodation.

(U) "Net worth" means the excess of assets over liabilities as determined by generally accepted accounting principles.

(V) "NMLSR" means a multistate licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators, or their successor entities, for the licensing and registration of loan originators, or any system established by the secretary of housing and urban development pursuant to the "Secure and Fair Enforcement for Mortgage Licensing Act of 2008," 122 Stat. 2810, 12 U.S.C. 5101.

(W) "Open-end loan" means consumer credit extended by a creditor under a plan to which all of the following conditions apply:

(1) The creditor reasonably contemplates repeated transactions.

(2) The creditor may impose a finance charge from time to time on an outstanding unpaid balance.

(3) The amount of credit that may be extended to the borrower during the term of the plan, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid.

(X) "Person" means an individual, partnership, association, trust, corporation, or any other legal entity.

(Y) "Precomputed loan" means a loan in which the debt is a sum comprising the principal amount and the amount of interest computed in advance on the assumption that all scheduled payments will be made when due.

(Z) "Principal amount" means the amount of cash paid to, or paid or payable for the account of, the borrower, and includes any charge, fee, or expense that is financed by the borrower at origination of the loan or during the term of the loan.

(AA) "Refinance" means a loan the proceeds of which are used in whole or in part to pay the unpaid balance of a prior loan made by the same licensee or any employee or affiliate of the licensee to the same borrower under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(BB) "Residential mortgage loan" means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real estate upon which is constructed or intended to be constructed a dwelling. For purposes of this division, "dwelling" has the same meaning as in the "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1602.

(CC) "State" in the context of referring to states in addition to Ohio means any state of the United States, the district of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific islands, the virgin islands, and the northern Mariana islands.

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

Sec. 1321.63. (A)(1) No person shall do either of the following without first having obtained a license from the superintendent of financial institutions under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code:

(a) Engage in the business of lending money under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code;

(b) 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.

(2) Division (A)(1) 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 for any such loan, or who for a fee or any manner of compensation arranges or offers to find or arrange for another person to make any such loan.

(B) 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.

(C) Any contract of a 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. 1321.631. Sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code do not apply to any of the following:

(A) Any credit transaction with a loan term of less than six months from the loan transaction date;

(B) Any credit transaction that does not require equal monthly payments, unless either of the following applies:

(1) The credit transaction contains an interest rate that is tied to a published and verifiable index and the contractual rate of interest is adjusted in accordance with changes in that index.

(2) The credit transaction provides for an extension of the first monthly installment period pursuant to division (C)(2)(a) or (D)(1)(a) of section 1321.68 of the Revised Code.

(C) Any credit transaction with an interest rate in excess of that provided for under section 1321.68 of the Revised Code;

(D) Any credit transaction secured by an interest in the covered borrower's residential mortgage loan, including a transaction to finance the purchase or initial construction of a dwelling, any refinance transaction, home equity loan or home equity line of credit, or reverse mortgage;

(E) Any credit transaction that originates as a result, directly or indirectly, of a referral from a person registered or acting as a credit services organization under sections 4712.01 to 4712.14 of the Revised Code;

(F) Any credit transaction made by a person licensed as a check-cashing business under sections 1315.21 to 1315.30 of the Revised Code;

(G) Any credit transaction made by a retail seller under Chapter 1317. of the Revised Code;

(H) Any credit transaction made by a person licensed or acting as a pawnbroker under Chapter 4727. of the Revised Code;

(I) Any credit transaction made by a person licensed under sections 1321.35 to 1321.48 of the Revised Code;

(J) Any credit transaction made by a collection agency pursuant to section 1319.12 of the Revised Code;

(K) Any credit transaction made by a premium finance company licensed under sections 1321.71 to 1321.83 of the Revised Code;

(L) Any credit transaction made by a person chartered and lawfully doing business under the authority of any law of this state, another state, or the United States as a bank, savings bank, trust company, savings and loan association, or credit union, or a subsidiary of any such entity, which subsidiary is regulated by a federal banking agency and is owned and controlled by such a depository institution;

(M) Any credit transaction made by a life, property, or casualty insurance company licensed to do business in this state or any entity licensed under Title XXXIX of the Revised Code that 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;

(N) Any licensee doing business under sections 1321.01 to 1321.19 of the Revised Code;

(O) Any registrant doing business under sections 1321.51 to 1321.60 of the Revised Code;

(P) Any person making a business loan described in division (B)(6) of section 1343.01 of the Revised Code;

(Q) Any political subdivision, or any governmental or other public entity, corporation, instrumentality, or agency, in or of the United States or any state of the United States, or any entity mentioned in division (B)(3) of section 1343.01 of the Revised Code;

(R) Any college or university, or controlled entity of a college or university, as those terms are defined in section 1713.05 of the Revised Code;

(S) 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, or savings and loan associations substantially all the business of which is confined to loans on real estate mortgages and evidences of their own indebtedness.

Sec. 1321.632. A licensee may engage in the business of making loans provided the licensee does not do any of the following:

(A) Assess an origination fee pursuant to section 1321.68 of the Revised Code more than three times in any twelve-month period;

(B) Accept a dated instrument from the borrower as security for a loan;

(D) Pay to a borrower, credit to a borrower's account, or pay to another person on the borrower's behalf the amount of an instrument, less interest, fees, or any other charges permitted by section 1321.68 of the Revised Code;

(E) Refinance the loan during the first one hundred twenty days of the loan term;

(F) Except for the deferment charge permitted by section 1321.68 of the Revised Code or in the case of a refinance, charge or collect any fee, charge, or remuneration of any sort for ~~renewing,~~ amending, or extending a loan beyond its original term.

Sec. 1321.64. (A) An application for a license shall contain an undertaking by the applicant to abide by those sections. The application shall be in writing, under oath, and in the form prescribed by the superintendent of financial institutions, and shall contain any information that the superintendent may require. Applicants that are foreign corporations shall obtain and maintain a license pursuant to Chapter 1703. of the Revised Code before a license is issued or renewed.

(B) Upon the filing of the application and the payment by the applicant of a nonrefundable investigation fee of two hundred dollars, a nonrefundable annual registration fee of three hundred dollars, and any additional fee required by the NMLSR, the division of financial institutions shall investigate the relevant facts. If the application involves investigation outside this state, the applicant may be required by the division to advance sufficient funds to pay any of the actual expenses of the investigation when it appears that these expenses will exceed two hundred dollars. An itemized statement of any of these expenses which the applicant is required to pay shall be furnished to the applicant by the division. A license shall not be issued unless all the required fees have been submitted to the division.

(C)(1) The investigation undertaken upon receipt of an application shall include both a civil and criminal records check of any control person.

(2)(a) Notwithstanding division (L) of section 121.08 of the Revised Code, the superintendent shall obtain a criminal records check on each control person and, as part of that records check, request that criminal records information from the federal bureau of investigation be obtained. To fulfill this requirement, the superintendent shall do either of the following:

(i) Request the superintendent of the bureau of criminal identification and investigation, or a vendor approved by the bureau, to conduct a criminal records check based on the control person's fingerprints or, if the fingerprints are unreadable, based on the control person's social security number, in accordance with section 109.572 of the Revised Code;

(ii) Authorize the NMLSR to request a criminal records check of the control person.

(b) Any fee required under division (C)(3) of section 109.572 of the Revised Code or by the NMLSR shall be paid by the applicant.

(D) If an application for a license does not contain all of the information required under division (A) of this section, and if such information is not submitted to the division or to the NMLSR within ninety days after the superintendent or the NMLSR requests the information in writing, including by electronic transmission or facsimile, the superintendent may consider the application withdrawn.

(E) If the superintendent of financial institutions finds that the financial responsibility, experience, and general fitness of the applicant command the confidence of the public and warrant the belief that the business will be operated honestly and fairly in compliance with the purposes of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code and the rules adopted thereunder, and that the applicant has the requisite net worth and assets required under section 1321.65 of the Revised Code, the superintendent shall issue a license to the applicant. The license shall be valid until the thirty-first day of December of the year in which it is issued. A person may be licensed under both sections 1321.51 to 1321.60 and sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(F) If the superintendent finds that the applicant does not meet the conditions set forth in this section, the superintendent shall issue a notice of intent to deny the application, and promptly notify the applicant of the denial, the grounds for the denial, and the applicant's reasonable opportunity to be heard on the action in accordance with Chapter 119. of the Revised Code.

(G) Notwithstanding any provision of this section to the contrary, the superintendent shall issue a license in accordance with Chapter 4796. of the Revised Code to an applicant if either of the following applies:

(1) The applicant holds a license in another state.

(2) The applicant has satisfactory work experience, a government certification, or a private certification as described in that chapter as a consumer installment loan lender in a state that does not issue that license.

Sec. 1321.643. (A)(1) Not more than one place of business shall be maintained under the same license, but the superintendent of financial institutions may issue additional licenses to the same licensee upon compliance with sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(2) Each licensed place of business shall be located in a state.

(B)(1) When a licensee wishes to change its place of business, it shall give at least fifteen days prior written notice of the change to the division of financial institutions. The division shall provide a license for the new address without cost.

(2) If a licensee changes its name, it shall give written notice of the change to the division prior to making loans under the new name. The division shall provide a license in the new name without cost.

(C) Each current license shall be kept conspicuously posted in each place of business of the licensee and is not transferable or assignable.

Sec. 1321.644. No person engaged in the business of selling tangible goods or services related to tangible goods may receive or retain a license under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code for such place of business.

Sec. 1321.65. Each licensee that conducts business under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code shall maintain both of the following:

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

(B) For each license, assets of at least fifty thousand dollars either in use or readily available for use in the conduct of the business.

Sec. 1321.651. All of the following apply to advertising for loans made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code:

(A) Every advertisement shall state and clearly indicate the identity of the licensee and shall do so in such a manner that prevents confusion with the name of any other unrelated licensee. Licensees shall be identified by means of trade names, service marks, or business names that are filed with the division of financial institutions and the secretary of state.

(B) Advertising shall not be false, misleading, or deceptive. False, misleading, or deceptive advertising includes, but is not limited to, the following:

(1) Placing, or causing to be placed, any advertisement indicating that special terms, reduced rates, guaranteed rates, particular rates, or any other special feature of loans is available unless the advertisement clearly states any limitations that apply;

(2) Placing, or causing to be placed, any advertisement containing a rate or special fee offer that is not a bona fide available rate or fee.

(C) A licensee shall comply with 12 C.F.R. 1026.16, as amended, for open-end loans, or 12 C.F.R. 1026.24, as amended, for closed-end loans.

(D) A licensee shall not use loan advertisements that provide only telephone or facsimile numbers or newspaper box addresses and that do not clearly indicate the identity of the licensee.

(E) A licensee shall not advertise that loans will be made within a specified time after the loan application is received, unless it is the general practice of the licensee to make loans within the specified time.

(F) A licensee shall not advertise special terms, reduced rates, reduced payments, or any other special feature of a loan within a specified limited time, unless the advertisement clearly states any limitations that apply to the offer.

(G) A licensee shall not advertise by the use of unqualified superlatives, including, but not limited to, "lowest rates," "lowest costs," "lowest payment plan," or "cheapest loans," or by making offers that cannot be reasonably fulfilled.

(H) A licensee shall not advertise the words "new" or "reduced," or words of similar import, in connection with rates, costs, payments, or plans, for more than ninety days after the rates, costs, payments, or plans have become effective.

(I) Any licensee specifying in any advertisement charges on loans in dollars shall also state the length of time required to repay the loans as well as the method of repayment, and shall, when the rate of interest is stated, do so in a manner to prevent misunderstanding.

(J) Any licensee advertising flat or average payments on loans that include principal and interest shall specify the number and frequency of payments required to repay the loans. Whenever the amounts of periodic payments are advertised, the amounts shall include all interest to the borrower, as well as principal. The principal payments alone may be shown separately provided the interest charges are also clearly stated with equal prominence.

(K) A licensee shall not advertise rebates, rates, or charges below the maximum lawful rate of interest that are conditioned upon prompt payment unless the condition is clearly indicated.

(L) A licensee shall not advertise either of the following:

(1) Waiver of payments in the event of sickness or disability or other contingency, without advertising that the interest and other charges, if assessed, continue during the waiver period;

(2) That the first payment on any loan may be made more than thirty days after the date of loan closing, without advertising that the interest and other charges, if assessed, will accrue from the date of disbursement of the loan funds until the first payment is due.

(M) A licensee shall not advertise for loans for illegal purposes.

(N) A licensee shall not advertise the availability of credit-related insurance without disclosing the charge, if any, for the insurance.

(O) Each licensee shall maintain in each licensed office or in a central location a file of all advertising for a period of two years from the date disseminated. This requirement includes newspaper, magazine, direct mailing, and facsimile advertising and solicitations, roadside advertising, internet advertising, and scripts of radio and television commercials. The file shall be readily available for inspection by the division at all times. Each licensee shall notify the division in writing of the location of the file. Each licensee shall, upon the request of the superintendent of financial institutions, provide to the division any printed or electronic advertising it has used regarding any business conducted under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

Sec. 1321.66. (A) Records a licensee is required to maintain shall be kept current and be available at a licensed location at all times during normal business hours for review by the superintendent. Records must be legible and maintained in a type size that is clearly readable without magnification and in conformity with any specific typeface or font size that may be required by state or federal law. Except when otherwise provided by federal or state law, records shall be maintained in English. When records are allowed to be in a language other than English, the licensee, at its expense, shall be responsible for providing the superintendent with a full and accurate translation. For purposes of this section, "current" means within thirty days from the date of the occurrence of the event required to be recorded. A licensee shall keep and preserve the following records:

(1) A sortable electronic spreadsheet that discloses the following fields of information:

(a) Principal borrower's name;

(b) Principal borrower's address or property address;

(d) Type of the security for the loan;

(e) Date of loan;

(f) Amount financed;

(g) Date finance charges begin to accrue;

(h) Loan origination charge;

(i) Itemization of all additional fees or charges;

(j) Principal amount of the loan;

(k) Scheduled or precomputed interest;

(l) Number of payments;

(m) Contractual rate of interest;

(n) Federal annual percentage rate;

(o) Payment amount;

(p) Types and amounts of credit-related insurance;

(q) Default charge;

(r) Check collection charge;

(s) Any points charged to the borrower;

(t) Any charges for prepayment of the loan.

(2) Payment histories for each outstanding loan and each loan paid in full that shall disclose all of the following:

(a) Principal borrower's name;

(b) Loan or account number;

(c) A chronological entry of all debits, credits, payments, and charges received, assessed, or disbursed in connection with the loan, recorded thereon in an identifiable manner in order to show the actual date of receipt, assessment, or disbursement and the balance due on the loan or account.

(3) A file for each principal borrower. If there are multiple loan transactions with the same borrower, each loan transaction in the file shall have a unique loan or account number. The file shall contain copies of all of the following:

(a) All documents related to the loan transaction from origination through the final entry on the record;

(b) Copies of the complaints, court orders, settlements, and judgments relating to collection litigation;

(c) In cases of garnishment or attachment in collection litigation, copies of all notices served on employers and amounts collected;

(d) Copies of all repossession and foreclosure legal documents and other records, including bills for all expenses;

(e) In instances where the security foreclosed upon or repossessed is offered for private sale, not less than three bona fide written bids or appraisals in order to establish that the terms of the sale were commercially reasonable to the borrower;

(f) A copy of the death certificate and documentation of all funds received or paid pursuant to a credit life claim.

(4) A sortable electronic spreadsheet of all loans in collection litigation that shall include all of the following:

(a) Principal borrower's name;

(b) Loan or account number;

(d) Name of the court in which proceedings were initiated;

(e) Indication of whether a final judgment has been entered, and if so, all of the following:

(i) Date of judgment;

(ii) Amount of judgment;

(iii) The judgment rate of interest.

(5) A sortable electronic spreadsheet of all loans in repossession and foreclosure that shall include all of the following:

(a) Principal borrower's name;

(b) Loan or account number;

(d) Date of repossession or foreclosure;

(e) Date of sale of the security;

(f) Gross amount received from the sale of the security;

(g) The amount of money applied to the outstanding loan balance;

(h) Where the security is offered for private or public sale, evidence that the sale was consummated in compliance with the provisions of sections 1309.610, 1309.611, 1309.615, 1309.617, and 1309.624 of the Revised Code.

(6) A sortable electronic spreadsheet of all loans upon which a credit life claim has been paid by the insurer that shall include all of the following:

(a) Principal borrower's name;

(b) Loan or account number;

(d) Total amount paid by the insurance claim;

(e) Amount applied to the principal borrower's account.

(7) General business records including, but not limited to, financial statements, check registers, bank statements, contracts with third-party vendors relating to lending services, policy and procedures manual, and training materials.

(8) All contracts or agreements relating to business relationships with businesses or individuals licensed by the division of financial institutions;

(9) A file of all advertisements;

(10) Histories of nonpublished indices used to establish interest rates for variable rate loans, which shall be maintained for two years from date of usage;

(11) Any other records the superintendent may from time to time specify in writing.

(B) Where electronic records are required, a licensee may retain paper records as well. Where electronic records are required, the superintendent may, for good cause, allow a licensee to retain paper records in lieu of the electronic records required by this section.

(C)(1) A licensee shall keep and preserve records pertaining to loans made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code for at least two years after the final entry on the record. The final entry on the record occurs when the loan is paid in full, charged off as uncollectible, sold, transferred or assigned to another, or discharged or otherwise settled by a final order issued in litigation governing the loan transaction.

(2) Notwithstanding division (C)(1) of this section, a licensee shall keep and preserve records pertaining to residential mortgage loans in accordance with 12 C.F.R. 1026.25(b)(3) as in effect on November 30, 2016.

(3) A licensee shall keep and preserve records pertaining to an advertisement for at least two years after the date the advertisement is published, broadcast, or disseminated.

(D) A licensee shall segregate the records pertaining to business conducted pursuant to sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code from all other business records.

(E) A licensee shall notify the superintendent via the NMLSR of a change of location of its records pertaining to business conducted pursuant to sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code not later than five business days after the change.

(F) Where a licensee maintains electronic records in compliance with this section and those records are located outside of this state, the licensee shall make the electronic records available to the division of financial institutions upon request, within the time frame provided by the division. The electronic records may be uploaded to a secure server for the purpose of the division conducting an examination of the licensee.

(G) In the event electronic records, books, records, data, and documents of a licensee are located outside of this state and the superintendent determines that an in-person examination is necessary, the licensee shall, upon the request of the superintendent, pay in advance the estimated costs of the examination of the licensee outside this state, including the proportionate cost of the salaries of division of financial institutions employees who conduct the examination. The estimated costs of an out-of-state examination, as determined by the superintendent, shall be deposited with the division of financial institutions upon demand. After the actual costs of the out-of-state examination have been determined, any funds in the deposit account in excess of costs as itemized by the division of financial institutions shall be returned to the licensee.

(H) A licensee shall make copies of records kept pursuant to divisions (A)(3)(b) and (c) of this section available upon request within three business days.

(I) Any records maintained on an electronic storage media or system shall meet all of the following requirements:

(1) The electronic storage media or system must preserve the records in a nonrewritable, nonerasable format.

(2) The electronic storage media or system must verify automatically the quality and accuracy of the storage media recording process.

(3) The electronic storage media or system must serialize the original and the duplicate units of storage media, and affix a date and time for the required period of retention on both the original and duplicate.

(4) The electronic storage media or system must have the capacity to readily download indices and records preserved on the electronic storage media or system to any medium acceptable to the superintendent.

(5) Acceptable facilities and appropriate equipment must, at all times during normal business hours, be available to the superintendent for immediate, easily readable projection or production of electronic storage media or system images and for producing easily readable images.

(6) Immediate facsimile enlargement must be available upon the superintendent's request.

(7) A duplicate copy of the electronic record stored on any electronic media or system for the time required must be stored separately from the "original" electronic record.

(8) The electronic storage media or system must organize and index accurately all information maintained on both the original and duplicate storage media or system.

(9) At all times, a licensee must be able to have indices of the electronic records being stored available for examination by the superintendent.

(10) Each index must also be duplicated and the duplicate copies must be stored separately from the original copy of each index.

(11) Original and duplicate indices must be preserved for the time required for the indexed records.

(12) An audit system must be in place that does all of the following:

(a) Provides for accountability regarding inputting of records and inputting any changes made to every original and duplicate record maintained and preserved;

(b) Requires the licensee, at all times, to have the results of the audit system available for examination by the superintendent;

(13) All information necessary to access records and indices stored on the electronic storage media or system, a copy of the physical and logical file format of the electronic storage media or system, the field format of all different information types written on the electronic storage media or system, together with the appropriate documentation and information necessary to access records and indices must be maintained, kept current, and provided promptly to the superintendent upon request.

(14) No paper documents produced or reproduced by means of an electronic storage media or system may be destroyed until the conditions of division ~~(H)~~(I) of this section have been met with regard to each paper document that is to be destroyed.

(15) At the request of the division:

(a) Records must be printed on paper for inspection or examination without cost to the division within forty-eight hours of the request. The superintendent may grant additional time for good cause shown upon receipt of a request for additional time from the licensee.

(b) The licensee shall provide any court documents in addition to those described in division (A)(3) of this section.

~~(I)~~(J) In order to reduce the risk of consumer fraud and related harms, including identity theft, licensees shall be required to comply with section 216 of the "Fair and Accurate Credit Transactions Act of 2003," 117 Stat. 1952 (amended 2010), 15 U.S.C. 1681w as in effect on November 30, 2016, section 501 of the "Gramm Leach Bliley Act," 113 Stat. 1338 (1999) (amended 2010), 15 U.S.C. 6801 as in effect on November 30, 2016, and the rules promulgated pursuant to those federal acts, including 16 C.F.R. Part 313 and 16 C.F.R. Part 682, as in effect November 30, 2016, pertaining to the maintenance, security, and disposal of consumer information and records.

~~(J)~~(K) The division shall make or cause to be made an examination of records pertaining to loans made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code at least once every twenty-four months for the purpose of determining whether the licensee is complying with those sections and verifying the licensee's annual report.

Sec. 1321.663. No person, in connection with any examination or investigation conducted by the superintendent of financial institutions under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code shall knowingly do any of the following:

(A) Circumvent, interfere with, obstruct, or fail to cooperate with the superintendent, including making a false or misleading statement, failing to produce records, or intimidating or suborning any witness;

(B) Withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information;

Sec. 1321.665. Before ceasing to conduct or discontinuing business as a licensee, the licensee shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code and shall notify the division of financial institutions in writing of the exact address where the books and records will be maintained during the required period.

Sec. 1321.666. The superintendent of financial institutions may suspend, revoke, or refuse to renew any license issued by the superintendent under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, or bring any other authorized administrative enforcement action in accordance with section 1321.70 of the Revised Code, against any person for failure to maintain records in accordance with section 1321.66 of the Revised Code.

Sec. 1321.67. (A) For purposes of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, a loan shall be considered closed upon the signature of the obligor or obligors, unless the loan contract is not executed by signature, in which case the loan is considered closed upon disbursement of loan funds.

(B) All loans made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code by direct mail shall be made from a place of business for which the licensee holds a valid license.

(C) Licensees have an ongoing duty to notify the division of financial institutions of material changes in the information contained in the application and exhibits, schedules, and other documentation submitted in conjunction with the application, and to report all changes or additions to information in the application within thirty days of the change. Material changes in the information include changes in affiliations, controlling interest, officers, directors, criminal record, and any change in net worth below the requirements set forth in section 1321.65 of the Revised Code.

(D) Each licensee shall do all of the following:

(1) Obtain the written consent of the borrower for any purchase of insurance on property of the borrower other than that which is used as security for the loan;

(2) Permit payment to be made in advance in any amount on any contract at any time, but the licensee may apply the payment first to interest and charges due up to the date of payment;

(3) Notify the borrower in writing of any interest rate change at least thirty but not more than one hundred twenty days prior to the effective date of the changes, provided that if the interest rate is tied to a published and verifiable index and the contractual rate of interest is adjusted within forty-five days of change in the published index rate, the licensee shall notify the borrower in writing of any interest rate change at least thirty days prior to the effective date of the change. The notice required under division (D)(3) of this section shall include all of the following:

(a) A statement of the borrower's current interest rate and corresponding monthly payment prior to the reset date;

(b) A good faith statement of the borrower's anticipated future interest rate and corresponding monthly payment following the reset date;

(c) A statement that notifies the borrower to contact the licensee for workout options in the event that there is a possible problem of repayment at the new interest rate and monthly payment following the reset;

(d) A ~~toll-free~~ telephone number, based in the United States, by which borrowers can discuss possible payment problems and workout options;

(e) An explanation of the index or formula that is being used to reset the interest rate and the source of that index or formula.

(4) In the instance of a non-amortized or partially amortized interest-bearing loan, provide the borrower with written notice of maturity at least ninety but not more than one hundred twenty days prior to the expected maturity date;

(5) Clearly indicate by prominently disclosing on, or in, the loan documents, the federal or state statutory authority pursuant to which the loan is made. This prominent disclosure shall be provided on loans made:

(a) Solely in reliance on the provisions of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code;

(b) Partially in reliance on the provisions of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code; or

(c) In reliance on any combination of federal or state provisions that do not include sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(6) In providing any payment history requested by the borrower or by the division, provide a clear and accurate payment statement in a manner a reasonable borrower should understand that sets forth the dates and amounts due and owing and the dates and amounts received and paid.

(E) A licensee shall not be prohibited from holding other licenses or registrations issued by the division as long as the licensee is in compliance with section 1321.63 of the Revised Code and other applicable provisions of state and federal laws.

(F) A licensee is liable for payment of the annual assessment described in division (B) of section 1321.641 of the Revised Code on any loan made by the licensee that has been sold, transferred, or assigned to another person if servicing rights have been retained by the licensee.

Sec. 1321.673. No licensee shall conduct the business of making loans under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code in any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction with any other such business, if the superintendent of financial institutions finds, pursuant to a hearing conducted in accordance with Chapter 119. of the Revised Code, that the other business is of such a nature that the conduct tends to conceal evasion of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, and orders the licensee in writing to desist from the conduct.

Sec. 1321.674. (A) Any person that willfully violates section 1321.68 of the Revised Code shall forfeit to the borrower the amount of interest paid by the borrower. The maximum rate of interest applicable to any loan transaction that does not comply with section 1321.68 of the Revised Code shall be the rate that would be applicable in the absence of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(B) Any extension of credit under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code shall include a notice in at least ten point type at the bottom of the first page of any loan agreement to read: "This loan is governed by, and made pursuant to, the provisions of the Ohio Consumer Installment Loan Act under R.C. 1321.62 – ~~1321.702~~1321.703."

Sec. 1321.69. (A) A licensee shall not permit any borrower to be indebted for a loan made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code at any time while the borrower is also indebted to an affiliate or agent of the licensee for a loan made under sections 1321.01 to 1321.19 or sections 1321.51 to 1321.60 of the Revised Code for the purpose or with the result of obtaining greater charges than otherwise would be permitted by sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(B) A licensee shall not induce or permit any person to become obligated to the licensee under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, directly or contingently, or both, under more than one contract of loan at the same time for the purpose or with the result of obtaining greater charges than would otherwise be permitted by sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(C) A licensee shall not fail to provide information regarding the amount required to pay in full a loan made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code within five business days after the receipt of a written request from a borrower or by another person designated in writing by the borrower.

(D) A licensee shall not obtain a license through any false or fraudulent representation of a material fact or any omission of a material fact required by state or federal law, or make any substantial misrepresentation in the application to engage in lending under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(E) A licensee, in connection with the business of making or offering to make a loan, shall not knowingly make false or misleading statements of a material fact, omissions of statements required by state or federal law, or false promises regarding a material fact, through advertising or other means, or knowingly engage in a continued course of misrepresentations.

(F) A licensee, or person making loans without a license in violation of section 1321.63 of the Revised Code, shall not knowingly engage in conduct, in connection with the business of making or offering to make loans under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, that constitutes improper, fraudulent, or dishonest dealings.

(G) A licensee or applicant for a license shall not fail to notify the division of financial institutions within thirty days after having a license, or comparable authority, revoked in any governmental jurisdiction.

(H) A licensee shall not knowingly make, propose, or solicit fraudulent, false, or misleading statements on any loan document or on any document related to a loan. For purposes of this division, "fraudulent, false, or misleading statements" does not include mathematical errors, inadvertent transposition of numbers, typographical errors, or any other bona fide error.

(I) A licensee shall not knowingly instruct, solicit, propose, or otherwise cause a borrower to sign in blank a loan-related document in connection with a loan.

(J) A licensee shall not take any note or other promise to pay that does not set forth the entire agreement made with the borrower.

(K) A licensee shall not take any note or promise to pay in which blanks are left to be filled in after execution.

(L) A licensee shall not charge or collect interest prior to the date of disbursement of the loan funds to the borrower.

(M) A licensee shall not make a new loan for the purpose of paying any part of the interest or principal due on an existing loan with the same licensee unless the interest and principal balance of the existing loan is paid in full from the proceeds of the new loan.

(N) Notwithstanding any provision of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code to the contrary, no licensee shall give, or advertise an offer to give, any article, merchandise, reward-program benefit, or any other thing of value, as inducement to a borrower or prospective borrower to obtain a loan, unless the cost of the thing of value is absorbed by the licensee as general overhead, rather than directly charged to the borrower who received the thing of value.

Sec. 1321.691. (A) As used in this section, "remote location" means the home of an employee or other location selected by the employee that is not a licensed place of business.

(B) Notwithstanding any provision of the Revised Code to the contrary, nothing in sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code shall be construed to interfere with the ability of a licensee's employee to work from a remote location, provided the licensee does all of the following:

(1) Ensures that in-person customer interactions are conducted only at a licensed place of business;

(2) Maintains appropriate safeguards for licensee and consumer data, information, and records, including the use of secure virtual private networks where appropriate;

(3) Employs appropriate risk-based monitoring and oversight processes of work performed from a remote location and maintains records of such work;

(4) Ensures consumer information and records are not maintained at a remote location;

(5) Ensures consumer and licensee information and records remain accessible and available for regulatory oversight and exams;

(6) Provides appropriate employee training to keep all conversations about, and with, consumers conducted from a remote location confidential, as if conducted from a commercial location, and to ensure remote employees work in an environment conducive and appropriate to that confidentiality;

(7) Keeps a record of all remote locations that are being used, in the form of city, state, and type of location, and makes a list of those locations available to the superintendent upon request.

Sec. 1321.70. (A) The division of financial institutions may, upon written notice to the licensee stating the contemplated action, the grounds for the action, and the licensee's reasonable opportunity to be heard on the action in accordance with Chapter 119. of the Revised Code, revoke, suspend, or refuse to renew any license issued under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code if it finds a violation of or failure to comply with any provision of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code or the rules adopted thereunder, any federal lending law, or any other law applicable to the business conducted under a license.

(B) In addition to, or in lieu of, any revocation, suspension, or denial, the division may impose a monetary fine after administrative hearing or in settlement of matters subject to claims under division (A) of this section.

(C) The revocation, suspension, or refusal to renew shall not impair the obligation of any pre-existing lawful contract made under sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code; provided, however, that a prior licensee shall make good faith efforts to promptly transfer the licensee's collection rights to another licensee or person exempt from licensing, or be subject to additional monetary fines and legal or administrative action by the division. Nothing in this division shall limit a court's ability to impose a cease-and-desist order preventing any further business or servicing activity.

(D)(1) The superintendent of financial institutions may impose a fine for a violation of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code committed by a licensee. All fines collected pursuant to this section shall be paid to the treasurer of state to the credit of the consumer finance fund created in section 1321.21 of the Revised Code. In determining the amount of a fine to be imposed pursuant to this division, the superintendent may consider all of the following to the extent it is known to the division:

(a) The seriousness of the violation;

(b) The licensee's good faith efforts to prevent the violation;

(d) The licensee's financial resources;

(e) Any other matters the superintendent considers appropriate in enforcing sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code.

(2) Monetary fines imposed under division (D)(1) of this section shall not exceed twenty-five thousand dollars.

(E) The superintendent may investigate alleged violations of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, or the rules adopted thereunder, or complaints concerning any such violation. The superintendent may make application to the court of common pleas for an order enjoining any violation and, upon a showing by the superintendent that a person has committed, or is about to commit, a violation, the court shall grant an injunction, restraining order, or other appropriate relief. The superintendent, in making application to the court of common pleas for an order enjoining a person from acting as a licensee in violation of section 1321.63 of the Revised Code, may also seek and obtain civil penalties for that unlicensed conduct in an amount not to exceed five thousand dollars per violation.

(F) In conducting an investigation pursuant to this section, the superintendent may compel, by subpoena, witnesses to testify in relation to any matter over which the superintendent has jurisdiction, and may require the production or photocopying of any book, record, or other document pertaining to such matter. If a person fails to file any statement or report, obey any subpoena, give testimony, produce any book, record, or other document as required by such a subpoena, or permit photocopying of any book, record, or other document subpoenaed, the court of common pleas of any county in this state, upon application made to it by the superintendent, shall compel obedience by attachment proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court, or a refusal to testify therein.

(G) If the superintendent determines that a person is engaged in, or is believed to be engaged in, activities that may constitute a violation of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, the superintendent may, after notice and a hearing conducted in accordance with Chapter 119. of the Revised Code, issue a cease-and-desist order. The superintendent, in taking administrative action to enjoin a person from acting as a licensee in violation of section 1321.63 of the Revised Code, may also seek and impose fines for those violations in an amount not to exceed five thousand dollars per violation. Such an order shall be enforceable in the court of common pleas.

(H) The superintendent shall regularly report violations of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code, as well as enforcement actions and other relevant information, to the NMLSR.

(I)(1) To protect the public interest, the superintendent may, without a prior hearing, do any of the following:

(a) Suspend the license of a person who is convicted of or pleads guilty or nolo contendere to a criminal violation of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code;

(b) Suspend any licensee who violates section 1321.65 of the Revised Code;

(2) The superintendent may, in accordance with Chapter 119. of the Revised Code, subsequently revoke any license suspended under division (I)(1) of this section.

Sec. 1321.701. (A) The attorney general may directly bring an action to enjoin a violation of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code with the same rights, privileges, and powers as those described in section 1345.06 of the Revised Code. The prosecuting attorney of the county in which the action may be brought may bring an action to enjoin a violation of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code only if the prosecuting attorney first presents any evidence of the violation to the attorney general and, within a reasonable period of time, the attorney general has not agreed to bring the action.

(B) These powers of the attorney general shall be in addition to any other applicable powers of the attorney general.

Sec. 1321.702. (A) As used in this section, "bona fide error" means an unintentional clerical, calculation, computer malfunction or programming, or printing error.

(B) A licensee shall not be held civilly liable in any action brought under this chapter or Chapter 1309., 1317., or 1345. of the Revised Code, and shall not be subject to any sanction by the superintendent of financial institutions, if all of the following conditions are met:

(1) The licensee shows by a preponderance of evidence that the compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

(2) Within sixty days after discovering the error, and prior to the initiation of any action by the superintendent or the receipt of written notice of the error from the borrower, the licensee notifies the superintendent and the borrower of the error and the manner in which the licensee intends to make full restitution to the borrower.

(3) The licensee promptly makes reasonable restitution to the borrower.

(C) In the event of a compliance failure, if the licensee does not meet the conditions set forth in division (B) of this section, a borrower injured by the error has a cause of action to recover damages. Such an action may not be maintained as a class action.

Sec. ~~1321.702~~ 1321.703. The superintendent of financial institutions may adopt, in accordance with Chapter 119. of the Revised Code, rules that are necessary for the enforcement of sections 1321.62 to ~~1321.702~~ 1321.703 of the Revised Code and that are consistent with those sections. Each rule shall contain a reference to the section, division, or paragraph of the Revised Code to which it applies. The superintendent shall send by regular mail to each licensee a copy of each rule that is adopted pursuant to this section.

Section 2. That existing sections 1321.02, 1321.62, 1321.63, 1321.631, 1321.632, 1321.64, 1321.643, 1321.644, 1321.65, 1321.651, 1321.66, 1321.663, 1321.665, 1321.666, 1321.67, 1321.673, 1321.674, 1321.69, 1321.691, 1321.70, 1321.701, and 1321.702 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.