111-1-03 Loan.

(A) The term "loan" includes a guarantee, endorsement, and any other form of security.

(B) A loan is a contribution at the time it is made and is a contribution to the extent that it remains unpaid. The aggregate amount loaned to a candidate or committee by a contributor, when added to other contributions from that individual to that candidate or committee, shall not exceed the contribution limit set forth in section 3517.102 of the Revised Code. A loan, to the extent that it is repaid, is no longer a contribution.

(C) If an individual, political action committee, political contributing entity, political party, campaign committee, or legislative campaign fund makes a loan to any candidate or committee, such loan shall be subject to the limitations set forth in section 3517.102 of the Revised Code. Repayment of the principal amount of such loan to any committee, fund, or party shall not be a contribution by the debtor to the lender, committee, fund, or party. The payment of interest to such committee, fund or party by the debtor shall be a contribution only to the extent that the interest paid exceeds a commercially reasonable rate prevailing at the time the loan is made.

(D) Except as otherwise provided in divisions (I)(6) and (J)(5) of section 3517.992 of the Revised Code, a loan that exceeds the contribution limits of section 3517.102 of the Revised Code shall be unlawful whether or not it is repaid.

(E) Except as provided in this rule, a loan is a contribution by each endorser or guarantor. Each endorser or guarantor shall be deemed to have contributed that portion of the total amount of the loan for which he or she agreed to be liable in a written agreement. Any reduction in the unpaid balance of the loan shall reduce proportionately the amount endorsed or guaranteed by each endorser or guarantor in such written agreement. In the event that such agreement does not stipulate the portion of the loan for which each endorser or guarantor is liable, the loan shall be considered a loan by each endorser or guarantor in the same proportion to the unpaid balance that each endorser or guarantor bears to the total number of endorsers or guarantors. If a third party other than the endorser or guarantor repays all or part of any loan the amount of any or all payments made by that third party constitutes a contribution by that third party.

(F) A candidate may obtain a loan on which his or her spouse's signature is required when joint assets are used as collateral or security for the loan. The spouse shall not be considered a contributor to the candidate's campaign if the value of the candidate's share of the property used as collateral equals or exceeds the amount of the loan which is used for the candidate's campaign.

(G) A loan obtained by a candidate's spouse, parents, children, sons-in-law, daughters-in-law, brothers, sisters, grandparents, mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law, or grandparents by marriage for the benefit of a statewide, senate or house candidate's campaign committee shall be considered a contribution from the person or persons who guaranteed the loan and thereby subject to any limitations of section 3517.102 of the Revised Code.

(H) A loan of money by a state bank, a federally chartered depository institution (including a national bank), or a state chartered depository institution whose deposits and accounts are insured is not a contribution by the lending institution if such loan is made in accordance with applicable banking laws and regulations and is made in the ordinary course of business. A loan will be deemed to be made in the ordinary course of business if it:

(1) Bears the usual and customary interest rate of the lending institution for the category of loan involved;

(2) Is made on a basis which assures repayment;

(3) Is evidenced by a written instrument; and

(4) Is subject to a due date or amortization schedule.

(I) Such loans shall be reported by the committee, party, or fund in accordance with division (B)(4)(e) of section 3517.10 of the Revised Code. For purposes of Chapter 3517. of the Revised Code, an overdraft made on a checking or savings account shall be considered a contribution by the bank or institution unless:

(1) The overdraft is made on an account which is subject to automatic overdraft protection;

(2) The overdraft is subject to immediate repayment; or

(3) There is a definite repayment schedule.

Effective: 01/17/2011
R.C. 119.032 review dates: 11/02/2010 and 07/15/2015
Promulgated Under: 119.03
Statutory Authority: 3517.23
Rule Amplifies: 3517.10 , 3517.102
Prior Effective Dates: 8/23/95 (Emer), 11/21/95, 7/13/98(Emer), 9/24/98, 1/1/02