1301:8-9-05 Business practices.

(A) For purposes of determining the amount of a principal reduction, payments shall be applied first to unpaid costs or disbursements which a licensee has become entitled to by law in connection with any suit to collect a loan after default, then to any check collection charges incurred, then to the loan origination fee, then to interest accrued to the end of the month in which payment is made, and the remainder to the unpaid principal.

(B) No licensee shall:

(1) Make a loan to a borrower during the same business day on which another loan to the borrower is paid off, made or remains outstanding. However, if a loan is to be paid off by depositing a check written by a borrower and the licensee deposits the borrower’s check with a financial institution, a licensee may thereafter make a subsequent loan to the same borrower on any date after the maturity date of the first loan. If the payoff check of the first loan is thereafter dishonored, the licensee shall not be deemed to have violated this paragraph or division (E) of section 1315.41 of the Revised Code. For purposes of this rule, borrowers include co-borrowers and co-signers.

(2) Charge, collect, or receive, directly or indirectly, any check cashing fee or other fee to cash or hold a check issued by the licensee or an affiliated licensee in connection with a loan.

(3) Deposit a borrower’s check sooner than the day of maturity.

(4) Prohibit a borrower from buying back a check or otherwise repaying a loan in cash on the day of maturity unless the loan contract indicates that the borrower’s check will be deposited on the day of maturity.

(5) Charge, collect or receive, directly or indirectly, any fee or charges of any sort to extend an installment payment beyond a due date or extend a loan beyond its maturity date. However, if a loan is not paid off before its maturity date because a check written by the borrower is returned or dishonored, a licensee may charge interest, at the rate contracted for under the loan contract in compliance with section 1315.39 of the Revised Code, for each month or partial month that the loan remains outstanding.

R.C. 119.032 review dates: 01/03/2005 and 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 1315.43

Rule Amplifies: 1315.39, 1315.40, 1315.41

Prior Effective Dates: 11/13/97, 12/22/03