Chapter 1181: DIVISION OF FINANCIAL INSTITUTIONS

1181.01 Superintendent is chief executive officer - qualifications - appointment of deputy superintendents.

The superintendent of financial institutions shall be the chief executive officer of the division of financial institutions.

The superintendent shall have at least five years of experience in the financial services industry or in the examination or regulation of financial institutions.

The superintendent shall appoint a deputy superintendent for banks, a deputy superintendent for savings and loan associations and savings banks, and a deputy superintendent for credit unions. Each deputy superintendent shall have at least five years of experience in that particular industry or at least five years of experience in the examination or regulation of banks, savings and loan associations, savings banks, or credit unions.

The superintendent shall also appoint a deputy superintendent for consumer finance, who shall have at least five years of experience in one or more of the consumer finance companies regulated by the division or in the examination or regulation of banks, savings and loan associations, savings banks, credit unions, or consumer finance companies.

The deputy superintendents appointed by the superintendent of financial institutions pursuant to this section shall serve in the unclassified civil service.

Cite as R.C. § 1181.01

Effective Date: 09-26-1996

1181.02 Employees.

The superintendent of financial institutions may appoint and employ such assistants, clerks, examiners, and other employees as the prompt execution of the duties of the superintendent's office requires, and may employ attorney examiners if the superintendent considers such assistants necessary.

Cite as R.C. § 1181.02

Effective Date: 09-26-1996

1181.03 Fidelity bonds.

(A) Before entering upon the discharge of the duties of the office of the superintendent of financial institutions, the superintendent shall give bond to the state in the sum of one million dollars with sureties approved by the governor and conditioned on the faithful discharge of the official duties of the office. The bond, with the approval of the governor and with the superintendent's oath of office endorsed on it, shall be filed with the office of the secretary of state.

(B) Before entering upon the discharge of the duties of their respective offices, the deputy superintendent for banks, the deputy superintendent for savings and loan associations and savings banks, the deputy superintendent for credit unions, and the deputy superintendent for consumer finance shall each give bond to the state in the sum of five hundred thousand dollars with sureties approved by the superintendent and conditioned on the faithful performance of their respective duties. The bonds shall be filed with the office of the secretary of state.

(C) The superintendent shall require of each other employee of the division of financial institutions a bond, conditioned on the faithful performance of each employee's respective duties, in an amount not less than five thousand dollars that the superintendent determines to be acceptable. The bonds may, in the discretion of the superintendent, be individual, schedule, or blanket bonds. The bonds shall be filed with the office of the secretary of state.

(D) The division shall pay the cost or premium of the bonds required by this section from funds appropriated to the division for that purpose.

Cite as R.C. § 1181.03

Effective Date: 09-26-1996

1181.04 Immunity.

Neither the superintendent of financial institutions nor any employee of the division of financial institutions shall be liable in any civil, criminal, or administrative proceeding for any mistake of judgment or discretion in any action taken, or any omission made by the superintendent or employee in good faith.

Cite as R.C. § 1181.04

Effective Date: 09-26-1996

1181.05 Conflicts of interest.

(A) As used in this section, "consumer finance company" means any person required to be licensed or registered under Chapter 1321., 1322., 4712., 4727., or 4728. or sections 1315.21 to 1315.30 of the Revised Code.

(B) Neither the superintendent of financial institutions nor any other employee of the division of financial institutions shall do any of the following: be interested, directly or indirectly, in any bank, savings and loan association, savings bank, credit union, or consumer finance company, that is under the supervision of the superintendent of financial institutions; directly or indirectly borrow money from any such financial institution or company; serve as a director or officer of or be employed by any such financial institution or company; or own an equity interest in any such financial institution or company. For purposes of this section, an equity interest does not include the ownership of an account in a mutual savings and loan association or in a savings bank that does not have permanent stock or the ownership of a share account in a credit union.

(C) Subject to division (G) of this section, an employee of the division of financial institutions may retain any extension of credit that otherwise would be prohibited by division (B) of this section if both of the following apply:

(1) The employee obtained the extension of credit prior to October 29, 1995, or the commencement of the employee's employment with the division, or as a result of a change in the employee's marital status, the consummation of a merger, acquisition, transfer of assets, or other change in corporate ownership beyond the employee's control, or the sale of the extension of credit in the secondary market or other business transaction beyond the employee's control.

(2) The employee liquidates the extension of credit under its original terms and without renegotiation.

If the employee chooses to retain the extension of credit, the employee shall immediately provide written notice of the retention to the employee's supervisor. Thereafter, the employee shall be disqualified from participating in any decision, examination, audit, or other action that may affect that particular creditor.

(D) Subject to division (G) of this section, an employee of the division of financial institutions may retain any ownership of or beneficial interest in the securities of a financial institution or consumer finance company that is under the supervision of the division of financial institutions, or of a holding company or subsidiary of such a financial institution or company, which ownership or beneficial interest otherwise would be prohibited by division (B) of this section, if the ownership or beneficial interest is acquired by the employee through inheritance or gift, prior to October 29, 1995, or the commencement of the employee's employment with the division, or as a result of a change in the employee's marital status or the consummation of a merger, acquisition, transfer of assets, or other change in corporate ownership beyond the employee's control.

If the employee chooses to retain the ownership or beneficial interest, the employee shall immediately provide written notice of the retention to the employee's supervisor. Thereafter, the employee shall be disqualified from participating in any decision, examination, audit, or other action that may affect the issuer of the securities. However, if the ownership of or beneficial interest in the securities and the subsequent disqualification required by this division impair the employee's ability to perform the employee's duties, the employee may be ordered to divest self of the ownership of or beneficial interest in the securities.

(E) Notwithstanding division (B) of this section, an employee of the division of financial institutions may have an indirect interest in the securities of a financial institution or consumer finance company that is under the supervision of the division of financial institutions, which interest arises through ownership of or beneficial interest in the securities of a publicly held mutual fund or investment trust, if the employee owns or has a beneficial interest in less than five per cent of the securities of the mutual fund or investment trust, and the mutual fund or investment trust is not advised or sponsored by a financial institution or consumer finance company that is under the supervision of the division of financial institutions. If the mutual fund or investment trust is subsequently advised or sponsored by a financial institution or consumer finance company that is under the supervision of the division of financial institutions, the employee shall immediately provide written notice of the ownership of or beneficial interest in the securities to the employee's supervisor. Thereafter, the employee shall be disqualified from participating in any decision, examination, audit, or other action that may affect the financial institution or consumer finance company. However, if the ownership of or beneficial interest in the securities and the subsequent disqualification required by this division impair the employee's ability to perform the employee's duties, the employee may be ordered to divest self of the ownership of or beneficial interest in the securities.

(F)

(1) For purposes of this section, the interests of an employee's spouse or dependent child arising through the ownership or control of securities shall be considered the interests of the employee, unless the interests are solely the financial interest and responsibility of the spouse or dependent child, the interests are not in any way derived from the income, assets, or activity of the employee, and any financial or economic benefit from the interests is for the personal use of the spouse or dependent child.

(2) If an employee's spouse or dependent child obtains interests arising through the ownership or control of securities and, pursuant to division (F)(1) of this section, the interests are not considered the interests of the employee, the employee shall immediately provide written notice of the interests to the employee's supervisor. Thereafter, the employee shall be disqualified from participating in any decision, examination, audit, or other action that may affect the issuer of the securities.

(G) For purposes of divisions (C) and (D) of this section, both of the following apply:

(1) With respect to any employee of the former division of consumer finance who, on the first day of the first pay period commencing after the effective date of this section, becomes an employee of the division of financial institutions, the employee's employment with the division of financial institutions is deemed to commence on the first day of the first pay period commencing after the effective date of this section.

(2) With respect to any employee who, on October 29, 1995, became an employee of the division of financial institutions, the employee may, notwithstanding divisions (C) and (D) of this section, retain any extension of credit by a consumer finance company that was obtained at any time prior to the first day of the first pay period commencing after the effective date of this section, or retain any ownership of or beneficial interest in the securities of a consumer finance company, or of a holding company or subsidiary of such a company, that was acquired at any time prior to the first day of the first pay period commencing after the effective date of this section. If the employee chooses to retain the extension of credit or the ownership or beneficial interest, the employee shall comply with divisions (C) and (D) of this section.

Cite as R.C. § 1181.05

Effective Date: 09-26-1996; 2008 HB545 09-01-2008

1181.06 Financial institutions fund.

There is hereby created in the state treasury the financial institutions fund. The fund shall receive assessments on the banks fund established under section 1121.30 of the Revised Code, the savings institutions fund established under section 1181.18 of the Revised Code, the credit unions fund established under section 1733.321 of the Revised Code, and the consumer finance fund established under section 1321.21 of the Revised Code in accordance with procedures prescribed by the superintendent of financial institutions and approved by the director of budget and management. Such assessments shall be in addition to any assessments on these funds required under division (G) of section 121.08 of the Revised Code. All operating expenses of the division of financial institutions shall be paid from the financial institutions fund.

Cite as R.C. § 1181.06

Effective Date: 06-30-1999; 04-06-2007

1181.07 Office facilities for superintendent.

The state shall furnish the superintendent of financial institutions suitable facilities for conducting the business of the superintendent's office at the seat of government and in any other city of the state where it is necessary to keep a resident examiner.

Cite as R.C. § 1181.07

Effective Date: 09-26-1996

1181.08 Adoption of rules.

In addition to the specific authority given the superintendent of financial institutions by other provisions of the Revised Code, the superintendent may from time to time adopt such rules as the superintendent considers necessary or appropriate for the administration of the division of financial institutions or to carry out any other duty of the superintendent.

Cite as R.C. § 1181.08

Effective Date: 09-26-1996

1181.09 Annual report.

At the conclusion of each fiscal year, the superintendent of financial institutions shall prepare a report on the operation of the division of financial institutions for that year. In conjunction with that report the superintendent shall also prepare a summary of the general condition of each bank, savings and loan association, and savings bank doing business in this state, which summary shall be based on each institution's report of its condition as of the thirtieth day of June of that year.

Cite as R.C. § 1181.09

Effective Date: 09-26-1996

1181.10 Seal of superintendent.

The seal of the superintendent of financial institutions shall be one and three-fourths inches in diameter and shall be surrounded by the words: "The superintendent of financial institutions of the state of Ohio."

The seal shall have engraved on it the coat of arms of the state, as described in section 5.04 of the Revised Code, and shall contain the words and devices mentioned in this section and no other.

Cite as R.C. § 1181.10

Effective Date: 09-26-1996

1181.11 Records as evidence.

Copies of all certificates, records, and papers in the office of the superintendent of financial institutions, including the records of the banking commission, the savings and loan associations and savings banks board, and the credit union council, duly certified by the superintendent and authenticated by the superintendent's seal of office, shall be evidence, in all courts of this state, of every matter which could be proved by the production of the original.

Cite as R.C. § 1181.11

Effective Date: 12-02-1996

1181.16 Savings and loan associations and savings banks board.

(A) There is hereby created a savings and loan associations and savings banks board which shall consist of seven members. The deputy superintendent for savings and loan associations and savings banks shall be a member of the board and its chairperson and executive head. The governor, with the advice and consent of the senate, shall appoint the remaining six members.

(B) After the second Monday in January of each year, the governor shall appoint two members. Terms of office shall be for three years commencing on the first day of February and ending on the thirty-first day of January. Each member shall hold office from the date of appointment until the end of the term for which the member was appointed. In the case of a vacancy in the office of any such member, the governor shall appoint a successor who shall hold office for the remainder of the term for which the successor's predecessor was appointed. Any member shall continue in office subsequent to the expiration date of the member's term until the member's successor takes office, or until a period of sixty days has elapsed, whichever occurs first.

(C) No person appointed as a member of such board may serve more than two full consecutive terms. However, a member may serve two full consecutive terms following the remainder of a term for which the member was appointed to fill a vacancy.

(D)

(1) At least two of the six appointive members of the savings and loan associations and savings banks board shall have had savings and loan association experience in a savings and loan association organized and transacting business under authority granted by the superintendent of financial institutions.

(2) At least two of the six appointive members of the savings and loan associations and savings banks board shall have had savings banks experience in a savings bank organized and transacting business under authority granted by the superintendent.

(E) No person who has been convicted of, or pleaded guilty to, a felony involving dishonesty or breach of trust shall take or hold office as a member of the savings and loan associations and savings banks board.

(F) The members of the board shall receive no salary, but their expenses incurred in the performance of their duties shall be paid from funds appropriated for that purpose.

(G) The governor may remove any of the six members appointed to the board whenever in the governor's judgment the public interest requires removal. Upon removing a member of the board, the governor shall file with the superintendent a statement of the cause for removal.

(H)

(1) The savings and loan associations and savings banks board shall hold regular meetings at such times and places as it fixes, but at least once every six months, and shall meet at any time on call of the deputy superintendent for savings and loan associations and savings banks upon two days' notice unless the board by resolution provides for a shorter notice.

(2) A majority of the full board constitutes a quorum and action taken by a majority of those present at any meeting at which a quorum is present shall be the action of the board.

(3) No member shall participate in a proceeding before the board involving any savings and loan association or savings bank of which the member is or was at any time in the preceding twelve months a member of the board of directors, officer, employee, or stockholder. A member may disqualify himself or herself from participating in a proceeding for any other cause deemed by the member to be sufficient.

(4) The board may, by a majority vote of those present at a meeting at which there is a quorum, adopt and amend bylaws and rules the board, in its judgment, considers necessary and proper. It shall select one of its members as secretary, who shall keep a record of all its proceedings.

(I) Neither the deputy superintendent for savings and loan associations and savings banks, nor any other member of the savings and loan associations and savings banks board, shall be liable, in any civil or criminal action or proceeding, for any mistake of judgment or discretion in any action taken, or in any omission made, by the deputy superintendent or other member in good faith.

Cite as R.C. § 1181.16

Effective Date: 09-22-2000

1181.17 Powers and duties.

The savings and loan associations and savings banks board shall do all of the following:

(A) Make recommendations to the superintendent of financial institutions and the deputy superintendent for savings and loan associations and savings banks on matters relating to the business of savings and loan associations and savings banks;

(B) Consider and make recommendations upon any matter addressed in Chapters 1151., 1153., 1155., 1157., 1161., 1163., and 1165. of the Revised Code that the superintendent or deputy superintendent submits to the board for that purpose;

(C) Pass upon and determine any matter the superintendent or deputy superintendent submits to the board for determination;

(D) Submit to the governor proposed amendments to the savings and loan associations or savings banks laws of this state;

(E) Consider and determine whether to confirm the annual schedule of assessments proposed by the superintendent of financial institutions in accordance with division (A) of sections 1155.13 and 1163.16 of the Revised Code.

Cite as R.C. § 1181.17

Effective Date: 09-22-2000

1181.18 Savings institutions fund.

There is hereby created in the state treasury the savings institutions fund.

The savings institutions fund shall be assessed a proportionate share of the administrative costs of the department of commerce and the division of financial institutions. The proportionate share of the administrative costs of the division of financial institutions shall be determined in accordance with procedures prescribed by the superintendent of financial institutions and approved by the director of budget and management. Such assessment shall be paid from the savings institutions fund to the division of administration fund or the financial institutions fund.

An amount equal to the appropriation from the savings institutions fund shall be transferred to the fund from the general revenue fund by the director of budget and management. All fees, assessments, charges, and forfeitures collected under Chapters 1151., 1155., 1161., and 1163. of the Revised Code shall be paid by the superintendent into the state treasury to the credit of the savings institutions fund. Such moneys shall be utilized to reimburse in full during the same fiscal year the general revenue fund for moneys transferred to the savings institutions fund. Any moneys paid to the superintendent pursuant to Chapters 1151., 1155., 1161., and 1163. of the Revised Code but not expended or encumbered by the superintendent either to reimburse the general revenue fund or to defray the costs of regulating savings and loan associations and savings banks shall remain in the savings institutions fund for expenditure by the superintendent in subsequent years.

Cite as R.C. § 1181.18

Effective Date: 06-30-1999

1181.21 Regulating consumer finance companies.

(A) As used in this section, "consumer finance company" has the same meaning as in section 1181.05 of the Revised Code.

(B) The superintendent of financial institutions shall see that the laws relating to consumer finance companies are executed and enforced.

(C) The deputy superintendent for consumer finance shall be the principal supervisor of consumer finance companies. In that position the deputy superintendent for consumer finance shall, notwithstanding section 1321.421 , division (A) of section 1321.76 , and sections 1321.07 , 1321.55 , 1322.06 , 4727.05 , and 4728.05 of the Revised Code, be responsible for conducting examinations and preparing examination reports under those sections. In addition, the deputy superintendent for consumer finance shall, notwithstanding sections 1315.27 , 1321.10 , 1321.43 , 1321.54 , 1321.77 , 1322.12 , 4712.14 , 4727.13 , and 4728.10 of the Revised Code, have the authority to adopt rules and standards in accordance with those sections. In performing or exercising any of the examination, rule-making, or other regulatory functions, powers, or duties vested by this division in the deputy superintendent for consumer finance, the deputy superintendent for consumer finance shall be subject to the control of the superintendent of financial institutions and the director of commerce.

Cite as R.C. § 1181.21

Effective Date: 09-26-1996; 2008 HB545 09-01-2008

1181.25 Evidence or disclosure of privileged, confidential or other nonpublic information.

The superintendent of financial institutions may introduce into evidence or disclose, or authorize to be introduced into evidence or disclosed, information that, under sections 1121.18 , 1155.16 , 1163.20 , 1315.122 , 1321.09 , 1321.48 , 1321.55 , 1321.76 , 1322.06 , 1322.061 , 1733.32 , 1733.327 , and 4727.18 of the Revised Code, is privileged, confidential, or otherwise not public information or a public record, provided that the superintendent acts only as provided in those sections or in the following circumstances:

(A) When in the opinion of the superintendent, it is appropriate with regard to any enforcement actions taken and decisions made by the superintendent under Chapters 1315., 1321., 1322., 1733., 4712., 4727., and 4728. of the Revised Code or Title XI of the Revised Code;

(B) When litigation has been initiated by the superintendent in furtherance of the powers, duties, and obligations imposed upon the superintendent by Chapters 1315., 1321., 1322., 1733., 4712., 4727., and 4728. of the Revised Code or Title XI of the Revised Code;

(C) When in the opinion of the superintendent, it is appropriate with regard to enforcement actions taken or decisions made by other financial institution regulatory authorities to whom the superintendent has provided the information pursuant to authority in Chapters 1315., 1321., 1322., 1733., 4712., 4727., and 4728. of the Revised Code or Title XI of the Revised Code.

Cite as R.C. § 1181.25

Effective Date: 06-18-2002; 04-06-2007; 2008 HB545 09-01-2008