CHAPTER 1321: SMALL LOANS

(A) As used in sections 1321.01 to 1321.19 of the Revised Code:

(1) “Person” includes individuals, partnerships, associations, trusts, corporations, and all other legal entities.

(2) “License” means a license issued under sections 1321.01 to 1321.19 of the Revised Code to make loans at a single place of business.

(3) “Licensee” means a person to whom one or more licenses have been issued.

(4) “Principal amount” means the amount of cash paid to, or paid or payable for the account of, the borrower.

(5) “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 line charges, credit report charges, or other fees and charges specifically authorized by law.

(6) “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.

(7) “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.

(8) “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.

(9) “Applicable charge” means the amount of interest attributable to each monthly installment period of the loan contract. The applicable charge is 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, the applicable charge for any installment period is 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, the 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 at the single rate provided in division (A) of section 1321.13 of the Revised Code, based upon the assumption that all payments were made according to schedule.

(10) “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.

(11) “Refinancing” 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 to the same borrower under sections 1321.01 to 1321.19 of the Revised Code.

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

(B) The division of financial institutions is responsible for the administration of sections 1321.01 to 1321.19 of the Revised Code. Neither the superintendent of the division, nor any deputy, assistant, clerk, examiner, or other person employed by the division to assist in the administration of such sections shall be interested, directly or indirectly, in the business licensed under the sections and any person so interested or who becomes so interested shall not be eligible to hold or retain any such position.

Effective Date: 09-26-1996

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 1321.71 to 1321.83 of the Revised Code; to licensees doing business pursuant to sections 1315.35 to 1315.44 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.

Effective Date: 09-26-1996; 03-30-2006

Application for a license shall be in writing, under oath, and in the form prescribed by the division of financial institutions, and shall contain the name and address of the applicant, and, if the applicant is a partnership or association, of every member thereof, and, if a corporation, of each officer and director thereof; also the approximate location where the business is to be conducted and such further relevant information as the division requires. At the time of making such application, the applicant shall pay to the division a license fee as determined by the superintendent of financial institutions pursuant to section 1321.20 of the Revised Code and a nonrefundable investigation fee of two hundred dollars. No license fee or any portion thereof shall be refunded after a license has been issued.

Effective Date: 09-26-1996

Upon the filing of an application under section 1321.03 of the Revised Code and payment of fees pursuant to section 1321.20 of the Revised Code, the division of financial institutions shall investigate the facts concerning the applicant and the requirements provided for in divisions (A) and (B) of this section.

The division shall approve the application and issue and deliver a license to the applicant if the division finds both of the following:

(A) That the financial responsibility, experience, reputation, and general fitness of the applicant and of the members thereof, if the applicant is a partnership or an association, and of the officers and directors thereof, if the applicant is a corporation, are such as to warrant the belief that the business will be operated lawfully, honestly, and fairly under sections 1321.01 to 1321.19 of the Revised Code and within the purposes of those sections, that the applicant has fully complied with those sections, and that the applicant is qualified to act as a licensed lender;

(B) That the applicant has available for the operation of such business cash or moneys deposited in a readily accessible fund or account of not less than twenty-five thousand dollars.

If the division does not so find, it shall enter an order denying such application and forthwith 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. In the event of denial, the division shall return the license fee but shall retain the investigation fee.

Effective Date: 09-26-1996

Each license shall state the address at which the business is to be conducted and shall state fully the name of the licensee. Each license shall be kept conspicuously posted in the place of business of the licensee and is not transferable or assignable.

Each license shall remain in effect until surrendered, revoked, or suspended under section 1321.08 or 3123.47 of the Revised Code. Every licensee shall each year pay to the division of financial institutions a license fee and an assessment as determined by the superintendent pursuant to section 1321.20 of the Revised Code. Payment of such renewal fee shall be according to the provisions of this section and the standard renewal procedure of sections 4745.01 to 4745.03 of the Revised Code. No other or further license fee or assessment shall be required from any such licensee by the state or any political subdivision in the state.

Every licensee shall maintain for each license current assets of at least ten thousand dollars, either in use or readily available for use in the conduct of the business.

Effective Date: 03-22-2001

Not more than one place of business shall be maintained under the same license issued under sections 1321.01 to 1321.05 of the Revised Code, but the division of financial institutions may issue additional licenses to the same licensee upon compliance with such sections.

No change in the place of business of a licensee to a location outside the original municipal corporation shall be permitted under the same license. When a licensee wishes to change the licensee’s place of business within the same municipal corporation, the licensee shall give written notice thereof in advance to the division which shall provide a license for the new address, without cost.

Sections 1321.01 to 1321.19 of the Revised Code do not limit the loans of any licensee to residents of the community in which the licensed place of business is situated.

Effective Date: 09-26-1996

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

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

(A) Licensees;

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

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

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

The fees and mileage of the sheriff and witnesses shall be the same as that allowed in the court of common pleas in criminal cases. Fees and mileage shall be paid from the funds of the division. No witness subpoenaed at the instance of parties other than the division is entitled to compensation from the state for attendance or travel unless the division certifies that the witness’ testimony was material to the subject matter of the hearing.

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

Effective Date: 09-26-1996

In accordance with Chapter 119. of the Revised Code:

(A) The division of financial institutions shall, upon written notice to the licensee stating the contemplated action and the grounds therefor, and upon reasonable opportunity to be heard, suspend or revoke any license issued by the division if it finds that:

(1) The licensee is in default in the payment of the annual license fee or assessment prescribed in section 1321.20 of the Revised Code or has failed to comply with any order of the division made and entered under division (A) of section 1321.10 of the Revised Code;

(2) The licensee has continued to violate any of the provisions of sections 1321.01 to 1321.19 of the Revised Code or any rule promulgated under division (A) of section 1321.10 of the Revised Code after receiving notice of such violation or violations from the division;

(3) Any fact or condition exists which if it had existed or had been known to exist at the time of the original application for such license, which fact or condition was not then known to the division, clearly would have warranted the division in refusing originally to issue such license.

(B) If the division finds that there exists probable cause for the suspension or revocation of any license under division (A) of this section and that enforcement of sections 1321.01 to 1321.19 of the Revised Code requires immediate suspension of the license pending complete investigation, it may, upon three days’ written notice, and hearing, enter an order suspending the license for a period not exceeding thirty days, during which period of suspension no loans may be made under the license, but the licensee may receive payments on existing loans. Upon completion of such investigation the division shall either reinstate the license or further suspend the license for a further period or give the licensee notice of the contemplated revocation of the license, the grounds for the revocation, and the licensee’s reasonable opportunity to be heard on the action in accordance with Chapter 119. of the Revised Code.

(C) Any licensee may surrender any license by delivering it to the division with written notice of its surrender. Such surrender shall not affect the licensee’s civil or criminal liability for acts committed prior to the surrender.

(D) No revocation or suspension of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any borrower nor shall such action affect the right of the licensee to collect the amounts due under the contract, or to enforce the contract.

(E) The division may reinstate or issue a new license to a person whose license has been revoked if no fact or condition then exists which clearly would have warranted the division in refusing originally to issue the license.

Effective Date: 09-26-1996

(A) Every licensee shall keep and use in the licensee’s business such books, accounts, and records as will enable the division of financial institutions to determine whether the licensee is complying with sections 1321.01 to 1321.19 of the Revised Code and with the orders and rules made by the division under those sections. Every licensee shall preserve such books, accounts, and records for at least two years after making the final entry on any loan recorded therein. Accounting systems maintained in whole or in part by mechanical or electronic data processing methods that provide information equivalent to that otherwise required are acceptable for this purpose.

As required by the superintendent of financial institutions, every licensee each year shall file a report with the division giving such relevant information concerning the business and operations, during the preceding calendar year, of each licensed place of business conducted by the licensee within the state. If a licensee has more than one place of business within this state it is optional with the licensee to furnish the report for each location, or a composite report for all locations. Such report shall be made under oath in the form prescribed by the division, which shall make and publish annually an analysis and recapitulation of such reports. Such licensee reports are not public records and shall only be used by the division for the purpose of enforcing sections 1321.01 to 1321.19 of the Revised Code or any rules or orders made in compliance with those sections. Such licensee reports may be introduced into evidence or disclosed when and in the manner authorized in section 1181.25 of the Revised Code, or in connection with criminal proceedings.

This section does not prevent the division from releasing to or exchanging with other financial institution regulatory authorities information relating to licensees.

(B) For purposes of this section, “financial institution regulatory authority” includes a regulator of a business activity in which a licensee is engaged, or has applied to engage in, to the extent that the regulator has jurisdiction over a licensee engaged in that business activity. A licensee is engaged in a business activity, and a regulator of that business activity has jurisdiction over the licensee, whether the licensee conducts the activity directly or a subsidiary or affiliate of the licensee conducts the activity.

Effective Date: 06-18-2002

In accordance with Chapter 119. of the Revised Code:

(A) The division of financial institutions may adopt rules and the superintendent of financial institutions may issue specific orders for the enforcement of sections 1321.01 to 1321.19 of the Revised Code. Every ruling, demand, requirement, and similar administrative act may be in the form of a written order. Every rule and order shall be a public record. After promulgation, a copy of every rule shall be mailed to all licensees.

(B) The division may, whenever it has reasonable cause to believe that any person has violated, is violating, or is threatening to or intends to violate sections 1321.01 to 1321.19 of the Revised Code, enter an order requiring the person to desist or to refrain from such violation; and an action may be brought on the relation of the superintendent to enjoin the person from continuing or engaging in such violation or from doing any acts in furtherance thereof. Such action shall be conducted under the direction and supervision of the attorney general. In any such action, an order or judgment may be entered awarding such preliminary or final injunction as is deemed proper. In addition to all other means provided for the enforcement of a restraining order or injunction, the court in which such action is brought may impound and appoint a receiver for the property and business of the defendants including books, papers, documents, and records pertaining thereto or so much thereof as the court finds reasonably necessary to prevent further violations of sections 1321.01 to 1321.19 of the Revised Code, through or by means of the use of said property and business. Such receiver, when appointed and qualified, has such powers and duties as to custody, collection, administration, winding up, and liquidation of the property and business as may be conferred upon the receiver by the court.

(C) Upon application of any person, the division may certify, under the seal of the superintendent, a statement relative to any matter that is the subject of public examination and disclosure. The division may likewise furnish under the seal of the superintendent a certified copy of any order issued by the division, and in any court such certified statements and such certified copies are prima-facie evidence of the facts disclosed therein or of the making of such order.

Effective Date: 09-26-1996

No licensee or other person subject to sections 1321.01 to 1321.19 of the Revised Code shall advertise, display, distribute, or broadcast or cause or permit to be advertised, displayed, distributed, or broadcast, any false, misleading, or deceptive statement or representation with regard to the rates, terms, or conditions for loans made under those sections. The division of financial institutions shall require that charges or rates of charge, whenever stated by a licensee, be stated fully and clearly in such manner as may be deemed necessary to prevent misunderstanding thereof by prospective borrowers.

Effective Date: 09-26-1996

No licensee shall conduct the business of making loans under sections 1321.01 to 1321.19 of the Revised Code, within any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, if the division of financial institutions finds, after hearing, that the other business is of such nature that such conduct tends to conceal evasion of those sections or of the rules made under those sections and orders the licensee in writing to desist from the conduct.

No licensee shall conduct the business of making loans under sections 1321.01 to 1321.19 of the Revised Code, under any other name, or at any other place of business within this state than that named in the license.

No licensee shall take a lien upon real estate as security for any loan made under those sections except such lien as is created upon the filing or recording of a certificate of judgment.

Effective Date: 09-26-1996

(A) Notwithstanding any other provisions of the Revised Code, a licensee may contract for and receive interest, calculated according to the actuarial method, at a rate or rates not exceeding twenty-eight per cent per year on that portion of the unpaid principal balance of the loan not exceeding one thousand dollars and twenty-two per cent per year on any part of the unpaid principal balance exceeding one thousand dollars. A licensee may contract for and receive interest at the single annual rate that would earn the same total interest at maturity of the loan, when the loan is paid according to its agreed terms, as would be earned by the application of the graduated rates set forth in this division. Loans may be interest-bearing or precomputed.

(B) For purposes of computation of time on interest-bearing and precomputed loans, including, but not limited to, the calculation of interest, a month is considered one-twelfth of a year, and a day is considered one three hundred sixty-fifth of a year when calculation is made for a fraction of a month. A year is as defined in section 1.44 of the Revised Code. A month is that period described in section 1.45 of the Revised Code.

(C) With respect to interest-bearing loans:

(1) Interest shall be computed on unpaid principal balances outstanding from time to time, for the time outstanding. Each payment shall be applied first to unpaid charges and fees, then to interest, and the remainder to the unpaid principal balance. However, if the amount of the payment is insufficient to pay the accumulated interest, the unpaid interest continues to accumulate to be paid from the proceeds of subsequent payments and is not added to the principal balance. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee may thereafter charge the same rate or rates of interest as provided in the loan contract.

(2) Interest shall not be compounded. However, if part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the new loan contract may include any unpaid interest that has accrued. The resulting loan contract shall be deemed a new and separate loan transaction for purposes of this section. The unpaid principal balance of a precomputed loan is the balance due after refund or credit of unearned interest as provided in division (D)(3) of this section.

(D) With respect to precomputed loans:

(1) Loans shall be repayable in substantially equal and consecutive monthly installments of principal and interest combined, except that the first installment period may exceed one month by not more than fifteen days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days; and provided further that monthly installment payment dates may be omitted to accommodate borrowers with seasonal income.

(2) Payments may be applied to the combined total of principal and precomputed interest until maturity of the loan. A licensee may charge interest after the original or deferred maturity of a precomputed loan at the rate or rates provided in division (A) of this section on all unpaid principal balances for the time outstanding.

(3) When any loan contract is paid in full by cash, renewal, refinancing, or a new loan, one month or more before the final installment due date, the licensee shall refund, or credit the borrower with, the total of the applicable charges for all fully unexpired installment periods, as originally scheduled or as deferred, that follow the day of prepayment. If the prepayment is made other than on a scheduled installment installment due date, the nearest scheduled installment due date shall be used in such computation. If the prepayment occurs prior to the first installment due date, the licensee may retain one-thirtieth of the applicable charge for a first installment period of one month for each day from date of loan to date of prepayment, and shall refund, or credit the borrower with, the balance of the total interest contracted for. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee shall credit the borrower with the same refund as if prepayment in full had been made on the date the judgment is entered and may thereafter convert the loan to an interest-bearing loan at the same rate or rates of interest as provided in the loan contract. If the maturity of the loan is accelerated for any reason, the licensee may convert the loan to an interest-bearing loan at the same rate or rates of interest as provided in the loan contract, provided the licensee credits the borrower with the same refund on the precomputed loan as if prepayment in full had been made on the date of the conversion.

(4) If the parties agree in writing, either in the loan contract or in a subsequent agreement, to a deferment of wholly unpaid installments, a licensee may grant a deferment and may collect a deferment charge as provided in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred installment. A proportionate charge may be made for deferment for periods of more or less than one month. A deferment charge is earned prorata during the deferment period and is fully earned on the last day of the deferment period. If a loan is prepaid in full during a deferment period, the licensee shall make, or credit to the borrower, a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan in full.

(E) A licensee, at the request of the borrower, may obtain, on one or more borrowers, credit life insurance, credit accident and health insurance, and unemployment insurance. The premium or identifiable charge for the insurance may be included in the principal amount of the loan and may not exceed the premium rate filed by the insurer with the superintendent of insurance and not disapproved by him. If a licensee obtains the insurance at the request of the borrower, the borrower shall have the right to cancel the insurance for a period of twenty-five days after the loan is made. If the borrower chooses to cancel the insurance, the borrower shall give the licensee written notice of this choice and shall return all of the policies or certificates of insurance or notices of proposed insurance to the licensee during such period, and the full premium or identifiable charge for the insurance shall be refunded to the borrower by the licensee. If the borrower requests, in the notice to cancel the insurance, that this refund be applied to reduce the balance of a precomputed loan, the licensee shall credit the amount of the refund plus the amount of interest applicable to the refund to the loan balance.

(F) A licensee may require the borrower to provide insurance or a loss payable endorsement covering reasonable risks of loss, damage, and destruction of property used as security for the loan and with the consent of the borrower such insurance may cover property other than that which is security for the loan. The amount and term of required property insurance shall be reasonable in relation to the amount and term of the loan contract and the type and value of the security, and the insurance shall be procured in accordance with the insurance laws of this state. The purchase of this insurance through the licensee or an agent or broker designated by the licensee shall not be a condition precedent to the granting of the loan. If the borrower purchases the insurance from or through the licensee or from another source, the premium may be included in the principal amount of the loan.

(G) In addition to the interest and charges provided for by this section, no further or other amount shall be charged or required by the licensee, except the amounts of fees authorized by law to record, file, or release security interests on a loan and fees for credit reports, which amounts may be included in the principal amount of the loan or collected at any time after the loan is made, and except costs and disbursements to which the licensee may become entitled by law in connection with any suit to collect a loan or any lawful activity to realize on a security interest after default.

(H) If the loan contract or security instrument contains covenants by the borrower to perform certain duties pertaining to insuring or preserving security and the licensee pursuant to the loan contract or security instrument pays for performance of the duties on behalf of the borrower, the licensee may add the amounts paid to the unpaid principal balance of the loan or collect them separately. A charge for interest may be made for sums advanced not exceeding the rate of interest permitted by division (A) of this section. Within a reasonable time after advancing a sum, the licensee shall notify the borrower in writing of the amount advanced, any interest charged with respect to the amount advanced, any revised payment schedule, and shall include a brief description of the reason for the advance.

(I) A licensee may charge and receive loan origination charges not exceeding the following:

(1) On loans in the principal amount of five hundred dollars of less, the greater of fifteen dollars or one per cent of the principal amount of the loan and, on each refinancing made more than six months after the original loan and any previous refinancing, not exceeding fifteen dollars;

(2) On all other loans, the greater of thirty dollars or one per cent of the principal amount of the loan and, on each refinancing, not exceeding thirty dollars. Loan origination charges may be paid by the borrower at the time of the loan or may be included in the principal amount of the loan.

(J) A licensee may charge and receive check collection charges not greater than twenty dollars plus any amount passed on from other financial institutions for each check, negotiable order of withdrawal, share draft, or other negotiable instrument returned or dishonored for any reason.

(K) If the loan contract so provides, a licensee may collect a default charge on any installment not paid in full within ten days after its due date. For this purpose, all installments are considered paid in the order in which they become due. Any amounts applied to an outstanding loan balance as a result of voluntary release of a security interest, sale of security on the loan, or cancellation of insurance shall be considered payments on the loan, unless the parties otherwise agree in writing at the time the amounts are applied. The amount of the default charge shall not exceed the greater of five per cent of the scheduled installment or five dollars.

Effective Date: 10-29-1993

As an alternative to the interest permitted in division (A) of section 1321.13 and in division (B) of section 1321.16 of the Revised Code, a licensee may contract for and receive interest at any rate or rates agreed upon or consented to by the parties to the loan contract or open-end loan agreement, but not exceeding an annual percentage rate of twenty-five per cent.

Effective Date: 02-11-1982

Licensees under section 1321.01 of the Revised Code shall:

(A) At the time any interest-bearing or precomputed loan is made, deliver to the borrower or, if there are two or more borrowers, to one of them, a statement in the English language disclosing in clear and distinct terms the amount and date of the loan, a schedule of payments or a description thereof, the type of the security, if any, for the loan, the name and address of the licensed office and of each borrower, and the agreed rate of interest, or in lieu thereof, a copy of the instrument evidencing the debt signed by the borrower;

(B) For each payment made on account of any such interest-bearing or precomputed loan, give to the person making it a receipt if requested;

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

(D) Upon repayment of the loan in full, mark plainly every obligation signed by any obligor, or a copy of the signed obligation, “paid” or “canceled” and return it and any pledge to the borrower or, if there are two or more borrowers, to one of them; provided that a continuing obligation in whole or in part is not repayment in full thereof.

No licensee shall take any note or promise to pay in which blanks are left to be filled in after execution.

Any licensee or other person who willfully violates section 1321.13 of the Revised Code shall forfeit to the borrower twice the amount of interest contracted for. The maximum rate of interest applicable to any loan transaction that does not comply with all provisions of section 1321.13 of the Revised Code shall be the rate that would be applicable in the absence of sections 1321.01 to 1321.19 of the Revised Code.

No licensee shall pledge or hypothecate any note or security given by any borrower except with a person residing or maintaining a place of business in this state or with a bank authorized to transact business in this state, under an agreement permitting the division of financial institutions to examine the papers so hypothecated.

The tender by the borrower, or at the borrower’s request, of an amount equal to the unpaid balance less the required rebate on a precomputed loan shall be accepted by the licensee in full payment of the loan obligation.

A licensee shall not, directly or indirectly, make any payment, or cause to be made any payment, whether in cash or otherwise, to a dealer in tangible goods or services, or to a retail seller as defined in section 1317.01 of the Revised Code, in connection with the making of a loan to a customer, patron, or other person who has done, or is doing, business with the dealer in tangible goods or services, or the retail seller. This section does not prohibit bona fide advertising practices involving only the borrowers.

Effective Date: 10-04-1996

(A) No licensee shall knowingly induce or permit any person, jointly or severally, to be obligated, 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 a higher rate of interest than would otherwise be permitted upon a single loan made under sections 1321.01 to 1321.19 of the Revised Code.

(B) No licensee shall charge, contract for, or receive, directly or indirectly, interest and charges greater than such licensee would be permitted to charge, contract for, or receive without a license under sections 1321.01 to 1321.19 of the Revised Code on any part of an indebtedness for one or more than one loan of money if the amount of such indebtedness is in excess of five thousand dollars.

(C) For the purpose of the limitations set forth in this section, the amount of any such indebtedness shall be determined by including the entire obligation of any person to the licensee for principal, direct or contingent or both, as borrower, indorser, guarantor, surety for, or otherwise, whether incurred or subsisting under one or more than one contract of loan, except that any contract of indorsement, guaranty, or suretyship that does not obligate the indorser, guarantor, or surety for any charges in excess of eight per cent per annum, is not included in such entire obligation. If a licensee acquires, directly or indirectly, by purchase or discount, bona fide obligations for goods or services owed by the person who received such goods or services to the person who provided such goods or services, then the amount of such purchased or discounted indebtedness to the licensee shall not be included in computing the aggregate indebtedness of such borrower to the licensee for the purpose of the prohibitions set forth in this section.

Effective Date: 07-14-1981

(A) A licensee may make open-end loans pursuant to an agreement between the licensee and the borrower whereby:

(1) The licensee may permit the borrower to obtain advances of money from the licensee from time to time or the licensee may advance money on behalf of the borrower from time to time as directed by the borrower.

(2) The amount of each advance and permitted interest, charges, and costs are debited to the borrower’s account and payments and other credits are credited to the same account.

(3) The interest and charges are computed on the unpaid balance or balances of the account from time to time.

(4) The borrower has the privilege of paying the account in full at any time or, if the account is not in default, in monthly installments of fixed or determinable amounts as provided in the agreement.

For open-end loans, “billing cycle” means the time interval between periodic billing dates. A billing cycle shall be considered monthly if the closing date of the cycle is the same date each month or does not vary by more than four days from such date.

(B) Notwithstanding any other provisions of the Revised Code, a licensee may contract for and receive interest for open-end loans at a rate or rates not exceeding those provided in division (A) of section 1321.13 of the Revised Code and may compute interest in each billing cycle by either of the following methods:

(1) By multiplying the daily rate or rates by the daily unpaid balance of the account, in which case the daily rates are determined by dividing the annual rates by three hundred sixty-five;

(2) By multiplying the monthly rate or rates by the average daily unpaid balance of the account in the billing cycle, in which case the average daily unpaid balance is the sum of all of the daily unpaid balances each day during the cycle divided by the number of days in the cycle. The monthly rates are determined by dividing the annual rates by twelve.

The billing cycle shall be monthly and the unpaid balance on any day shall be determined by adding to any balance unpaid as of the beginning of that day all advances and permitted interest, charges, and costs and deducting all payments and other credits made or received that day.

(C) In addition to the interest permitted in division (B) of this section, a licensee may charge and receive or add to the unpaid balance any or all of the following:

(1) All charges and costs authorized by divisions (E), (F), (G), (H), and (J) of section 1321.13 of the Revised Code;

(2) An annual credit line charge, for the privilege of maintaining a line of credit, for the first year not exceeding the greater of one per cent of the original credit line or thirty dollars, and for subsequent years not exceeding twenty dollars;

(3) A default charge on any required minimum payment not paid in full within ten days after its due date. For this purpose, all required minimum payments are considered paid in the order in which they become due. The amount of the default charge shall not exceed the greater of five per cent of the required minimum payment or five dollars.

(D) The borrower at any time may pay all or any part of the unpaid balance on the account or, if the account is not in default, the borrower may pay the unpaid balance in installments subject to minimum payment requirements as determined by the licensee and set forth in the open-end loan agreement.

(E) If credit life insurance or credit accident and health insurance is obtained by the licensee and if the insured dies or becomes disabled when there is an outstanding open-end loan indebtedness, the insurance shall be sufficient to pay the unpaid balance on the loan due on the date of the borrower’s death in the case of credit life insurance or all minimum payments that become due on the loan during the covered period of disability in the case of credit accident and health insurance. The additional charge for credit life insurance, credit accident and health insurance, or unemployment insurance shall be calculated each billing cycle by applying the current monthly premium rate for the insurance, filed by the insurer with the superintendent of insurance and not disapproved by the superintendent, to the unpaid balances in the borrower’s account, using one of the methods specified in division (B) of this section for the calculation of interest. No credit life insurance, credit accident and health insurance, or unemployment insurance written in connection with an open-end loan shall be canceled by the licensee because of delinquency of the borrower in making the required minimum payments on the loan unless one or more such payments is past due for a period of thirty days or more. The licensee shall advance to the insurer the amounts required to keep the insurance in force during such period, which amounts may be debited to the borrower’s account.

(F) Whenever there is no unpaid balance in an open-end loan account, the account may be terminated by written notice, by the borrower or the licensee, to the other party. If a licensee has taken a security interest in personal property to secure the open-end loan, the licensee shall release the security interest and terminate any financing statement in accordance with section 1309.513 of the Revised Code.

Effective Date: 07-01-2001

No loan made outside this state for which a greater rate of interest, consideration, or charges than is authorized by sections 1321.01 to 1321.19 of the Revised Code has been charged, contracted for, or received is enforceable in this state and every person participating therein in this state is subject to sections 1321.01 to 1321.19 of the Revised Code; provided that this section does not apply to loans legally made in any state under and in accordance with a regulatory loan law similar in principle to such sections. All loan contracts made with residents of this state are considered as made within this state and subject to the laws of this state, regardless of any statement in the contract or note to the contrary, except as to licensing if the lender is licensed under and in accordance with a regulatory loan law similar in principle to such sections. A loan in an amount of five thousand dollars or less made to a borrower residing in this state at the time the loan is made by a lender whose office is located outside this state and whose primary business consists of making loans by mail is not enforceable in this state for a greater rate of interest, consideration, or charges than is authorized by sections 1321.01 to 1321.19 of the Revised Code.

Effective Date: 07-14-1981

In addition to any other remedy that may be available, any licensee and any person alleging to be aggrieved by an order or action of the division of financial institutions, within thirty days from the entry of the order complained of, or within sixty days of the action complained of if there is no order, may file a complaint against the superintendent of financial institutions in the court of common pleas of Franklin county. Such complaint may pray for reversal, rescission, or modification of the order or action complained of, and for such other relief as may be appropriate, and it shall allege the facts relied upon to obtain any such relief. When the complaint has been filed, summons forthwith shall be issued and shall be served upon the superintendent, either by personal service or by certified mail addressed to the superintendent’s office in the department of commerce. The summons is returnable within five days from its date and in all other respects it is made as in civil actions. All allegations of the complaint shall be deemed denied without further pleading, and the court, upon application by either party, shall advance the cause and hear it without delay. Mere technical irregularities in the procedure had before the division shall be disregarded, and the burden of proof is on the complainant to show that the division, in issuing the order or in taking the action complained of, exceeded or abused its discretion. Any party to the action may summon witnesses and compel their attendance as in any criminal action, and may introduce evidence in addition to that relied upon by the division.

An action under this section is a special proceeding and may be appealed by either party pursuant to the Rules of Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505. of the Revised Code.

Effective Date: 09-26-1996

Sections 1321.01 to 1321.19, inclusive, of the Revised Code may be modified, amended, or repealed so as to effect a cancellation or alteration of any license or right of a licensee, provided that such cancellation or alteration shall not impair or affect the obligation of any pre-existing contract between any licensee and any borrower, nor the right of the licensee to collect principal, interest, and charges as set forth in said obligation.

Effective Date: 10-01-1953

(A) Every person licensed or registered under this chapter shall pay to the superintendent of financial institutions, prior to the last day of June, an annual license or certificate of registration fee. On or about the fifteenth day of April of each year, the superintendent shall determine the license or certificate fees to be charged, pursuant to sections 1321.03, 1321.05, 1321.53, and 1321.73 of the Revised Code. Such determination shall be made by dividing the appropriation for the consumer finance section of the division of financial institutions for the current fiscal year by the number of licenses and certificates issued as of the date of the computation. In no event shall the amount of the fee exceed three hundred dollars, except that the maximum fee which may be charged insurance premium finance companies licensed under section 1321.73 of the Revised Code shall not exceed three hundred seventy-five dollars. Prior to the first day of June of each year, the superintendent shall inform each person licensed or registered under this chapter of the amount of the license or certificate fee for the succeeding fiscal year as determined by this section.

(B)(1) Each person licensed under Chapter 4727. of the Revised Code who is subject to annual license renewal under division (E)(1) of section 4727.03 of the Revised Code shall, prior to the last day of June, pay to the superintendent a fee equal to twice the amount of the fee determined by the superintendent pursuant to division (A) of this section. However, in no event shall the amount of the fee exceed three hundred dollars.

(2) Each person licensed under Chapter 4727. of the Revised Code who is subject to biennial license renewal under division (E)(2) of section 4727.03 of the Revised Code shall, prior to the date the license expires, pay to the superintendent a fee equal to four times the amount of the fee determined by the superintendent pursuant to division (A) of this section. However, in no event shall the amount of the fee exceed six hundred dollars.

(C) The fee for a license or certificate issued pursuant to Chapter 1321., 4727., or 4728. of the Revised Code after the first day of January of the year the license or certificate expires shall be equal to one-half the amount determined according to divisions (A) and (B) of this section or in accordance with section 4728.03 of the Revised Code.

(D) If the renewal fees billed by the superintendent pursuant to divisions (A) and (B) of this section are less than the estimated expenditures of the consumer finance section of the division of financial institutions, as determined by the superintendent, for the following fiscal year, the superintendent may assess each person licensed pursuant to section 1321.04 or registered pursuant to section 1321.53 of the Revised Code at a rate sufficient to equal in the aggregate the difference between the renewal fees billed and the estimated expenditures. Each person shall pay the assessed amount to the superintendent prior to the last day of June. In no case shall the assessment exceed ten cents per each one hundred dollars of interest (excluding charge-off recoveries), points, loan origination charges, and credit line charges collected by that person during the previous calendar year. If an assessment is imposed under this division, it shall not be less than two hundred fifty dollars per licensee or registrant and shall not exceed thirty thousand dollars less the total renewal fees paid pursuant to division (A) of this section by each licensee or registrant.

Effective Date: 08-10-2000; 05-06-2005

All fees, charges, penalties, and forfeitures collected under Chapters 1321., 1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30, sections 1315.35 to 1315.44, and sections 1349.25 to 1349.37 of the Revised Code shall be paid to the superintendent of financial institutions and shall be deposited by the superintendent into the state treasury to the credit of the consumer finance fund, which is hereby created. The fund may be expended or obligated by the superintendent for the defrayment of the costs of administration of Chapters 1321., 1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30, sections 1315.35 to 1315.44, and sections 1349.25 to 1349.37 of the Revised Code by the division of financial institutions. All actual and necessary expenses incurred by the superintendent, including any services rendered by the department of commerce for the division’s administration of Chapters 1321., 1322., 4712., 4727., and 4728., sections 1315.21 to 1315.30, sections 1315.35 to 1315.44, and sections 1349.25 to 1349.37 of the Revised Code, shall be paid from the fund. The fund shall be assessed a proportionate share of the administrative costs of the department and the division. The proportionate share of the administrative costs of the division of financial institutions shall be determined in accordance with procedures prescribed by the superintendent and approved by the director of budget and management. Such assessment shall be paid from the consumer finance fund to the division of administration fund or the financial institutions fund.

Effective Date: 09-26-2003

Effective Date: 07-30-1993

No assignment of, or order for, wages or salary is valid unless made in writing by the person by whom the said wages or salary are earned and no assignment of, or order for, wages or salary made by a married person is valid unless the written consent of the husband or wife of the person making such assignment or order is attached to such assignment or order. No assignment of or order for, wages or salary of a minor is valid unless the written consent of a parent or the guardian of such minor is attached to such order or assignment. No assignment of, or order for, wages or salary is valid for more than twenty-five per cent of the earnings, wages, or salary of any married person. No such assignment is valid for more than fifty per cent of the earnings, wages, or salary of any unmarried person.

Assignments of wages have priority as to each other from the time they are filed with the employer of the assignor, and the balance due any married person after twenty-five per cent has been so assigned, or due any unmarried person after fifty per cent has been so assigned is not subject to further assignment.

Effective Date: 10-01-1953

Notwithstanding section 1321.31 of the Revised Code, no assignment of, or order for wages or salary is valid unless the wages assigned or ordered are to be paid for the support of the employee’s spouse or minor child in complying with an order of a court of record for the support of the employee’s spouse or minor child. This section does not affect or invalidate any contract or agreement between employers and their employees, or as between employers, employees, and any labor union as to any checkoff on the wages of such employees as may be agreed upon. This section and section 4113.16 of the Revised Code shall not affect or invalidate any deduction from the wages or salary made in accordance with a payroll deduction plan agreed upon between the employer and employee provided that the same be revocable at any time by the employee upon notice to the employer up to the time of payment thereof.

Effective Date: 10-16-1959

The limitations and regulations of sections 1321.01 to 1321.19 and 1321.31 of the Revised Code do not apply to assignments of, or orders for, wages for the support of a spouse or children when such assignments or orders are made to comply with an order of a court of record. The employee may assign whatever portion of his earnings that may be required to comply with the court order for support.

Effective Date: 01-01-1979

As used in sections 1321.51 to 1321.60 of the Revised Code:

(A) “Person” means an individual, partnership, association, trust, corporation, or any other legal entity.

(B) “Certificate” means a certificate of registration issued under sections 1321.51 to 1321.60 of the Revised Code.

(C) “Registrant” means a person to whom one or more certificates have been issued.

(D) “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.

(E) “Interest” means all charges payable directly or indirectly by a borrower to a registrant 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 line charges, points, prepayment penalties, or other fees and charges specifically authorized by law.

(F) “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.

(G) “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.

(H) “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.

(I) “Applicable charge” means the amount of interest attributable to each monthly installment period of the loan contract. The applicable charge is 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, the applicable charge for any installment period is 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, the 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.

(J) “Broker” means a person who acts as an intermediary or agent in finding, arranging, or negotiating loans, and charges or receives a fee for these services.

(K) “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.

(L) “Point” means a charge equal to one per cent of either of the following:

(1) The principal amount of a precomputed loan or interest-bearing loan;

(2) The original credit line of an open-end loan.

(M) “Prepayment penalty” means a charge for prepayment of a loan at any time prior to five years from the date the loan contract is executed.

(N) “Refinancing” 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 registrant to the same borrower under sections 1321.51 to 1321.60 of the Revised Code.

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

Effective Date: 08-10-2000

(A)(1) No person, on that person’s own behalf or on behalf of any other person, shall do either of the following without having first obtained a certificate of registration from the division of financial institutions:

(a) Advertise, solicit, or hold out that the person is engaged in the business of making loans secured by a mortgage on a borrower’s real estate which is other than a first lien on the real estate;

(b) Engage in the business of lending or collecting the person’s own or another person’s money, credit, or choses in action for such loans.

(2) Each person issued a certificate is subject to all the rules prescribed under sections 1321.51 to 1321.60 of the Revised Code.

(B) All loans made to persons who at the time are residents of this state are considered as made within this state and subject to the laws of this state, regardless of any statement in the contract or note to the contrary.

(C) A registrant may make unsecured loans, loans secured by a mortgage on a borrower’s real estate which is a first lien or other than a first lien on the real estate, loans secured by other than real estate, and loans secured by any combination of mortgages and security interests, on terms and conditions provided by sections 1321.51 to 1321.60 of the Revised Code.

(D)(1) If a lender that is subject to sections 1321.51 to 1321.60 of the Revised Code makes a loan in violation of division (A)(1) of this section, the lender has no right to collect, receive, or retain any interest or charges on that loan.

(2) If a registrant applies to the division for a renewal of the registrant’s certificate after the date required by division (A)(4) of section 1321.53 of the Revised Code, but prior to the first day of August of that year, and the division approves the application, division (D)(1) of this section does not apply with respect to any loan made by the registrant while the registrant’s certificate was expired.

Effective Date: 08-10-2000

(A)(1) An application for a certificate of registration under sections 1321.51 to 1321.60 of the Revised Code 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 division of financial institutions, shall give the location where the business is to be conducted and the names and addresses of the partners, officers, or trustees of the applicant, and shall contain any further relevant information that the division may require. Applicants that are foreign corporations shall obtain and maintain a license pursuant to Chapter 1703. of the Revised Code before a certificate is issued or renewed.

(2) Upon the filing of the application and the payment by the applicant of two hundred dollars as an investigation fee and an annual registration fee as determined by the superintendent of financial institutions pursuant to section 1321.20 of the Revised Code, the division 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 such 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 the applicant by the division. No certificate shall be issued unless the fees have been submitted to the division, and no registration fee or investigation fee will be returned after a certificate has been issued.

(3) If an application for a certificate of registration does not contain all of the information required under division (A)(1) of this section, and if such information is not submitted to the division within ninety days after the application is filed, the superintendent may consider the application withdrawn and may retain the investigation fee.

(4) If the division finds that the financial responsibility, experience, character, and general fitness of the applicant are such as to command the confidence of the public and to warrant the belief that the business will be operated honestly and fairly in compliance with and within the purposes of sections 1321.51 to 1321.60 of the Revised Code, and that the applicant has the net worth and assets required by division (B) of this section, the division shall thereupon issue a certificate to the applicant. The certificate shall expire on the first day of July next after its issue, and on the first day of July in each succeeding year, unless renewed by payment of an annual fee, and any assessment, as determined by the superintendent pursuant to section 1321.20 of the Revised Code, on or before the last day of June of each year. No other fee or assessment shall be required of a registrant by the state or any political subdivision of the state.

If the division does not so find, it shall enter an order denying the application, and forthwith 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. In the event of denial, the division shall return the registration fee but retain the investigation fee.

(5) If there is a change of ten per cent or more in the ownership of a registrant, the division may make any investigation necessary to determine whether any fact or condition exists that, if it had existed at the time of the original application for a certificate of registration, the fact or condition would have warranted the division to deny the application under division (A)(4) of this section. If such a fact or condition is found, the division may, in accordance with Chapter 119. of the Revised Code, revoke the registrant’s certificate.

(B) Each registrant that engages in lending under sections 1321.51 to 1321.60 of the Revised Code shall maintain both of the following:

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

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

(C) Not more than one place of business shall be maintained under the same certificate, but the division may issue additional certificates to the same registrant upon compliance with sections 1321.51 to 1321.60 of the Revised Code, governing the issuance of a single certificate. No change in the place of business of a registrant to a location outside the original municipal corporation shall be permitted under the same certificate without the approval of a new application, the payment of the registration fee as determined by the superintendent pursuant to section 1321.20 of the Revised Code and, if required by the superintendent, the payment of an investigation fee of two hundred dollars. When a registrant wishes to change its place of business within the same municipal corporation, it shall give written notice of the change in advance to the division, which shall provide a certificate for the new address without cost. If a registrant changes its name, prior to making loans under the new name it shall give written notice of the change to the division, which shall provide a certificate in the new name without cost. Sections 1321.51 to 1321.60 of the Revised Code do not limit the loans of any registrant to residents of the community in which the registrant’s place of business is situated. Each certificate shall be kept conspicuously posted in the place of business of the registrant and is not transferable or assignable.

(D) Sections 1321.51 to 1321.60 of the Revised Code do not apply to any of the following:

(1) Persons lawfully doing business under the authority of any law of this state, another state, or the United States relating to banks, savings banks, trust companies, savings and loan associations, or credit unions;

(2) Life, property, or casualty insurance companies licensed to do business in this state;

(3) Any person that is a lender making a loan pursuant to sections 1321.01 to 1321.19 of the Revised Code or a business loan as described in division (B)(6) of section 1343.01 of the Revised Code;

(4) Any governmental agency or instrumentality, or any entity included under division (B)(3) of section 1343.01 of the Revised Code.

(E) No person engaged in the business of selling tangible goods or services related to tangible goods may receive or retain a certificate under sections 1321.51 to 1321.60 of the Revised Code for such place of business.

Effective Date: 08-10-2000

(A) The division of financial institutions may adopt, in accordance with Chapter 119. of the Revised Code, rules that are necessary for the enforcement of sections 1321.51 to 1321.60 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 division shall send by regular mail to each registrant a copy of each rule that is adopted pursuant to this section.

(B) The division shall, upon written notice to the registrant stating the contemplated action, the grounds for the action, and the registrant’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 certificate issued under sections 1321.51 to 1321.60 of the Revised Code, or impose a monetary fine, if it finds that the registrant has continued to violate those sections, after receiving notice of the violation or violations from the division, or is in default in the payment of the annual assessment or certificate of registration fee prescribed in section 1321.20 of the Revised Code. The revocation, suspension, or refusal to renew shall not impair the obligation of any pre-existing lawful contract made under sections 1321.51 to 1321.60 of the Revised Code.

Monetary fines imposed under this division shall not exceed twenty-five thousand dollars.

(C) The superintendent of financial institutions may investigate alleged violations of sections 1321.51 to 1321.60 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 such violation and, upon a showing by the superintendent that a person has committed, or is about to commit, such a violation, the court shall grant an injunction, restraining order, or other appropriate relief.

(D) 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.

(E) 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 1321.51 to 1321.60 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. Such an order shall be enforceable in the court of common pleas.

Effective Date: 08-10-2000

(A) The attorney general may directly bring an action to enjoin a violation of sections 1321.51 to 1321.60 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 1321.51 to 1321.60 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)(1) The prosecuting attorney of the county in which an alleged offense may be prosecuted may initiate criminal proceedings under sections 1321.51 to 1321.60 of the Revised Code.

(2) In order to initiate criminal proceedings under sections 1321.51 to 1321.60 of the Revised Code, the attorney general shall first present any evidence of criminal violations to the prosecuting attorney of the county in which the alleged offense may be prosecuted. If, within a reasonable period of time, the prosecuting attorney has not agreed to prosecute the violations, the attorney general may proceed in the prosecution with all the rights, privileges, and powers conferred by law on prosecuting attorneys, including the power to appear before grand juries and to interrogate witnesses before such grand juries.

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

Effective Date: 01-01-2007

(A) Every registrant shall keep records pertaining to loans made under sections 1321.51 to 1321.60 of the Revised Code. Such records shall be segregated from records pertaining to transactions that are not subject to these sections of the Revised Code. Every registrant shall preserve records pertaining to loans made under sections 1321.51 to 1321.60 of the Revised Code for at least two years after making the final entry on such records. Accounting systems maintained in whole or in part by mechanical or electronic data processing methods that provide information equivalent to that otherwise required are acceptable for this purpose. At least once each eighteen-month cycle, the division of financial institutions shall make or cause to be made an examination of records pertaining to loans made under sections 1321.51 to 1321.60 of the Revised Code, for the purpose of determining whether the registrant is complying with these sections and of verifying the registrant’s annual report.

(B)(1) As required by the superintendent of financial institutions, each registrant shall file with the division each year a report under oath or affirmation, on forms supplied by the division, concerning the business and operations for the preceding calendar year. Whenever a registrant operates two or more registered offices or whenever two or more affiliated registrants operate registered offices, then a composite report of the group of registered offices may be filed in lieu of individual reports.

(2) The division shall publish annually an analysis of the information required under division (B)(1) of this section, but the individual reports shall not be public records and shall not be open to public inspection.

(C) All information obtained by the superintendent or the superintendent’s deputies, examiners, assistants, agents, or clerks by reason of their official position, including information obtained by such persons from the annual report of a registrant or in the course of examining a registrant or investigating an applicant for a certificate, is privileged and confidential. All such information shall remain privileged and confidential for all purposes except when it is necessary for the superintendent and the superintendent’s deputies, examiners, assistants, agents, or clerks to take official action regarding the affairs of the registrant or in connection with criminal proceedings. Such information may also be introduced into evidence or disclosed when and in the manner authorized in section 1181.25 of the Revised Code.

(D) No person is in violation of sections 1321.51 to 1321.60 of the Revised Code for any act taken or omission made in reliance on a written notice, interpretation, or examination report from the superintendent.

(E) This section does not prevent the division from releasing to or exchanging with other financial institution regulatory authorities information relating to registrants.

(F) For purposes of this section, “financial institution regulatory authority” includes a regulator of a business activity in which a registrant is engaged, or has applied to engage in, to the extent that the regulator has jurisdiction over a registrant engaged in that business activity. A registrant is engaged in a business activity, and a regulator of that business activity has jurisdiction over the registrant, whether the registrant conducts the activity directly or a subsidiary or affiliate of the registrant conducts the activity.

Effective Date: 06-18-2002

No registrant shall conduct the business of making loans under sections 1321.51 to 1321.60 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 1321.51 to 1321.60 of the Revised Code or of the rules adopted under those sections, and orders the registrant in writing to desist from the conduct.

Effective Date: 09-26-1996

Any person who willfully violates section 1321.57 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 1321.57 of the Revised Code shall be the rate that would be applicable in the absence of sections 1321.51 to 1321.60 of the Revised Code.

Effective Date: 06-13-1996

(A) Notwithstanding any other provisions of the Revised Code, a registrant may contract for and receive interest, calculated according to the actuarial method, at a rate or rates not exceeding twenty-one per cent per year on the unpaid principal balances of the loan. Loans may be interest-bearing or precomputed.

(B) For purposes of computation of time on interest-bearing and precomputed loans, including, but not limited to, the calculation of interest, a month is considered one-twelfth of a year, and a day is considered one three hundred sixty-fifth of a year when calculation is made for a fraction of a month. A year is as defined in section 1.44 of the Revised Code. A month is that period described in section 1.45 of the Revised Code. Alternatively, a registrant may consider a day as one three hundred sixtieth of a year and each month as having thirty days.

(C) With respect to interest-bearing loans:

(1)(a) Interest shall be computed on unpaid principal balances outstanding from time to time, for the time outstanding.

(b) As an alternative to the method of computing interest set forth in division (C)(1)(a) of this section, a registrant may charge and collect interest for the first installment period based on elapsed time from the date of the loan to the first scheduled payment due date, and for each succeeding installment period from the scheduled payment due date to the next scheduled payment due date, regardless of the date or dates the payments are actually made.

(c) Whether a registrant computes interest pursuant to division (C)(1)(a) or (b) of this section, each payment shall be applied first to unpaid charges, then to interest, and the remainder to the unpaid principal balance. However, if the amount of the payment is insufficient to pay the accumulated interest, the unpaid interest continues to accumulate to be paid from the proceeds of subsequent payments and is not added to the principal balance.

(2) Interest shall not be compounded, collected, or paid in advance. However, both of the following apply:

(a) Interest may be charged to extend the first monthly installment period by not more than fifteen days, and the interest charged for the extension may be added to the principal amount of the loan.

(b) If part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, the principal amount payable under the new loan contract may include any unpaid interest that has accrued. The resulting loan contract shall be deemed a new and separate loan transaction for purposes of this section. The unpaid principal balance of a precomputed loan is the balance due after refund or credit of unearned interest as provided in division (D)(3) of this section.

(D) With respect to precomputed loans:

(1) Loans shall be repayable in monthly installments of principal and interest combined, except that the first installment period may exceed one month by not more than fifteen days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days; and provided further that monthly installment payment dates may be omitted to accommodate borrowers with seasonal income.

(2) Payments may be applied to the combined total of principal and precomputed interest until maturity of the loan. A registrant may charge interest after the original or deferred maturity of a precomputed loan at the rate specified in division (A) of this section on all unpaid principal balances for the time outstanding.

(3) When any loan contract is paid in full by cash, renewal, refinancing, or a new loan, one month or more before the final installment due date, the registrant shall refund, or credit the borrower with, the total of the applicable charges for all fully unexpired installment periods, as originally scheduled or as deferred, that follow the day of prepayment. If the prepayment is made other than on a scheduled installment due date, the nearest scheduled installment due date shall be used in such computation. If the prepayment occurs prior to the first installment due date, the registrant may retain one-thirtieth of the applicable charge for a first installment period of one month for each day from date of loan to date of prepayment, and shall refund, or credit the borrower with, the balance of the total interest contracted for. If the maturity of the loan is accelerated for any reason and judgment is entered, the registrant shall credit the borrower with the same refund as if prepayment in full had been made on the date the judgment is entered.

(4) If the parties agree in writing, either in the loan contract or in a subsequent agreement, to a deferment of wholly unpaid installments, a registrant may grant a deferment and may collect a deferment charge as provided in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred installment. A proportionate charge may be made for deferment for periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. If a loan is prepaid in full during a deferment period, the registrant shall make, or credit to the borrower, a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan in full.

(E) A registrant, at the request of the borrower, may obtain, on one or more borrowers, credit life insurance, credit accident and health insurance, and unemployment insurance. The premium or identifiable charge for the insurance may be included in the principal amount of the loan and may not exceed the premium rate filed by the insurer with the superintendent of insurance and not disapproved by the superintendent. If a registrant obtains the insurance at the request of the borrower, the borrower shall have the right to cancel the insurance for a period of twenty-five days after the loan is made. If the borrower chooses to cancel the insurance, the borrower shall give the registrant written notice of this choice and shall return all of the policies or certificates of insurance or notices of proposed insurance to the registrant during such period, and the full premium or identifiable charge for the insurance shall be refunded to the borrower by the registrant. If the borrower requests, in the notice to cancel the insurance, that this refund be applied to reduce the balance of a precomputed loan, the registrant shall credit the amount of the refund plus the amount of interest applicable to the refund to the loan balance.

If the registrant obtains the insurance at the request of the borrower, the registrant shall not charge or collect interest on any insured amount that remains unpaid after the insured borrower’s date of death.

(F) A registrant may require the borrower to provide insurance or a loss payable endorsement covering reasonable risks of loss, damage, and destruction of property used as security for the loan and with the consent of the borrower such insurance may cover property other than that which is security for the loan. The amount and term of required property insurance shall be reasonable in relation to the amount and term of the loan contract and the type and value of the security, and the insurance shall be procured in accordance with the insurance laws of this state. The purchase of this insurance through the registrant or an agent or broker designated by the registrant shall not be a condition precedent to the granting of the loan. If the borrower purchases the insurance from or through the registrant or from another source, the premium may be included in the principal amount of the loan.

(G) On loans secured by an interest in real estate, all of the following apply:

(1) A registrant may charge and receive up to two points, and a prepayment penalty not in excess of one per cent of the original principal amount of the loan. Points may be paid by the borrower at the time of the loan or may be included in the principal amount of the loan. On a refinancing, a registrant may not charge under division (G)(1) of this section either of the following:

(a) Points on the portion of the principal amount that is applied to the unpaid principal amount of the refinanced loan, if the refinancing occurs within one year after the date of the refinanced loan on which points were charged;

(b) A prepayment penalty.

(2) As an alternative to the prepayment penalty described in division (G)(1) of this section, a registrant may contract for, charge, and receive the prepayment penalty described in division (G)(2) of this section for the prepayment of a loan prior to two years after the date the loan contract is executed. This prepayment penalty shall not exceed two per cent of the original principal amount of the loan if the loan is paid in full prior to one year after the date the loan contract is executed. The penalty shall not exceed one per cent of the original principal amount of the loan if the loan is paid in full at any time from one year, but prior to two years, after the date the loan contract is executed. A registrant shall not charge or receive a prepayment penalty under division (G)(2) of this section if any of the following applies:

(a) The loan is a refinancing by the same registrant or a registrant to whom the loan has been assigned;

(b) The loan is paid in full as a result of the sale of the real estate that secures the loan;

(c) The loan is paid in full with the proceeds of an insurance claim against an insurance policy that insures the life of the borrower or an insurance policy that covers loss, damage, or destruction of the real estate that secures the loan.

(3) Division (G) of this section is not a limitation on discount points or other charges for purposes of section 501(b)(4) of the “Depository Institutions Deregulation and Monetary Control Act of 1980,” 94 Stat. 161, 12 U.S.C.A. 1735f-7 note.

(H)(1) In addition to the interest and charges provided for by this section, no further or other amount, whether in the form of broker fees, placement fees, or any other fees whatsoever, shall be charged or received by the registrant, except costs and disbursements in connection with any suit to collect a loan or any lawful activity to realize on a security interest or mortgage after default, including reasonable attorney fees incurred by the registrant as a result of the suit or activity and to which the registrant becomes entitled by law, and except the following additional charges which may be included in the principal amount of the loan or collected at any time after the loan is made:

(a) The amounts of fees authorized by law to record, file, or release security interests and mortgages on a loan;

(b) With respect to a loan secured by an interest in real estate, the following closing costs, if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section:

(i) Fees or premiums for title examination, abstract of title, title insurance, surveys, title endorsements, title binders, title commitments, home inspections, or pest inspections; settlement or closing costs; courier fees; and any federally mandated flood plain certification fee;

(ii) If not paid to the registrant, an employee of the registrant, or a person related to the registrant, fees for preparation of a mortgage, settlement statement, or other documents, fees for notarizing mortgages and other documents, appraisal fees, and fees for any federally mandated inspection of home improvement work financed by a second mortgage loan;

(c) Fees for credit investigations not exceeding ten dollars.

(2) Division (H)(1) of this section does not limit the rights of registrants to engage in other transactions with borrowers, provided the transactions are not a condition of the loan.

(I) If the loan contract or security instrument contains covenants by the borrower to perform certain duties pertaining to insuring or preserving security and the registrant pursuant to the loan contract or security instrument pays for performance of the duties on behalf of the borrower, the registrant may add the amounts paid to the unpaid principal balance of the loan or collect them separately. A charge for interest may be made for sums advanced not exceeding the rate of interest permitted by division (A) of this section. Within a reasonable time after advancing a sum, the registrant shall notify the borrower in writing of the amount advanced, any interest charged with respect to the amount advanced, any revised payment schedule, and shall include a brief description of the reason for the advance.

(J)(1) In addition to points authorized under division (G) of this section, a registrant may charge and receive the following:

(a) With respect to secured loans: if the principal amount of the loan is less than five hundred dollars, loan origination charges not exceeding fifteen dollars; if the principal amount of the loan is at least five hundred dollars but less than one thousand dollars, loan origination charges not exceeding thirty dollars; if the principal amount of the loan is at least one thousand dollars but less than two thousand dollars, loan origination charges not exceeding one hundred dollars; if the principal amount of the loan is at least two thousand dollars but less than five thousand dollars, loan origination charges not exceeding two hundred dollars; and if the principal amount of the loan is at least five thousand dollars, loan origination charges not exceeding the greater of two hundred fifty dollars or one per cent of the principal amount of the loan.

(b) With respect to unsecured loans: if the principal amount of the loan is less than five hundred dollars, loan origination charges not exceeding fifteen dollars; if the principal amount of the loan is at least five hundred dollars but less than one thousand dollars, loan origination charges not exceeding thirty dollars; if the principal amount of the loan is at least one thousand dollars but less than five thousand dollars, loan origination charges not exceeding one hundred dollars; and if the principal amount of the loan is at least five thousand dollars, loan origination charges not exceeding the greater of two hundred fifty dollars or one per cent of the principal amount of the loan.

(2) If a refinancing occurs within ninety days after the date of the refinanced loan, a registrant may not impose loan origination charges on the portion of the principal amount that is applied to the unpaid principal amount of the refinanced loan.

(3) Loan origination charges may be paid by the borrower at the time of the loan or may be included in the principal amount of the loan.

(K) A registrant may charge and receive check collection charges not greater than twenty dollars plus any amount passed on from other financial institutions for each check, negotiable order of withdrawal, share draft, or other negotiable instrument returned or dishonored for any reason.

(L) If the loan contract so provides, a registrant may collect a default charge on any installment not paid in full within ten days after its due date. For this purpose, all installments are considered paid in the order in which they become due. Any amounts applied to an outstanding loan balance as a result of voluntary release of a security interest, sale of security on the loan, or cancellation of insurance shall be considered payments on the loan, unless the parties otherwise agree in writing at the time the amounts are applied. The amount of the default charge shall not exceed the greater of five per cent of the scheduled installment or fifteen dollars.

Effective Date: 08-10-2000; 01-01-2007

As an alternative to the interest permitted in division (A) of section 1321.57 and in division (B) of section 1321.58 of the Revised Code, a registrant may contract for and receive interest at any rate or rates agreed upon or consented to by the parties to the loan contract or open-end loan agreement, but not exceeding an annual percentage rate of twenty-five per cent.

Effective Date: 02-11-1982

(A) A registrant may make open-end loans pursuant to an agreement between the registrant and the borrower whereby:

(1) The registrant may permit the borrower to obtain advances of money from the registrant from time to time or the registrant may advance money on behalf of the borrower from time to time as directed by the borrower.

(2) The amount of each advance and permitted interest, charges, and costs are debited to the borrower’s account and payments and other credits are credited to the same account.

(3) The interest and charges are computed on the unpaid balance or balances of the account from time to time.

(4) The borrower has the privilege of paying the account in full at any time or, if the account is not in default, in installments of determinable amounts as provided in the agreement.

For open-end loans, “billing cycle” means the time interval between periodic billing dates. A billing cycle shall be considered monthly if the closing date of the cycle is the same date each month or does not vary by more than four days from such date.

(B) Notwithstanding any other provisions of the Revised Code, a registrant may contract for and receive interest for open-end loans at a rate or rates not exceeding twenty-one per cent per year and may compute interest in each billing cycle by either of the following methods:

(1) By multiplying the daily rate by the daily unpaid balance of the account, in which case the daily rate is determined by dividing the annual rate by three hundred sixty-five;

(2) By multiplying the monthly rate by the average daily unpaid balance of the account in the billing cycle, in which case the average daily unpaid balance is the sum of all of the daily unpaid balances each day during the cycle divided by the number of days in the cycle. The monthly rate is determined by dividing the annual rate by twelve.

The billing cycle shall be monthly and the unpaid balance on any day shall be determined by adding to any balance unpaid as of the beginning of that day all advances and permitted interest, charges, and costs and deducting all payments and other credits made or received that day.

(C) In addition to the interest permitted in division (B) of this section, a registrant may charge and receive or add to the unpaid balance any or all of the following:

(1) All charges and costs authorized by divisions (E), (F), (G), (H), (I), and (K) of section 1321.57 of the Revised Code;

(2) An annual credit line charge, for the privilege of maintaining a line of credit, as follows:

(a) For the first year:

(i) If the original credit line is less than five thousand dollars, an amount not exceeding one hundred fifty dollars;

(ii) If the original credit line is at least five thousand dollars, an amount not exceeding the greater of one per cent of the original credit line or two hundred fifty dollars.

(b) For subsequent years an amount not exceeding the greater of one-half per cent of the credit line on the anniversary date or fifty dollars.

(3) A default charge on any required minimum payment not paid in full within ten days after its due date. For this purpose, all required minimum payments are considered paid in the order in which they become due. The amount of the default charge shall not exceed the greater of five per cent of the required minimum payment or fifteen dollars.

(D) The borrower at any time may pay all or any part of the unpaid balance on the account or, if the account is not in default, the borrower may pay the unpaid balance in installments subject to minimum payment requirements as determined by the registrant and set forth in the open-end loan agreement.

(E) If credit life insurance or credit accident and health insurance is obtained by the registrant and if the insured dies or becomes disabled when there is an outstanding open-end loan indebtedness, the insurance shall be sufficient to pay the unpaid balance on the loan due on the date of the borrower’s death in the case of credit life insurance or all minimum payments that become due on the loan during the covered period of disability in the case of credit accident and health insurance. The additional charge for credit life insurance, credit accident and health insurance, or unemployment insurance shall be calculated each billing cycle by applying the current monthly premium rate for the insurance, filed by the insurer with the superintendent of insurance and not disapproved by the superintendent, to the unpaid balances in the borrower’s account, using one of the methods specified in division (B) of this section for the calculation of interest. No credit life insurance, credit accident and health insurance, or unemployment insurance written in connection with an open-end loan shall be canceled by the registrant because of delinquency of the borrower in making the required minimum payments on the loan unless one or more such payments is past due for a period of thirty days or more. The registrant shall advance to the insurer the amounts required to keep the insurance in force during such period, which amounts may be debited to the borrower’s account.

(F) Whenever there is no unpaid balance in an open-end loan account, the account may be terminated by written notice, by the borrower or the registrant, to the other party. If a registrant has taken a mortgage on real property to secure the open-end loan, the registrant shall deliver, within thirty days following termination of the account, a release of the mortgage to the borrower. If a registrant has taken a security interest in personal property to secure the open-end loan, the registrant shall release the security interest and terminate any financing statement in accordance with section 1309.513 of the Revised Code.

Effective Date: 07-01-2001

(A) No registrant under sections 1321.51 to 1321.60 of the Revised Code shall permit any borrower to be indebted for a loan made under sections 1321.51 to 1321.60 of the Revised Code at any time while the borrower is also indebted to an affiliate or agent of the registrant for a loan made under sections 1321.01 to 1321.19 of the Revised Code for the purpose or with the result of obtaining greater charges than otherwise would be permitted by sections 1321.51 to 1321.60 of the Revised Code.

(B) No registrant shall induce or permit any person to become obligated to the registrant under sections 1321.51 to 1321.60 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 1321.51 to 1321.60 of the Revised Code.

(C) No registrant shall refuse to provide information regarding the amount required to pay in full a loan under sections 1321.51 to 1321.60 of the Revised Code when requested by the borrower or by another person designated in writing by the borrower.

(D) On any loan or application for a loan under sections 1321.51 to 1321.60 of the Revised Code secured by a mortgage on a borrower’s real estate which is other than a first lien on the real estate, no person shall pay or receive, directly or indirectly, fees or any other type of compensation for services of a broker that, in the aggregate, exceed the lesser of one thousand dollars or one per cent of the principal amount of the loan.

Effective Date: 06-13-1996

Advertising for loans subject to sections 1321.51 to 1321.60 of the Revised Code shall not be false, misleading, or deceptive.

Effective Date: 06-13-1996

As used in sections 1321.71 to 1321.83 of the Revised Code:

(A) “Annual percentage rate” means the ratio of the finance charges, as authorized by sections 1321.79 and 1321.791 of the Revised Code, on a loan to the unpaid principal balance on the loan for any period of time, expressed on an annual basis.

(B) “Insurance premium finance company” or “premium finance company” means a person engaged in the business of entering into or otherwise acquiring premium finance agreements.

(C) “Person” means any individual, partnership, association, trust, corporation, or other legal entity.

(D) “Premium finance agreement” means an agreement by which an insured or prospective insured promises to pay a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or broker in payment of premiums on an insurance contract together with a finance charge as authorized and limited by sections 1321.71 to 1321.83 of the Revised Code.

(E) “License” means a license issued by the division of financial institutions under sections 1321.71 to 1321.83 of the Revised Code.

(F) “Licensee” means a premium finance company holding a license.

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

Effective Date: 09-26-1996

Sections 1321.71 to 1321.83 of the Revised Code do not apply with respect to any of the following:

(A) Life, property, or casualty insurance companies authorized to do business in this state as to policies issued by those companies;

(B) The inclusion of a charge for insurance in connection with any installment transaction pursuant to Chapter 1317. of the Revised Code;

(C) The financing of insurance premiums at a rate of interest not exceeding the maximum rate permitted by section 1343.01 of the Revised Code;

(D) Persons lawfully doing business under the authority of any law of this state, another state, or the United States relating to banks, savings banks, trust companies, savings and loan associations, lenders authorized to make loans pursuant to sections 1321.01 to 1321.19 of the Revised Code, lenders authorized to make loans pursuant to sections 1321.51 to 1321.60 of the Revised Code, or any credit union;

(E) Any person who purchases or otherwise acquires a premium finance agreement from a licensee if the licensee remains responsible for collecting payments due under the agreement, and for otherwise servicing the agreement, in compliance with sections 1321.71 to 1321.83 of the Revised Code.

Effective Date: 06-13-1996

(A) No person shall engage in the business of entering into or otherwise acquiring premium finance agreements in the state without first having obtained a license as a premium finance company from the division of financial institutions.

(B) The annual license fee shall be determined by the superintendent of financial institutions pursuant to section 1321.20 of the Revised Code. Licenses may be renewed from year to year as of the first day of July of each year upon payment of the fee.

(C) The person to whom the license or the renewal thereof is issued shall file sworn answers, subject to the penalties of perjury, to such interrogatories as the division requires. The division may, at any time, require the applicant to fully disclose the identity of all stockholders, partners, officers, and employees, and it may, at its discretion, refuse to issue or renew a license in the name of any firm, partnership, or corporation if it is not satisfied that any officer, employee, stockholder, or partner thereof, who may materially influence the applicant’s conduct, meets the standards provided by sections 1321.71 to 1321.83 of the Revised Code.

(D) Each applicant shall execute and file with the division proof that the applicant has a net worth of at least fifty thousand dollars, as determined in accordance with generally accepted accounting principles. The proof is subject to the approval of the division.

Effective Date: 09-26-1996

(A) Application for a license as a premium finance company shall be in writing, under oath, in the form prescribed by the division of financial institutions. An applicant also shall provide the form of premium finance agreement it intends to use in doing business under sections 1321.71 to 1321.83 of the Revised Code. Upon the filing of an application and the payment of the license fee, and upon deposit of an investigation fee not to exceed three hundred dollars if the investigation can be conducted in this state or the estimated costs of the investigation if it must be conducted outside this state, the division shall make an investigation of each applicant and shall issue a license if the applicant is qualified in accordance with sections 1321.71 to 1321.83 of the Revised Code. An itemized statement of any investigation expenses incurred which the applicant is required to pay shall be furnished the applicant by the division, and only the actual cost of such investigation shall be paid by the applicant, but at no time shall the investigation fee be less than two hundred dollars. If the division does not so find, it shall, within a reasonable period of time after it has received the application, at the request of the applicant, give the applicant opportunity for a hearing conducted in accordance with Chapter 119. of the Revised Code.

(B) The division shall issue or renew a license when it is satisfied that the applicant:

(1) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for;

(2) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied for;

(3) If a corporation, is a corporation incorporated under the laws of this state or is a foreign corporation authorized to transact business in this state;

(4) Has a net worth of at least fifty thousand dollars, as determined in accordance with generally accepted accounting principles;

(5) With respect to the issuance of a license, has filed with the division a form of premium finance agreement that complies with sections 1321.71 to 1321.83 of the Revised Code.

(C) Not more than one place of business shall be maintained under the same license, but the division may issue additional licenses to the same licensee upon compliance with sections 1321.71 to 1321.83 of the Revised Code.

No change in the place of business of a licensee to a location outside the original municipal corporation shall be permitted under the same license without the approval of a new application, the payment of the license fee as determined by the superintendent of financial institutions pursuant to section 1321.20 of the Revised Code, and, if required by the superintendent, the payment of an investigation fee of two hundred dollars. If a licensee wishes to change its place of business within the same municipal corporation, it shall give written notice of the change in advance to the division, which shall provide a license for the new address without cost. If a licensee changes its name, it shall give, prior to entering into or otherwise acquiring premium finance agreements under the new name, written notice of the change to the division, which shall provide a license in the new name, without cost.

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

Effective Date: 09-26-1996

(A) The division of financial institutions may revoke, suspend, or refuse to renew a license of any premium finance company if, after investigation, it appears to the division that:

(1) Any license issued to the company was obtained by fraud;

(2) There was any misrepresentation in the application for the license;

(3) The holder of the license has otherwise shown himself, herself, or itself untrustworthy or incompetent to act as a premium finance company;

(4) The company has violated sections 1321.71 to 1321.83 of the Revised Code.

(B) Before the division revokes, suspends, or refuses to renew the license of any premium finance company, it shall give to the applicant notice and an opportunity for a hearing conducted in accordance with Chapter 119. of the Revised Code. In lieu of revoking or suspending the license for any of the causes enumerated in this section, after notice and an opportunity for a hearing conducted in accordance with Chapter 119. of the Revised Code, the division may subject the company to a penalty of not more than five hundred dollars for each offense when, in its judgment, it finds that the public interest would not be harmed by the continued operations of the company. The amount of any such penalty shall be paid by the company through the office of the division to the treasurer of state to the credit of the consumer finance fund.

(C) The superintendent of financial institutions may investigate alleged violations of sections 1321.71 to 1321.83 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 such violation and, upon a showing by the superintendent that a person has committed, or is about to commit, such a violation, the court shall grant an injunction, restraining order, or other appropriate relief.

(D) 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, give testimony, produce any book, record, or other document as required by such a subpoena, permit photocopying of any book, record, or other document subpoenaed, or obey any other order of a subpoena, 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.

(E) 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 1321.71 to 1321.83 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. Such an order shall be enforceable in the court of common pleas.

(F) No licensee or other person is in violation of sections 1321.71 to 1321.83 of the Revised Code for any act taken or omission made in reliance on a written notice, interpretation, or examination report from the division.

Effective Date: 09-26-1996

(A) Each licensee shall keep records of its insurance premium finance transactions conducted under sections 1321.71 to 1321.83 of the Revised Code. Such records shall be maintained separately from any records pertaining to transactions that are not subject to those sections. Each licensee shall preserve its records pertaining to insurance premium finance transactions conducted under sections 1321.71 to 1321.83 of the Revised Code for at least two years after the final entry on such records. Preservation of records by means of accounting systems maintained in whole or in part by mechanical or electronic data processing methods constitutes compliance with this division.

The division of financial institutions for purposes of determining whether a licensee is complying with sections 1321.71 to 1321.83 of the Revised Code, may make or cause to be made an examination of records pertaining to insurance premium finance transactions conducted under those sections.

(B) If a licensee’s books, records, data, and other documents are located outside this state, the licensee shall, upon the request of the superintendent of financial institutions, deposit with the division an amount equal to the estimated costs, as determined by the superintendent, of an examination of the licensee conducted outside this state. After the actual costs of the examination have been determined and itemized by t