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This website publishes administrative rules on their effective dates, as designated by the adopting state agencies, colleges, and universities.

Rule 109:4-3-28 | Unconscionable terms in home mortgage loans.


(A) Pursuant to division (C)(1) of section 1345.031 of the Revised Code, any unconscionable arbitration clause, unconscionable clause requiring the consumer to pay the suppliers attorney fees, or unconscionable liquidated damages clause included in a mortgage loan contract is unenforceable.

(B) The basis for determining that an arbitration clause is unconscionable shall be on grounds that exist at law or in equity for the revocation of any contract.

(C) Mortgage loan contract clauses that are unconscionable and unenforceable pursuant to division (C) of section 1345.031 of the Revised Code, include, but shall not be limited to:

(1) An arbitration clause that is not clearly and conspicuously disclosed to the consumer;

(2) An arbitration clause that limits, restricts or precludes the applicability of any rights or remedies afforded the consumer under Chapter 1345. of the Revised Code;

(3) An arbitration clause that provides for a limitation on actions of a shorter duration than provided for by statute under state or federal law;

(4) An arbitration clause that fails to provide the consumer with fair and reasonable access to discover and present information, documents and other evidence necessary to support the consumers claim or defense;

(5) An arbitration clause that requires that the arbitration decision remain confidential;

(6) An arbitration clause that fails to provide an appeal process for a decision on the basis that the decision is arbitrary, capricious or contrary to law;

(7) A liquidated damages clause is unconscionable unless fixing the amount of actual damages is impracticable or extremely difficult, the amount selected represents a reasonable endeavor by the supplier and consumer to estimate fair compensation for the loss sustained by the breach described, and the amount is not a penalty. This provision does not prohibit a supplier from imposing and collecting late payment fees and check collection charges as permitted by law or from accelerating loan repayment in conformity with division (B)(3) of section 1345.031 of the Revised Code;

(8) A mandatory attorney fee clause that purports to bind the consumer to the payment of the suppliers attorney fees or legal costs in connection with the suppliers claim that the consumer has breached a term of the residential mortgage loan. This prohibition does not preclude the supplier from requesting or receiving an award of attorney fees or legal costs as a prevailing party in a civil action as provided by law and ordered by a court.

(D) In determining whether or not an arbitration clause in a residential mortgage loan is unconscionable, great weight and due consideration shall be given to the "Statement of Principles" of the National Consumer Disputes Advisory Committee in the "Consumer Due Process Protocol" promulgated by the American arbitration association.

Last updated April 28, 2022 at 12:21 PM

Supplemental Information

Authorized By: 1345.05
Amplifies: Chapter 1345.031(C)
Five Year Review Date: 4/28/2027