NEW BILL INTRODUCED IN THE OHIO HOUSE RESTRICTING PAYDAY LENDING
Representative Matt Lundy (D-Elyria) introduced a new bill aimed at further restricting payday lending, Ohio H. B. No 486. Rep. Lundy introduced Ohio H.B. 209 also aimed at restricting payday lending last year. Ohio H.B. 209 has not moved out of committee.
The new bill, like Ohio H.B. 209, eliminates check cashing fees on checks and money orders disbursed to fund loans by (i) prohibiting check cashing licensees from charging a fee for cashing a proceeds check or money order disbursed to fund a loan made by the check cashing licensee or an affiliate of the check cashing licensee and (ii) prohibiting Small Loan Act or Mortgage Loan Act lenders from (a) charging or receiving a fee for cashing a proceeds check or money order disbursed to fund a loan, (b) requiring or directing a borrower to cash a proceeds check or money order disbursed to fund a loan at the place of the business of the lender, an affiliate of the lender or any third party or (c) seeking or obtaining directly or indirectly compensation from any affiliate or third party that provides check cashing services to cash a proceeds check or money order disbursed to fund a loan made by the lender.
The new bill adds to the “no other fee” provisions in the Small Loan Act and Mortgage Loan Act the language “including any fee assessed by a credit services organization.”
For loans made under the Small Loan Act or Mortgage Loan Act, the new bill prohibits charging a person a loan origination charge more than once per 90 day period on any one or more loans with a principal amount of $1,000 or less. On loans made under the Mortgage Loan Act, the new bill prohibits the charging of a credit investigation fee more than once per 90 day period on any one or more loans with a principal amount of $1,000 or less.
The bill increases the penalty for willful violations of certain provisions of the Small Loan Act and Mortgage Loan Act.
The bill was introduced Monday, April 12, 2010, and will have its first hearing Tuesday, April 13, 2010, at 10:30 a.m.
A copy of the bill is attached. Please call us with any questions regarding the bill.
- Darrell Dreher and Elizabeth Anstaett