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As Introduced
136th
General Assembly
Regular
Session
S. B. No. 269
2025-2026
Senator Lang
To
amend sections 1321.02, 1321.07, and 1321.141 of the Revised Code
for
the purpose of revising the Small Loan Act.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 1321.02, 1321.07, and 1321.141 of the Revised Code be
amended to read as follows:
Sec.
1321.02.
(A)
No
person shall engage in the business of lending money, credit, or
choses in action in amounts of five thousand dollars or less,
or
and
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.
(B)
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 1321.62 to 1321.702 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 1321.35 to 1321.48 of the Revised Code; to registrants
conducting business as mortgage lenders under Chapter 1322. 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.
(C)
Sections 1321.01 to 1321.19 of the Revised Code do not apply to loans
made or credit extended by entities exempt under division (B) of this
section or to a person that solicits, arranges, finds, or brokers
loans made or credit extended by such exempt entities.
(D)
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
(E)(1)
Division (A)
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
without a license
for any
such
loan
or use of money or for any
such
loan,
use
,
or sale of credit
,
in the amount of five thousand dollars or less,
or who for a fee or any manner of compensation arranges or offers to
find or arrange for
another
a
licensee or a
person
that is required to be licensed under this section
to make any
such
loan,
use, or sale of credit
described in division (A) of this section
.
(2)
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.
(F)
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.
Sec.
1321.07.
(A)
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)
(1)
Licensees;
(B)
(2)
Other persons engaged in the business described in
division (A) of
section
1321.02 of the Revised Code or participating in such business as
principal, agent, broker, or otherwise;
(C)
(3)
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 self out as willing to make, find, or
arrange for
another
a
licensee or for a
person
that
is required to be licensed under section 1321.02 of the Revised Code
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
division
(A)
of
section 1321.02 of the Revised Code.
(B)(1)
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.
(2)
The
fees of the sheriff shall be the same as that allowed in the court of
common pleas in criminal cases. Witnesses shall be paid the fees and
mileage provided for under section 119.094 of the Revised Code. 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.
(C)
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.
Sec.
1321.141.
(A)
A licensee shall not make a loan under sections 1321.01 to 1321.19 of
the Revised Code that meets either of the following conditions:
(1)
The amount of the loan is one thousand dollars or less.
(2)
The loan has a duration of one year or less.
(B)
A licensee shall not engage in any act or practice to evade the
requirement of division (A) of this section, including by assisting a
borrower to obtain a loan
from a licensee or a person that is required to be licensed under
section 1321.02 of the Revised Code
on terms that would be prohibited by
that
division
division (A) of this section
.
(C)
No licensee shall fail to comply with this section.
Section
2.
That
existing sections 1321.02, 1321.07, and 1321.141 of the Revised Code
are hereby repealed.
Section
3.
Section
1321.02 of the Revised Code is presented in this act as a composite
of the section as amended by both H.B. 199 and S.B. 24 of the 132nd
General Assembly. The General Assembly, applying the principle stated
in division (B) of section 1.52 of the Revised Code that amendments
are to be harmonized if reasonably capable of simultaneous operation,
finds that the composite is the resulting version of the section in
effect prior to the effective date of the section as presented in
this act.