Bill Text: OH HB222 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To require the licensure of, and otherwise regulate, providers of debt settlement services.

Sponsorship: Moderate Partisan Bill (Republican 7-1)

Status: (Introduced - Dead) 2011-05-05 - To Financial Institutions, Housing & Urban Development [HB222 Detail]

Download: Ohio-2011-HB222-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 222

Representative Mecklenborg 

Cosponsors: Representatives McKenney, Grossman, Stebelton, Blessing, Letson, Balderson, McClain 

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A BILL

To amend section 4710.01 and to enact sections

1

4710.20 to 4710.41 of the Revised Code to require

2

the licensure of, and otherwise regulate,

3

providers of debt settlement services.

4

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 4710.01 be amended and sections	5
4710.20, 4710.21, 4710.22, 4710.23, 4710.24, 4710.25, 4710.26,	6
4710.27, 4710.28, 4710.29, 4710.30, 4710.31, 4710.32, 4710.33,	7
4710.34, 4710.35, 4710.36, 4710.37, 4710.38, 4710.39, 4710.40, and	8
4710.41 of the Revised Code be enacted to read as follows:	9

Sec. 4710.01.  As used in this chapter:

10

(A) "Person" includes individuals, partnerships,	11
associations, corporations, trusts, and other legal entities.	12

(B)(1) "Debt adjusting" means doing business in debt	13
adjusting, budget counseling, debt management, or debt pooling	14
service, or holding oneself out, by words of similar import, as	15
providing services to debtors in the management of their debts, to	16
do either of the following:	17

(1)(a) To effect the adjustment, compromise, or discharge of	18
any account, note, or other indebtedness of the debtor;	19

(2)(b) To receive from the debtor and disburse to the	20
debtor's creditors any money or other thing of value.	21

(2) "Debt adjusting" does not include debt settlement	22
services as defined in section 4710.20 of the Revised Code.	23

(C) "Resides" means to live in a particular place on a	24
temporary or a permanent basis.	25

Sec. 4710.20.  As used in sections 4710.20 to 4710.41 of the	26
Revised Code:	27

(A) "Affiliate" means a person that controls, is controlled	28
by, or is under common control with the licensee.	29

(B) "Agreement" means an agreement between a licensee and an	30
individual for the provision of debt settlement services.	31

(C) "Business address" means the physical location of a	32
business, including the name and number of a street.	33

(D) "Concessions" means assent to repayment of a debt on	34
terms more favorable to an individual than the terms of the	35
contract between the individual and a creditor.	36

(E) "Day" means a calendar day.

37

(F) "Debt settlement services" means the services as an	38
intermediary between an individual and one or more unsecured	39
creditors of the individual for the purpose of obtaining	40
concessions under which a creditor accepts less than the balance	41
owed as payment in full of the debt, and without receiving money	42
from the individual for distribution of that money to the	43
individual's creditor. The term does not include any of the	44
following:	45

(1) Legal services provided in an attorney-client	46
relationship by an attorney licensed or otherwise authorized to	47
practice law in this state;	48

(2) Accounting services provided in an accountant–client	49
relationship by a certified public accountant licensed to provide	50
accounting services in this state;	51

(3) Financial planning services provided in a financial	52
planner-client relationship by a member of a financial planning	53
profession who holds current certification by the certified	54
financial planner board of standards, inc.	55

(G) "Financial institution" means any national bank, any bank	56
doing business under authority granted by the superintendent of	57
financial institutions or the regulatory authority of another	58
state of the United States, any federal savings association, any	59
savings and loan association or savings bank doing business under	60
authority granted by the superintendent or the regulatory	61
authority of another state of the United States, or any credit	62
union regulated by a state or federal regulatory authority.	63

(H) "Good faith" means honesty in fact and the observance of	64
reasonable standards of fair dealing.	65

(I) "Licensee" means a person that has been issued a license	66
to provide debt settlement services under sections 4710.20 to	67
4710.41 of the Revised Code.	68

(J) "Person" means an individual, corporation, business	69
trust, estate, trust, partnership, limited liability company,	70
association, joint venture, or any other legal or commercial	71
entity. The term does not include a public corporation,	72
government, or governmental subdivision, agency, or	73
instrumentality.	74

(K) "Program" means a program or strategy in which a provider	75
furnishes debt settlement services in contemplation that creditors	76
will settle debts for less than the full amount of debt owed by an	77
individual.	78

(L) "Record" means information that is inscribed on a	79
tangible medium or that is stored in an electronic or other medium	80
and is retrievable in a perceivable form.	81

(M) "Sign" means, with present intent to authenticate or	82
adopt a record, to do either of the following:	83

(1) Execute or adopt a tangible symbol;

84

(2) Attach to or logically associate with the record an	85
electronic sound, symbol, or process.	86

(N) "State" means, except when the context indicates the term	87
is referring to the state of Ohio, a state of the United States,	88
the District of Columbia, Puerto Rico, the United States Virgin	89
Islands, or any territory or insular possession subject to the	90
jurisdiction of the United States.	91

(O) "Settlement" means an arrangement under which a creditor	92
accepts concessions on an individual's account through a debt	93
settlement services program and money is paid to the creditor.	94

Sec. 4710.21.  (A) No person shall provide debt settlement	95
services for compensation without first having obtained a license	96
from the director of commerce under sections 4710.20 to 4710.41 of	97
the Revised Code.	98

(B) Sections 4710.20 to 4710.41 of the Revised Code do not	99
apply to the following persons or their employees when the person	100
or the employee is engaged in the regular course of the person's	101
business or profession:	102

(1) A judicial officer, a person acting under an order of a	103
court or an administrative agency, or an assignee for the benefit	104
of creditors;	105

(2) A financial institution, bank holding company, or the	106
subsidiary, agent, or affiliate of either;	107

(3) A title insurer, escrow company, or other person that	108
provides bill-paying services if the provision of debt settlement	109
services is incidental to the bill-paying services;	110

(4) An agent or employee of a licensee.

111

Sec. 4710.22.  (A) Application for an original or renewal	112
license to provide debt settlement services shall be in writing,	113
signed under oath, and in the form prescribed by the director of	114
commerce. The application form shall contain a statement informing	115
the applicant that a false or dishonest answer to a question may	116
be grounds for denial or subsequent suspension or revocation of	117
the applicant's license. The application for an original or	118
renewal license shall be accompanied by a license fee as	119
determined by the director by rule, and shall contain all of the	120
following:	121

(1) The applicant's name, principal business address and	122
telephone number, and all of the applicant's other business	123
addresses in this state, electronic mail addresses, and internet	124
web site addresses;	125

(2) All names under which the applicant conducts business;

126

(3) The address of each location in this state at which the	127
applicant will provide debt settlement services or a statement	128
that the applicant does not maintain a physical location in the	129
state;	130

(4) The name and home address of each officer and director of	131
the applicant and each person that owns at least ten per cent of	132
the applicant's business;	133

(5) A statement describing, to the extent it is known or	134
should be known by the applicant, any material civil or criminal	135
judgment relating to financial fraud or misuse, any material	136
violation of state or federal securities laws, and any material	137
administrative or enforcement action relating to financial fraud	138
or misuse by a governmental agency in any jurisdiction against the	139
applicant, any of its officers, directors, owners, or agents;	140

(6) A copy of each form of agreement that the applicant will	141
use with individuals who reside in this state;	142

(7) The schedule of fees and charges that the applicant will	143
use with individuals who reside in this state;	144

(8) A copy or description of any ownership interest of at	145
least ten per cent by a director, owner, or employee of the	146
applicant in the applicant's debt settlement services business;	147

(9) A description of any ownership interest of at least ten	148
per cent by a director, owner, or employee of the applicant in:	149

(a) Any affiliate of the applicant; or

150

(b) Any entity that provides products or services to the	151
applicant or any individual relating to the applicant's debt	152
settlement services business.	153

(10) The identity of each director who is an affiliate of the	154
applicant;	155

(11) Evidence that the applicant has a resident agent in the	156
state recorded with the secretary of state;	157

(12) Any other information that the director reasonably	158
requires to perform the director's duties, which the director may	159
require by rule.	160

(B) The director may, upon receipt and review of an	161
application, request additional information that the director	162
reasonably requires to perform the director's duties.	163

(C) The term of any license issued pursuant to sections	164
4710.20 to 4710.41 of the Revised Code shall not be more than one	165
year. Licensees who wish to renew their license must submit an	166
application for renewal at least thirty days, but not more than	167
sixty days, before the license expiration date.	168

(D) If a person who provides debt settlement services holds a	169
license or certificate of registration in another state	170
authorizing it to provide debt settlement services, the person may	171
submit a copy of that license or certificate and the application	172
for it instead of the application described in division (A) of	173
this section if all of the following apply:	174

(1) The application in the other state contains information	175
substantially similar to or more comprehensive than that required	176
by division (A) of this section.	177

(2) The applicant provides the information required by	178
divisions (A)(1), (3), (6), and (7) of this section.	179

(3) The applicant certifies that the information contained in	180
the application is current, and to the extent it is not current,	181
supplements the application to make the information current.	182

Sec. 4710.23.  (A) The director of commerce shall issue an	183
original or renewal license to the applicant unless the director	184
finds any of the following:	185

(1) The applicant has not complied with the requirements of	186
section 4710.22 of the Revised Code.	187

(2) The application contains information that is materially	188
erroneous or incomplete.	189

(3) An officer, director, or owner of the applicant has been	190
convicted of a crime, or suffered a civil judgment, involving	191
dishonesty or the violation of state or federal securities laws.	192

(4) The application is not accompanied by the fee established	193
by the director.	194

(5) There is reasonable evidence to support the director's	195
opinion that the applicant will not provide debt settlement	196
services in a lawful, honest, and fair manner.	197

(B) The director shall approve or deny an initial license	198
within sixty days after an application is filed. If a request for	199
additional information is made pursuant to division (B) of section	200
4710.22 of the Revised Code, the director may extend the sixty-day	201
period for not more than forty-five days.	202

(C) If a licensee has filed a timely and complete application	203
for license renewal, the license remains in effect until the	204
director notifies the applicant of a denial.	205

(D) Within seven days after issuing an order denying an	206
application, the director shall notify the applicant of the	207
denial, the grounds for the denial, and the applicant's	208
opportunity for a hearing pursuant to Chapter 119. of the Revised	209
Code. If the application is denied, the director shall return the	210
annual license fee.	211

(E) If the director has denied an application for a renewal	212
license, the licensee, within thirty days after receiving notice	213
of the denial, may appeal and request a hearing in accordance with	214
Chapter 119. of the Revised Code. While an appeal is pending, the	215
licensee may continue to provide debt settlement services to	216
individuals with whom the licensee has agreements. If the	217
licensee's appeal fails, the licensee may, with the approval of	218
the director, continue to provide debt settlement services to	219
individuals with whom it has agreements until the licensee	220
transfers the agreements to another licensee.	221

Sec. 4710.24.  No person licensed under sections 4710.20 to	222
4710.41 of the Revised Code shall conduct business in this state	223
unless the licensee has obtained and maintains in effect at all	224
times a corporate surety bond issued by a bonding company or	225
insurance company authorized to do business in this state. The	226
bond shall be in favor of the director of commerce and in a penal	227
sum the director determines is warranted by the financial	228
condition and business experience of the licensee, the history of	229
the licensee in providing debt settlement services, the risk to	230
individuals, and any other factor the director considers	231
appropriate. The penal sum shall be at least ten thousand dollars	232
and not more than fifty thousand dollars.	233

The term of the bond shall coincide with the term of the	234
license. The licensee shall file a copy of the bond with the	235
director. The bond shall be for the exclusive benefit of any	236
individual injured by a violation of or failure to comply with any	237
provision of sections 4710.20 to 4710.41 of the Revised Code by a	238
licensee or an employee of a licensee.	239

Sec. 4710.25.  A licensee shall do all of the following:

240

(A) Act in good faith when engaging in the business of debt	241
settlement services;	242

(B) Maintain a toll-free communication system, staffed at a	243
level that reasonably permits an individual to speak to a customer	244
service representative, as appropriate, during ordinary business	245
hours;	246

(C) Provide all disclosures and documents required by	247
sections 4710.20 to 4710.41 of the Revised Code in English and in	248
any other language the licensee has or will use primarily to	249
communicate with the individual.	250

Sec. 4710.26.  (A) Before providing debt settlement services,	251
a licensee shall give the individual an itemized list of goods and	252
services and the charges for each. The information shall be	253
presented in a clear and conspicuous manner.	254

(B) A licensee shall not provide debt settlement services	255
unless the licensee has prepared a financial analysis with respect	256
to the income and debts of the individual seeking the services.	257

(C) Before an individual assents to an agreement to engage in	258
a program, a licensee shall do both of the following:	259

(1) Provide the individual with a copy of the financial	260
analysis required by division (B) of this section in a record that	261
identifies the licensee and that the individual may keep whether	262
or not the individual assents to the agreement;	263

(2) Inform the individual of the availability, at the	264
individual's option, of assistance by a toll-free communication	265
system or in person to discuss the financial analysis required by	266
division (B) of this section.	267

(D) Before an individual assents to an agreement to engage in	268
a program, the licensee shall inform the individual of all of the	269
following:	270

(1) Programs are not suitable for all individuals.

271

(2) Participation in a program may adversely affect the	272
individual's credit rating or credit scores.	273

(3) Nonpayment of debt may lead creditors to increase finance	274
and other charges or undertake collection activity, including	275
litigation.	276

(4) If a creditor settles for less than the full amount of	277
the debt, the program may result in the creation of taxable income	278
to the individual, even if the individual does not receive any	279
money.	280

(5) Specific results cannot be predicted or guaranteed and	281
the licensee cannot force negotiations or settlements with	282
creditors but will advocate solely on behalf of the individual.	283

(6) Programs require that individuals meet a certain savings	284
goal in order to maximize settlement results.	285

(7) The licensee does not provide accounting or legal advice	286
to individuals, unless the licensee is professionally licensed to	287
provide such advice.	288

(8) The licensee does not make payments to the individual's	289
creditors.	290

(9) The name and business address of the licensee.

291

Sec. 4710.27.  (A) As used in this section:

292

(1) "Federal act" means the "Electronic Signatures in Global	293
and National Commerce Act," 114 Stat. 464, 15 U.S.C. 7001 et seq.,	294
as amended.	295

(2) "Consumer" means an individual who seeks or obtains goods	296
or services that are used primarily for personal, family, or	297
household purposes.	298

(B) A licensee may satisfy the requirements of sections	299
4710.26, 4710.28, and 4710.33 of the Revised Code by utilizing the	300
internet or other electronic means if the licensee obtains a	301
consumer's consent in the manner provided for in the federal act.	302

(C) The disclosures and materials required by sections	303
4710.26, 4710.28, and 4710.33 of the Revised Code shall be	304
presented in a form that is capable of being accurately reproduced	305
for later reference.	306

(D) With respect to disclosure by means of an internet web	307
site, the disclosure of the information required by division (D)	308
of section 4710.26 of the Revised Code must appear on one or more	309
screens that contain no other information, and the individual must	310
indicate that the individual has seen the information before	311
proceeding to assent to the formation of a program.	312

(E) At the time of providing the materials and agreement	313
required by divisions (C) and (D) of section 4710.26 and sections	314
4710.28 and 4710.33 of the Revised Code, a licensee shall inform	315
the individual that upon electronic, telephonic, or written	316
request, it will send the individual a written copy of the	317
materials and will comply with a request as provided in division	318
(F) of this section.	319

(F) If a licensee is requested, before the expiration of	320
ninety days after a program is completed or terminated, to send a	321
written copy of the materials required by divisions (C) and (D) of	322
section 4710.26 and sections 4710.28 and 4710.33 of the Revised	323
Code, the licensee shall send them at no charge within three	324
business days after the request is made, but the licensee need not	325
comply with a request more than once per calendar month or if it	326
reasonably believes the request is made for purposes of	327
harassment. If a request is made more than ninety days after a	328
program is completed or terminated, the licensee shall send within	329
a reasonable time a written copy of the materials requested.	330

(G) A licensee that maintains an internet web site shall	331
disclose on the home page of its web site or on a page that is	332
clearly and conspicuously connected to the home page by a link	333
that clearly reveals its contents, all of the following:	334

(1) Its name and all names under which it does business;

335

(2) Its principal business address, telephone number, and	336
electronic mail address, if any.	337

(H) Subject to division (I) of this section, if a consumer	338
who has consented to electronic communication in the manner	339
provided by section 101 of the federal act withdraws consent as	340
provided in the federal act, a licensee may terminate its	341
agreement with the consumer.	342

(I) If a licensee wishes to terminate an agreement with a	343
consumer pursuant to division (H) of this section, it shall notify	344
the consumer that it will terminate the agreement unless the	345
consumer, within thirty days after receiving the notification,	346
consents to electronic communication in the manner provided in	347
section 101(c) of the federal act.	348

(J) This section modifies, limits, and supersedes the federal	349
act, but does not modify, limit, or supersede section 101(c) of	350
that act or authorize electronic delivery of any of the notices	351
described in section 103(b) of that act.	352

Sec. 4710.28.  (A) An agreement shall meet the following	353
requirements:	354

(1) Be in a record;

355

(2) Be dated and signed by the individual;

356

(3) Include the name of the individual and the address where	357
the individual resides;	358

(4) Include the name, business address, and telephone number	359
of the licensee;	360

(5) Be delivered to the individual immediately upon formation	361
of the agreement;	362

(6) Disclose all of the following:

363

(a) The services to be provided;

364

(b) The amount or method of determining the amount of all	365
fees, individually itemized, to be paid by the individual;	366

(c) How the licensee will comply with its obligations under	367
section 4710.33 of the Revised Code;	368

(d) That the individual may contact the director of commerce	369
with any questions or complaints regarding the licensee;	370

(e) The address, telephone number, and internet address or	371
web site of the director.	372

(B) For purposes of division (A)(5) of this section, delivery	373
of an electronic record occurs when it is made available in a	374
format in which the individual may retrieve, save, and print the	375
record, and the individual is notified that it is available.	376

(C) If the director supplies the licensee with any	377
information required under division (A)(6)(e) of this section, the	378
licensee may comply with that requirement only by disclosing the	379
information supplied by the director.	380

(D) An agreement shall provide that the individual has a	381
right to terminate the agreement at any time by giving the	382
licensee written or electronic notice, in which event all powers	383
of attorney granted by the individual to the licensee are revoked	384
and ineffective.	385

(E) An agreement may not do any of the following:

386

(1) Provide for application of the law of any jurisdiction	387
other than the United States and this state;	388

(2) Except as permitted by Section 2 of the "Federal	389
Arbitration Act," 61 Stat. 669, 9 U.S.C. 1, et seq., as amended,	390
contain a provision that modifies or limits otherwise available	391
forums or procedural rights, including the right to trial by jury,	392
that are generally available to the individual under law;	393

(3) Contain a provision that restricts the individual's	394
remedies under sections 4710.20 to 4710.41 of the Revised Code, or	395
other law;	396

(4) Contain a provision that does the following:

397

(a) Limits or releases the liability of any person for not	398
performing the agreement or for violating any provision of	399
sections 4710.20 to 4710.41 of the Revised Code;	400

(b) Indemnifies any person for liability arising under the	401
agreement or under sections 4710.20 to 4710.41 of the Revised	402
Code.	403

Sec. 4710.29.  (A) A licensee shall not impose, directly or	404
indirectly, a fee or other charge on an individual or receive	405
money from or on behalf of an individual for debt settlement	406
services, except as permitted by this section.	407

(B) A licensee shall not impose fees or other charges or	408
receive payment for debt settlement services unless both of the	409
following conditions are met:	410

(1) The licensee and the individual have signed an agreement	411
that complies with sections 4710.28 and 4710.32 of the Revised	412
Code.	413

(2) A settlement has been executed in the form required under	414
division (C) of section 4710.33 of the Revised Code and at least	415
one payment has been made by the individual pursuant to that	416
settlement.	417

(C) The total amount of fees or other charges for debt	418
settlement services shall be reasonable. A fee or other charge	419
shall:	420

(1) Bear the same proportional relationship to the total fees	421
or other charges for renegotiating, settling, reducing, or	422
altering the terms of the entire debt balance as the individual	423
debt amount bears to the entire debt balance at the time the	424
licensee and the individual signed the agreement; or	425

(2) Represent a percentage of the difference between the debt	426
owed the creditor and the amount the creditor has agreed to accept	427
as payment in full of the debt. If the fee or other charge for an	428
individual debt is determined in this manner, the same percentage	429
shall be used for all of the other individual debts.	430

(D) A licensee may impose a reasonable charge to the	431
individual, plus any amount passed on from a financial institution	432
for each check, negotiable order of withdrawal, share draft, or	433
other negotiable instrument returned or dishonored for any reason,	434
provided that the terms and conditions upon which such	435
insufficient funds charges will be charged to the individual are	436
set forth in the agreement.	437

(E) A licensee shall not solicit or accept a voluntary	438
contribution from an individual or on behalf of an individual.	439

Sec. 4710.30.  (A) If a licensee imposes a fee or other	440
charge or receives money or other payments not authorized by	441
section 4710.29 of the Revised Code, the individual may void the	442
agreement and recover as provided for in section 4710.39 of the	443
Revised Code.	444

(B) If a person providing debt settlement services is not	445
licensed as required by section 4710.21 of the Revised Code when	446
an individual assents to an agreement, the agreement is voidable	447
by the individual.	448

(C) If an individual voids an agreement under this section,	449
the licensee or person providing debt settlement services without	450
a license does not have a claim against the individual for breach	451
of contract or for restitution.	452

Sec. 4710.31.  If an individual who has entered into an	453
agreement fails for sixty days to set aside the savings required	454
by the agreement, a licensee may terminate the agreement.	455

Sec. 4710.32.  A licensee shall not do any of the following:

456

(A) Exercise or attempt to exercise a power of attorney after	457
an individual has terminated an agreement;	458

(B) Initiate a transfer of money from an individual's account	459
at a financial institution or with another person, unless the	460
transfer is one of the following:	461

(1) A return of money to the individual;

462

(2) Before termination of an agreement, properly authorized	463
by the agreement for payment of a fee;	464

(3) In payment of a creditor to fund a negotiated settlement	465
authorized by an individual.	466

(C) Structure a settlement in a manner that would result in a	467
negative amortization of any of an individual's debts;	468

(D) Settle a debt or lead an individual to believe that a	469
payment to a creditor is in settlement of a debt to the creditor	470
unless, at the time of settlement, the individual receives a	471
certification or confirmation by the creditor that the payment is	472
in full settlement of the debt, or is part of a payment plan that	473
is in full settlement of the debt;	474

(E) Represent that:

475

(1) The licensee will furnish money to pay bills or prevent	476
attachments;	477

(2) Payment of a certain amount will guarantee satisfaction	478
of a certain amount or range of indebtedness; or	479

(3) Participation in a program will or may prevent	480
litigation, garnishment, attachment, repossession, foreclosure,	481
eviction, or loss of employment.	482

(F) Represent that the licensee is authorized or competent to	483
furnish legal advice or perform legal services, unless such advice	484
or services is provided by a licensed attorney working with the	485
licensee;	486

(G) Represent that it is one of the following:

487

(1) A not-for-profit entity, unless it is organized and	488
properly operating as a not-for-profit entity under the laws of	489
this state;	490

(2) A tax-exempt entity, unless it has received certification	491
of tax-exempt status from the federal internal revenue service.	492

(H) Take a confession of judgment or power of attorney to	493
confess judgment against an individual;	494

(I) Employ an unfair, unconscionable, or deceptive act or	495
practice, including the knowing omission of any material	496
information;	497

(J) Purchase a debt or obligation of the individual;

498

(K) Obtain a mortgage or other security interest from any	499
person in connection with the services provided to the individual;	500

(L) Make statements that are misleading or deceptive.

501

Sec. 4710.33.  (A) A licensee shall provide the accounting	502
required by division (B) of this section upon request.	503

(B) For each settlement, the licensee shall document in a	504
record an accounting of all of the following:	505

(1) The amount the creditor accepts as settlement in full of	506
the debt and any other terms of the settlement;	507

(2) The amount of the debt when the creditor agreed to the	508
settlement;	509

(3) For licensees using fee agreements that calculate any	510
portion of the fee based on a percentage of savings the individual	511
realizes from a settled debt, the calculation of that fee.	512

(C) A settlement shall be in writing, indicate the assent of	513
the creditor through endorsement, and clearly set forth the amount	514
of the debt, the amount the creditor has agreed to accept as	515
payment in full of the debt, and any other material terms of the	516
settlement. The debtor's authorization of the settlement shall be	517
documented in a record.	518

(D) A licensee shall maintain records for each individual for	519
whom it provides debt settlement services for four years after the	520
final payment made by the individual and produce a copy of them to	521
the individual within a reasonable time after a request is made	522
for them. The licensee may use electronic or other means of	523
storage of the records.	524

Sec. 4710.34.  (A) The director of commerce may do the	525
following:	526

(1) Act on the director's own initiative or in response to	527
complaints and may receive complaints regarding, or take action to	528
obtain voluntary compliance with, sections 4710.20 to 4710.41 of	529
the Revised Code;	530

(2) Seek or provide remedies as provided for in section	531
4710.36 of the Revised Code.	532

(B) The director may investigate and examine, by subpoena or	533
otherwise, the activities, books, accounts, and records of a	534
licensee, or a person to which a licensee has delegated its	535
obligations under an agreement, to determine compliance with	536
sections 4710.20 to 4710.41 of the Revised Code. Information that	537
identifies individuals who have agreements with the licensee shall	538
not be disclosed to the public. In connection with the	539
investigation, the director may do the following:	540

(1) Charge the person the reasonable expenses necessarily	541
incurred to conduct the examination;	542

(2) Require or permit a person to file a statement under oath	543
as to all the facts and circumstances of a matter to be	544
investigated.	545

(C) The director may adopt rules in accordance with Chapter	546
119. of the Revised Code to implement the provisions of sections	547
4710.20 to 4710.41 of the Revised Code.	548

(D) The director may enter into cooperative arrangements with	549
any other federal or state agency having authority over licensees	550
and may exchange with any of those agencies information about a	551
licensee, including information obtained during an examination of	552
the licensee.	553

Sec. 4710.35.  (A) As used in this section, "consumer price	554
index" means the consumer price index prepared by the United	555
States bureau of labor statistics (U.S. city average for urban	556
wage earners and clerical workers: all items, 1982-1984=100) or,	557
if that index is no longer published, a generally available	558
comparable index.	559

(B) The director of commerce, by rule adopted in accordance	560
with Chapter 119. of the Revised Code, shall establish reasonable	561
fees to be paid by licensees for the expense of administering	562
sections 4710.20 to 4710.41 of the Revised Code. All fees,	563
charges, and penalties collected under sections 4710.20 to 4710.41	564
of the Revised Code shall be paid to the director and shall be	565
deposited by the director into the state treasury to the credit of	566
the debt settlement services fund, which is hereby created. Funds	567
in the debt settlement services fund shall be used for	568
administering sections 4710.20 to 4710.41 of the Revised Code.	569

(C) The director, by rule adopted in accordance with Chapter	570
119. of the Revised Code, shall establish the dollar amounts for	571
the license fees under section 4710.22 of the Revised Code. Those	572
license fees, and the penalties collected under section 4710.36 of	573
the Revised Code, shall be adjusted to reflect inflation, as	574
measured by the consumer price index. The director shall adopt a	575
base year and adjust the dollar amounts, effective on July 1 of	576
each year, if the change in the index from the base year, as of	577
December 31 of the preceding year, is at least ten per cent. The	578
dollar amount shall be rounded to the nearest ten dollars.	579

(D) The director shall notify licensees of any change in	580
dollar amounts made pursuant to division (C) of this section and	581
make that information available to the public.	582

Sec. 4710.36.  (A) The director of commerce shall enforce	583
sections 4710.20 to 4710.41 of the Revised Code, and any rule	584
adopted thereunder, by taking one or more of the following	585
actions:	586

(1) Ordering a licensee or a director, employee, or other	587
agent of a licensee to cease and desist from any violations;	588

(2) Ordering a licensee or another person that has caused a	589
violation to correct the violation, or a licensee or another	590
person that has failed to comply with those sections to correct	591
the failure, including making restitution of money or property to	592
a person aggrieved by a violation or failure to comply;	593

(3) Imposing on such a licensee or person a civil penalty not	594
exceeding one thousand dollars for each violation or failure to	595
comply;	596

(4) Prosecuting a civil action to do either of the following:

597

(a) Enforce an order;

598

(b) Obtain restitution or an injunction or other equitable	599
relief, or both.	600

(5) Intervening in an action brought under section 4710.37 of	601
the Revised Code.	602

(B) If a person violates or fails to comply with, or	603
knowingly authorizes, directs, or aids in the violation of or	604
failure to comply with, a final order issued under division (A)(1)	605
or (2) of this section, the director may impose an additional	606
civil penalty not exceeding one thousand dollars for each	607
violation or failure.	608

(C) The director may maintain an action to enforce sections	609
4710.20 to 4710.41 of the Revised Code in any county.	610

(D) The director may recover the reasonable costs of actions	611
or proceedings brought pursuant to divisions (A) and (B) of this	612
section, including attorney's fees based on the hours reasonably	613
expended and the hourly rates for attorneys of comparable	614
experience in the community.	615

(E) In determining the amount of a civil penalty to impose	616
under division (A) or (B) of this section, the director shall	617
consider the seriousness of the violation or failure, the good	618
faith of the person committing the violation or failure, any	619
previous violations or failures by the person, the deleterious	620
effect of the violation or failure on the public, and any other	621
factor the director considers relevant to the determination of the	622
civil penalty.	623

(F) No enforcement action or adjudication order made by the	624
director under this section shall be valid unless an opportunity	625
for a hearing is afforded in accordance with Chapter 119. of the	626
Revised Code. Such opportunity for a hearing shall be given before	627
taking the enforcement action or making the adjudication order	628
except in those situations where section 119.06 of the Revised	629
Code provides otherwise.	630

Sec. 4710.37.  The director of commerce shall publish and	631
maintain, on the department of commerce internet web site, a	632
current list of all licensees.	633

Sec. 4710.38.  (A) As used in this section, "insolvent"	634
means:	635

(1) Having generally ceased to pay debts in the ordinary	636
course of business other than as a result of a good-faith dispute;	637

(2) Being unable to pay debts as they become due;

638

(3) Being insolvent within the meaning of the federal	639
bankruptcy law.	640

(B) The director of commerce may suspend, revoke, or deny	641
renewal of a license if any of the following apply:	642

(1) A fact or condition exists that, if it had existed when	643
the licensee applied for a license, it would have been a reason	644
for denial.	645

(2) The licensee has committed a material violation of or	646
failure to comply with any provision of sections 4710.20 to	647
4710.41 of the Revised Code or a rule or order of the director.	648

(3) The licensee is insolvent.

649

(4) The licensee or an employee or affiliate of the licensee	650
has refused to permit the director to make an examination	651
authorized by division (B) of section 4710.34 of the Revised Code,	652
failed to comply with an order to file a statement pursuant to	653
division (B)(2) of section 4710.34 of the Revised Code within	654
thirty days after the request, or made a material	655
misrepresentation or omission with regard to that statement.	656

(5) The licensee has not responded within a reasonable time	657
and in an appropriate manner to communications from the director.	658

(C) If the director suspends or revokes a license, the	659
licensee may appeal and request a hearing pursuant to Chapter 119.	660
of the Revised Code.	661

Sec. 4710.39.  (A) If an individual voids an agreement	662
pursuant to section 4710.30 of the Revised Code, the individual	663
may recover in a civil action all money paid by or on behalf of	664
the individual pursuant to the agreement, in addition to the	665
recovery under division (B)(3) of this section.	666

(B) Subject to division (C) of this section, an individual	667
with respect to whom a licensee or a person providing debt	668
settlement services without a license violates or fails to comply	669
with any provision of sections 4710.20 to 4710.41 of the Revised	670
Code may recover in a civil action all of the following from the	671
licensee or person that caused the violation or failure:	672

(1) Compensatory damages for economic injury caused by the	673
violation or failure;	674

(2) Except as otherwise provided in division (C) of this	675
section, with respect to a failure to comply with division (C) of	676
section 4710.25 of the Revised Code, a violation of section	677
4710.32 of the Revised Code, and a violation of or failure to	678
comply with sections 4710.26, 4710.28, and 4710.29 of the Revised	679
Code, the greater of the amount recovered under division (B)(1) of	680
this section or one thousand dollars;	681

(3) For violations of section 4710.21 or 4710.29 of the	682
Revised Code, reasonable attorney's fees and costs.	683

(C) In a class action, the minimum damages provided in	684
division (B) of this section do not apply.	685

(D) A licensee is not liable under this section for a	686
violation or failure to comply with any provision of sections	687
4710.20 to 4710.41 of the Revised Code if the licensee proves that	688
the violation or failure was not intentional and resulted from a	689
good-faith error notwithstanding the maintenance of procedures	690
reasonably adapted to avoid the error. If, in connection with a	691
violation or failure, the licensee has received more money than	692
authorized by an agreement or by sections 4710.20 to 4710.41 of	693
the Revised Code, the defense provided by this division is not	694
available unless the licensee refunds the excess within three	695
business days after learning of the violation or failure.	696

(E) If a licensee or a person providing debt settlement	697
services without a license violates or fails to comply with any	698
provision of sections 4710.20 to 4710.41 of the Revised Code, an	699
individual may recover under this section or pursuant to section	700
4710.41 of the Revised Code, but not both for the same act or	701
practice.	702

Sec. 4710.40.  (A) An action or proceeding brought pursuant	703
to division (A) or (B) of section 4710.36 of the Revised Code must	704
be commenced within two years after the conduct that is the basis	705
of the director of commerce's complaint occurs.	706

(B) An action brought pursuant to section 4710.41 of the	707
Revised Code must be commenced within two years after the latest	708
of the following:	709

(1) The individual's last transmission of money to the	710
licensee;	711

(2) The date on which the individual discovered or reasonably	712
should have discovered the facts giving rise to the individual's	713
claim;	714

(3) Termination of actions or proceedings by the director	715
with respect to a violation of or failure to comply with any	716
provision of sections 4710.20 to 4710.41 of the Revised Code.	717

(C) The period prescribed in division (B)(2) of this section	718
is tolled during any period during which the licensee or, if	719
different, the defendant, has materially and willfully	720
misrepresented information required by sections 4710.20 to 4710.41	721
of the Revised Code to be disclosed to the individual, if the	722
information so misrepresented is material to the establishment of	723
the liability of the defendant under sections 4710.20 to 4710.41	724
of the Revised Code.	725

Sec. 4710.41. Any violation of or failure to comply with any	726
provision of sections 4710.20 to 4710.41 of the Revised Code by a	727
person providing debt settlement services without a license is	728
deemed an unfair or deceptive act or practice in violation of	729
section 1345.02 of the Revised Code. A person injured by such a	730
violation has a cause of action and is entitled to the same relief	731
available to a consumer under section 1345.09 of the Revised Code,	732
and all the powers and remedies available to the attorney general	733
to enforce sections 1345.01 to 1345.13 of the Revised Code are	734
available to the attorney general to enforce sections 4710.20 to	735
4710.41 of the Revised Code.	736

Section 2.  That existing section 4710.01 of the Revised Code	737
is hereby repealed.	738