Bill Text: OH SB251 | 2011-2012 | 129th General Assembly | Introduced

Ohio Senate Bill 251 (Prior Session Legislation)

Introduced

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

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Introduced - Dead) 2011-11-08 - To Financial Institutions [SB251 Detail]

Download: Ohio-2011-SB251-Introduced.html

As Introduced

129th General Assembly

Regular Session

2011-2012

S. B. No. 251

Senators Beagle, Sawyer

Cosponsors: Senators Patton, Hite, Balderson, Daniels, LaRose

A BILL

To amend section 4710.01 and to enact sections

4710.20 to 4710.43 of the Revised Code to require

the licensure of, and otherwise regulate,

providers of debt settlement services.

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,	8
4710.41, 4710.42, and 4710.43 of the Revised Code be enacted to	9
read as follows:	10

Sec. 4710.01. As used in this chapter:

(A) "Person" includes individuals, partnerships,	12
associations, corporations, trusts, and other legal entities.	13

(B)(1) "Debt adjusting" means doing business in debt	14
adjusting, budget counseling, debt management, or debt pooling	15
service, or holding oneself out, by words of similar import, as	16
providing services to debtors in the management of their debts, to	17
do either of the following:	18

~~(1)~~(a) To effect the adjustment, compromise, or discharge of	19
any account, note, or other indebtedness of the debtor;	20

~~(2)~~(b) To receive from the debtor and disburse to the	21
debtor's creditors any money or other thing of value.	22

(2) "Debt adjusting" does not include debt settlement	23
services as defined in section 4710.20 of the Revised Code.	24

(C) "Resides" means to live in a particular place on a	25
temporary or a permanent basis.	26

Sec. 4710.20. As used in sections 4710.20 to 4710.43 of the	27
Revised Code:	28

(A) "Affiliate" means a person that controls, is controlled	29
by, or is under common control with the licensee.	30

(B) "Agreement" means an agreement between a licensee and an	31
individual for the provision of debt settlement services.	32

(C) "Business address" means the physical location of a	33
business, including the name and number of a street.	34

(D) "Concessions" means assent to repayment of a debt on	35
terms more favorable to an individual than the terms of the	36
contract between the individual and a creditor.	37

(E) "Day" means a calendar day.

(F) "Debt settlement services" means the services as an	39
intermediary between an individual and one or more unsecured	40
creditors of the individual for the purpose of obtaining	41
concessions under which a creditor accepts less than the balance	42
owed as payment in full of the debt, and without receiving money	43
from the individual for distribution of that money to the	44
individual's creditor. The term does not include any of the	45
following:	46

(1) Legal services provided in an attorney-client	47
relationship by an attorney licensed or otherwise authorized to	48
practice law in this state;	49

(2) Accounting services provided in an accountant–client	50
relationship by a certified public accountant licensed to provide	51
accounting services in this state;	52

(3) Financial planning services provided in a financial	53
planner-client relationship by a member of a financial planning	54
profession who holds current certification by the certified	55
financial planner board of standards, inc.	56

(G) "Financial institution" means any national bank, any bank	57
doing business under authority granted by the superintendent of	58
financial institutions or the regulatory authority of another	59
state of the United States, any federal savings association, any	60
savings and loan association or savings bank doing business under	61
authority granted by the superintendent or the regulatory	62
authority of another state of the United States, or any credit	63
union regulated by a state or federal regulatory authority.	64

(H) "Good faith" means honesty in fact and the observance of	65
reasonable standards of fair dealing.	66

(I) "Licensee" means a person that has been issued a license	67
to provide debt settlement services under sections 4710.20 to	68
4710.43 of the Revised Code.	69

(J) "Person" means an individual, corporation, business	70
trust, estate, trust, partnership, limited liability company,	71
association, joint venture, or any other legal or commercial	72
entity. The term does not include a public corporation,	73
government, or governmental subdivision, agency, or	74
instrumentality.	75

(K) "Program" means a program or strategy in which a provider	76
furnishes debt settlement services in contemplation that creditors	77
will settle debts for less than the full amount of debt owed by an	78
individual.	79

(L) "Record" means information that is inscribed on a	80
tangible medium or that is stored in an electronic or other medium	81
and is retrievable in a perceivable form.	82

(M) "Sign" means, with present intent to authenticate or	83
adopt a record, to do either of the following:	84

(1) Execute or adopt a tangible symbol;

(2) Attach to or logically associate with the record an	86
electronic sound, symbol, or process.	87

(N) "State" means, except when the context indicates the term	88
is referring to the state of Ohio, a state of the United States,	89
the District of Columbia, Puerto Rico, the United States Virgin	90
Islands, or any territory or insular possession subject to the	91
jurisdiction of the United States.	92

(O) "Settlement" means an arrangement under which a creditor	93
accepts concessions on an individual's account through a debt	94
settlement services program and money is paid to the creditor.	95

Sec. 4710.21. (A) No person shall provide debt settlement	96
services for compensation without first having obtained a license	97
from the director of commerce under sections 4710.20 to 4710.43 of	98
the Revised Code.	99

(B) Sections 4710.20 to 4710.43 of the Revised Code do not	100
apply to the following persons or their employees when the person	101
or the employee is engaged in the regular course of the person's	102
business or profession:	103

(1) A judicial officer, a person acting under an order of a	104
court or an administrative agency, or an assignee for the benefit	105
of creditors;	106

(2) A financial institution, bank holding company, or the	107
subsidiary, agent, or affiliate of either;	108

(3) A title insurer, escrow company, or other person that	109
provides bill-paying services if the provision of debt settlement	110
services is incidental to the bill-paying services;	111

(4) An agent or employee of a licensee.

112

Sec. 4710.22. (A) Application for an original or renewal	113
license to provide debt settlement services shall be in writing,	114
signed under oath, and in the form prescribed by the director of	115
commerce. The application form shall contain a statement informing	116
the applicant that a false or dishonest answer to a question may	117
be grounds for denial or subsequent suspension or revocation of	118
the applicant's license. The application for an original or	119
renewal license shall be accompanied by a license fee as	120
determined by the director by rule, and shall contain all of the	121
following:	122

(1) The applicant's name, principal business address and	123
telephone number, and all of the applicant's other business	124
addresses in this state, electronic mail addresses, and internet	125
web site addresses;	126

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

127

(3) The address of each location in this state at which the	128
applicant will provide debt settlement services or a statement	129
that the applicant does not maintain a physical location in the	130
state;	131

(4) The name and home address of each officer and director of	132
the applicant and each person that owns at least ten per cent of	133
the applicant's business;	134

(5) A statement describing, to the extent it is known or	135
should be known by the applicant, any material civil or criminal	136
judgment relating to financial fraud or misuse, any material	137
violation of state or federal securities laws, and any material	138
administrative or enforcement action relating to financial fraud	139
or misuse by a governmental agency in any jurisdiction against the	140
applicant, any of its officers, directors, owners, or agents;	141

(6) A copy of each form of agreement that the applicant will	142
use with individuals who reside in this state;	143

(7) The schedule of fees and charges that the applicant will	144
use with individuals who reside in this state;	145

(8) A copy or description of any ownership interest of at	146
least ten per cent by a director, owner, or employee of the	147
applicant in the applicant's debt settlement services business;	148

(9) A description of any ownership interest of at least ten	149
per cent by a director, owner, or employee of the applicant in:	150

(a) Any affiliate of the applicant; or

151

(b) Any entity that provides products or services to the	152
applicant or any individual relating to the applicant's debt	153
settlement services business.	154

(10) The identity of each director who is an affiliate of the	155
applicant;	156

(11) Evidence that the applicant has a resident agent in the	157
state recorded with the secretary of state;	158

(12) Any other information that the director reasonably	159
requires to perform the director's duties, which the director may	160
require by rule.	161

(B) The director may, upon receipt and review of an	162
application, request additional information that the director	163
reasonably requires to perform the director's duties.	164

(C) The term of any license issued pursuant to sections	165
4710.20 to 4710.43 of the Revised Code shall not be more than two	166
years. Licensees who wish to renew their license must submit an	167
application for renewal at least thirty days, but not more than	168
sixty days, before the license expiration date.	169

(D) If a person who provides debt settlement services holds a	170
license or certificate of registration in another state	171
authorizing it to provide debt settlement services, the person may	172
submit a copy of that license or certificate and the application	173
for it instead of the application described in division (A) of	174
this section if all of the following apply:	175

(1) The application in the other state contains information	176
substantially similar to or more comprehensive than that required	177
by division (A) of this section.	178

(2) The applicant provides the information required by	179
divisions (A)(1), (3), (6), and (7) of this section.	180

(3) The applicant certifies that the information contained in	181
the application is current, and to the extent it is not current,	182
supplements the application to make the information current.	183

Sec. 4710.23. (A) The director of commerce shall issue an	184
original or renewal license to the applicant unless the director	185
finds any of the following:	186

(1) The applicant has not complied with the requirements of	187
section 4710.22 of the Revised Code.	188

(2) The application contains information that is materially	189
erroneous or incomplete.	190

(3) An officer, director, or owner of the applicant has been	191
convicted of a crime, or suffered a civil judgment, involving	192
dishonesty or the violation of state or federal securities laws.	193

(4) The application is not accompanied by the fee established	194
by the director.	195

(5) There is reasonable evidence to support the director's	196
opinion that the applicant will not provide debt settlement	197
services in a lawful, honest, and fair manner.	198

(B) The director shall approve or deny an initial license	199
within sixty days after an application is filed. If a request for	200
additional information is made pursuant to division (B) of section	201
4710.22 of the Revised Code, the director may extend the sixty-day	202
period for not more than forty-five days.	203

(C) If a licensee has filed a timely and complete application	204
for license renewal, the license remains in effect until the	205
director notifies the applicant of a denial.	206

(D) Within seven days after issuing an order denying an	207
application, the director shall notify the applicant of the	208
denial, the grounds for the denial, and the applicant's	209
opportunity for a hearing pursuant to Chapter 119. of the Revised	210
Code. If the application is denied, the director shall return the	211
license fee.	212

(E) If the director has denied an application for a renewal	213
license, the licensee, within thirty days after receiving notice	214
of the denial, may appeal and request a hearing in accordance with	215
Chapter 119. of the Revised Code. While an appeal is pending, the	216
licensee may continue to provide debt settlement services to	217
individuals with whom the licensee has agreements. If the	218
licensee's appeal fails, the licensee may, with the approval of	219
the director, continue to provide debt settlement services to	220
individuals with whom it has agreements until the licensee	221
transfers the agreements to another licensee. The director may	222
establish a date by which all transfers must occur and may modify	223
the date at any time.	224

Sec. 4710.24. No person licensed under sections 4710.20 to	225
4710.43 of the Revised Code shall conduct business in this state	226
unless the licensee has obtained and maintains in effect at all	227
times a corporate surety bond issued by a bonding company or	228
insurance company authorized to do business in this state. The	229
bond shall be in favor of the director of commerce and in a penal	230
sum the director determines is warranted by the financial	231
condition and business experience of the licensee, the history of	232
the licensee in providing debt settlement services, the risk to	233
individuals, and any other factor the director considers	234
appropriate. The penal sum shall be at least ten thousand dollars	235
and not more than fifty thousand dollars.	236

The term of the bond shall coincide with the term of the	237
license. The licensee shall file a copy of the bond with the	238
director. The bond shall be for the exclusive benefit of any	239
individual injured by a violation of or failure to comply with any	240
provision of sections 4710.20 to 4710.43 of the Revised Code by a	241
licensee or an employee of a licensee.	242

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

243

(A) Act in good faith when engaging in the business of debt	244
settlement services;	245

(B) Maintain a toll-free communication system, staffed at a	246
level that reasonably permits an individual to speak to a customer	247
service representative, as appropriate, during ordinary business	248
hours;	249

(C) Provide all disclosures and documents required by	250
sections 4710.20 to 4710.43 of the Revised Code in English and in	251
any other language the licensee has or will use primarily to	252
communicate with the individual.	253

(D) List on all written, recorded, or electronic	254
advertisements targeted at customers in this state that the	255
licensee is licensed by the department of commerce and maintains a	256
surety bond as required by this chapter.	257

Sec. 4710.26. (A) Before providing debt settlement services,	258
a licensee shall give the individual an itemized list of goods and	259
services and the charges for each. The information shall be	260
presented in a clear and conspicuous manner.	261

(B) A licensee shall not provide debt settlement services	262
unless the licensee has prepared a financial analysis with respect	263
to the income and debts of the individual seeking the services.	264

(C) Before an individual assents to an agreement to engage in	265
a program, a licensee shall do both of the following:	266

(1) Provide the individual with a copy of the financial	267
analysis required by division (B) of this section in a record that	268
identifies the licensee and that the individual may keep whether	269
or not the individual assents to the agreement;	270

(2) Inform the individual of the availability, at the	271
individual's option, of assistance by a toll-free communication	272
system or in person to discuss the financial analysis required by	273
division (B) of this section.	274

(D) Before an individual assents to an agreement to engage in	275
a program, the licensee shall inform the individual of all of the	276
following in writing:	277

(1) Programs are not suitable for all individuals.

278

(2) Participation in a program may adversely affect the	279
individual's credit rating or credit scores.	280

(3) Nonpayment of debt may lead creditors to increase finance	281
and other charges or undertake collection activity, including	282
litigation.	283

(4) If a creditor settles for less than the full amount of	284
the debt, the program may result in the creation of taxable income	285
to the individual, even if the individual does not receive any	286
money.	287

(5) Specific results cannot be predicted or guaranteed and	288
the licensee cannot force negotiations or settlements with	289
creditors but will advocate solely on behalf of the individual.	290

(6) Programs require that individuals meet a certain savings	291
goal in order to maximize settlement results.	292

(7) The licensee does not provide accounting or legal advice	293
to individuals, unless the licensee is professionally licensed to	294
provide such advice.	295

(8) The licensee does not make payments to the individual's	296
creditors.	297

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

298

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

299

(1) "Federal act" means the "Electronic Signatures in Global	300
and National Commerce Act," 114 Stat. 464, 15 U.S.C. 7001 et seq.,	301
as amended.	302

(2) "Consumer" means an individual who seeks or obtains goods	303
or services that are used primarily for personal, family, or	304
household purposes.	305

(B) A licensee may satisfy the requirements of sections	306
4710.26, 4710.28, and 4710.33 of the Revised Code by utilizing the	307
internet or other electronic means if the licensee obtains a	308
consumer's consent in the manner provided for in the federal act.	309

(C) The disclosures and materials required by sections	310
4710.26, 4710.28, and 4710.33 of the Revised Code shall be	311
presented in a form that is capable of being accurately reproduced	312
for later reference.	313

(D) With respect to disclosure by means of an internet web	314
site, the disclosure of the information required by division (D)	315
of section 4710.26 of the Revised Code must appear on one or more	316
screens that contain no other information, and the individual must	317
indicate that the individual has seen the information before	318
proceeding to assent to the formation of a program.	319

(E) At the time of providing the materials and agreement	320
required by divisions (C) and (D) of section 4710.26 and sections	321
4710.28 and 4710.33 of the Revised Code, a licensee shall inform	322
the individual that upon electronic, telephonic, or written	323
request, it will send the individual a written copy of the	324
materials and will comply with a request as provided in division	325
(F) of this section.	326

(F) If a licensee is requested, before the expiration of	327
ninety days after a program is completed or terminated, to send a	328
written copy of the materials required by divisions (C) and (D) of	329
section 4710.26 and sections 4710.28 and 4710.33 of the Revised	330
Code, the licensee shall send them at no charge within three	331
business days after the request is made, but the licensee need not	332
comply with a request more than once per calendar month or if it	333
reasonably believes the request is made for purposes of	334
harassment. If a request is made more than ninety days after a	335
program is completed or terminated, the licensee shall send within	336
a reasonable time a written copy of the materials requested.	337

(G) A licensee that maintains an internet web site shall	338
disclose on the home page of its web site or on a page that is	339
clearly and conspicuously connected to the home page by a link	340
that clearly reveals its contents, all of the following:	341

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

342

(2) Its principal business address, telephone number, and	343
electronic mail address, if any.	344

(H) Subject to division (I) of this section, if a consumer	345
who has consented to electronic communication in the manner	346
provided by section 101 of the federal act withdraws consent as	347
provided in the federal act, a licensee may terminate its	348
agreement with the consumer.	349

(I) If a licensee wishes to terminate an agreement with a	350
consumer pursuant to division (H) of this section, it shall notify	351
the consumer that it will terminate the agreement unless the	352
consumer, within thirty days after receiving the notification,	353
consents to electronic communication in the manner provided in	354
section 101(c) of the federal act.	355

(J) This section modifies, limits, and supersedes the federal	356
act, but does not modify, limit, or supersede section 101(c) of	357
that act or authorize electronic delivery of any of the notices	358
described in section 103(b) of that act.	359

Sec. 4710.28. (A) An agreement shall meet the following	360
requirements:	361

(1) Be in a record;

362

(2) Be dated and signed by the individual;

363

(3) Include the name of the individual and the address where	364
the individual resides;	365

(4) Include the name, business address, and telephone number	366
of the licensee;	367

(5) Be delivered to the individual immediately upon formation	368
of the agreement;	369

(6) Disclose all of the following:

370

(a) The services to be provided;

371

(b) The amount or method of determining the amount of all	372
fees, individually itemized, to be paid by the individual;	373

(c) How the licensee will comply with its obligations under	374
section 4710.33 of the Revised Code;	375

(d) That the individual may contact the director of commerce	376
with any questions or complaints regarding the licensee;	377

(e) The address, telephone number, and internet address or	378
web site of the director.	379

(B) For purposes of division (A)(5) of this section, delivery	380
of an electronic record occurs when it is made available in a	381
format in which the individual may retrieve, save, and print the	382
record, and the individual is notified that it is available.	383

(C) If the director supplies the licensee with any	384
information required under division (A)(6)(e) of this section, the	385
licensee may comply with that requirement only by disclosing the	386
information supplied by the director.	387

(D) An agreement shall provide that the individual has a	388
right to terminate the agreement at any time by giving the	389
licensee written or electronic notice, in which event all powers	390
of attorney granted by the individual to the licensee are revoked	391
and ineffective.	392

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

393

(1) Provide for application of the law of any jurisdiction	394
other than the United States and this state;	395

(2) Except as permitted by Section 2 of the "Federal	396
Arbitration Act," 61 Stat. 669, 9 U.S.C. 1, et seq., as amended,	397
contain a provision that modifies or limits otherwise available	398
forums or procedural rights, including the right to trial by jury,	399
that are generally available to the individual under law;	400

(3) Contain a provision that restricts the individual's	401
remedies under sections 4710.20 to 4710.43 of the Revised Code, or	402
other law;	403

(4) Contain a provision that does the following:

404

(a) Limits or releases the liability of any person for not	405
performing the agreement or for violating any provision of	406
sections 4710.20 to 4710.43 of the Revised Code;	407

(b) Indemnifies any person for liability arising under the	408
agreement or under sections 4710.20 to 4710.43 of the Revised	409
Code.	410

Sec. 4710.29. (A) A licensee shall not impose, directly or	411
indirectly, a fee or other charge on an individual or receive	412
money from or on behalf of an individual for debt settlement	413
services, except as permitted by this section.	414

(B) A licensee shall not impose fees or other charges or	415
receive payment for debt settlement services unless both of the	416
following conditions are met:	417

(1) The licensee and the individual have signed an agreement	418
that substantially complies with sections 4710.28 and 4710.32 of	419
the Revised Code.	420

(2) A settlement has been executed in the form required under	421
division (C) of section 4710.33 of the Revised Code and at least	422
one payment has been made by the individual pursuant to that	423
settlement.	424

(C) The total amount of fees or other charges for debt	425
settlement services shall be reasonable. A fee or other charge	426
shall:	427

(1) Bear the same proportional relationship to the total fees	428
or other charges for renegotiating, settling, reducing, or	429
altering the terms of the entire debt balance as the individual	430
debt amount bears to the entire debt balance at the time the	431
licensee and the individual signed the agreement; or	432

(2) Represent a percentage of the difference between the debt	433
owed the creditor and the amount the creditor has agreed to accept	434
as payment in full of the debt. If the fee or other charge for an	435
individual debt is determined in this manner, the same percentage	436
shall be used for all of the other individual debts.	437

(D) A licensee may impose a reasonable charge to the	438
individual, plus any amount passed on from a financial institution	439
for each check, negotiable order of withdrawal, share draft, or	440
other negotiable instrument returned or dishonored for any reason,	441
provided that the terms and conditions upon which such	442
insufficient funds charges will be charged to the individual are	443
set forth in the agreement.	444

(E) A licensee shall not solicit or accept a voluntary	445
contribution from an individual or on behalf of an individual.	446

Sec. 4710.30. (A) If a licensee imposes a fee or other	447
charge or receives money or other payments not authorized by	448
section 4710.29 of the Revised Code, the individual may void the	449
agreement and recover as provided for in section 4710.39 of the	450
Revised Code.	451

(B) If a person providing debt settlement services is not	452
licensed as required by section 4710.21 of the Revised Code when	453
an individual assents to an agreement, the agreement is voidable	454
by the individual.	455

(C) If an individual voids an agreement under this section,	456
the licensee or person providing debt settlement services without	457
a license does not have a claim against the individual for breach	458
of contract or for restitution.	459

Sec. 4710.31. If an individual who has entered into an	460
agreement fails for sixty days to set aside the savings required	461
by the agreement, a licensee may terminate the agreement.	462

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

463

(A) Exercise or attempt to exercise a power of attorney after	464
an individual has terminated an agreement;	465

(B) Initiate a transfer of money from an individual's account	466
at a financial institution or with another person, unless the	467
transfer is one of the following:	468

(1) A return of money to the individual;

469

(2) Before termination of an agreement, properly authorized	470
by the agreement for payment of a fee;	471

(3) In payment of a creditor to fund a negotiated settlement	472
authorized by an individual.	473

(C) Structure a settlement in a manner that would result in a	474
negative amortization of any of an individual's debts;	475

(D) Settle a debt or lead an individual to believe that a	476
payment to a creditor is in settlement of a debt to the creditor	477
unless, at the time of settlement, the individual receives a	478
certification or confirmation by the creditor that the payment is	479
in full settlement of the debt, or is part of a payment plan that	480
is in full settlement of the debt;	481

(E) Represent that:

482

(1) The licensee will furnish money to pay bills or prevent	483
attachments;	484

(2) Payment of a certain amount will guarantee satisfaction	485
of a certain amount or range of indebtedness; or	486

(3) Participation in a program will or may prevent	487
litigation, garnishment, attachment, repossession, foreclosure,	488
eviction, or loss of employment.	489

(F) Represent that the licensee is authorized or competent to	490
furnish legal advice or perform legal services, unless such advice	491
or services is provided by a licensed attorney working with the	492
licensee;	493

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

494

(1) A not-for-profit entity, unless it is organized and	495
properly operating as a not-for-profit entity under the laws of	496
this state;	497

(2) A tax-exempt entity, unless it has received certification	498
of tax-exempt status from the federal internal revenue service.	499

(H) Take a confession of judgment or power of attorney to	500
confess judgment against an individual;	501

(I) Employ an unfair, unconscionable, or deceptive act or	502
practice, including the knowing omission of any material	503
information;	504

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

505

(K) Obtain a mortgage or other security interest from any	506
person in connection with the services provided to the individual;	507

(L) Make statements that are misleading or deceptive.

508

Sec. 4710.33. (A) A licensee shall provide the accounting	509
required by division (B) of this section upon request.	510

(B) For each settlement, the licensee shall document in a	511
record an accounting of all of the following:	512

(1) The amount the creditor accepts as settlement in full of	513
the debt and any other terms of the settlement;	514

(2) The amount of the debt when the creditor agreed to the	515
settlement;	516

(3) For licensees using fee agreements that calculate any	517
portion of the fee based on a percentage of savings the individual	518
realizes from a settled debt, the calculation of that fee.	519

(C) A settlement shall be in writing, indicate the assent of	520
the creditor through endorsement, and clearly set forth the amount	521
of the debt, the amount the creditor has agreed to accept as	522
payment in full of the debt, and any other material terms of the	523
settlement. The debtor's authorization of the settlement shall be	524
documented in a record.	525

(D) A licensee shall maintain records for each individual for	526
whom it provides debt settlement services for four years after the	527
final payment made by the individual and produce a copy of them to	528
the individual within a reasonable time after a request is made	529
for them. The licensee may use electronic or other means of	530
storage of the records.	531

Sec. 4710.34. (A) The director of commerce may do the	532
following:	533

(1) Act on the director's own initiative or in response to	534
complaints and may receive complaints regarding, or take action to	535
obtain compliance with, sections 4710.20 to 4710.43 of the Revised	536
Code;	537

(2) Seek or provide remedies as provided for in section	538
4710.36 of the Revised Code.	539

(B) The director may investigate and examine, by subpoena or	540
otherwise, the activities, books, accounts, and records of a	541
licensee, or a person to which a licensee has delegated its	542
obligations under an agreement, to determine compliance with	543
sections 4710.20 to 4710.43 of the Revised Code. Information that	544
identifies individuals who have agreements with the licensee shall	545
not be disclosed to the public. In connection with the	546
investigation, the director may do the following:	547

(1) Charge the person the reasonable expenses necessarily	548
incurred to conduct the examination;	549

(2) Require or permit a person to file a statement under oath	550
as to all the facts and circumstances of a matter to be	551
investigated.	552

(C) The director may adopt rules in accordance with Chapter	553
119. of the Revised Code to implement the provisions of sections	554
4710.20 to 4710.43 of the Revised Code.	555

(D) The director may enter into cooperative arrangements with	556
any other federal or state agency having authority over licensees	557
and may exchange with any of those agencies information about a	558
licensee, including information obtained during an examination of	559
the licensee.	560

Sec. 4710.35. (A) As used in this section, "consumer price	561
index" means the consumer price index prepared by the United	562
States bureau of labor statistics (U.S. city average for urban	563
wage earners and clerical workers: all items, 1982-1984=100) or,	564
if that index is no longer published, a generally available	565
comparable index.	566

(B) The director of commerce, by rule adopted in accordance	567
with Chapter 119. of the Revised Code, shall establish reasonable	568
fees to be paid by licensees for the expense of administering	569
sections 4710.20 to 4710.43 of the Revised Code. All fees,	570
charges, and penalties collected under sections 4710.20 to 4710.43	571
of the Revised Code shall be paid to the director and shall be	572
deposited by the director into the state treasury to the credit of	573
the debt settlement services fund, which is hereby created. Funds	574
in the debt settlement services fund shall be used for	575
administering sections 4710.20 to 4710.43 of the Revised Code.	576

(C) The director, by rule adopted in accordance with Chapter	577
119. of the Revised Code, shall establish the dollar amounts for	578
the license fees under section 4710.22 of the Revised Code. Those	579
license fees, and the penalties collected under section 4710.36 of	580
the Revised Code, shall be adjusted to reflect inflation, as	581
measured by the consumer price index. The director shall adopt a	582
base year and adjust the dollar amounts, effective on July 1 of	583
each year, if the change in the index from the base year, as of	584
December 31 of the preceding year, is at least ten per cent. The	585
dollar amount shall be rounded to the nearest ten dollars.	586

(D) The director shall notify licensees of any change in	587
dollar amounts made pursuant to division (C) of this section and	588
make that information available to the public.	589

Sec. 4710.36. (A) The director of commerce shall enforce	590
sections 4710.20 to 4710.43 of the Revised Code, and any rule	591
adopted thereunder, by taking one or more of the following	592
actions:	593

(1) Ordering a licensee or a director, employee, or other	594
agent of a licensee to cease and desist from any violations;	595

(2) Ordering a licensee or another person that has caused a	596
violation to correct the violation, or a licensee or another	597
person that has failed to comply with those sections to correct	598
the failure, including making restitution of money or property to	599
a person aggrieved by a violation or failure to comply;	600

(3) Imposing on such a licensee or person a civil penalty not	601
exceeding one thousand dollars for each violation or failure to	602
comply;	603

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

604

(a) Enforce an order;

605

(b) Obtain restitution or an injunction or other equitable	606
relief, or both.	607

(B) If a person violates or fails to comply with, or	608
knowingly authorizes, directs, or aids in the violation of or	609
failure to comply with, a final order issued under division (A)(1)	610
or (2) of this section, the director may impose an additional	611
civil penalty not exceeding one thousand dollars for each	612
violation or failure.	613

(C) The director may maintain an action to enforce sections	614
4710.20 to 4710.43 of the Revised Code in any county.	615

(D) The director may recover the reasonable costs of actions	616
or proceedings brought pursuant to divisions (A) and (B) of this	617
section, including attorney's fees based on the hours reasonably	618
expended and the hourly rates for attorneys of comparable	619
experience in the community.	620

(E) In determining the amount of a civil penalty to impose	621
under division (A) or (B) of this section, the director shall	622
consider the seriousness of the violation or failure, the good	623
faith of the person committing the violation or failure, any	624
previous violations or failures by the person, the deleterious	625
effect of the violation or failure on the public, and any other	626
factor the director considers relevant to the determination of the	627
civil penalty.	628

(F) No enforcement action or adjudication order made by the	629
director under this section shall be valid unless an opportunity	630
for a hearing is afforded in accordance with Chapter 119. of the	631
Revised Code. Such opportunity for a hearing shall be given before	632
taking the enforcement action or making the adjudication order	633
except in those situations where section 119.06 of the Revised	634
Code provides otherwise.	635

Sec. 4710.37. The director of commerce shall publish and	636
maintain, on the department of commerce internet web site, a	637
current list of all licensees.	638

Sec. 4710.38. (A) As used in this section, "insolvent"	639
means:	640

(1) Having generally ceased to pay debts in the ordinary	641
course of business other than as a result of a good-faith dispute;	642

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

643

(3) Being insolvent within the meaning of the federal	644
bankruptcy law.	645

(B) The director of commerce may suspend, revoke, or deny	646
renewal of a license if any of the following apply:	647

(1) A fact or condition exists that, if it had existed when	648
the licensee applied for a license, it would have been a reason	649
for denial.	650

(2) The licensee has committed a material violation of or	651
failure to comply with any provision of sections 4710.20 to	652
4710.43 of the Revised Code or a rule or order of the director.	653

(3) The licensee is insolvent.

654

(4) The licensee or an employee or affiliate of the licensee	655
has refused to permit the director to make an examination	656
authorized by division (B) of section 4710.34 of the Revised Code,	657
failed to comply with an order to file a statement pursuant to	658
division (B)(2) of section 4710.34 of the Revised Code within	659
thirty days after the request, or made a material	660
misrepresentation or omission with regard to that statement.	661

(5) The licensee has not responded within a reasonable time	662
and in an appropriate manner to communications from the director.	663

(C) If the director suspends or revokes a license, the	664
licensee may appeal and request a hearing pursuant to Chapter 119.	665
of the Revised Code.	666

Sec. 4710.39. (A) If an individual voids an agreement	667
pursuant to section 4710.30 of the Revised Code, the individual	668
may recover in a civil action all money paid by or on behalf of	669
the individual pursuant to the agreement, in addition to the	670
recovery under division (B)(3) of this section.	671

(B) Subject to division (C) of this section, an individual	672
with respect to whom a licensee or a person providing debt	673
settlement services without a license violates or fails to comply	674
with any provision of sections 4710.20 to 4710.43 of the Revised	675
Code may recover in a civil action all of the following from the	676
licensee or person that caused the violation or failure:	677

(1) Compensatory damages for economic injury caused by the	678
violation or failure;	679

(2) Except as otherwise provided in division (C) of this	680
section, with respect to a failure to comply with division (C) of	681
section 4710.25 of the Revised Code, a violation of section	682
4710.32 of the Revised Code, and a violation of or failure to	683
comply with sections 4710.26, 4710.28, and 4710.29 of the Revised	684
Code, the greater of the amount recovered under division (B)(1) of	685
this section or one thousand dollars;	686

(3) For violations of section 4710.21 or 4710.29 of the	687
Revised Code, reasonable attorney's fees and costs.	688

(C) In a class action, the minimum damages provided in	689
division (B) of this section do not apply.	690

(D) A licensee is not liable under this section for a	691
violation or failure to comply with any provision of sections	692
4710.20 to 4710.43 of the Revised Code if the licensee proves that	693
the violation or failure was not intentional and resulted from a	694
good-faith error notwithstanding the maintenance of procedures	695
reasonably adapted to avoid the error. If, in connection with a	696
violation or failure, the licensee has received more money than	697
authorized by an agreement or by sections 4710.20 to 4710.43 of	698
the Revised Code, the defense provided by this division is not	699
available unless the licensee refunds the excess within three	700
business days after learning of the violation or failure.	701

(E)(1) If a licensee violates or fails to comply with any	702
provision of sections 4710.20 to 4710.43 of the Revised Code, an	703
individual may recover under this section or, if the violation or	704
failure by the licensee violates section 1345.02 of the Revised	705
Code, under section 1345.09 of the Revised Code, but not both for	706
the same act or practice.	707

(2) If a person providing debt settlement services without a	708
license violates or fails to comply with any provision of sections	709
4710.20 to 4710.43 of the Revised Code, an individual may recover	710
under this section and section 4710.41 of the Revised Code.	711

Sec. 4710.40. (A) An action or proceeding brought pursuant	712
to division (A) or (B) of section 4710.36 of the Revised Code must	713
be commenced within two years after the conduct that is the basis	714
of the director of commerce's complaint occurs.	715

(B) An action brought pursuant to section 4710.41 of the	716
Revised Code must be commenced within two years after the latest	717
of the following:	718

(1) The individual's last transmission of money to the	719
licensee;	720

(2) The date on which the individual discovered or reasonably	721
should have discovered the facts giving rise to the individual's	722
claim;	723

(3) Termination of actions or proceedings by the director	724
with respect to a violation of or failure to comply with any	725
provision of sections 4710.20 to 4710.43 of the Revised Code.	726

(C) The period prescribed in division (B)(2) of this section	727
is tolled during any period during which the licensee or, if	728
different, the defendant, has materially and willfully	729
misrepresented information required by sections 4710.20 to 4710.43	730
of the Revised Code to be disclosed to the individual, if the	731
information so misrepresented is material to the establishment of	732
the liability of the defendant under sections 4710.20 to 4710.43	733
of the Revised Code.	734

Sec. 4710.41. Any violation of or failure to comply with any	735
provision of sections 4710.20 to 4710.43 of the Revised Code by a	736
person providing debt settlement services without a license is	737
deemed an unfair or deceptive act or practice in violation of	738
section 1345.02 of the Revised Code. A person injured by such a	739
violation has a cause of action and is entitled to the same relief	740
available to a consumer under section 1345.09 of the Revised Code.	741

Sec. 4710.42. All the powers and remedies available to the	742
attorney general to enforce sections 1345.01 to 1345.13 of the	743
Revised Code are available to the attorney general to enforce	744
sections 4710.25 to 4710.33 of the Revised Code, to the extent	745
those sections address a violation of section 1345.02 of the	746
Revised Code.	747

Sec. 4710.43. If a licensee act or practice violates	748
sections 4710.25 to 4710.33 of the Revised Code and section	749
1345.02 of the Revised Code, one of the following, but not both,	750
may occur regarding the act or practice:	751