Fiscal Note & Local Impact Statement
124 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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STATE FUND |
FY 2002 |
FY 2003 |
FY 2004 |
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Financial Institutions
Fund 4X2 (800-619) |
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Revenues |
-0- |
-0- |
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Expenditures |
Potential $125-$250
increase |
Potential $250-$500
increase |
Potential $125-$250
increase |
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Note: The state fiscal year is July 1 through June 30. For
example, FY 2002 is July 1, 2001 – June 30, 2002.
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The
Department of Commerce expects to use existing staff and facilities for the
Predatory Lending Study Committee, and estimates that they will spend a total
of $500 to $1,000 for supplies over the duration of the study.
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LOCAL
GOVERNMENT |
FY 2002 |
FY 2003 |
FUTURE YEARS |
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Municipalities |
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Revenues |
Potential minimal loss |
Potential minimal loss |
Potential minimal loss |
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Expenditures |
Potential minimal decrease |
Potential minimal decrease |
Potential minimal decrease |
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Note: For most local governments, the fiscal year is the calendar year. The school district fiscal year is July 1 through June 30.
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If
a municipality enacts an ordinance regulating loans, then they may generate
revenue by imposing a fee or fines associated with the regulation. As a result,
a municipality may increase their expenditures by regulating loans through
administrative costs or court costs associated with prosecuting violators. This
bill prohibits municipalities from enacted such ordinances or resolutions and
results in a potential minimal revenue loss and/or potential minimal
expenditure decrease for municipalities.
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The
City of Dayton adopted a Predatory Lending Ordinance in July 2001, which
include a penalty. However, the
ordinance is not yet effective because of a pending law suite filed against
them by the American Financial Services Association.
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The State of Ohio currently
regulates activities related to the lending and credit business in the state.
The Department of Commerce, Division of Financial Institutions, regulates many
financial institutions. Of these financial institutions, a large number of them
participate in lending and credit activities. This bill prohibits any political
subdivision of the state from enacting any ordinance, resolution or regulation
intended to regulate any lending or credit activities. This bill clearly
identifies the State of Ohio as the regulator of all loans and other forms of
credit in the state in order to maintain uniformity in the regulation of
lending and credit activities throughout the state.
According to the Department
of Commerce’s initial review, this bill probably will not add any additional
work for the division, and will only further clarify the state’s role in
regulating financial institutions.
If a municipality enacts an
ordinance regulating loans, then they may generate revenue by imposing a fee or
fines associated with the regulation. In addition, a municipality’s
expenditures may increase as the result of an ordinance regulating loans due to
an increase in administrative costs or court costs associated with prosecuting
violators. For example, the City of Dayton adopted a Predatory Lending
Ordinance in July 2001, which includes penalties and fines. However, the
ordinance is not yet effective because of a pending law suit filed against them
by the American Financial Services Association. HB 386 prohibits
municipalities, such as the City of Dayton, from enacting ordinances or
resolutions regulating loans or credit activities and may result in a potential
minimal revenue loss and/or potential minimal expenditure decrease for
municipalities.
This bill creates a
13-member Predatory Lending Study Committee to exist until December 31, 2003.
The Department of Commerce expects to use existing staff and facilities for the
Predatory Lending Study Committee, and estimates that they will spend a total
of $500 to $1,000 for supplies over the duration of the study.
LSC fiscal staff: Jeremie Newman, Budget Analyst
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