Ohio § 1349.27

§ 1349.27.

A creditor shall not do any of the following: (A) Make a covered loan that includes any of the following: (1) Terms under which a consumer must pay a prepayment penalty for paying all or part

of the principal before the date on which the principal is due.  For purposes of division (A)(1) of this section, any method of computing a refund

of unearned scheduled interest is a prepayment penalty if it is less favorable to

the consumer than the actuarial method. Division (A)(1) of this section does not apply to a prepayment penalty imposed in

accordance with section 129(c)(2) of the “Home Ownership and Equity Protection Act

of 1994,” 108 Stat. 2190, 15 U.S.C.A. 1639(c)(2) , as amended, and the regulations adopted thereunder by the federal reserve board,

as amended. (2) Terms under which the outstanding principal balance will increase at any time over

the course of the loan because the regular periodic payments do not cover the full

amount of interest due; (3) Terms under which more than two periodic payments required under the loan are consolidated

and paid in advance from the loan proceeds provided to the consumer; (4) Terms under which a rebate of interest arising from a loan acceleration due to default

is calculated by a method less favorable than the actuarial method. (B) Make a covered loan that provides for an interest rate applicable after default that

is higher than the interest rate that applies before default; (C) Make a covered loan having a term of less than five years that includes terms under

which the aggregate amount of the regular periodic payments would not fully amortize

the outstanding principal balance.  This division does not apply to any covered loan with a maturity of less than one

year, if the purpose of the loan is a “bridge” loan connected with the acquisition

or construction of a dwelling intended to become the consumer's principal dwelling. (D) Engage in a pattern or practice of extending credit to consumers under covered loans

based on the consumers' collateral without regard to the consumers' repayment ability,

including the consumers' current and expected income, current obligations, and employment; (E) Make a payment to a contractor under a home improvement contract from amounts extended

as credit under a covered loan, except in either of the following ways: (1) By an instrument that is payable to the consumer or jointly to the consumer and the

contractor; (2) At the election of the consumer, by a third party escrow agent in accordance with

terms established in a written agreement signed by the consumer, the creditor, and

the contractor before the date of payment. (F) On or after October 1, 2002, make a covered loan that includes a demand feature that

permits the creditor to terminate the loan in advance of the original maturity date

and to demand repayment of the entire outstanding balance, except in any of the following

circumstances: (1) There is fraud or material misrepresentation by the consumer in connection with the

loan. (2) The consumer fails to meet the repayment terms of the agreement for any outstanding

balance. (3) There is any action or inaction by the consumer that adversely affects the creditor's

security for the loan or any right of the creditor in that security. (G)(1) Within one year after having made a covered loan, refinance a covered loan to the

same borrower into another covered loan, unless the refinancing is in the consumer's

interest.  An assignee holding or servicing a covered loan shall not, for the remainder of

the one-year period following the date of origination of the covered loan, refinance

any covered loan to the same consumer into another covered loan, unless the refinancing

is in the consumer's interest. A creditor or assignee shall not engage in acts or practices to evade division (G)(1)

of this section, including a pattern or practice of arranging for the refinancing

of its own loans by affiliated or unaffiliated creditors, or modifying a loan agreement,

whether or not the existing loan is satisfied and replaced by the new loan, and charging

a fee. (2) Division (G)(1) of this section shall apply on and after October 1, 2002. (H) Finance, directly or indirectly, into a covered loan or finance to the same borrower

within thirty days of a covered loan any credit life or credit disability insurance

premiums sold in connection with the covered loan, provided that any credit life or

credit disability insurance premiums calculated and paid on a monthly or other periodic

basis shall not be considered financed by the person originating the loan.  For purposes of this division, credit life or credit disability insurance does not

include a contract issued by a government agency or private mortgage insurance company

to insure the lender against loss caused by a mortgagor's default. (I) Replace or consolidate a zero interest rate or other low-rate loan made by a governmental

or nonprofit lender with a covered loan within the first ten years of the low-rate

loan unless the current holder of the loan consents in writing to the refinancing.  For purposes of this division, a “ low-rate loan ” means a loan that carries a current interest rate two percentage points or more

below the current yield on United States treasury securities with a comparable maturity.  If the loan's current interest rate is either a discounted introductory rate or

a rate that automatically steps up over time, the fully indexed rate or the fully

stepped-up rate, as applicable, shall be used, in lieu of the current rate, to determine

whether a loan is a low-rate loan. (J) Make a covered loan if, at the time the loan was consummated, the consumer's total

monthly debt, including amounts owed under the loan, exceed fifty per cent of the

consumer's monthly gross income, as verified by the credit application, the consumer's

financial statement, a credit report, financial information provided to the person

originating the loan by or on behalf of the consumer, or any other reasonable means,

unless the consumer submits both of the following: (1) Verification that the consumer received prepurchase counseling from a counseling

service that meets the criteria established by the superintendent of financial institutions

under section 1349.271 of the Revised Code ; (2) A disclosure, signed by the consumer, that acknowledges the risk of entering into

such a loan.