The Ohio Attorney General filed with the Joint Committee on Agency Rule Review (JCARR), on October 16, 2006, proposed rules dealing with mortgage lending under new provisions of the Ohio Consumer Sales Practices Act enacted earlier this year as part of S.B. No. 185. S.B. No. 185, effective January 1, 2007, was enacted after much debate and modifies the application of the Consumer Sales Practices Act and the Consumer Credit Mortgage Loan Law and contains other provisions.

    The proposed rules address issues related to unconscionable mortgage lending practices under the Consumer Sales Practices Act. Items covered in the rules include determining a consumer’s ability to repay a residential mortgage loan, refinancing a low rate mortgage loan, recommending default, required disclosures, improperly influencing an appraiser, reasonable probability of payment, unconscionable clauses and limitations on advance payments. The proposed rules are available on the Ohio Attorney General’s website at www.ag.state.oh.us/about/rules/index.asp.

    A public hearing on the proposed rules is scheduled for November 16, 2006. The effective date of a rule is determined by two different factors: 1) when the rule leaves JCARR jurisdiction (which lasts 65 days from the date of original filing or 29 days from the date of refiling) and 2) when the agency files the rule in final form with JCARR, the Legislative Services Commission and the Ohio Secretary Of State. When filing the rule the agency assigns an effective date which cannot be less than 10 days from the date of the final filing, although an agency may assign an effective date that is more than 10 days from the date of final filing.

    Elizabeth Anstaett and Darrell Dreher