TOLEDO PREDATORY LENDING ORDINANCE UPHELD
The Ohio Sixth District Court of Appeals reversed the decision of the Lucas County Court of Common Pleas and found the Toledo predatory lending ordinance constitutional. American Financial Services Ass’n v. City of Toledo, Case No. L-04-1214 (Ohio App. June 10, 2005). In determining whether the ordinance was preempted the court stated that a state statute takes precedence over local ordinance when (i) a conflict exists between the ordinance and state law; (ii) the challenged ordinance involves the exercise of police power, rather than local self-government and (iii) the statute is a general law. The court found that no conflict existed between the Toledo Predatory Lending Ordinance and the state statutory provisions dealing with predatory loans. The court remanded the case to the lower court for further proceedings consistent with the decision.
The court also certified the conflict between the decision and a 2004 decision on the Dayton predatory lending ordinance. In that
case, the Second District Court of Appeals found a similar predatory lending ordinance enacted in Dayton unconstitutional. City of Dayton v. Ohio, 2004 WL 1367067 (June 18, 2004). The City of Dayton did not appeal the decision. The Ohio Supreme Court is currently considering the conflict between the Dayton decision and the decision of the Eighth District Court of Appeals finding the Cleveland predatory lending ordinance constitutional. American Financial Services Ass’n v. City of Cleveland, Case No. 83676 (Ohio App. Dec. 2, 2004). Motions have been filed by AFSA and the State of Ohio in the Sixth District Court of Appeals to stay the decision finding the ordinance valid pending an appeal to the Ohio Supreme Court.
Darrell Dreher and Elizabeth Anstaett