Financial Institution Law Update
Ohio’s financial institutions (as well as others) will soon have to comply with new notice requirements pursuant to Ohio House Bill 489, which goes into effect on March 20, 2019.
The bill created Ohio Revised Code § 1349.72, which requires—prior to collection or attempted collection on a debt—a detailed, written notice to be sent to a debtor if the debt is a second mortgage or junior lien on the debtor’s residential real property and the debt is in default.
The notice must be written, in at least 12-point font, and contain the following information:
- The name and contact information of the person collecting the debt;
- The amount of the debt;
- A statement that the debtor has the right to an attorney;
- A statement that the debtor may qualify for relief under Chapter 7 or 13 of the United States Bankruptcy Code; and
- A statement that the debtor may be able to protect the residential real property from foreclosure under Chapter 13 of the Bankruptcy Code.
No time period is specified as to when this notice must be sent in relation to when collection efforts are initiated.
If the owner of the debt fails to comply with these new notice requirements, the debtor can sue for resulting damages, although the new statute specifically prohibits recovery by class action.
The statute also requires the owner of the debt, upon written request of the debtor, to provide a copy of the note and the loan history to the debtor. No time period is specified for compliance.
Many questions will arise as to the scope and application of this new statute. In any event, financial institutions will need to have new forms prepared to ensure compliance with this law.
If you have any questions or would like to discuss the above issues in more detail, please do not hesitate to contact Thomas Potts, Faulkner, Garmhausen, Keister & Shenk, A Legal Professional Association, at 937-492-1271 or email@example.com.