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#317939 - 02/17/05 04:21 PM Ohio version of SCRA
JJohns Offline
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JJohns
Joined: Jun 2003
Posts: 682
IL
Just got word that HB 426 was signed on 2/15 by the Governor of Ohio. It's a state version of the federal SCRA. One big difference is that this new OH law apparently mandates a 6% rate cap even on loans that were made AFTER the individual entered active duty. If true, it certainly creates some new operational and system-related issues. Haven't looked at it yet but just wanted to put a "heads-up" out there.
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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#317940 - 02/17/05 04:55 PM Re: Ohio version of SCRA
Anonymous
Unregistered

Look for national banks to appeal, claiming the state is not in authority here, the OCC is.

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#317941 - 02/17/05 09:34 PM Re: Ohio version of SCRA
Anonymous
Unregistered

I don't doubt that national banks will be able to avoid applicability, but I wouldn't say that sovles the problem. You can see the local news headline already: "ABC Bank refuses to follow Ohio law designed to aid our troops." Complex arguements about federal preemption and OCC authority don't mean much in the realm of public opinion.

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#317942 - 02/17/05 11:00 PM Re: Ohio version of SCRA
rlcarey Offline
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rlcarey
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Galveston, TX
Since the SCRA is not a regulation issued by the OCC, the preemption would not apply anyway.
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#317943 - 02/18/05 01:58 AM Re: Ohio version of SCRA
MikeD Offline
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Joined: Jul 2004
Posts: 30
Los Angeles
It's also interesting as regards new loans. If you say your rate is 8%, and the servicemember can't pay more than 6% by law, doesn't that make it impossible to approve the loan, due to the law?

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#317944 - 02/18/05 02:58 PM Re: Ohio version of SCRA
Andy_Z Offline
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When I started in this industry at a finance company, if you lived in or had relatives in Ark. you were denied. The usury rate there was so low that the company wanted nothing to do with them.

The law of unintended consequences could have the same effect. If you are in the military and need a $2,500 loan, if 6% doesn't break even, the lenders may be forced to deny them, or lose money. At what point is it profitable?
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