Ohio Regulatory Updates
Ohio Enacts the Notary Public Modernization Act
The state of Ohio has recently enacted the Notary Public Modernization Act with Senate Bill 263. This bill was signed by the governor on December 19, 2018 and is effective 91 days after filling with the Secretary of State.
The purpose of the Notary Public Modernization Act is to update and streamline the antiquated notary public system in Ohio. One key element of the act is that it allows for electronic notarizations, eliminating the need for in-person face-to-face meetings for notarial acts. Instead, this new feature allows Ohio residents to have their documents notarized over the internet, by connecting with a commissioned Ohio notary using live audio-video communications technology.
In addition to allowing electronic notarizations, the act also remedies the inconsistency and inefficiency in Ohio’s notary commissioning process. Due to a myriad of state and local processes that vary by county, there were previously 88 different processes by which a person could become a notary public in Ohio. To remedy this the bill eliminates the county-by-county registration system, and replaces it with one centralized, uniform system.
The new notary commissioning system consolidates the process under the sole authority of the office of the Secretary of State. The Secretary of State is to oversee the entire process of appointing and commissioning notaries public, and all applications and fees are to be sent directly to the Secretary of State’s office for processing.
Under the new bill, all notary public applicants are also required to submit to a stringent background check, administered by Ohio’s Bureau of Criminal Investigation and Identification. And, in addition, the bill requires prospective notary public applicants to participate in an approved training course and pass an assessment. The bill notes that attorneys in the state of Ohio, who previously would become notaries automatically when admitted to practice, will now be required to fulfill the training and assessment requirements as well.
Ohio Amends Provisions Regarding Financial Institutions
The state of Ohio has recently enacted House Bill 489, which includes several provisions that affect financial institutions. This bill was signed by the governor on December 19, 2018 and is effective 91 days after filling with the Secretary of State.
One of the new provisions in HB 489 decreases the number of bank and credit union examinations that are to be carried out by the Division of Financial Institutions. Under the current law, state banks and credit unions licensed by the Division are subject to examination at least once every 24 months, or as often as the Superintendent of Financial Institutions considers necessary on each state bank and credit union. However, the new bill generally prohibits the Superintendent from conducting examinations more often than once every 24 months for a state bank or credit union that meets the following conditions: (1) it maintains assets of $10 billion or less, and (2) it maintains a composite rating of one (the highest rating) under the uniform financial institutions rating system. However, more frequent examinations may be carried out if (1) there is reasonable cause to believe that there is a risk of harm to the bank, or (2) the Division participates with other financial regulatory authorities in a joint, concurrent, or coordinated examination.
Another new provision relates to mortgage servicer registration. The bill requires nonexempt mortgage loan servicers to register every principal office and branch office with the Division of Financial Institutions under the regulatory umbrella of the Ohio Residential Mortgage Lending Act. This provision was included because the Ohio Residential Mortgage Lending Act had inadvertently exempted entities involved exclusively in mortgage loan servicing from this registration requirement. The annual renewal fee is $500 and is deposited into the Consumer Finance Fund (Fund 5530).
There are several other minor provisions mentioned in the bill that affect financial institutions. One such provision prohibits individuals from using the name of a credit union in promotional material, without its express written permission, in a way that may cause another person to believe that the person using the name is associated with the credit union. Another provision in the bill provides certain conditions under which a bank or credit union may not be held civilly liable or subject to sanctions by the Superintendent in the event of a “bona fide error.” And finally, the bill also authorizes the Speaker of the House of Representatives or the President of the Senate to request the Legislative Service Commission to arrange for “data analytics” to be conducted on any publicly available data regarding state banks or credit unions, to assist the General Assembly in proposing or evaluating legislation.
Ohio Amends Provisions Regarding Foreclosure Procedures
The state of Ohio has recently amended its foreclosure procedures with House Bill 480. This bill was signed by the Governor on December 19, 2018 and is effective 91 days after filing with the Secretary of State.
The new provisions add requirements for multi-parcel auctions to the state’s current foreclosure law. For the purposes of the bill, “multi-parcel auction” means any auction of real or personal property in which multiple parcels or lots are offered for sale in various amalgamations, including as individual parcels or lots, combinations of parcels or lots, and all parcels or lots as a whole.
This bill authorizes the Department of Agriculture to specifically regulate multi-parcel auctions. It also requires a contract for a multi-parcel auction to include a statement that specifies that the auction will be a multi-parcel auction. In addition, the bill requires all advertisements for multi-parcel auctions to state that the auction will be offered in various amalgamations, including as individual parcels or lots, combinations of parcels or lots, and all parcels or lots as a whole.
The provisions authorize an auctioneer or auction firm to advertise an absolute auction as a multi-parcel auction if the auctioneer complies with requirements governing advertising, sales, and bidding established in current law and by the bill. However, the bill also authorizes the Department to deny, refuse to renew, suspend, or revoke an auctioneer license for either of the following: specifying that an auction is a multi-parcel auction, but not conducting the auction as specified; or failing to display a notice conspicuously at the clerk’s desk or on a bid card that clearly states an explanation of the multi-parcel auction process.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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