To amend section 9.79; to enact new sections 4710.01, 4710.02, 4710.03, and 4710.04 and sections 4710.05, 4710.06, 4710.07, 4710.08, 4710.09, 4710.10, 4710.11, 4710.12, 4710.13, 4710.14, 4710.15, 4710.16, 4710.17, 4710.18, and 4710.19; and to repeal sections 4710.01, 4710.02, 4710.03, 4710.04, and 4710.99 of the Revised Code to provide for the licensure of debt services providers.
HB534 creates a new licensing and regulatory framework for debt resolution services providers in Ohio. The bill requires anyone offering debt resolution services to Ohio consumers to obtain a license from the Superintendent of Financial Institutions, post a surety bond, disclose business and financial information, and comply with detailed contract, advertising, recordkeeping, and consumer-notice requirements. It also defines key terms such as debt resolution services, dedicated accounts, and consumer agreements, and sets out exemptions for banks, attorneys acting within attorney-client relationships, creditors, certain nonprofits, government actors, CPAs, and some out-of-state or non-Ohio consumer activity.
The bill is designed to regulate how debt settlement or debt negotiation companies operate, including when they may charge fees, how they must handle consumer funds, what disclosures must be made about risks and outcomes, and what practices are prohibited. It also gives the Superintendent authority to deny, suspend, revoke, or fine licensees, to investigate complaints, and to require annual reporting. The bill applies prospectively to agreements entered into, amended, or renewed after the effective date, and it delays implementation for one year while directing the Superintendent to adopt implementing rules.
HB534 would add a new chapter to the Revised Code governing debt resolution services and would amend section 9.79 to align criminal-record licensing standards with the new chapter. It would centralize oversight in the Superintendent of Financial Institutions, impose licensing and bonding requirements, create consumer-protection rules for contracts, fees, account handling, disclosures, and advertising, and authorize administrative enforcement, penalties, and appeals under Chapter 119. The bill would also repeal existing provisions in Chapter 4710 and replace them with a more detailed regulatory scheme for debt settlement providers and related actors.
The bill’s structure suggests a generally consumer-protection-oriented approach, with a strong emphasis on transparency, fee restrictions, and limits on deceptive practices. Even without recorded committee testimony or votes, the introduced text indicates an effort to legitimize and regulate the industry rather than ban it outright, while preserving access for certain exempt professionals and entities. The overall tone is regulatory and cautious, reflecting concern about consumer harm in debt settlement arrangements.
The main points of potential contention are likely to be the licensing burden, the fee restrictions, and the scope of prohibited practices. Debt resolution providers may view the bonding, reporting, fingerprinting, and disclosure requirements as costly or restrictive, while consumer advocates may focus on whether the bill’s exemptions are too broad or whether the rules sufficiently protect consumers from misleading promises and high-risk programs. Another likely issue is the bill’s allowance for fees only after certain debt-resolution milestones are met, which could be seen as protecting consumers but also limiting business models in the industry.