Eric Jones Law

I recently had a case in the Franklin County Municipal Court wherein I represented a payday lender who was seeking judgment against a borrower for a relatively small balance but at an annual interest rate of 25%.  The Court in my case raised the issue of whether the lender had the legal right to be a licensed registrant under Ohio’s Mortgage Loan Act and hence could avail itself of the annual statutory interest ceiling of 25% as found in the Act.  After briefing the issue and presenting my arguments, the Court found in my client’s favor and entered judgment accordingly.  The purpose of this article is to discuss some of the issues involved in payday lending loans.

This particular type of loan is generally defined as a small loan to be repaid with a single automatic withdraw from the borrower’s checking account when his or her next pay check is deposited into a checking account.  Some critics point out what they claim are
the exorbitantly high interest rates on these loans, and have assailed payday lenders as ruthlessly praying upon consumers who, as a last resort, have been forced into borrowing money between employment pay periods at these high rates in order to make ends meet.  Others have voiced support for this type of loan by pointing out that the consumer borrower would not have otherwise been able to feed his or her family, put gas in their car to travel to and from work, or keep their electricity on but for this loan product.

For a time Ohio law allowed lenders to charge an APR of 391% on these types of short-term loans.  (See, Ohio’s previously-repealed Payday Loan Act).  However, in 2008 the Legislature enacted the Short-Term Loan Act.  R.C. §§1321.35-1321.48 (STLA).  Among other things, this law typically limits these types of loans to the 8% annual interest rate found in Ohio’s general usury statute.  (R.C. §1343.01).

The Ohio Mortgage Loan Act (R.C. §1321.01 et seq.) (OMLA) is somewhat of a misnomer as it is a general-purpose licensed lender act permitting registrants to make not only mortgage loans but also other types of direct consumer loans.  A lender making
loans under the OMLA must register with the Ohio Department of Commerce.  Among other things, the OMLA governs the maximum interest rate a licensed lender may charge the consumer borrower, which, as set forth in R.C. §1321.571, is 25%.
Naturally payday lenders would prefer to charge 25% interest as permitted under the OMLA rather than the lower interest rate prescribed in the STLA.

Many Courts throughout the State of Ohio have agreed that payday lenders have the right to avail themselves of the interest rate found in the OMLA, and for several years the general rule of thumb is that the 25% rate is perfectly acceptable in these
types of loans.  A recent case in Lorain County, however, has cast some doubt as to whether that rule of thumb will continue.

In 2009, the Elyria Municipal Court ruled in Neighborhood Finance, Inc. dba Cashland v. Scott that by writing payday loans using the guidelines found in the OMLA, specifically the interest rate ceiling of 25%, lenders are attempting to circumvent the intent of the Ohio Legislature in repealing the Payday Loan Act and enacting the STLA.  The Judge in the Scott case ultimately held, among other things, that the payday lender could not legally charge the borrower 25% interest but rather was limited to the 8% rate found in the general usury statute.  It is important to note that Scott is currently being appealed to the Ninth District Court of Appeals in Lorain County, so the case is far from being the controlling law in Ohio.  But if the Appeals Court affirms the Trial Court’s ruling, that decision would become the controlling law in the Ninth District and it would create a split amongst Ohio Courts on this issue.  Should that occur, the Supreme Court of Ohio may ultimately have to decide what the law of the land is.

Author: Brett E. Schmied

Social Security disability benefits can be paid to people who have recently worked and paid Social Security taxes and are unable to work because of a serious medical condition that is expected to last at least a year or result in death. The fact that a person is a recent parolee or is unemployed does not qualify as a disability.

If you are receiving Social Security Disability Insurance benefits (SSDI), your benefits will be suspended if you are admitted for more than 30 continuous days to a jail or prison because you were convicted of a criminal offense. Your benefits can be reinstated starting with the month following the month you are released. Although you cannot receive monthly SSDI benefits while you are confined, benefits to your spouse or children will  as long as they remain eligible.

If you are receiving Supplemental Security Income (SSI), your payments are suspended while you are in prison. Your payments can be reinstated in the month you are released. However, if your confinement lasts for 12 consecutive months or longer, your eligibility for SSI benefits will terminate and you must file a new application for benefits. Similarly, neither SSDI nor SSI benefits can be paid if there is an active warrant for your arrest.

While you are in prison, your eligibility for Medicare Part A (hospital insurance) continues uninterrupted while you are in prison. On the other hand, Medicare Part B (medical insurance) will terminate if you do not pay your monthly premiums while you are in prison. To start Medicare Part B, you will need to file an application with SSA during a general enrollment period, which is January through March of each calendar year. If you file during this enrollment period, your Medicare Part B eligibility will begin on July 1 of that year.

If your Medicaid eligibility was terminated while you were in prison, you will need to contact your local social services office to reapply for Medicaid coverage.

If your SSDI or SSI benefits were suspended because you were in prison, you can request that they be reinstated. You will need to contact Social Security and provide a copy of your release documents before SSA can take action on your
request. SSA cannot start your benefits until you are actually released. Further, SSA must have your official release documents from the jail or prison where you were confined. Please remember to bring your release forms when you visit your local Social Security office. This will help SSA get your benefits started more quickly.

If you were not receiving either SSDI or SSI benefits before you went to prison or your benefits were terminated, you will need to file a new application for benefits if you think you may be eligible. You should contact Social Security for more information about filing a claim for benefits. You will need to provide proof of your release from prison, in addition to a new application and other documents.