Recently, the Ohio Department of Commerce issued an alert that nonbank entities receiving compensation for arranging or brokering bank loans of $5,000 or less must obtain a license under the Small Loan Act (SLA). This requirement applies regardless of whether the compensation comes from the borrower or the bank.
Loans governed by the Short-Term Loan Act, General Loan Law, or Consumer Installment Loan Act are exempt from this requirement. The department urged companies to review their product offerings to ensure compliance with SLA requirements, particularly the prohibition of loans under $1,000 or with terms of one year or less.
The alert also addressed arranging bank loans over $5,000, stating the department is still considering its position and will not require licensure for these loans for the 2025 cycle.
