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Ohio Supreme Court rejects Cleveland’s predatory lending ordinances

Banking industry seeking similar decision on Toledo law

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Cleveland's attempts to curb predatory mortgage lending through local ordinances infringes on powers reserved for the state, the Ohio Supreme Court has ruled in a decision that could discourage other cities from attempting similar measures. In a 5-2 decision this month, Ohio's highest court invalidated three Cleveland city ordinances aimed at curbing predatory lending, saying they conflict with state laws and are unconstitutional. Lenders are seeking a similar decision from the state Supreme Court in a challenge of a similar ordinance in Toledo. In the Cleveland case, the state Supreme Court held that state statutes governing residential mortgage lenders are general laws intended to establish a uniform regulatory scheme, and that cities are barred from passing their own conflicting rules for mortgage lenders. Provisions of Cleveland's ordinances also prohibited lending practices implicitly allowed under state law, the court found. In 2002, Ohio legislators incorporated much of the fe...