Ohio Neighborhood Fin., Inc. v. Scott
Appellant, a registered lender under the Mortgage Loan Act (MLA), and Appellee executed a customer agreement for a single-installment, $500 loan governed by the MLA. Appellee later defaulted on his loan. Appellant filed this action to recover on its loan to Appellee, seeking the unpaid principal balance on the loan along with interest and fees permitted by the MLA. A magistrate judge determined that Appellee’s loan was impermissible under the MLA and that the loan should be governed by the Short-Term Lender Act (STLA). The court of appeals affirmed, holding that the MLA does not authorize single-installment, interest-bearing loans and that the STLA prohibits MLA registrants from making single-installment loans of short duration. The Supreme Court reversed, holding (1) an “interest-bearing loan,” as defined by the MLA, may include a loan requiring repayment in a single installment; (2) Lenders registered under the MLA may make single-installment, interest-bearing loans, and the STLA does not limit the authority of lenders registered under the MLA to make any loans authorized by the MLA; and (3) Appellant’s loan to Appellee was an interest-bearing loan as defined under the MLA.View "Ohio Neighborhood Fin., Inc. v. Scott" on Justia Law