HB 332

As Passed by the House
136th General Assembly
    Regular Session  Am. H. B. No. 332
        2025-2026
  Representatives Mathews, T., Hiner
  Cosponsors: Representatives Thomas, D., Deeter, Williams, Fischer, Abrams,
  Brennan, Claggett, Click, Daniels, Dovilla, Ghanbari, Hall, D., Hall, T., Holmes,
  Hoops, John, Johnson, Klopfenstein, Lampton, Lear, Manning, Mathews, A.,
  Miller, J., Miller, K., Oelslager, Peterson, Plummer, Richardson, Robb Blasdel,
 Santucci, Schmidt, Sigrist, Synenberg, Thomas, C., White, A., Workman, Young
  To amend sections 135.61, 135.62, 135.621, 135.623,  1
  1733.04, and 1733.24 and to enact section 135.67  2
  of the Revised Code to create the small defense  3
  business linked deposit program.  4
 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
      Section 1. That sections 135.61, 135.62, 135.621, 135.623,  5
1733.04, and 1733.24 be amended and section 135.67 of the  6
Revised Code be enacted to read as follows:  7
      Sec. 135.61. (A) For the purposes of this section:  8
      (1) "Eligible borrower," "eligible credit union," and  9
"eligible lending institution" have the same meanings as in  10
section 135.62 of the Revised Code.  11
      (2) "Eligible participant" and "eligible savings  12
institution" have the same meanings as in section 135.70 of the  13
Revised Code.  14
      (B) The treasurer of state may invest in linked deposits  15
under sections 135.61 to 135.66 135.67 and 135.70 to 135.71 of  16
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As Passed by the House
the Revised Code, provided that at the time any such linked  17
deposits are placed, purchased, or designated, the combined  18
amount of investments of public money of the state in linked  19
deposits of any kind is not more than twelve per cent of the  20
state's total average investment portfolio, as determined by the  21
treasurer of state. When deciding whether to invest in any  22
linked deposits, the treasurer of state shall give priority to  23
the investment, liquidity, and cash flow needs of the state.  24
       (C) The treasurer of state may, in accordance with section  25
111.15 of the Revised Code, adopt rules necessary for the  26
implementation and administration of linked deposits authorized  27
by this section, including, but not limited to, the manner in  28
which an eligible lending institution or eligible savings  29
institution is designated, and the manner in which linked  30
deposits are placed, purchased, designated, held, and  31
collateralized.  32
       (D) Notwithstanding any contrary provision of the Revised  33
Code, the treasurer of state may require an eligible credit  34
union that holds linked deposits authorized under this section  35
to pay interest at a rate not lower than the product of the  36
interest rate set in the deposit agreement, as required by  37
sections 135.623 and 135.703 of the Revised Code, multiplied by  38
the sum of one plus the treasurer of state's assessment rate.  39
The treasurer of state may, in accordance with section 119.03 of  40
the Revised Code, adopt rules necessary for the implementation  41
of this division.  42
       (E)(1) Records of the treasurer of state, an eligible  43
lending institution, or an eligible savings institution are not  44
public records within the meaning of section 149.43 of the  45
Revised Code if any of the following apply:  46
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       (a) The record is provided by an eligible borrower to an  47
eligible lending institution, or by an eligible participant to  48
an eligible savings institution, to obtain a financial service  49
or product from such institution.  50
       (b) The record results from a transaction between the  51
eligible borrower and the eligible lending institution, or the  52
eligible participant and the eligible savings institution,  53
involving a financial product or service.  54
       (c) An eligible lending institution or eligible savings  55
institution otherwise obtains the record about an eligible  56
borrower or eligible participant in connection with providing a  57
financial product or service.  58
       (2) The records specified in division (E)(1) of this  59
section may include names, addresses, telephone numbers, social  60
security numbers, income, credit scores, information obtained  61
through cookies and other internet collection devices, loan  62
amounts, contributors to a linked deposit savings account, and  63
amounts contributed to, earned by, or distributed from a linked  64
deposit savings account.  65
       Sec. 135.62. As used in sections 135.62 to 135.66 135.67  66
of the Revised Code:  67
       (A) "Discount interest rate" means an interest rate below  68
the prevailing interest rate that the treasurer of state  69
determines eligible lending institutions are willing to pay to  70
hold linked deposits.  71
       (B) "Eligible borrower" means a borrower that has met all  72
the requirements necessary to participate in the adoption linked  73
deposit program under section 135.63 of the Revised Code,  74
agricultural linked deposit program under section 135.64 of the  75
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As Passed by the House
Revised Code, small business linked deposit program under  76
section 135.65 of the Revised Code, or home improvement linked  77
deposit program under section 135.66 of the Revised Code, or  78
small defense business linked deposit program under section  79
135.67 of the Revised Code.  80
       (C) "Eligible credit union" means, notwithstanding any  81
contrary provision of sections 135.01 to 135.21 of the Revised  82
Code, a federal credit union, a foreign credit union licensed  83
pursuant to section 1733.39 of the Revised Code, or a credit  84
union as defined in section 1733.01 of the Revised Code, located  85
in this state.  86
       (D) "Eligible lending institution" means a financial  87
institution that is eligible to make loans, agrees to  88
participate in the applicable linked deposit program, and is one  89
of the following:  90
       (1) A public depository of state funds, or an eligible  91
credit union designated under division (A) of section 135.12 of  92
the Revised Code;  93
       (2) For the agricultural linked deposit program,  94
notwithstanding any contrary provision of sections 135.01 to  95
135.21 of the Revised Code, an institution of the farm credit  96
system organized under the federal "Farm Credit Act of 1971," 85  97
Stat. 583, 12 U.S.C. 2001, as amended.  98
       (E) "Homestead" means a dwelling owned and occupied in  99
this state as a single-family primary residence by an individual  100
for the purpose of qualifying for the home improvement linked  101
deposit program. "Homestead" includes a house, condo, a unit in  102
a multiple-unit dwelling, manufactured home or mobile home taxed  103
as real property pursuant to division (B) of section 4503.06 of  104
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As Passed by the House
the Revised Code, or any other building with a residential  105
classification, as allowed by the treasurer of state.  106
"Homestead" includes so much of the land surrounding the  107
dwelling as is reasonably necessary for the use of the dwelling  108
as a residence, as determined by the treasurer of state.  109
       (F) "Linked deposit" means a certificate of deposit, a  110
share certificate, other financial institution instrument, or  111
portion of an existing deposit of interim funds made in  112
accordance with section 135.09 of the Revised Code placed,  113
purchased, or designated by the treasurer of state with an  114
eligible lending institution; provided the institution agrees to  115
lend up to the value of such certificate of deposit, share  116
certificate, or other financial institution instrument, or  117
designated portion of an existing deposit to eligible borrowers  118
for applicable linked deposit programs at the rate established  119
in division (A) of section 135.624 of the Revised Code, and in  120
accordance with the deposit agreement provided in section  121
135.623 of the Revised Code.  122
       (G) "Linked deposit program" means a program authorized  123
under sections 135.61 to 135.66 135.67 of the Revised Code and  124
established by the treasurer of state pursuant to such sections.  125
       (H) "Loan" means a contractual agreement under which an  126
eligible lending institution agrees to lend money to an eligible  127
borrower in the form of an upfront lump sum, a line of credit,  128
or any other reasonable arrangement approved by the treasurer of  129
state.  130
       (I) "Manufactured home" has the same meaning as in section  131
3781.06 of the Revised Code.  132
       (J) "Mobile home" has the same meaning as in section  133
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4501.01 of the Revised Code.  134
       (K) "Other financial institution instrument" means:  135
       (1) For the agricultural linked deposit program under  136
section 135.64 of the Revised Code, an investment by the  137
treasurer of state in bonds, notes, debentures, or other  138
obligations or securities issued by the federal farm credit bank  139
with regard to an eligible lending institution;  140
       (2) For all linked deposit programs other than the  141
agricultural linked deposit program, a product that otherwise  142
would pay the prevailing interest rate approved by the treasurer  143
of state, for the purpose of providing eligible borrowers with  144
the benefits of the applicable linked deposit program, and in  145
accordance with the deposit agreement provided in section  146
135.623 of the Revised Code.  147
       (L) "Owner" includes a holder of one of the several  148
estates in fee, a vendee in possession under a purchase  149
agreement or a land contract, a mortgagor, a life tenant, one or  150
more tenants with a right of survivorship, tenants in common, a  151
settlor of a revocable or irrevocable inter vivos trust holding  152
the title to a homestead occupied by the settlor as of right  153
under the trust, or any other determination as made by the  154
treasurer of state.  155
       (M) "Prevailing interest rate" means a current market  156
interest rate selected by the treasurer of state that eligible  157
lending institutions are willing to pay to hold deposits of the  158
treasurer of state.  159
       (N) "Qualifying adoption expense" means any expense  160
incurred to legally adopt a child as described in division (C)  161
of section 3107.055 of the Revised Code, including any costs  162
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As Passed by the House
incurred by the eligible borrower proximately relating to the  163
completion and approval of the home study under section 3107.031  164
of the Revised Code, and any other expense as determined by the  165
treasurer of state.  166
       (O) "Treasurer of state's assessment rate" means a rate  167
not exceeding ten per cent that is calculated in a manner  168
determined by the treasurer of state and that seeks to account  169
for the effect that varying tax treatment among different types  170
of financial institutions has on the ability of financial  171
institutions to pay competitive interest rates to hold deposits.  172
       Sec. 135.621. (A) An eligible lending institution that  173
desires to receive a linked deposit shall accept and review  174
applications for loans from eligible borrowers for linked  175
deposit programs in which the eligible lending institution  176
participates. The eligible lending institution shall apply all  177
usual lending standards to determine the credit worthiness of  178
each eligible borrower. No loan shall exceed the amount  179
determined by the treasurer of state.  180
       (B) An eligible borrower shall certify on its loan  181
application that the reduced rate loan will be used exclusively  182
for the purposes of the applicable linked deposit program, as  183
described in section 135.63, 135.64, 135.65, or 135.66, or  184
135.67 of the Revised Code. Whoever knowingly makes a false  185
statement concerning such application is guilty of the offense  186
of falsification under section 2921.13 of the Revised Code.  187
       (C) The eligible lending institution shall forward to the  188
treasurer of state a linked deposit loan package, in the form  189
and manner prescribed by the treasurer of state. The package  190
shall include such information as required by the treasurer of  191
state, including the amount of each loan requested by each  192
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As Passed by the House
eligible borrower and all other information as described in  193
section 135.63, 135.64, 135.65, or 135.66, or 135.67 of the  194
Revised Code for the applicable linked deposit program. The  195
institution shall certify both of the following:  196
        (1) That each applicant is an eligible borrower and, for  197
each such eligible borrower, the present borrowing rate;  198
        (2) That the eligible lending institution applied all of  199
its usual lending standards to determine the credit worthiness  200
of each eligible borrower.  201
        (D) No fee shall be charged to any party for the  202
preparation, processing, or reporting of any application to an  203
eligible lending institution or the treasurer of state for  204
participation in a linked deposit program.  205
        Sec. 135.623. (A) An eligible lending institution shall  206
enter into a deposit agreement with the treasurer of state,  207
which shall include requirements necessary to carry out the  208
purposes of sections 135.62 to 135.66 135.67 of the Revised  209
Code.  210
        (B) The deposit agreement shall specify the maturity  211
period of the linked deposit considered appropriate by the  212
treasurer of state, which shall not exceed five years, as well  213
as any other information, terms, or conditions the treasurer of  214
state may require. Interest shall be paid by the eligible  215
lending institution at times determined by the treasurer of  216
state.  217
        Sec. 135.67. (A) As used in this section:  218
        (1) "Armed forces" has the same meaning as in section  219
5903.01 of the Revised Code.  220
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       (2) "Gross receipts" has the same meaning as in section  221
5751.01 of the Revised Code.  222
       (B) The general assembly finds that the defense industry  223
makes significant contributions to the economic well-being of  224
this state. However, various economic challenges, such as  225
tightened capital availability, inflationary pressures, and  226
rising interest rates, can discourage fledgling businesses,  227
particularly small businesses, from taking root in this state  228
and engaging with the defense industry. Accordingly, it is  229
declared to be the public policy of the state to make reduced  230
rate loans available to defense-oriented businesses, including  231
subcontractors for those businesses, through the small defense  232
business linked deposit program.  233
       (C) An eligible borrower for the small defense business  234
linked deposit program is any person that has all the following  235
characteristics:  236
       (1) Is currently headquartered or domiciled in this state,  237
and has been headquartered or domiciled in this state for at  238
least five years preceding the person's application for  239
participation in the linked deposit program;  240
       (2) Maintains offices or operating facilities in this  241
state that comprise not less than fifty-one per cent of the  242
total of all offices and operating facilities maintained by the  243
person;  244
       (3) Is a party to, or has been a party to, a contract or  245
subcontract with the armed forces or an agency or  246
instrumentality of the United States government for the  247
provision of goods or services to the armed forces;  248
       (4) Has less than fifty million dollars in gross receipts  249
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As Passed by the House
for the twelve months preceding application to the linked  250
deposit program;  251
       (5) Is organized for profit.  252
       (D) An eligible lending institution for the small defense  253
business linked deposit program must be able to make commercial  254
loans.  255
       (E) An eligible borrower shall certify on the loan  256
application that the reduced rate loan will be used exclusively  257
in this state to create new jobs, preserve existing jobs and  258
employment opportunities, or materially contribute to the  259
preservation or growth of the eligible borrower's business.  260
       Sec. 1733.04. (A) In addition to the authority conferred  261
by section 1701.13 of the Revised Code, but subject to any  262
limitations contained in sections 1733.01 to 1733.45 of the  263
Revised Code, and its articles and regulations, a credit union  264
may do any of the following:  265
       (1) Make loans as provided in section 1733.25 of the  266
Revised Code;  267
       (2) Invest its money as provided in section 1733.30 of the  268
Revised Code;  269
       (3) If authorized by the code of regulations, rebate to  270
the borrowing members a portion of the member's interest paid to  271
the credit union;  272
       (4) If authorized by the regulations, charge a membership  273
or entrance fee;  274
       (5) Purchase group savings life insurance and group credit  275
life insurance;  276
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As Passed by the House
       (6) Make reasonable contributions to any nonprofit civic,  277
charitable, or service organizations;  278
       (7) Act as trustee or custodian, for which reasonable  279
compensation may be received, under any written trust instrument  280
or custodial agreement created or organized in the United States  281
and forming part of a tax-advantaged savings plan that qualifies  282
for specific tax treatment under sections 223, 401(d), 408,  283
408A, and 530 of the Internal Revenue Code, 26 U.S.C. 223,  284
401(d), 408, 408A, and 530, as amended, for its members or  285
groups of its members, provided that the funds of such plans are  286
invested in share accounts or share certificate accounts of the  287
credit union. These services include, but are not limited to,  288
acting as a trustee or custodian for member retirement,  289
education, or health savings accounts.  290
       (8) Participate in and pledge assets in connection with  291
the linked deposit programs under sections 135.61 to 135.66  292
135.67 of the Revised Code and sections 135.70 to 135.71 of the  293
Revised Code.  294
       (B) The authority of a credit union shall be subject to  295
the following:  296
       (1) A credit union may not borrow money in excess of  297
twenty-five per cent of its shares and undivided earnings,  298
without prior specific authorization by the superintendent of  299
credit unions.  300
       (2) A credit union may not pay a commission or other  301
compensation to any person for securing members or for the sale  302
of its shares, except that reasonable incentives may be made  303
available directly to members or potential members to promote  304
thrift.  305
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As Passed by the House
       (C)(1) A credit union may have service facilities other  306
than its home office.  307
       (2) Real estate may be acquired by lease, purchase, or  308
otherwise as necessary and to the extent required for use of the  309
credit union presently and in the future operation of its office  310
or headquarters, and in case of a purchase of real estate, the  311
superintendent must first be notified in writing prior to the  312
purchase of the real estate. Nothing herein contained shall be  313
deemed to prohibit a credit union from taking title to real  314
estate in connection with a default in the payment of a loan,  315
provided that title to such real estate shall not be held by the  316
credit union for more than two years without the prior written  317
approval of the superintendent. A credit union also may lease  318
space in any real estate it acquires in accordance with rules  319
adopted by the superintendent.  320
       (D)(1) As used in division (D) of this section:  321
       (a) "School" means an elementary or secondary school.  322
       (b) "Student" means a child enrolled in a school.  323
       (c) "Student branch" means the designation provided to the  324
credit union for the in-school services and financial education  325
offered to students.  326
       (2) A credit union, upon agreement with a school board, in  327
the case of a public school, or the governing authority, in the  328
case of a nonpublic school, and with the permission of the  329
superintendent, may open and maintain a student branch.  330
       (3) Notwithstanding any other provision of this section,  331
any student enrolled in the school maintaining a student branch  332
who is not otherwise qualified for membership in the credit  333
union maintaining the student branch is qualified to be a member  334
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As Passed by the House
of that student branch.  335
       (4) The student's membership in the student branch expires  336
upon the student's graduation from secondary school.  337
       (5) The student branch is for the express use of students  338
and may not be used by faculty, staff, or lineal ancestors or  339
descendants of students.  340
       (6) Faculty, staff, or lineal ancestors or descendants of  341
students are not eligible for membership in the credit union  342
maintaining the student branch unless otherwise qualified by  343
this section to be members.  344
       (7) The superintendent may adopt rules appropriate to the  345
formation and operation of student branches.  346
       (E) A credit union may guarantee the signature of a member  347
in connection with a transaction involving tangible or  348
intangible property in which a member has or seeks to acquire an  349
interest.  350
       Sec. 1733.24. (A) A credit union is authorized to receive  351
funds for deposit in share accounts, share draft accounts, and  352
share certificates from its members, from other credit unions,  353
and from an officer, employee, or agent of the federal, state,  354
or local governments, or political subdivisions of the state, in  355
accordance with such terms, rates, and conditions as may be  356
established by its board of directors, and for purposes of the  357
linked deposit programs created under sections 135.61 to 135.66  358
135.67 of the Revised Code and sections 135.70 to 135.71 of the  359
Revised Code.  360
       (B) The shares and share accounts of the credit union may  361
be of one or more classes, as designated by the board of  362
directors, subject to approval of the superintendent of credit  363
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As Passed by the House
unions based on rules that shall assure equitable distribution  364
of dividends among classes, considering costs and advantages of  365
each class to the members of the credit union, including without  366
limitation special services rendered, length of ownership,  367
minimum investment, conditions of repurchase, and other  368
appropriate standards or combinations thereof. In the event the  369
articles of incorporation of the credit union indicate the  370
authorized number of shares to be unlimited, the designation of  371
classification of shares and share accounts of the credit union  372
may be effected by the board of directors, subject to the  373
approval of the superintendent, and does not require amendment  374
of the articles of incorporation. All shares of the credit union  375
shall have a par value per share as set by the board of  376
directors. Redemptions and liquidating dividends shall be  377
prorated to each member on the basis of the price paid the  378
credit union for such share, irrespective of the class of such  379
shares.  380
       (C)(1) Each credit union shall have one class of shares  381
designated as "membership share." The membership shares, or if a  382
credit union has but one class of shares, then all of the shares  383
of the credit union, shall have a par value as set by the board  384
of directors.  385
       (2) Two or more persons that are eligible for membership  386
that have jointly subscribed for one or more shares under a  387
joint account each may be admitted to membership.  388
       (D) A credit union need not issue certificates for any or  389
all of its classes of shares but irrespective of whether  390
certificates are issued, a registry of shares must be kept,  391
including all of the transactions of the credit union pertaining  392
to such shares.  393
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As Passed by the House
       (E) A credit union is authorized to maintain share draft  394
accounts in accordance with rules prescribed by the  395
superintendent. The credit union may pay dividends on share  396
draft accounts, may pay dividends at different rates on  397
different types of share draft accounts, and may permit the  398
owners of such share draft accounts to make withdrawals by  399
negotiable or transferable instruments or other orders for the  400
purpose of making transfers to third parties.  401
       (F) Unless otherwise provided by written agreement of the  402
parties, the rights, responsibilities, and liabilities attaching  403
to a share draft withdrawn from, transferred to, or otherwise  404
handled by a credit union are defined in and governed by  405
Chapters 1303. and 1304. of the Revised Code, as if the credit  406
union were a bank.  407
       (G) Unless otherwise provided in the articles or  408
regulations, a member may designate any person or persons to own  409
or hold shares, or share accounts with the member in joint  410
tenancy with right of survivorship and not as tenants in common.  411
       (H) Shares or share accounts may be issued in the name of  412
a custodian under the Ohio transfers to minors act, a member in  413
trust for a beneficiary, a fiduciary or custodian in trust for a  414
member beneficiary, or a fiduciary or custodian in trust upon  415
the death of a member. Redemption of such shares or payment of  416
such share accounts to a member, to the extent of the payment,  417
discharges the liability of the credit union to the member and  418
the beneficiary, and the credit union shall be under no  419
obligation to see to the application of the payment. Unless  420
prior to the death of a member, the member has notified the  421
credit union in writing in a form approved by the credit union  422
of a different beneficiary to receive the proceeds of such  423
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As Passed by the House
shares or share accounts, then the proceeds shall be paid to the  424
beneficiary or to the beneficiary's parent or legal  425
representative. Any payment made pursuant to written  426
instructions of the member or pursuant to the provisions herein  427
contained shall be a valid and sufficient release and discharge  428
of the credit union in connection with any such share or share  429
accounts.  430
       (I)(1) Except as otherwise provided in the articles or  431
regulations, and subject to the provisions thereof, a minor may  432
purchase shares, share accounts, or other depository  433
instruments, and except for qualification as a voting member,  434
the credit union may deal with the minor with respect to shares,  435
share accounts, or other depository instruments owned by the  436
minor as if the minor were a person of legal age.  437
       (2) If shares, share accounts, or other depository  438
instruments are issued in the name of a minor, redemption of any  439
part or all of the shares or withdrawal of funds by payment to  440
the minor of the shares or funds and any declared dividends or  441
interest releases the credit union from all obligation to the  442
minor as to the shares reduced or funds withdrawn.  443
       (J) The regulations may require advance written notice of  444
a member's intention to withdraw the member's shares. Such  445
advance notice shall not exceed sixty days.  446
       (K) Notwithstanding any provision of law to the contrary,  447
funds deposited in a share account, share certificate, or in any  448
other manner pursuant to a program offered by a credit union to  449
promote consumer savings do not constitute valuable  450
consideration for purposes of a scheme of chance under Chapter  451
2915. of the Revised Code.  452
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As Passed by the House
       Section 2. That existing sections 135.61, 135.62, 135.621,  453
135.623, 1733.04, and 1733.24 of the Revised Code are hereby  454
repealed.  455