## Facts

- Andrew Block bought a used car from North Shore Auto Sales (J.D. Byrider) under a retail installment contract that was assigned to North Shore Auto Financing, Inc. (CNAC).
- The contract charged a 25% per annum interest rate, the statutory maximum under Ohio’s Retail Installment Sales Act (RISA), R.C. 1317.061.
- The contract included a $35 vendors’ single-interest (VSI) insurance premium in the “amount financed.”
- VSI insurance primarily protected the lender’s interest in the vehicle collateral if the borrower failed to obtain or maintain required insurance.
- CNAC sued to collect; Block counterclaimed and asserted class claims (including a certified “Usury Class”) alleging that treating the $35 VSI premium as “amount financed” improperly understated the finance charge.
- Block relied on Truth in Lending Act (TILA) rules governing when insurance premiums may be excluded from the finance charge, asserting that required disclosures were not given (including disclosure of the cost and that coverage could be obtained elsewhere).
- After a bench trial, the trial court entered judgment for CNAC and North Shore on the class claims.

## Issues

1. Whether the $35 VSI insurance premium could be excluded from the “finance charge” when assessing compliance with R.C. 1317.061’s maximum rate for retail installment contracts.
2. Whether TILA’s disclosure conditions for excluding insurance premiums inform how VSI premiums must be classified for RISA usury analysis.
3. Whether failure to satisfy TILA’s exclusion conditions required treating the VSI premium as a finance charge, potentially making a contract at the 25% maximum rate usurious under RISA.

## Decision

- The appellate court reversed the bench-trial judgment for CNAC and North Shore and remanded for further proceedings.
- It held the trial court erred in permitting the $35 VSI premium to be treated as “amount financed” in a manner that avoided finance-charge treatment in the RISA usury analysis.
- It concluded that, absent compliance with the disclosure conditions tied to excluding such insurance from the finance charge, the VSI premium should be treated as part of the finance charge for evaluating whether the maximum-rate contract violated RISA.

## Legal Principles

- Under RISA, charging the statutory maximum rate under R.C. 1317.061 limits the creditor’s ability to impose additional costs of credit through reclassification of charges outside the finance charge.
- TILA’s treatment of insurance premiums and its disclosure prerequisites may be used to assess whether a lender-benefit insurance charge is properly excluded from the finance charge in a RISA usury claim.
- If the creditor does not satisfy the required disclosures for excluding VSI-type premiums from the finance charge (including clear disclosure of cost and meaningful consumer choice), the premium must be treated as a finance charge.
- When a contract already bears the maximum lawful rate, including improperly excluded credit costs in the finance charge can push the effective cost of credit beyond RISA’s limit and trigger statutory remedies on a class-wide basis.

## Conclusion

The appellate court held that the trial court misapplied RISA and related TILA finance-charge principles by allowing a $35 VSI premium to remain in the “amount financed” without the disclosures necessary to exclude it from the finance charge; because the contracts charged the maximum statutory rate, the misclassification could render them usurious, requiring reversal and remand for liability and remedy determinations under the correct framework.


North Shore Auto Fin., Inc. v. Block, 188 Ohio App. 3d 48, 934 N.E.2d 381 (Ohio Ct. App. 2010)