Ohioans owe an estimated $43.3 billion in credit card debt, and a pair of bills at the Statehouse would rewrite the rules governing the for-profit companies that promise to help them pay it off.

Senate Bill 256, sponsored by Sen. George Lang, and House Bill 534, co-sponsored by Rep. Erika White and Rep. Haraz Ghanbari, would replace Ohio's existing fee caps on debt settlement firms with a new licensing framework overseen by the superintendent of financial institutions. Supporters say the current law effectively shuts out companies that could help struggling families. Consumer advocates warn the change would strip protections that have been in place for more than two decades.

The debt picture

Ohio's average credit card balance stood at $5,706 as of March 2026, according to Experian. That was a 0.4% decline from the prior year. The state's average FICO score dropped two points to 713 over the same period.

The Columbus metro area averaged $6,209 per cardholder, Experian reported.

Student loan debt adds to the burden. Ohio ranks fourth nationally for student loans as a share of household debt, at 12.53%, according to Education Data Initiative figures from late 2025. Medical debt hit one in five Ohio adults in 2025, the Ohio Capital Journal reported, citing the Ohio Medicaid Assessment Survey.

WalletHub’s analysis of its proprietary user data found that 19.66% of Ohio credit cards were delinquent in the second quarter of 2025. That share increased 28.65% from the previous quarter, the fifth-largest increase among states.

What the law says now

Ohio's Debt Adjusters Act, enacted in 2004 under Ohio Revised Code Chapter 4710 (ORC 4710), caps what debt adjusters can charge. The law limits initial consultation fees to $75, annual consultation fees to $100 and monthly service fees to 8.5% of the amount paid to creditors or $30, whichever is greater, according to the Ohio Attorney General's office.

Debt adjusters also must file annual audits with the attorney general and maintain $100,000 in insurance coverage.

Those caps apply to any company that compromises debts on a consumer's behalf, including for-profit settlement firms. A legal analysis by Shipkevich PLLC placed Ohio among states whose fee structures effectively exclude the for-profit settlement business model.

An analysis commissioned by the Association for Consumer Debt Relief found that clients in other states who reached at least one settlement through a for-profit debt relief company saved an average of $6,370 after fees. The study covered about 4.3 million clients enrolled between 2016 and 2022.

The savings figure does not represent every enrollee’s experience, however. About 24% of clients left their programs without settling at least half of their enrolled debt, the report found.

Two sides of the debate

Greg R. Lawson, a research fellow at the Buckeye Institute, argued in a November 2025 policy memo that Ohio's "ambiguous, outdated debt-adjusting laws bar or hinder many reputable settlement firms from providing their services."

The companion House and Senate bills would require licensing, surety bonds of up to $50,000, consumer disclosures and FDIC-insured accounts. Fees would be tied to actual debt resolution outcomes, according to Lawson's memo.

Ohio's current law "was built around traditional nonprofit credit counseling and does not account for the modern debt resolution model that has operated under federal regulation since 2010," Sen. Lang said when he introduced his bill earlier this year. "Because of that disconnect, Ohio’s framework is not aligned with federal standards or with most neighboring states, including Pennsylvania, Kentucky, Indiana, and Michigan."

Kalitha Williams, policy liaison for asset building at Policy Matters Ohio, testified against a similar earlier bill, SB 226, warning that the for-profit settlement industry targets people who are struggling financially.

Williams said consumers who enter settlement programs often stop paying creditors while an escrow account builds, leading to defaults, lawsuits and sometimes the bankruptcy they were trying to avoid.

Ohio recorded 26,110 personal bankruptcy filings in the 12 months ending March 31, 2026, up 5.4% from 24,777 the year before, according to a SmartAsset study of federal court records. That is about 220 filings per 100,000 residents.

Williams pointed to Colorado, which removed its fee cap in 2011. More than half of consumers who entered settlement programs there dropped out within two years, she said.

Both bills remain pending in committee in the 136th General Assembly. Neither has received a floor vote.