Legislative Update on H.B. 532: Testimony from Linda Hondros


House Commerce and Labor Committee
Interested Party Testimony
House Bill 532
Presented by Linda Hondros

Chairman Young, Vice-Chair DeVitis, Ranking Member Lepore-Hagan and members of the House Commerce and Labor Committee; thank you for the opportunity to provide testimony to House Bill 532. My name is Linda Hondros and I’m here to testify as an opponent due to specific language in the bill and I am hoping the concerns can be appropriately addressed or I stand in opposition to the bill.

I am the CEO of Hondros College and we have been offering real estate education in the State of Ohio for over 40 years. I was licensed as a real estate salesperson in the 1980’s and was a realtor for many years. I have been very active in the State of Ohio and currently serve on the board of directors and executive committee for the Ohio Chamber of Commerce, where I was chairman from 2011-2013. I have served on various local boards including OhioHealth for 9 years, YWCA Columbus for 2 terms, the Ohio Racing Commission for 2 terms, Ohio Certificate of Need, Consumer Credit Counsel of Central Ohio and most recently served on the Marijuana Task Force for the House. Our College is an affiliate member of the National Association of Realtors, the Ohio Association of Realtors, the Columbus Realtors, and the National Real Estate Educators Association, where I was a former national director and Ohio chapter director. I am testifying as an expert in education, as an expert in real estate and as an active businessperson and community leader.

The reason I wanted to testify before committee today is because I am opposed to the language included in HB 532 that states that the courses required for an Ohio real estate salespersons license must be credit-eligible but then defines credit-eligible as credit-bearing or non-credit bearing. This language contradicts itself and will have a negative impact on real estate education, professionalism and consumer protection. As usual, the devil is in the details. We believe, in concept, we are all on the same page. We all believe professionalism in the industry is of the utmost importance and quality education for individuals entering the industry will
establish a foundation for those individuals to build their careers and skills to represent their buyers and seller and their brokerage.

However, the current language allows for non-credit bearing coursework which means the education can be offered through continuing education or community enrichment departments at an institution of higher education. While those departments serve an important role for community enrichment and skills training – they do not go through the state and federal approval process that State approved and US Department of Education recognized accreditation programs must go through. And those are the entities that ensure that the education is meeting strict guidelines for program oversight, faculty credentialing, protection of student data, approval of online learning platforms, verification of student identity, curriculum and other standards.

There is a misconception that simply stating that the courses are offered by an institution of higher education automatically means that these standards are met. The fact is that NONE of this is looked at by regulatory bodies if the courses are non-credit bearing. In a non-credit bearing course offered for continuing education, they are approved internally by the institution which does not provide for any external state or accreditation standard.

There has been ambiguity in real estate license law for many years and although the law has not changed since 1989, the interpretation of the law and enforcement of the regulatory requirements have changed over time. When the law changed in 1989 to require that the courses required for a real estate salespersons license in Ohio be taught by an institution of higher education, we went through the process of becoming a College which took years of investment in both time and resources. The courses needed to sit within a degree program and be eligible for credit. That is how the law was interpreted and enforced. About 10 years ago, that interpretation began to change as leadership at the Ohio Division of Real Estate and Professional Licensing changed.

We have worked closely with the Ohio Division of Real Estate and Professional Licensing and they have acknowledged the need to address the issue for many years. The Superintendent has explained to the Ohio Real Estate Commission that there was ambiguity in the law and there needed to be clarifying language added to the statute to fix it. It was also communicated that it would make sense to do so when the statute was being updated for other initiatives the Division wanted to make to modernize real estate license law. The Ohio Real Estate Commission meeting minutes from November 7, 2012 demonstrate the acknowledgement by the Superintendent of the Ohio Division of Real Estate as well as the Ohio Real Estate Commission. In looking at the minutes from the November 7, 2012 Ohio Real Estate Commission meeting, the Division was initiating discussions of distance education for real estate. The Superintendent stated that, “the division would request of the provider that any courses offered as non-academic credit be approved to be available for credit.” The minutes also state that, “the main concern with the monitoring of institutions of higher education in contracting their name and certificates for an offsite third party person or entity to offer qualifying education.” She goes on to add that the issue, “had been constant and recurring and that needed to be addressed.”

Following that date, Hondros College made a presentation to the Ohio Real Estate Commission of an online course (which we also previously made to the Ohio Association of Realtors Professional Development Committee and Legislative Steering Committee). Columbus State Community College also presented an online course to the Ohio Real Estate Commission. Both the Hondros course presentation and the Columbus State course presentation was an example of a credit bearing course. Both the Ohio Association of Realtors and the Ohio Real Estate Commission were in favor of that education and delivery standard when they chose to support distance learning. Without the language requiring that the courses be credit bearing; that is not what the industry will get. We do not want to see the quality education programs that are offered in Ohio turn in to a click through, unregulated exam prep.

We know that there are already programs being offered without state and accreditation oversight, and as I mentioned earlier, it has been recognized by the Superintendent. I included some examples of individuals and LLC’s running real estate classes. They are NOT institutions of higher education. The classes are NOT AT the institution of higher education. The courses are contracts through continuing education departments and they are not being regulated by any state regulatory body or accrediting body. I understand that institutions of higher education can enter third party contracts, but in these cases they are not meeting any standard that protects the public. They are simply internal arrangements. Within this current environment, if we add distance learning, any institution of higher education can contract out the education through their continuing education department to any provider worldwide and the coursework does not need to meet any regulatory oversight. That completely goes against the message being communicated by proponents of the bill stating they want quality education standards. In fact, there will essentially be no standards.

I must reiterate, we are supportive of the task force recommendations and we understand the desire for distance education. Our passion is to protect the educational environment with high standards and quality assurances to prepare real estate professionals for the largest financial investment most people will make in their lives. ALL providers MUST meet the standards and guidelines that help to make that a reality. In the wake of the mortgage crisis and the crash of the housing market, all other industries involved in the real estate transaction, such as mortgage and appraisal, are strengthening their regulatory requirements for education. And the National Association of Realtors has acknowledged the need for college level coursework in their DANGER Report published in 2015. I also must point out that states that allow for online pre-licensing see a much higher number of disciplinary actions. We have an opportunity in Ohio to set the standard in online real estate education and keep our disciplinary actions down. I attached an example showing California and Florida showing 38% of their agents receiving disciplinary actions compared to Ohio at 21%.

We are opposed to non-credit bearing coursework. We understand not all students, or even most, will take the courses for credit. However, our proposed clarity in the language allows these individuals to earn college credit for the courses and also ensures the courses, the faculty, the materials, the delivery platforms, the security of student data, the integrity of student identity and many other factors are in place. I included in your packet the materials that are reviewed and audited by our regulatory bodies – the Ohio State Board of Career Colleges and Schools as well as ACICS; which is our accrediting body recognized by the US Department of Education.
We are here to support the industry and the State of Ohio. We are passionate for education and professionalism and we believe they go hand in hand. To make distance education possible while maintaining quality standards, we simply need to remove the word “non-credit bearing” from lines 271-272 and change the word “may” to “shall” in line 532.

We have seen a possible amendment proposed by the Ohio Department of Higher Education in an effort to resolve the non-credit bearing concern. While this amendment demonstrates their acknowledgement that non-credit bearing courses do not go through the regulatory approval process, it is ambiguous and adds no specifics for oversight other than referring back to the real estate statute. In addition, it is creating another level of regulation and an additional process that is unnecessary. There is a regulatory approval process in place that works when courses are credit bearing.

We want to thank State Representative Ryan Smith and the other interested parties for multiple IP meetings over the last several months. We are absolutely not trying to hold up this bill or work against distance education. Quite the contrary. We want to see it happen – successfully. We understand this is a complicated issue. We also understand the all parties have used the term “quality education” in referring to what we are all trying to accomplish. However, without proper oversight from state regulators and accrediting agencies and college level coursework, we do not feel that quality will be maintained. In fact, we are certain it will fall to the lowest common denominator.

In addition, while we did our recent research, we confirmed that in some cases LLC’s are offering the courses “in conjunction” with a college or university. They certainly are not “at” the institution of higher education and we cannot find any indication that they are meeting requirements for 3rd party contracts for non-credit bearing programs. Nor is there any indication that they meet any standards or policies for protecting the public. Some specifically say that they are not part of the college and are for continuing education only. That is not what anyone we have heard from in our discussions is expecting when we talk about quality education and institution of higher education. In addition, the pricing for such courses is not lower than what a student can receive at many other institutions that are offering the courses as credit bearing. Actually, some of the LLC’s offering the courses are priced significantly higher than those that are credit bearing at the institution of higher education. I have attached some pricing examples for both credit bearing courses and third part contract non-credit bearing courses.

OAR has provided several supporters of distance learning and quality education. But we hear over and over that the industry is defining quality education as college level, credit bearing coursework. By defining credit eligible as credit bearing or non-credit bearing completely contradicts itself in the language and circumvents the whole regulatory process that works, is
established, and produces great agents. We can accomplish distance education and get this ambiguity clarified by simply removing the “non-credit bearing” wording.

Ohio should do everything it can to ensure that the education offered to potential real estate licensees is meeting regulatory rigor to ensure standards are established. Incoming real estate professionals have a significant influence on the housing market and the economy and are investing in education that delivers learning outcomes. Simply passing a licensing exam is not enough. The education is a critical piece in building knowledge and competency to deal with the challenges of representing buyers and sellers in real estate transactions. The education must go through a clear and established regulatory approval process that other credit bearing courses in a college degree program must go through. Let the state of Ohio continue to set the standard and not allow for a loophole or ambiguity when it comes to the educational standards and do the right thing by our residents, our licensees and home buyers and sellers.

Chairman Young and members of the committee, thank you for the opportunity to testify today on this important issue. I urge the committee to consider amending the language in HB 532 to allow for distance education if the courses are credit bearing and eligible for degree credit. We urge you to remove the word “non-credit bearing” from lines 271-272 and change the word “may” to “shall” in line 532. This will establish a clear regulatory environment and standards for real estate licensing courses. This language is critical to maintain professionalism in the industry and protection for Ohio consumers who put their public trust in real estate licensees. I am happy to answer any questions you may have.

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