EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Title 54 of NRS is hereby amended by adding thereto a new chapter to consist of the 1-2 provisions set forth as sections 2 to 39, inclusive, of this act.

1-3 Sec. 2. As used in this chapter, unless the context otherwise requires, the words and terms 1-4 defined in sections 3 to 8, inclusive, of this act have the meanings ascribed to them in those sections.

1-5 Sec. 3. "Applicant" means a person who applies for licensure as a mortgage company pursuant 1-6 to this chapter.

2-1 Sec. 3.3. "Commercial mortgage loan" means a loan that:

2-2 1. Directly or indirectly, is secured by a lien on commercial property; and

2-3 2. Is created with the consent of the owner of the commercial property.

2-4 Sec. 3.5. "Commercial property" means any real property which is located in this state and 2-5 which is not used for a residential dwelling or dwellings intended for occupancy by four or fewer 2-6 families.

2-7 Sec. 4. "Commissioner" means the commissioner of financial institutions.

2-8 Sec. 5. "Depository financial institution" means a bank, savings and loan association, thrift 2-9 company or credit union.

2-10 Sec. 6. "Division" means the division of financial institutions of the department of business and 2-11 industry.

2-12 Sec. 6.5. "Institutional investor" means a person who, in the regular course of business, makes 2-13 commercial mortgage loans of more than $250,000 that are funded exclusively from one or more 2-14 of the following sources:

2-15 1. The person’s cash, corporate capital or warehouse credit lines at a depository financial 2-16 institution or other sources that are liability items on the person’s financial statements.

2-17 2. Correspondent contracts between the person and another institutional investor or between the 2-18 person and a depository financial institution, trust company, profit-sharing or pension trust, 2-19 installment lender or insurance company.

2-20 3. An affiliate’s cash, corporate capital or warehouse credit lines at a depository financial 2-21 institution or other sources that are liability items on the affiliate’s financial statements for which 2-22 the affiliate’s assets are pledged. As used in this subsection, "affiliate" means another person who, 2-23 directly or indirectly through one or more intermediaries, controls, is controlled by or is under 2-24 common control with the person who is the institutional investor.

2-25 Sec. 7. "Licensee" means a person who is licensed as a mortgage company pursuant to this 2-26 chapter.

2-27 Sec. 8. 1. "Mortgage company" means any of the following:

2-28 (a) A person who, directly or indirectly:

2-29 (1) Holds himself out as being able to:

2-30 (I) Buy or sell notes secured by liens on real property; or

2-31 (II) Make loans secured by liens on real property using his own money; and

2-32 (2) Does not engage in any other act or transaction described in the definition of "mortgage 2-33 broker," as set forth in section 57 of this act,

3-1 unless the person is also licensed as a mortgage broker pursuant to chapter 645B of NRS.

3-2 (b) A person who, directly or indirectly:

3-3 (1) Negotiates, originates or makes or offers to negotiate, originate or make commercial 3-4 mortgage loans as an agent for or on behalf of an institutional investor; and

3-5 (2) Does not engage in any other act or transaction described in the definition of "mortgage 3-6 broker," as set forth in section 57 of this act, unless the person is also licensed as a mortgage broker 3-7 pursuant to chapter 645B of NRS.

3-8 2. For the purposes of this section, a person does not make a loan secured by a lien on real 3-9 property using his own money if any portion of the money that is used to make the loan is provided 3-10 by another person who acquires ownership of or a beneficial interest in the loan.

3-11 Sec. 9. The provisions of this chapter do not:

3-12 1. Limit any statutory or common law right of a person to bring a civil action against a 3-13 mortgage company for any act or omission involved in the transaction of business by or on behalf of 3-14 the mortgage company;

3-15 2. Limit the right of the state to punish a person for the violation of any law, ordinance or 3-16 regulation; or

3-17 3. Establish a basis for a person to bring a civil action against the state or its officers or 3-18 employees for any act or omission in carrying out the provisions of this chapter, including, without 3-19 limitation, any act or omission relating to the disclosure of information or the failure to disclose 3-20 information pursuant to the provisions of this chapter.

3-21 Sec. 10. Except as otherwise provided in section 11 of this act, the provisions of this chapter do 3-22 not apply to:

3-23 1. Any person doing business under the laws of this state, any other state or the United States 3-24 relating to banks, savings banks, trust companies, savings and loan associations, consumer finance 3-25 companies, industrial loan companies, credit unions, thrift companies or insurance companies, 3-26 unless the business conducted in this state is not subject to supervision by the regulatory authority of 3-27 the other jurisdiction, in which case licensing pursuant to this chapter is required.

3-28 2. A real estate investment trust, as defined in 26 U.S.C. § 856, unless the business conducted in 3-29 this state is not subject to supervision by the regulatory authority of the other jurisdiction, in 3-30 which case licensing pursuant to this chapter is required.

3-31 3. An employee benefit plan, as defined in 29 U.S.C. § 1002(3), if the loan is made directly from 3-32 money in the plan by the plan’s trustee.

3-33 4. An attorney at law rendering services in the performance of his duties as an attorney at law.

4-1 5. A real estate broker rendering services in the performance of his duties as a real estate 4-2 broker.

4-3 6. Any firm or corporation:

4-4 (a) Whose principal purpose or activity is lending money on real property which is secured by a 4-5 mortgage;

4-6 (b) Approved by the Federal National Mortgage Association as a seller and servicer; and

4-7 (c) Approved by the Department of Housing and Urban Development and the Department of 4-8 Veterans Affairs.

4-9 7. Any person doing any act under an order of any court.

4-10 8. Any one natural person, or husband and wife, who provides money for investment in loans 4-11 secured by a lien on real property, on his own account, unless such a person makes a loan secured 4-12 by a lien on real property using his own money and assigns all or a part of his interest in the loan to 4-13 another person, other than his spouse or child, within 5 years after the date on which the loan is 4-14 made or the deed of trust is recorded, whichever occurs later.

4-15 9. Agencies of the United States and of this state and its political subdivisions, including the 4-16 public employees’ retirement system.

4-17 10. A seller of real property who offers credit secured by a mortgage of the property sold.

4-18 Sec. 11. 1. A person who claims an exemption from the provisions of this chapter pursuant to 4-19 subsection 1 or 6 of section 10 of this act must:

4-20 (a) File a written application for a certificate of exemption with the office of the commissioner;

4-21 (b) Pay the fee required pursuant to section 14 of this act; and

4-22 (c) Include with the written application satisfactory proof that the person meets the requirements 4-23 of subsection 1 or 6 of section 10 of this act.

4-24 2. The commissioner may require a person who claims an exemption from the provisions of this 4-25 chapter pursuant to subsections 2 to 5, inclusive, or 7 to 10, inclusive, of section 10 of this act to:

4-26 (a) File a written application for a certificate of exemption with the office of the commissioner;

4-27 (b) Pay the fee required pursuant to section 14 of this act; and

4-28 (c) Include with the written application satisfactory proof that the person meets the requirements 4-29 of at least one of those exemptions.

4-30 3. A certificate of exemption expires automatically if, at any time, the person who claims the 4-31 exemption no longer meets the requirements of at least one exemption set forth in the provisions of 4-32 section 10 of this act.

4-33 4. If a certificate of exemption expires automatically pursuant to this section, the person shall 4-34 not provide any of the services of a mortgage

5-1 company or otherwise engage in, carry on or hold himself out as engaging in or carrying on the 5-2 business of a mortgage company, unless the person applies for and is issued:

5-3 (a) A license as a mortgage company pursuant to this chapter; or

5-4 (b) Another certificate of exemption.

5-5 5. The commissioner may impose upon a person who is required to apply for a certificate of 5-6 exemption or who holds a certificate of exemption an administrative fine of not more than $10,000 5-7 for each violation that he commits, if the person:

5-8 (a) Has knowingly made or caused to be made to the commissioner any false representation of 5-9 material fact;

5-10 (b) Has suppressed or withheld from the commissioner any information which the person 5-11 possesses and which, if submitted by him, would have rendered the person ineligible to hold a 5-12 certificate of exemption; or

5-13 (c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an 5-14 order of the commissioner that applies to a person who is required to apply for a certificate of 5-15 exemption or who holds a certificate of exemption.

5-16 Sec. 12. 1. A person may apply to the commissioner for an exemption from the provisions of 5-17 this chapter governing the making of a loan of money.

5-18 2. The commissioner may grant the exemption if he finds that:

5-19 (a) The making of the loan would not be detrimental to the financial condition of the lender or 5-20 the debtor;

5-21 (b) The lender or the debtor has established a record of sound performance, efficient 5-22 management, financial responsibility and integrity;

5-23 (c) The making of the loan is likely to increase the availability of capital for a sector of the state 5-24 economy; and

5-25 (d) The making of the loan is not detrimental to the public interest.

5-26 3. The commissioner:

5-27 (a) May revoke an exemption unless the loan for which the exemption was granted has been 5-28 made; and

5-29 (b) Shall issue a written statement setting forth the reasons for his decision to grant, deny or 5-30 revoke an exemption.

5-31 Sec. 13. 1. A person who wishes to be licensed as a mortgage company must file a written 5-32 application for a license with the office of the commissioner and pay the fee required pursuant to 5-33 section 14 of this act. An application for a license as a mortgage company must:

5-34 (a) Be verified.

6-1 (b) State the name, residence address and business address of the applicant and the location of 6-2 each principal office and branch office at which the mortgage company will conduct business within 6-3 this state.

6-4 (c) State the name under which the applicant will conduct business as a mortgage company.

6-5 (d) If the applicant is not a natural person, list the name, residence address and business address 6-6 of each person who will have an interest in the mortgage company as a principal, partner, officer, 6-7 director or trustee, specifying the capacity and title of each such person.

6-8 (e) Indicate the general plan and character of the business.

6-9 (f) State the length of time the applicant has been engaged in the business of a mortgage 6-10 company.

6-11 (g) Include a financial statement of the applicant.

6-12 (h) Include any other information required pursuant to the regulations adopted by the 6-13 commissioner or an order of the commissioner.

6-14 2. If a mortgage company will conduct business at one or more branch offices within this state, 6-15 the mortgage company must apply for a license for each such branch office.

6-16 3. Except as otherwise provided in this chapter, the commissioner shall issue a license to an 6-17 applicant as a mortgage company if:

6-18 (a) The application complies with the requirements of this chapter; and

6-19 (b) The applicant and each general partner, officer or director of the applicant, if the applicant is 6-20 a partnership, corporation or unincorporated association:

6-21 (1) Has a good reputation for honesty, trustworthiness and integrity and displays competence to 6-22 transact the business of a mortgage company in a manner which safeguards the interests of the 6-23 general public. The applicant must submit satisfactory proof of these qualifications to the 6-24 commissioner.

6-25 (2) Has not been convicted of, or entered a plea of nolo contendere to, a felony or any crime 6-26 involving fraud, misrepresentation or moral turpitude.

6-27 (3) Has not made a false statement of material fact on his application.

6-28 (4) Has not had a license that was issued pursuant to the provisions of this chapter or chapter 6-29 645B of NRS suspended or revoked within the 10 years immediately preceding the date of his 6-30 application.

6-31 (5) Has not had a license that was issued in any other state, district or territory of the United 6-32 States or any foreign country suspended or revoked within the 10 years immediately preceding the 6-33 date of his application.

7-1 (6) Has not violated any provision of this chapter or chapter 645B of NRS, a regulation adopted 7-2 pursuant thereto or an order of the commissioner.

7-3 4. If an applicant is a partnership, corporation or unincorporated association, the commissioner 7-4 may refuse to issue a license to the applicant if any member of the partnership or any officer or 7-5 director of the corporation or unincorporated association has committed any act or omission that 7-6 would be cause for refusing to issue a license to a natural person.

7-7 Sec. 14. 1. A license issued to a mortgage company pursuant to this chapter expires each year 7-8 on December 31, unless it is renewed. To renew a license, the licensee must submit to the 7-9 commissioner on or before December 31 of each year:

7-10 (a) An application for renewal that complies with the requirements of this chapter; and

7-11 (b) The fee required to renew the license pursuant to this section.

7-12 2. If the licensee fails to submit any item required pursuant to subsection 1 to the commissioner 7-13 on or before December 31 of any year, the license is canceled. The commissioner may reinstate a 7-14 canceled license if the licensee submits to the commissioner:

7-15 (a) An application for renewal that complies with the requirements of this chapter;

7-16 (b) The fee required to renew the license pursuant to this section; and

7-17 (c) A reinstatement fee of $200.

7-18 3. Except as otherwise provided in section 11 of this act, a certificate of exemption issued 7-19 pursuant to this chapter expires each year on December 31, unless it is renewed. To renew a 7-20 certificate of exemption, a person must submit to the commissioner on or before December 31 of 7-21 each year:

7-22 (a) An application for renewal that complies with the requirements of this chapter; and

7-23 (b) The fee required to renew the certificate of exemption.

7-24 4. If the person fails to submit any item required pursuant to subsection 3 to the commissioner 7-25 on or before December 31 of any year, the certificate of exemption is canceled. Except as otherwise 7-26 provided in section 11 of this act, the commissioner may reinstate a canceled certificate of 7-27 exemption if the person submits to the commissioner:

7-28 (a) An application for renewal that complies with the requirements of this chapter;

7-29 (b) The fee required to renew the certificate of exemption; and

7-30 (c) A reinstatement fee of $100.

7-31 5. A person must pay the following fees to apply for, to be issued or to renew a license as a 7-32 mortgage company pursuant to this chapter:

8-1 (a) To file an original application for a license, $1,500 for the principal office and $40 for each 8-2 branch office. The person must also pay such additional expenses incurred in the process of 8-3 investigation as the commissioner deems necessary. All money received by the commissioner 8-4 pursuant to this paragraph must be placed in the investigative account created by NRS 232.545.

8-5 (b) To be issued a license, $1,000 for the principal office and $60 for each branch office.

8-6 (c) To renew a license, $500 for the principal office and $100 for each branch office.

8-7 6. A person must pay the following fees to apply for or to renew a certificate of exemption 8-8 pursuant to this chapter:

8-9 (a) To file an application for a certificate of exemption, $200.

8-10 (b) To renew a certificate of exemption, $100.

8-11 7. To be issued a duplicate copy of any license or certificate of exemption, a person must make a 8-12 satisfactory showing of its loss and pay a fee of $10.

8-13 8. Except as otherwise provided in this chapter, all fees received pursuant to this chapter must be 8-14 deposited in the state treasury for credit to the state general fund.

8-15 Sec. 15. 1. In addition to the requirements set forth in sections 13 and 14 of this act, a natural 8-16 person who applies for the issuance or renewal of a license as a mortgage company shall submit 8-17 to the commissioner:

8-18 (a) In any application for issuance of a license, the social security number of the applicant and 8-19 the statement prescribed by the welfare division of the department of human resources pursuant to 8-20 NRS 425.520. The statement must be completed and signed by the applicant.

8-21 (b) In any application for renewal of a license, the statement prescribed by the welfare division of 8-22 the department of human resources pursuant to NRS 425.520. The statement must be completed 8-23 and signed by the applicant.

8-24 2. The commissioner shall include the statement required pursuant to subsection 1 in:

8-25 (a) The application or any other forms that must be submitted for the issuance or renewal of the 8-26 license; or

8-27 (b) A separate form prescribed by the commissioner.

8-28 3. The commissioner shall not issue or renew a license as a mortgage company if the applicant 8-29 is a natural person who:

8-30 (a) Fails to submit the statement required pursuant to subsection 1; or

8-31 (b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court 8-32 order for the support of a child and is not in compliance with the order or a plan approved by the 8-33 district attorney or

9-1 other public agency enforcing the order for the repayment of the amount owed pursuant to the 9-2 order.

9-3 4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is 9-4 subject to a court order for the support of a child and is not in compliance with the order or a plan 9-5 approved by the district attorney or other public agency enforcing the order for the repayment of the 9-6 amount owed pursuant to the order, the commissioner shall advise the applicant to contact the 9-7 district attorney or other public agency enforcing the order to determine the actions that the 9-8 applicant may take to satisfy the arrearage.

9-9 Sec. 16. 1. A license entitles a licensee to engage only in the activities authorized by this 9-10 chapter.

9-11 2. The provisions of this chapter do not prohibit a licensee from:

9-12 (a) Holding a license as a mortgage broker pursuant to chapter 645B of NRS; or

9-13 (b) Conducting the business of a mortgage company and the business of a mortgage broker in the 9-14 same office or place of business.

9-15 Sec. 17. 1. A mortgage company shall post each license in a conspicuous place in the office 9-16 for which the license has been issued.

9-17 2. A mortgage company may not transfer or assign a license to another person, unless the 9-18 commissioner gives his written approval.

9-19 Sec. 18. 1. The commissioner must be notified of a transfer of 5 percent or more of the 9-20 outstanding voting stock of a mortgage company and must approve a transfer of voting stock of a 9-21 mortgage company which constitutes a change of control.

9-22 2. The person who acquires stock resulting in a change of control of the mortgage company 9-23 shall apply to the commissioner for approval of the transfer. The application must contain 9-24 information which shows that the requirements of this chapter for obtaining a license will be 9-25 satisfied after the change of control. Except as otherwise provided in subsection 3, the commissioner 9-26 shall conduct an investigation to determine whether those requirements will be satisfied. If, after 9-27 the investigation, the commissioner denies the application, he may forbid the applicant from 9-28 participating in the business of the mortgage company.

9-29 3. A mortgage company may submit a written request to the commissioner to waive an 9-30 investigation pursuant to subsection 2. The commissioner may grant a waiver if the applicant has 9-31 undergone a similar investigation by a state or federal agency in connection with the licensing of or 9-32 his employment with a financial institution.

9-33 4. As used in this section, "change of control" means:

9-34 (a) A transfer of voting stock which results in giving a person, directly or indirectly, the power to 9-35 direct the management and policy of a mortgage company; or

10-1 (b) A transfer of at least 25 percent of the outstanding voting stock of a mortgage company.

10-2 Sec. 19. 1. Subject to the administrative control of the director of the department of business 10-3 and industry, the commissioner shall exercise general supervision and control over mortgage 10-4 companies doing business in this state.

10-5 2. In addition to the other duties imposed upon him by law, the commissioner shall:

10-6 (a) Adopt any regulations that are necessary to carry out the provisions of this chapter, except as 10-7 to loan fees.

10-8 (b) Conduct such investigations as may be necessary to determine whether any person has 10-9 violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of 10-10 the commissioner.

10-11 (c) Conduct an annual examination of each mortgage company doing business in this state.

10-12 (d) Conduct such other examinations, periodic or special audits, investigations and hearings as 10-13 may be necessary and proper for the efficient administration of the laws of this state regarding 10-14 mortgage companies.

10-15 (e) Classify as confidential certain records and information obtained by the division when those 10-16 matters are obtained from a governmental agency upon the express condition that they remain 10-17 confidential. This paragraph does not limit examination by the legislative auditor.

10-18 (f) Conduct such examinations and investigations as are necessary to ensure that mortgage 10-19 companies meet the requirements of this chapter for obtaining a license, both at the time of the 10-20 application for a license and thereafter on a continuing basis.

10-21 3. For each special audit, investigation or examination, a mortgage company shall pay a fee 10-22 based on the rate established pursuant to NRS 658.101.

10-23 Sec. 20. Each mortgage company shall pay the assessment levied pursuant to NRS 658.055 10-24 and cooperate fully with the audits and examinations performed pursuant thereto.

10-25 Sec. 21. 1. In the conduct of any examination, periodic or special audit, investigation or 10-26 hearing, the commissioner may:

10-27 (a) Compel the attendance of any person by subpoena.

10-28 (b) Administer oaths.

10-29 (c) Examine any person under oath concerning the business and conduct of affairs of any 10-30 person subject to the provisions of this chapter and in connection therewith require the production of 10-31 any books, records or papers relevant to the inquiry.

11-1 2. Any person subpoenaed under the provisions of this section who willfully refuses or willfully 11-2 neglects to appear at the time and place named in the subpoena or to produce books, records or 11-3 papers required by the commissioner, or who refuses to be sworn or answer as a witness, is guilty of 11-4 a misdemeanor.

11-5 3. The commissioner may assess against and collect from a person all costs, including, without 11-6 limitation, reasonable attorney’s fees, that are attributable to any examination, periodic or special 11-7 audit, investigation or hearing that is conducted to examine or investigate the conduct, activities 11-8 or business of the person pursuant to this chapter.

11-9 Sec. 22. 1. Each mortgage company shall keep and maintain at all times at each location 11-10 where the mortgage company conducts business in this state complete and suitable records of all 11-11 mortgage transactions made by the mortgage company at that location. Each mortgage company 11-12 shall also keep and maintain at all times at each such location all original books, papers and data, or 11-13 copies thereof, clearly reflecting the financial condition of the business of the mortgage company.

11-14 2. Each mortgage company shall submit to the commissioner each month a report of the 11-15 mortgage company’s activity for the previous month. The report must:

11-16 (a) Specify the volume of loans made by the mortgage company for the month or state that no 11-17 loans were made in that month;

11-18 (b) Include any information required pursuant to the regulations adopted by the commissioner; 11-19 and

11-20 (c) Be submitted to the commissioner by the 15th day of the month following the month for 11-21 which the report is made.

11-22 3. The commissioner may adopt regulations prescribing accounting procedures for mortgage 11-23 companies handling trust accounts and the requirements for keeping records relating to such 11-24 accounts.

11-25 Sec. 23. 1. Except as otherwise provided in this section, not later than 60 days after the last 11-26 day of each fiscal year for a mortgage company, the mortgage company shall submit to the 11-27 commissioner a financial statement that:

11-28 (a) Is dated not earlier than the last day of the fiscal year; and

11-29 (b) Has been prepared from the books and records of the mortgage company by an independent 11-30 public accountant who holds a permit to engage in the practice of public accounting in this state 11-31 that has not been revoked or suspended.

11-32 2. The commissioner may grant a reasonable extension for the submission of a financial 11-33 statement pursuant to this section if a mortgage company requests such an extension before the date 11-34 on which the financial statement is due.

12-1 3. If a mortgage company maintains any accounts described in section 26 of this act, the 12-2 financial statement submitted pursuant to this section must be audited. The public accountant who 12-3 prepares the report of an audit shall submit a copy of the report to the commissioner at the same 12-4 time that he submits the report to the mortgage company.

12-5 4. The commissioner shall adopt regulations prescribing the scope of an audit conducted 12-6 pursuant to subsection 3.

12-7 Sec. 24. 1. Except as otherwise provided in this section or by specific statute, all papers, 12-8 documents, reports and other written instruments filed with the commissioner pursuant to this 12-9 chapter are open to public inspection.

12-10 2. The commissioner may withhold from public inspection or refuse to disclose to a person, for 12-11 such time as the commissioner considers necessary, any information that, in his judgment, 12-12 would:

12-13 (a) Impede or otherwise interfere with an investigation that is currently pending against a 12-14 mortgage company; or

12-15 (b) Have an undesirable effect on the welfare of the public or the welfare of any mortgage 12-16 company.

12-17 Sec. 25. 1. Except as otherwise provided in subsection 3, the amount of any advance fee, 12-18 salary, deposit or money paid to any mortgage company or other person to obtain a loan secured by a 12-19 lien on real property must be placed in escrow pending completion of the loan or a commitment 12-20 for the loan.

12-21 2. The amount held in escrow pursuant to subsection 1 must be released:

12-22 (a) Upon completion of the loan or commitment for the loan, to the mortgage company or other 12-23 person to whom the advance fee, salary, deposit or money was paid.

12-24 (b) If the loan or commitment for the loan fails, to the person who made the payment.

12-25 3. Advance payments to cover reasonably estimated costs paid to third persons are excluded 12-26 from the provisions of subsections 1 and 2 if the person making them first signs a written agreement 12-27 which specifies the estimated costs by item and the estimated aggregate cost, and which recites 12-28 that money advanced for costs will not be refunded. If an itemized service is not performed and the 12-29 estimated cost thereof is not refunded, the recipient of the advance payment is subject to the 12-30 penalties provided in section 39 of this act.

12-31 Sec. 26. 1. All money paid to a mortgage company for payment of taxes or insurance 12-32 premiums on real property which secures any loan made by the mortgage company must be 12-33 deposited in an insured depository financial institution and kept separate, distinct and apart from 12-34 money belonging to the mortgage company. Such money, when

13-1 deposited, is to be designated as an "impound trust account" or under some other appropriate 13-2 name indicating that the accounts are not the money of the mortgage company.

13-3 2. The mortgage company has a fiduciary duty to each debtor with respect to the money in an 13-4 impound trust account.

13-5 3. The mortgage company shall, upon reasonable notice, account to any debtor whose real 13-6 property secures a loan made by the mortgage company for any money which that person has paid to 13-7 the mortgage company for the payment of taxes or insurance premiums on the real property.

13-8 4. The mortgage company shall, upon reasonable notice, account to the commissioner for all 13-9 money in an impound trust account.

13-10 5. A mortgage company shall:

13-11 (a) Require contributions to an impound trust account in an amount reasonably necessary to 13-12 pay the obligations as they become due.

13-13 (b) Within 30 days after the completion of the annual review of an impound trust account, notify 13-14 the debtor:

13-15 (1) Of the amount by which the contributions exceed the amount reasonably necessary to pay 13-16 the annual obligations due from the account; and

13-17 (2) That the debtor may specify the disposition of the excess money within 20 days after receipt 13-18 of the notice. If the debtor fails to specify such a disposition within that time, the mortgage 13-19 company shall maintain the excess money in the account.

13-20 This subsection does not prohibit a mortgage company from requiring additional amounts to be 13-21 paid into an impound trust account to recover a deficiency that exists in the account.

13-22 6. A mortgage company shall not make payments from an impound trust account in a manner 13-23 that causes a policy of insurance to be canceled or causes property taxes or similar payments to 13-24 become delinquent.

13-25 Sec. 27. 1. Money in an impound trust account is not subject to execution or attachment on 13-26 any claim against the mortgage company.

13-27 2. It is unlawful for a mortgage company knowingly to keep or cause to be kept any money in a 13-28 depository financial institution under the heading of "impound trust account" or any other name 13-29 designating such money as belonging to the debtors of the mortgage company, unless the money 13-30 has been paid to the mortgage company by a debtor pursuant to section 26 of this act and is being 13-31 held in trust by the mortgage company pursuant to the provisions of that section.

13-32 Sec. 28. 1. If a person is required to make a payment to a mortgage company pursuant to the 13-33 terms of a loan secured by a lien on real property, the mortgage company may not charge the 13-34 person a late

14-1 fee, an additional amount of interest or any other penalty in connection with that payment if the 14-2 payment is delivered to the mortgage company before 5 p.m. on:

14-3 (a) The day that the payment is due pursuant to the terms of the loan, if an office of the mortgage 14-4 company is open to customers until 5 p.m. on that day; or

14-5 (b) The next day that an office of the mortgage company is open to customers until 5 p.m., if the 14-6 provisions of paragraph (a) do not otherwise apply.

14-7 2. A person and a mortgage company may not agree to alter or waive the provisions of this 14-8 section by contract or other agreement, and any such contract or agreement is void and must not be 14-9 given effect to the extent that it violates the provisions of this section.

14-10 Sec. 29. 1. Whether or not a complaint has been filed, the commissioner may investigate a 14-11 mortgage company or other person if, for any reason, it appears that:

14-12 (a) The mortgage company is conducting business in an unsafe and injurious manner or in 14-13 violation of any provision of this chapter, a regulation adopted pursuant to this chapter or an order 14-14 of the commissioner;

14-15 (b) The person is offering or providing any of the services of a mortgage company or otherwise 14-16 engaging in, carrying on or holding himself out as engaging in or carrying on the business of a 14-17 mortgage company without being licensed or exempt from licensing pursuant to the provisions of 14-18 this chapter; or

14-19 (c) The person is violating any other provision of this chapter, a regulation adopted pursuant to 14-20 this chapter or an order of the commissioner.

14-21 2. If, upon investigation, the commissioner has reasonable cause to believe that the mortgage 14-22 company or other person has engaged in any conduct or committed any violation described in 14-23 subsection 1, the commissioner may:

14-24 (a) Advise the district attorney of the county in which the conduct or violation occurred, and the 14-25 district attorney shall cause the appropriate legal action to be taken against the mortgage 14-26 company or other person to enjoin the conduct or the operation of the business or prosecute the 14-27 violation; and

14-28 (b) Bring a civil action to:

14-29 (1) Enjoin the mortgage company or other person from engaging in the conduct, operating the 14-30 business or committing the violation; and

14-31 (2) Enjoin any other person who has encouraged, facilitated, aided or participated in the 14-32 conduct, the operation of the business or the

15-1 commission of the violation, or who is likely to engage in such acts, from engaging in or 15-2 continuing to engage in such acts.

15-3 3. If the commissioner brings a civil action pursuant to subsection 2, the district court of any 15-4 county of this state is hereby vested with the jurisdiction in equity to enjoin the conduct, the 15-5 operation of the business or the commission of the violation and may grant any injunctions that are 15-6 necessary to prevent and restrain the conduct, the operation of the business or the commission of 15-7 the violation. During the pendency of the proceedings before the district court:

15-8 (a) The court may issue any temporary restraining orders as may appear to be just and proper;

15-9 (b) The findings of the commissioner shall be deemed to be prima facie evidence and sufficient 15-10 grounds, in the discretion of the court, for the ex parte issuance of a temporary restraining order; 15-11 and

15-12 (c) The commissioner may apply for and on due showing is entitled to have issued the court’s 15-13 subpoena requiring forthwith the appearance of any person to:

15-14 (1) Produce any documents, books and records as may appear necessary for the hearing of the 15-15 petition; and

15-16 (2) Testify and give evidence concerning the conduct complained of in the petition.

15-17 Sec. 30. 1. In addition to any other action that is permitted pursuant to this chapter, if the 15-18 commissioner has reasonable cause to believe that:

15-19 (a) The assets or capital of a mortgage company are impaired; or

15-20 (b) A mortgage company is conducting business in an unsafe and injurious manner that may 15-21 result in danger to the public,

15-22 the commissioner may immediately take possession of all the property, business and assets of the 15-23 mortgage company that are located in this state and retain possession of them pending further 15-24 proceedings provided for in this chapter.

15-25 2. If the licensee, the board of directors or any officer or person in charge of the offices of the 15-26 mortgage company refuses to permit the commissioner to take possession of the property of the 15-27 mortgage company pursuant to subsection 1:

15-28 (a) The commissioner shall notify the attorney general; and

15-29 (b) The attorney general shall immediately bring such proceedings as may be necessary to place 15-30 the commissioner in immediate possession of the property of the mortgage company.

15-31 3. If the commissioner takes possession of the property of the mortgage company, the 15-32 commissioner shall:

15-33 (a) Make or have made an inventory of the assets and known liabilities of the mortgage 15-34 company; and

16-1 (b) File one copy of the inventory in his office and one copy in the office of the clerk of the 16-2 district court of the county in which the principal office of the mortgage company is located and 16-3 shall mail one copy to each stockholder, partner, officer, director or associate of the mortgage 16-4 company at his last known address.

16-5 4. The clerk of the court with which the copy of the inventory is filed shall file it as any other 16-6 case or proceeding pending in the court and shall give it a docket number.

16-7 Sec. 31. 1. If the commissioner takes possession of the property of a mortgage company 16-8 pursuant to section 30 of this act, the licensee, officers, directors, partners, associates or stockholders 16-9 of the mortgage company may, within 60 days after the date on which the commissioner takes 16-10 possession of the property, make good any deficit in the assets or capital of the mortgage company or 16-11 remedy any unsafe and injurious conditions or practices of the mortgage company.

16-12 2. At the expiration of the 60-day period, if the deficiency in assets or capital has not been made 16-13 good or the unsafe and injurious conditions or practices remedied, the commissioner may apply 16-14 to the court to be appointed receiver and proceed to liquidate the assets of the mortgage company 16-15 which are located in this state in the same manner as now provided by law for liquidation of a 16-16 private corporation in receivership.

16-17 3. No other person may be appointed receiver by any court without first giving the 16-18 commissioner ample notice of his application.

16-19 4. The inventory made by the commissioner and all claims filed by creditors are open at all 16-20 reasonable times for inspection, and any action taken by the receiver upon any of the claims is 16-21 subject to the approval of the court before which the cause is pending.

16-22 5. The expenses of the receiver and compensation of counsel, as well as all expenditures 16-23 required in the liquidation proceedings, must be fixed by the commissioner subject to the approval of 16-24 the court and, upon certification of the commissioner, must be paid out of the money in his hands 16-25 as the receiver.

16-26 Sec. 32. 1. For each violation committed by an applicant, whether or not he is issued a 16-27 license, the commissioner may impose upon the applicant an administrative fine of not more than 16-28 $10,000, if the applicant:

16-29 (a) Has knowingly made or caused to be made to the commissioner any false representation of 16-30 material fact;

16-31 (b) Has suppressed or withheld from the commissioner any information which the applicant 16-32 possesses and which, if submitted by him, would have rendered the applicant ineligible to be licensed 16-33 pursuant to the provisions of this chapter; or

17-1 (c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an 17-2 order of the commissioner in completing and filing his application for a license or during the 17-3 course of the investigation of his application for a license.

17-4 2. For each violation committed by a licensee, the commissioner may impose upon the licensee 17-5 an administrative fine of not more than $10,000, may suspend, revoke or place conditions upon 17-6 his license, or may do both, if the licensee, whether or not acting as such:

17-7 (a) Is insolvent;

17-8 (b) Is grossly negligent or incompetent in performing any act for which he is required to be 17-9 licensed pursuant to the provisions of this chapter;

17-10 (c) Does not conduct his business in accordance with law or has violated any provision of this 17-11 chapter, a regulation adopted pursuant to this chapter or an order of the commissioner;

17-12 (d) Is in such financial condition that he cannot continue in business with safety to his 17-13 customers;

17-14 (e) Has made a material misrepresentation in connection with any transaction governed by this 17-15 chapter;

17-16 (f) Has suppressed or withheld from a client any material facts, data or other information 17-17 relating to any transaction governed by the provisions of this chapter which the licensee knew or, by 17-18 the exercise of reasonable diligence, should have known;

17-19 (g) Has knowingly made or caused to be made to the commissioner any false representation of 17-20 material fact or has suppressed or withheld from the commissioner any information which the 17-21 licensee possesses and which, if submitted by him, would have rendered the licensee ineligible to be 17-22 licensed pursuant to the provisions of this chapter;

17-23 (h) Has failed to account to persons interested for all money received for a trust account;

17-24 (i) Has refused to permit an examination by the commissioner of his books and affairs or has 17-25 refused or failed, within a reasonable time, to furnish any information or make any report that may 17-26 be required by the commissioner pursuant to the provisions of this chapter or a regulation 17-27 adopted pursuant to this chapter;

17-28 (j) Has been convicted of, or entered a plea of nolo contendere to, a felony or any crime 17-29 involving fraud, misrepresentation or moral turpitude;

17-30 (k) Has refused or failed to pay, within a reasonable time, any fees, assessments, costs or 17-31 expenses that the licensee is required to pay pursuant to this chapter or a regulation adopted 17-32 pursuant to this chapter;

18-1 (l) Has failed to satisfy a claim made by a client which has been reduced to judgment;

18-2 (m) Has failed to account for or to remit any money of a client within a reasonable time after a 18-3 request for an accounting or remittal;

18-4 (n) Has commingled the money or other property of a client with his own or has converted the 18-5 money or property of others to his own use; or

18-6 (o) Has engaged in any other conduct constituting a deceitful, fraudulent or dishonest business 18-7 practice.

18-8 Sec. 33. 1. If the commissioner receives a copy of a court order issued pursuant to NRS 18-9 425.540 that provides for the suspension of all professional, occupational and recreational licenses, 18-10 certificates and permits issued to a person who is the holder of a license as a mortgage company, 18-11 the commissioner shall deem the license issued to that person to be suspended at the end of the 18-12 30th day after the date on which the court order was issued unless the commissioner receives a letter 18-13 issued to the holder of the license by the district attorney or other public agency pursuant to NRS 18-14 425.550 stating that the holder of the license has complied with the subpoena or warrant or has 18-15 satisfied the arrearage pursuant to NRS 425.560.

18-16 2. The commissioner shall reinstate a license as a mortgage company that has been suspended 18-17 by a district court pursuant to NRS 425.540 if the commissioner receives a letter issued by the 18-18 district attorney or other public agency pursuant to NRS 425.550 to the person whose license was 18-19 suspended stating that the person whose license was suspended has complied with the subpoena or 18-20 warrant or has satisfied the arrearage pursuant to NRS 425.560.

18-21 Sec. 34. If a person is a partnership, corporation or unincorporated association, the 18-22 commissioner may take any disciplinary action set forth in this chapter against the person if any 18-23 member of the partnership or any officer or director of the corporation or unincorporated 18-24 association has committed any act or omission that would be cause for taking such disciplinary 18-25 action against a natural person.

18-26 Sec. 35. 1. If the commissioner enters an order taking any disciplinary action against a 18-27 person or denying a person’s application for a license, the commissioner shall cause written notice 18-28 of the order to be served personally or sent by certified mail or telegraph to the person.

18-29 2. Unless a hearing has already been conducted concerning the matter, the person, upon 18-30 application, is entitled to a hearing. If the person does not make such an application within 20 days 18-31 after the date of the initial order, the commissioner shall enter a final order concerning the 18-32 matter.

19-1 3. A person may appeal a final order of the commissioner in accordance with the provisions of 19-2 chapter 233B of NRS that apply to a contested case.

19-3 Sec. 36. It is unlawful for any person to offer or provide any of the services of a mortgage 19-4 company or otherwise to engage in, carry on or hold himself out as engaging in or carrying on the 19-5 business of a mortgage company without first obtaining a license as a mortgage company pursuant 19-6 to this chapter, unless the person:

19-7 1. Is exempt from the provisions of this chapter; and

19-8 2. Complies with the requirements for that exemption.

19-9 Sec. 37. It is unlawful for any foreign corporation, association or business trust to conduct any 19-10 business as a mortgage company within this state, unless it:

19-11 1. Qualifies under chapter 80 of NRS; and

19-12 2. Complies with the provisions of this chapter or, if it claims an exemption from the provisions 19-13 of this chapter, complies with the requirements for that exemption.

19-14 Sec. 38. Except as otherwise provided in section 39 of this act, a person, or any general 19-15 partner, director, officer, agent or employee of a person, who violates any provision of this chapter, a 19-16 regulation adopted pursuant to this chapter or an order of the commissioner is guilty of a 19-17 misdemeanor.

19-18 Sec. 39. A person, or any general partner, director, officer, agent or employee of a person, who 19-19 violates any provision of section 25, 26 or 27 of this act is guilty of:

19-20 1. A misdemeanor if the amount involved is less than $250;

19-21 2. A gross misdemeanor if the amount involved is $250 or more but less than $1,000; or

19-22 3. A category D felony if the amount involved is $1,000 or more, and shall be punished as 19-23 provided in NRS 193.130.

19-24 Sec. 40. Chapter 627 of NRS is hereby amended by adding thereto a new section to read as 19-25 follows:

19-26 1. As a substitute for the surety bond required by NRS 627.180, a construction control may, in 19-27 accordance with the provisions of this section, deposit with any bank or trust company authorized 19-28 to do business in this state, in a form approved by the state contractors’ board:

19-31 (b) Bills, bonds, notes, debentures or other obligations of the United States or any agency or 19-32 instrumentality thereof, or guaranteed by the United States; or

20-1 (c) Any obligation of this state or any city, county, town, township, school district or other 20-2 instrumentality of this state, or guaranteed by this state.

20-3 2. The obligations of a bank, savings and loan association, thrift company or credit union must 20-4 be held to secure the same obligation as would the surety bond. With the approval of the state 20-5 contractors’ board, the depositor may substitute other suitable obligations for those deposited which 20-6 must be assigned to the State of Nevada and are negotiable only upon approval by the state 20-7 contractors’ board.

20-8 3. Any interest or dividends earned on the deposit accrue to the account of the depositor.

20-9 4. The deposit must be in an amount at least equal to the required surety bond and must state 20-10 that the amount may not be withdrawn except by direct and sole order of the state contractors’ board. 20-11 The value of any item deposited pursuant to this section must be based upon principal amount or 20-12 market value, whichever is lower.

20-13 Sec. 41. NRS 627.180 is hereby amended to read as follows:

20-14 627.180 1. [Except for savings] The provisions of this section do not apply to:

21-1 Bond No.

21-2 CONSTRUCTION CONTROL BOND

21-3 Know All Men by These Presents:

21-4 That I, ................................, having a principal place of business in ...................................................., 21-5 Nevada, as principal, and ................................, a corporation licensed to execute surety bonds under 21-6 the provisions of the Nevada Insurance Code, as surety, are held and firmly bound to the State of 21-7 Nevada, for the use of any person by whom funds are entrusted to the principal or to whom funds are 21-8 payable by the principal, in the sum of ................ Dollars, lawful money of the United States of 21-9 America, to be paid to the State of Nevada, for which payment well and truly to be made we bind 21-10 ourselves, our heirs, executors and successors, jointly and severally, firmly by these presents:

21-11 The Condition of the Above Obligation Is Such That:

21-12 Whereas, Under the Construction Control Law, certain duties,

21-13 obligations and requirements are imposed upon all persons, copartnerships,

21-14 associations or corporations acting as construction controls;

21-15 Now, Therefore, If the principal and its agents and employees shall

21-16 faithfully and in all respects conduct business as a construction control in

21-17 accordance with the provisions of the Construction Control Law, this

21-18 obligation shall be void, otherwise to remain in full force and effect;

21-19 Provided, However, That the surety or sureties may cancel this bond

21-20 and be relieved of further liability hereunder by delivering 30 days’ written

21-21 notice of cancellation to the principal; however, such cancellation shall not

21-22 affect any liability incurred or accrued hereunder prior to the termination of

21-23 such 30-day period;

21-24 Provided Further, That the total aggregate liability of the surety or

21-25 sureties herein for all claims which may arise under this bond shall be

21-26 limited to the payment of ................ Dollars.

21-27 In Witness Whereof, The principal and surety have hereunto set their

21-28 hands this ................................ day of ................................, 19.....

21-29

21-30 By

21-31 Principal

21-32 (Surety)

21-33 By

21-34 Attorney

21-35 4. Each construction control shall initially deposit a surety bond that

21-36 complies with the provisions of this section or a substitute form of

21-37 security that complies with the provisions of section 40 of this act in the

22-1 amount of $20,000. Not later than 3 months after the initial deposit and

22-2 annually thereafter, the construction control shall:

22-3 (a) Submit to the state contractors’ board a signed and notarized

22-4 affidavit attesting to the average monthly balance in the trust account

22-5 maintained by the construction control; and

22-6 (b) Deposit a surety bond that complies with the provisions of this

22-7 section or a substitute form of security that complies with the provisions

22-8 of section 40 of this act in the following amount based upon the average

22-9 monthly balance in the trust account maintained by the construction

22-10 control:

22-11 AVERAGE MONTHLY BALANCE AMOUNT OF BOND OR

22-12 SECURITY REQUIRED

22-13 Less than $2,000,000 $20,000

22-14 $2,000,000 or more but less than $4,000,000 40,000

22-15 $4,000,000 or more but less than $6,000,000 60,000

22-16 $6,000,000 or more but less than $8,000,000 80,000

22-17 $8,000,000 or more but less than $12,000,000 120,000

22-18 $12,000,000 or more but less than $20,000,000 200,000

22-19 $20,000,000 or more 250,000

22-20 Sec. 42. NRS 645A.030 is hereby amended to read as follows:

22-21 645A.030 1. Except as otherwise [authorized by] provided in NRS

22-41 Nevada for such use and benefit, for which payment well and truly to be

23-1 made, and that we bind ourselves, our heirs, executors, administrators,

23-2 successors and assigns, jointly and severally, firmly by these presents.

23-3 The condition of that obligation is such that: Whereas, the principal has

23-4 [made an application to] been issued a license as an escrow agency or

23-5 escrow agent by the commissioner of financial institutions of the

23-6 department of business and industry of the State of Nevada [for a license as

23-7 an escrow agent or agency] and is required to furnish a bond [in the amount

23-8 of $50,000] , which is conditioned as set forth in this bond:

23-9 Now, therefore, if the principal, his agents and employees, strictly,

23-10 honestly and faithfully comply with the provisions of chapter 645A of

23-11 NRS, and pay all damages suffered by any person because of a violation of

23-12 any of the provisions of chapter 645A of NRS, or by reason of any fraud,

23-13 dishonesty, misrepresentation or concealment of material facts growing out

23-14 of any transaction governed by the provisions of chapter 645A of NRS,

23-15 then this obligation is void; otherwise it remains in full force.

23-16 This bond becomes effective on the .......... day of ................, 19......, and

23-17 remains in force until the surety is released from liability by the

23-18 commissioner of financial institutions or until this bond is canceled by the

23-19 surety. The surety may cancel this bond and be relieved of further liability

23-20 hereunder by giving 60 days’ written notice to the principal and to the

23-21 commissioner of financial institutions of the department of business and

23-22 industry of the State of Nevada.

23-23 In Witness Whereof, the seal and signature of the principal hereto is

23-24 affixed, and the corporate seal and the name of the surety hereto is affixed

23-25 and attested by its authorized officers at ........................, Nevada, this

23-26 ................ day of ................, 19......

23-27 (Seal)

23-28 Principal

23-29 (Seal)

23-30 Surety

23-31 By

23-32 Attorney in fact

23-33

23-34 Licensed resident agent

23-35 4. Each escrow agency shall deposit a corporate surety bond that

23-36 complies with the provisions of this section or a substitute form of

23-37 security that complies with the provisions of NRS 645A.031 in the

23-38 following amount based upon the average monthly balance of the trust

23-39 account or escrow account maintained by the escrow agency pursuant to

23-40 NRS 645A.160:

24-1 AVERAGE MONTHLY BALANCE AMOUNT OF BOND OR

24-2 SECURITY REQUIRED

24-3 $50,000 or less $20,000

24-4 More than $50,000 but not more than $250,000 50,000

24-5 More than $250,000 but not more than $500,000 100,000

24-6 More than $500,000 but not more than $750,000 150,000

24-7 More than $750,000 but not more than $1,000,000 $200,000

24-8 More than $1,000,000 250,000

24-9 The commissioner shall determine the appropriate amount of the surety

24-10 bond or substitute form of security that must be deposited initially by the

24-11 escrow agency based upon the expected average monthly balance of the

24-12 trust account or escrow account maintained by the escrow agency

24-13 pursuant to NRS 645A.160. After the initial deposit, the commissioner

24-14 shall, on a semiannual basis, determine the appropriate amount of the

24-15 surety bond or substitute form of security that must be deposited by the

24-16 escrow agency based upon the average monthly balance of the trust

24-17 account or escrow account maintained by the escrow agency pursuant to

24-18 NRS 645A.160.

24-19 Sec. 43. NRS 645A.031 is hereby amended to read as follows:

24-20 645A.031 1. As a substitute for the surety bond required by NRS

24-41 account of the depositor.

25-1 4. The deposit must be in an amount at least equal to the required

25-2 surety bond and must state that the amount may not be withdrawn except by

25-3 direct and sole order of the commissioner. The value of any item deposited

25-4 pursuant to this section must be based upon principal amount or market

25-5 value, whichever is lower.

25-6 Sec. 44. NRS 645A.037 is hereby amended to read as follows:

25-7 645A.037 1. Except as otherwise provided in subsection 2, [no] a

25-13 2. A licensee may conduct the business of administering escrows

25-14 pursuant to this chapter in the same office or place of business as [a] :

25-15 (a) A firm or corporation that is exempt from licensing as a mortgage

25-16 company pursuant to subsection 6 of section 10 of this act.

25-17 (b) A mortgage company if:

25-18 [(a)] (1) The licensee and the mortgage company:

25-19 [(1)] (I) Operate as separate legal entities;

25-20 [(2)] (II) Maintain separate accounts, books and records;

25-21 [(3)] (III) Are subsidiaries of the same parent corporation; and

25-22 [(4)] (IV) Maintain separate licenses; and

25-23 [(b)] (2) The mortgage company is licensed by this state pursuant to

25-24 sections 2 to 39, inclusive, of this act and does not [receive money to

25-25 acquire or repay loans or maintain trust accounts as provided by NRS

25-26 645B.175.] conduct any business as a mortgage broker licensed pursuant

25-27 to chapter 645B of NRS in the office or place of business.

25-28 Sec. 45. Chapter 645B of NRS is hereby amended by adding thereto

25-29 the provisions set forth as sections 46 to 83, inclusive, of this act.

25-30 Sec. 46. "Applicant" means a person who applies for licensure as a

25-31 mortgage broker pursuant to this chapter.

25-32 Sec. 47. "Commissioner" means the commissioner of financial

25-33 institutions.

25-34 Sec. 48. "Construction control" has the meaning ascribed to it in

25-35 NRS 627.050.

25-36 Sec. 49. "Depository financial institution" means a bank, savings

25-37 and loan association, thrift company or credit union.

25-38 Sec. 50. "Division" means the division of financial institutions of

25-39 the department of business and industry.

25-40 Sec. 51. "Escrow agency" has the meaning ascribed to it in NRS

25-41 645A.010.

25-42 Sec. 52. "Escrow agent" has the meaning ascribed to it in NRS

25-43 645A.010.

26-1 Sec. 53. "Escrow officer" has the meaning ascribed to it in NRS

26-2 692A.028.

26-3 Sec. 53.5. "Financial services license or registration" means any

26-4 license or registration issued in this state or any other state, district or

26-5 territory of the United States that authorizes the person who holds the

26-6 license or registration to engage in any business or activity described in

26-7 the provisions of this chapter, sections 2 to 39, inclusive, of this act,

26-8 chapter 604, 645, 645A, 645C or 649 of NRS or Title 55 or 56 of NRS.

26-9 Sec. 54. "Investor" means a person who wants to acquire or who

26-10 acquires ownership of or a beneficial interest in a loan secured by a lien

26-11 on real property.

26-12 Sec. 55. "Licensee" means a person who is licensed as a mortgage

26-13 broker pursuant to this chapter.

26-14 Sec. 56. 1. "Mortgage agent" means a natural person who:

26-15 (a) Is an employee or independent contractor of a mortgage broker

26-16 who is required to be licensed pursuant to this chapter; and

26-17 (b) Is authorized by the mortgage broker to engage in, on behalf of

26-18 the mortgage broker, any activity that would require the person, if he

26-19 were not an employee or independent contractor of the mortgage broker,

26-20 to be licensed as a mortgage broker pursuant to this chapter.

26-21 2. The term does not include a person who:

26-22 (a) Is licensed as a mortgage broker;

26-23 (b) Is a general partner, officer or director of a mortgage broker; or

26-24 (c) Performs only clerical or ministerial tasks for a mortgage broker.

26-25 Sec. 57. 1. "Mortgage broker" means a person who, directly or

26-26 indirectly:

26-27 (a) Holds himself out for hire to serve as an agent for any person in

26-28 an attempt to obtain a loan which will be secured by a lien on real

26-29 property;

26-30 (b) Holds himself out for hire to serve as an agent for any person who

26-31 has money to lend, if the loan is or will be secured by a lien on real

26-32 property;

26-33 (c) Holds himself out as being able to make loans secured by liens on

26-34 real property;

26-35 (d) Holds himself out as being able to buy or sell notes secured by

26-36 liens on real property; or

26-37 (e) Offers for sale in this state any security which is exempt from

26-38 registration under state or federal law and purports to make investments

26-39 in promissory notes secured by liens on real property.

26-40 2. The term does not include a person who is licensed as a mortgage

26-41 company, as defined in section 8 of this act, unless the person is also

26-42 licensed as a mortgage broker pursuant to this chapter.

27-1 Sec. 58. "Policy of title insurance" has the meaning ascribed to it in

27-2 NRS 692A.035.

27-3 Sec. 59. "Relative" means a spouse or any other person who is

27-4 related within the second degree by blood or marriage.

27-5 Sec. 60. "Title agent" has the meaning ascribed to it in NRS

27-6 692A.060.

27-7 Sec. 61. "Title insurer" has the meaning ascribed to it in NRS

27-8 692A.070.

27-9 Sec. 61.3. 1. The advisory council on mortgage investments and

27-10 mortgage lending is hereby created.

27-11 2. The advisory council consists of five members appointed by the

27-12 legislative commission from a list of persons provided by the

27-13 commissioner.

27-14 3. The members of the advisory council:

27-15 (a) Must be persons who have experience with, an interest in or a

27-16 knowledge of issues relating to mortgage investments or mortgage

27-17 lending. Such persons may include, without limitation, investors, public

27-18 officers and employees, licensees and persons who have engaged in or

27-19 been involved with any business, profession or occupation relating to

27-20 mortgage investments or mortgage lending.

27-21 (b) Serve terms of 2 years and at the pleasure of the legislative

27-22 commission.

27-23 (c) May be reappointed.

27-24 (d) Serve without compensation and may not receive a per diem

27-25 allowance or travel expenses.

27-26 4. Any vacancy in the membership of the advisory council must be

27-27 filled for the remainder of the unexpired term in the same manner as the

27-28 original appointment.

27-29 5. A member of the advisory council who is an officer or employee of

27-30 this state or a political subdivision of this state must be relieved from his

27-31 duties without loss of his regular compensation so that he may prepare

27-32 for and attend meetings of the advisory council and perform any work

27-33 necessary to carry out the duties of the advisory council in the most

27-34 timely manner practicable. A state agency or political subdivision of this

27-35 state shall not require an officer or employee who is a member of the

27-36 advisory council to make up the time he is absent from work to carry out

27-37 his duties as a member of the advisory council or use annual vacation or

27-38 compensatory time for the absence.

27-39 6. Notwithstanding any other provision of law, a member of the

27-40 advisory council:

27-41 (a) Is not disqualified from public employment or holding a public

27-42 office because of his membership on the advisory council; and

28-1 (b) Does not forfeit his public office or public employment because of

28-2 his membership on the advisory council.

28-3 Sec. 61.5. 1. The members of the advisory council on mortgage

28-4 investments and mortgage lending shall elect a chairman and a vice

28-5 chairman from among their membership. The vice chairman shall

28-6 perform the duties of the chairman during any absence of the chairman.

28-7 2. The advisory council may meet at least once each calendar

28-8 quarter and at other times on the call of the chairman or a majority of its

28-9 members.

28-10 3. The meetings of the advisory council may be held at any location

28-11 designated by the chairman or a majority of its members.

28-12 4. A majority of the members of the advisory council constitutes a

28-13 quorum for the transaction of all business.

28-14 5. The chairman may appoint subcommittees of the members of the

28-15 advisory council to consider specific problems relating to mortgage

28-16 investments or mortgage lending.

28-17 Sec. 61.7. The purpose of the advisory council on mortgage

28-18 investments and mortgage lending is to:

28-19 1. Consult with, advise and make recommendations to the

28-20 commissioner in all matters relating to mortgage investments and

28-21 mortgage lending.

28-22 2. Make recommendations to the legislature concerning the

28-23 enactment of any legislation relating to mortgage investments and

28-24 mortgage lending.

28-25 3. Make recommendations to the legislature and the commissioner

28-26 concerning educational requirements and other qualifications for

28-27 persons who are engaged in any business, profession or occupation

28-28 relating to mortgage investments and mortgage lending.

28-29 4. Conduct hearings, conferences and special studies on all matters

28-30 relating to mortgage investments and mortgage lending.

28-31 5. Provide a forum for the consideration and discussion of all

28-32 matters relating to mortgage investments and mortgage lending.

28-33 6. Gather and disseminate information relating to mortgage

28-34 investments and mortgage lending.

28-35 7. Engage in other activities that are designed to promote, improve

28-36 and protect the reliability and stability of mortgage investments and

28-37 mortgage lending in this state.

28-38 Sec. 62. Except as otherwise provided in section 78 of this act:

28-39 1. A person who claims an exemption from the provisions of this

28-40 chapter pursuant to subsection 1 or 6 of NRS 645B.015 must:

28-41 (a) File a written application for a certificate of exemption with the

28-42 office of the commissioner;

28-43 (b) Pay the fee required pursuant to NRS 645B.050; and

29-1 (c) Include with the written application satisfactory proof that the

29-2 person meets the requirements of subsection 1 or 6 of NRS 645B.015.

29-3 2. The commissioner may require a person who claims an exemption

29-4 from the provisions of this chapter pursuant to subsections 2 to 5,

29-5 inclusive, or 7 to 10, inclusive, of NRS 645B.015 to:

29-6 (a) File a written application for a certificate of exemption with the

29-7 office of the commissioner;

29-8 (b) Pay the fee required pursuant to NRS 645B.050; and

29-9 (c) Include with the written application satisfactory proof that the

29-10 person meets the requirements of at least one of those exemptions.

29-11 3. A certificate of exemption expires automatically if, at any time, the

29-12 person who claims the exemption no longer meets the requirements of at

29-13 least one exemption set forth in the provisions of NRS 645B.015.

29-14 4. If a certificate of exemption expires automatically pursuant to this

29-15 section, the person shall not provide any of the services of a mortgage

29-16 broker or otherwise engage in, carry on or hold himself out as engaging

29-17 in or carrying on the business of a mortgage broker, unless the person

29-18 applies for and is issued:

29-19 (a) A license as a mortgage broker pursuant to this chapter; or

29-20 (b) Another certificate of exemption.

29-21 5. The commissioner may impose upon a person who is required to

29-22 apply for a certificate of exemption or who holds a certificate of

29-23 exemption an administrative fine of not more than $10,000 for each

29-24 violation that he commits, if the person:

29-25 (a) Has knowingly made or caused to be made to the commissioner

29-26 any false representation of material fact;

29-27 (b) Has suppressed or withheld from the commissioner any

29-28 information which the person possesses and which, if submitted by him,

29-29 would have rendered the person ineligible to hold a certificate of

29-30 exemption; or

29-31 (c) Has violated any provision of this chapter, a regulation adopted

29-32 pursuant to this chapter or an order of the commissioner that applies to a

29-33 person who is required to apply for a certificate of exemption or who

29-34 holds a certificate of exemption.

29-35 Sec. 63. The commissioner may refuse to issue a license to an

29-36 applicant if the commissioner has reasonable cause to believe that the

29-37 applicant or any general partner, officer or director of the applicant has,

29-38 after October 1, 1999, employed or proposed to employ a person as a

29-39 mortgage agent or authorized or proposed to authorize a person to be

29-40 associated with a mortgage broker as a mortgage agent at a time when

29-41 the applicant or the general partner, officer or director knew or, in light

29-42 of all the surrounding facts and circumstances, reasonably should have

29-43 known that the person:

30-1 1. Had been convicted of, or entered a plea of nolo contendere to, a

30-2 felony or any crime involving fraud, misrepresentation or moral

30-3 turpitude; or

30-4 2. Had a financial services license or registration suspended or

30-5 revoked within the immediately preceding 10 years.

30-6 Sec. 64. 1. If an applicant is a natural person, the commissioner

30-7 may refuse to issue a license to the applicant if the commissioner has

30-8 reasonable cause to believe that the applicant would be subject to control

30-9 by a relative who would be ineligible to be licensed pursuant to this

30-10 chapter.

30-11 2. If an applicant is a partnership, corporation or unincorporated

30-12 association, the commissioner may refuse to issue a license to the

30-13 applicant if:

30-14 (a) Any member of the partnership or any officer or director of the

30-15 corporation or unincorporated association has committed any act or

30-16 omission that would be cause for refusing to issue a license to a natural

30-17 person; or

30-18 (b) The commissioner has reasonable cause to believe that any

30-19 member of the partnership or any officer or director of the corporation

30-20 or unincorporated association would be subject to control by a relative

30-21 who would be ineligible to be licensed pursuant to this chapter.

30-22 Sec. 64.5. The provisions of sections 63 and 64 of this act do not

30-23 limit the authority of the commissioner to refuse to issue a license to an

30-24 applicant for any other lawful reason or pursuant to any other provision

30-25 of law.

30-26 Sec. 65. A mortgage broker shall:

30-27 1. Teach his mortgage agents the fundamentals of mortgage lending

30-28 and the ethics of the profession; and

30-29 2. Supervise the activities of his mortgage agents and the operation

30-30 of his business.

30-31 Sec. 66. 1. A person shall not act as or provide any of the services

30-32 of a mortgage agent or otherwise engage in, carry on or hold himself out

30-33 as engaging in or carrying on the activities of a mortgage agent if the

30-34 person:

30-35 (a) Has been convicted of, or entered a plea of nolo contendere to, a

30-36 felony or any crime involving fraud, misrepresentation or moral

30-37 turpitude; or

30-38 (b) Has had a financial services license or registration suspended or

30-39 revoked within the immediately preceding 10 years.

30-40 2. A mortgage agent may not be associated with or employed by more

30-41 than one mortgage broker at the same time.

30-42 3. A mortgage broker shall register with the division each person

30-43 who will be associated with or employed by the mortgage broker as a

31-1 mortgage agent. To register a person as a mortgage agent, a mortgage

31-2 broker must:

31-3 (a) Submit to the division a registration form which is provided by the

31-4 division and which:

31-5 (1) States the name, residence address and business address of the

31-6 person;

31-7 (2) Is signed by the person;

31-8 (3) Includes a provision by which the person gives his written

31-9 consent to an investigation of his credit history, criminal history and

31-10 background; and

31-11 (4) Includes any other information or supporting materials required

31-12 by the regulations adopted by the commissioner. Such information or

31-13 supporting materials may include, without limitation, a complete set of

31-14 fingerprints from the person, the social security number of the person

31-15 and other forms of identification of the person; and

31-16 (b) Pay the actual costs and expenses incurred by the division to

31-17 investigate the credit history, criminal history and background of the

31-18 person. All money received pursuant to this paragraph must be placed in

31-19 the investigative account created by NRS 232.545.

31-20 4. A mortgage broker shall not employ a person as a mortgage agent

31-21 or authorize a person to be associated with the mortgage broker as a

31-22 mortgage agent if the mortgage broker has not registered the person with

31-23 the division pursuant to subsection 3 or if the person:

31-24 (a) Has been convicted of, or entered a plea of nolo contendere to, a

31-25 felony or any crime involving fraud, misrepresentation or moral

31-26 turpitude; or

31-27 (b) Has had a financial services license or registration suspended or

31-28 revoked within the immediately preceding 10 years.

31-29 5. If a mortgage agent terminates his association or employment

31-30 with a mortgage broker for any reason, the mortgage broker shall, not

31-31 later than the end of the next business day following the date of

31-32 termination:

31-33 (a) Deliver to the mortgage agent or send by certified mail to the last

31-34 known residence address of the mortgage agent a written statement

31-35 which advises him that his termination is being reported to the division;

31-36 and

31-37 (b) Deliver or send by certified mail to the division:

31-38 (1) A written statement of the circumstances surrounding the

31-39 termination; and

31-40 (2) A copy of the written statement that the mortgage broker

31-41 delivers or mails to the mortgage agent pursuant to paragraph (a).

32-1 Sec. 67. 1. A license entitles a licensee to engage only in the