(REPRINTED WITH ADOPTED AMENDMENTS)

 

Assembly Bill No. 324–Assemblymen Goldwater, Dini, Cegavske, Parks, Manendo, Berman, Buckley, Freeman, Lee
and Smith

 

March 12, 2001

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Revises various provisions regarding regulation of mortgage brokers, mortgage agents and mortgage companies. (BDR 54‑491)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: Yes.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to financial institutions; creating the mortgage industry commission; prescribing the powers and duties of the mortgage industry commission and its executive director; transferring the responsibilities of regulating mortgage brokers and mortgage agents from the commissioner of financial institutions to the mortgage industry commission and its executive director; revising various provisions relating to the regulation of mortgage brokers and mortgage agents; revising provisions concerning certain powers of attorney; eliminating the advisory council on mortgage investments and mortgage lending; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. Chapter 645B of NRS is hereby amended by adding thereto

1-2  the provisions set forth as sections 2 to 14.5, inclusive, of this act.

1-3    Sec. 2.  “Accredited investor” means an investor:

1-4    1.  Who, on the date of an act or transaction, meets the criteria to be

1-5  an accredited investor pursuant to the provisions of Regulation D of the

1-6  Securities and Exchange Commission, 17 C.F.R. §§ 230.501 to 230.508,

1-7  inclusive; or

1-8    2.  Whom, on the date of an act or transaction, a mortgage broker or

1-9  mortgage agent reasonably believes meets the criteria to be an accredited

1-10  investor pursuant to the provisions of Regulation D of the Securities and

1-11  Exchange Commission, 17 C.F.R. §§ 230.501 to 230.508, inclusive.

1-12    Sec. 3. “Executive director” means the executive director of the

1-13  commission.

1-14    Sec. 4.  “Mortgage company” has the meaning ascribed to it in

1-15  NRS 645E.100.

2-1    Sec. 5.  For the purposes of this chapter:

2-2    1.  The southern district of Nevada consists of the counties of Clark,

2-3  Esmeralda, Lincoln and Nye; and

2-4    2.  The northern district of Nevada consists of all other counties of

2-5  this state.

2-6    Sec. 6.  1.  The mortgage industry commission is hereby created.

2-7    2.  The commission consists of five members appointed by the

2-8  governor. The governor shall appoint to the commission:

2-9    (a) Three members who are residents of the southern district of

2-10  Nevada; and

2-11    (b) Two members who are residents of the northern district of Nevada.

2-12    3.  If, during his term, a member changes his residency to a location

2-13  outside of the district from which he was appointed, the member shall be

2-14  deemed to have resigned from his office, and the office shall be deemed

2-15  to be vacant.

2-16    4.  A person may not be appointed to the commission unless the

2-17  person:

2-18    (a) Is a citizen of the United States;

2-19    (b) Has been a resident of this state for at least 5 years immediately

2-20  preceding the date of his appointment; and

2-21    (c) For at least 3 years immediately preceding the date of his

2-22  appointment:

2-23      (1) Has held a valid license issued by this state as a mortgage

2-24  broker or mortgage company or has been a general partner, director or

2-25  officer of such a mortgage broker or mortgage company; or

2-26      (2) Has been actively and legally engaged in this state in the

2-27  business of mortgage lending or in the activities of a mortgage agent.

2-28    5.  Before entering upon the duties of his office, a member shall take:

2-29    (a) The constitutional oath of office; and

2-30    (b) An oath that he is legally qualified to serve as a member of the

2-31  commission.

2-32    Sec. 7.  1.  After the initial terms, the members of the commission

2-33  must be appointed to terms of 3 years. Upon the expiration of his term, a

2-34  member continues to serve on the commission until a qualified person

2-35  has been appointed as his successor.

2-36    2.  Members of the commission may not be appointed to serve more

2-37  than two consecutive terms, excluding any appointment to:

2-38    (a) An initial term of less than 3 years; and

2-39    (b) An unexpired term that does not exceed 18 months.

2-40    3.  A person who has been appointed to serve two consecutive terms

2-41  on the commission may be appointed to the commission if, on the date of

2-42  his most recent appointment, more than 3 years have elapsed since the

2-43  expiration of his last term.

2-44    4.  Any vacancy in the membership of the commission must be filled

2-45  for the remainder of the unexpired term in the same manner as the

2-46  original appointment.

2-47    Sec. 8.  1.  The commission shall:

2-48    (a) Operate on the basis of a fiscal year beginning on July 1 and

2-49  ending on June 30.

3-1    (b) At the first meeting of each fiscal year, select one member as

3-2  chairman and one member as vice chairman. The chairmanship of the

3-3  commission must alternate each fiscal year between a member who is a

3-4  resident of the southern district of Nevada and a member who is a

3-5  resident of the northern district of Nevada. The vice chairman may not

3-6  be a resident of the same district as the chairman. If a vacancy occurs in

3-7  the chairmanship or vice chairmanship, the vacancy must be filled for

3-8  the remainder of the unexpired term by a member who is a resident of

3-9  the same district as his predecessor. The vice chairman shall perform the

3-10  duties of the chairman during any absence of the chairman.

3-11    2.  The commission:

3-12    (a) Shall hold at least two meetings each year, one in the southern

3-13  district of Nevada and one in the northern district of Nevada; and

3-14    (b) May hold additional meetings each year at the call of the

3-15  chairman or upon a written request submitted to the executive director by

3-16  two members of the commission.

3-17    3.  The chairman shall designate the time and place for each meeting

3-18  of the commission. Not later than 3 working days before each meeting,

3-19  the executive director shall give each member of the commission written

3-20  notice of the time, place and purpose of the meeting.

3-21    4.  Three members of the commission constitute a quorum. A

3-22  majority of the members present during a quorum may take any action or

3-23  make any decision as the commission.

3-24    5.  The commission shall:

3-25    (a) Prepare and maintain a record of its transactions and

3-26  proceedings; and

3-27    (b) Adopt a seal of which each court of this state shall take judicial

3-28  notice.

3-29    6.  While engaged in the business of the commission, each member of

3-30  the commission is entitled to receive:

3-31    (a) A salary of not more than $80 per day, as fixed by the commission;

3-32  and

3-33    (b) A per diem allowance and travel expenses at a rate fixed by the

3-34  commission. The rate must not exceed the rate provided for officers and

3-35  employees of this state generally.

3-36    Sec. 9. 1.  The commission shall designate the location of the

3-37  principal office of the commission. If the principal office of the

3-38  commission is located in:

3-39    (a) The southern district of Nevada, the commission shall establish at

3-40  least one branch office in the northern district of Nevada.

3-41    (b) The northern district of Nevada, the commission shall establish at

3-42  least one branch office in the southern district of Nevada.

3-43    2.  Within the limits of legislative appropriation, the commission may

3-44  establish such additional branch offices in this state as it considers

3-45  necessary to carry out its functions and duties.

3-46    3.  The executive director shall conduct business primarily in the

3-47  principal office of the commission.

 

 

4-1    Sec. 10.  The commission may delegate to the executive director:

4-2    1.  The authority of the commission to take any disciplinary action

4-3  and to impose any fines and penalties; and

4-4    2.  Any other authority conferred on the commission by this chapter

4-5  and any other specific statute relating to the powers and duties of the

4-6  commission.

4-7    Sec. 11.  1.  The director of the department of business and industry

4-8  shall appoint an executive director who:

4-9    (a) Within the limits of legislative appropriation, is entitled to receive

4-10  such compensation as is fixed by the commission;

4-11    (b) Is in the unclassified service of the state; and

4-12    (c) Serves at the pleasure of the director of the department of business

4-13  and industry.

4-14    2.  The executive director may not be:

4-15    (a) A member of the commission; or

4-16    (b) A licensed mortgage broker or mortgage company, a partner,

4-17  director or officer of a licensed mortgage broker or mortgage company

4-18  or, directly or indirectly, interested in, employed by or associated with a

4-19  licensed mortgage broker or mortgage company.

4-20    3.  Except as otherwise provided in NRS 284.143, the executive

4-21  director shall devote his entire time and attention to the business of his

4-22  office and shall not pursue any other business or occupation or hold any

4-23  other office of profit.

4-24    4.  The executive director:

4-25    (a) Is subject to the supervision of the director of the department of

4-26  business and industry;

4-27    (b) Is responsible for administering and carrying out the policies and

4-28  administrative functions of the commission;

4-29    (c) Shall direct and supervise all the technical and administrative

4-30  functions of the commission;

4-31    (d) Shall report to the commission all relevant and important matters

4-32  concerning the administration of the office of the commission;

4-33    (e) Shall perform the duties set forth in this chapter and the duties

4-34  delegated to the executive director by the commission pursuant to section

4-35  10 of this act; and

4-36    (f) Shall perform any lawful act that the executive director considers

4-37  necessary or desirable to carry out the purposes and provisions of this

4-38  chapter and any other specific statute relating to the powers and duties of

4-39  the commission.

4-40    Sec. 12. 1.  Within the limits of legislative appropriation, the

4-41  executive director may employ such persons as he deems necessary to

4-42  carry out the functions and duties of the commission.

4-43    2.  A person employed by the executive director may not be:

4-44    (a) A member of the commission; or

4-45    (b) A licensed mortgage broker or mortgage company, a partner,

4-46  director or officer of a licensed mortgage broker or mortgage company

4-47  or, directly or indirectly, interested in, employed by or associated with a

4-48  licensed mortgage broker or mortgage company.

5-1    3.  While engaged in the business of the commission, the executive

5-2  director and each person employed by the executive director is entitled to

5-3  receive a per diem allowance and travel expenses at a rate fixed by the

5-4  commission. The rate must not exceed the rate provided for officers and

5-5  employees of this state generally.

5-6    Sec. 13.  The commission, the commissioner of financial institutions

5-7  and the division of financial institutions shall cooperate with, share

5-8  records and information with and assist each other to the extent

5-9  necessary to carry out the provisions of this chapter, chapter 645E of

5-10  NRS and any other specific statute relating to the powers and duties of

5-11  the commission, the commissioner of financial institutions and the

5-12  division of financial institutions.

5-13    Sec. 14.  1.  The attorney general is the attorney for the commission

5-14  and the executive director.

5-15    2.  The attorney general shall designate one or more of his deputies to

5-16  conduct actions, proceedings and hearings for the commission and the

5-17  executive director. Such deputies shall advise the commission and the

5-18  executive director on all matters relating to the commission.

5-19    Sec. 14.5.  The commission shall adopt regulations that set forth the

5-20  procedures that a mortgage broker or mortgage agent must follow to

5-21  determine whether an investor is an accredited investor.

5-22    Sec. 15.  NRS 645B.010 is hereby amended to read as follows:

5-23    645B.010  As used in this chapter, unless the context otherwise

5-24  requires, the words and terms defined in NRS 645B.0103 to 645B.0135,

5-25  inclusive, and sections 2, 3 and 4 of this act have the meanings ascribed to

5-26  them in those sections.

5-27    Sec. 16.  NRS 645B.0105 is hereby amended to read as follows:

5-28    645B.0105  [“Commissioner” means the commissioner of financial

5-29  institutions.] “Commission” means:

5-30    1.  The mortgage industry commission created pursuant to section 6

5-31  of this act; and

5-32    2.  The executive director if the mortgage industry commission has

5-33  delegated its authority to the executive director pursuant to section 10 of

5-34  this act.

5-35    Sec. 17.  NRS 645B.0111 is hereby amended to read as follows:

5-36    645B.0111  “Division[”] of financial institutions” means the division

5-37  of financial institutions of the department of business and industry.

5-38    Sec. 18.  NRS 645B.0127 is hereby amended to read as follows:

5-39    645B.0127  1.  “Mortgage broker” means a person who, directly or

5-40  indirectly:

5-41    (a) Holds himself out for hire to serve as an agent for any person in an

5-42  attempt to obtain a loan which will be secured by a lien on real property;

5-43    (b) Holds himself out for hire to serve as an agent for any person who

5-44  has money to lend, if the loan is or will be secured by a lien on real

5-45  property;

5-46    (c) Holds himself out as being able to make loans secured by liens on

5-47  real property;

5-48    (d) Holds himself out as being able to buy or sell notes secured by liens

5-49  on real property; or

6-1    (e) Offers for sale in this state any security which is exempt from

6-2  registration under state or federal law and purports to make investments in

6-3  promissory notes secured by liens on real property.

6-4    2.  The term does not include a person who is licensed as a mortgage

6-5  company[, as defined in NRS 645E.100,] pursuant to chapter 645E of

6-6  NRS, unless the person is also licensed as a mortgage broker pursuant to

6-7  this chapter.

6-8    Sec. 19.  NRS 645B.016 is hereby amended to read as follows:

6-9    645B.016  Except as otherwise provided in NRS 645B.690:

6-10    1.  A person who claims an exemption from the provisions of this

6-11  chapter pursuant to subsection 1 or 6 of NRS 645B.015 must:

6-12    (a) File a written application for a certificate of exemption with the

6-13  office of the [commissioner;] commission;

6-14    (b) Pay the fee required pursuant to NRS 645B.050; and

6-15    (c) Include with the written application satisfactory proof that the

6-16  person meets the requirements of subsection 1 or 6 of NRS 645B.015.

6-17    2.  The [commissioner] commission may require a person who claims

6-18  an exemption from the provisions of this chapter pursuant to subsections 2

6-19  to 5, inclusive, or 7 to 10, inclusive, of NRS 645B.015 to:

6-20    (a) File a written application for a certificate of exemption with the

6-21  office of the [commissioner;] commission;

6-22    (b) Pay the fee required pursuant to NRS 645B.050; and

6-23    (c) Include with the written application satisfactory proof that the

6-24  person meets the requirements of at least one of those exemptions.

6-25    3.  A certificate of exemption expires automatically if, at any time, the

6-26  person who claims the exemption no longer meets the requirements of at

6-27  least one exemption set forth in the provisions of NRS 645B.015.

6-28    4.  If a certificate of exemption expires automatically pursuant to this

6-29  section, the person shall not provide any of the services of a mortgage

6-30  broker or otherwise engage in, carry on or hold himself out as engaging in

6-31  or carrying on the business of a mortgage broker, unless the person applies

6-32  for and is issued:

6-33    (a) A license as a mortgage broker pursuant to this chapter; or

6-34    (b) Another certificate of exemption.

6-35    5.  The [commissioner] commission may impose upon a person who is

6-36  required to apply for a certificate of exemption or who holds a certificate of

6-37  exemption an administrative fine of not more than $10,000 for each

6-38  violation that he commits, if the person:

6-39    (a) Has knowingly made or caused to be made to the [commissioner]

6-40  commission any false representation of material fact;

6-41    (b) Has suppressed or withheld from the [commissioner] commission

6-42  any information which the person possesses and which, if submitted by

6-43  him, would have rendered the person ineligible to hold a certificate of

6-44  exemption; or

6-45    (c) Has violated any provision of this chapter, a regulation adopted

6-46  pursuant to this chapter or an order of the [commissioner] commission that

6-47  applies to a person who is required to apply for a certificate of exemption

6-48  or who holds a certificate of exemption.

 

7-1    Sec. 20.  NRS 645B.018 is hereby amended to read as follows:

7-2    645B.018  1.  A person may apply to the [commissioner] commission

7-3  for an exemption from the provisions of this chapter governing the making

7-4  of a loan of money.

7-5    2.  The [commissioner] commission may grant the exemption if [he]

7-6  the commission finds that:

7-7    (a) The making of the loan would not be detrimental to the financial

7-8  condition of the lender, the debtor or the person who is providing the

7-9  money for the loan;

7-10    (b) The lender, the debtor or the person who is providing the money for

7-11  the loan has established a record of sound performance, efficient

7-12  management, financial responsibility and integrity;

7-13    (c) The making of the loan is likely to increase the availability of capital

7-14  for a sector of the state economy; and

7-15    (d) The making of the loan is not detrimental to the public interest.

7-16    3.  The [commissioner:] commission:

7-17    (a) May revoke an exemption unless the loan for which the exemption

7-18  was granted has been made; and

7-19    (b) Shall issue a written statement setting forth the reasons for [his] its

7-20  decision to grant, deny or revoke an exemption.

7-21    Sec. 21.  NRS 645B.020 is hereby amended to read as follows:

7-22    645B.020  1.  A person who wishes to be licensed as a mortgage

7-23  broker must file a written application for a license with the office of the

7-24  [commissioner] commission and pay the fee required pursuant to

7-25  NRS 645B.050. An application for a license as a mortgage broker must:

7-26    (a) Be verified.

7-27    (b) State the name, residence address and business address of the

7-28  applicant and the location of each principal office and branch office at

7-29  which the mortgage broker will conduct business within this state.

7-30    (c) State the name under which the applicant will conduct business as a

7-31  mortgage broker.

7-32    (d) List the name, residence address and business address of each

7-33  person who will:

7-34      (1) If the applicant is not a natural person, have an interest in the

7-35  mortgage broker as a principal, partner, officer, director or trustee,

7-36  specifying the capacity and title of each such person.

7-37      (2) Be associated with or employed by the mortgage broker as a

7-38  mortgage agent.

7-39    (e) If the applicant is a natural person, include the social security

7-40  number of the applicant.

7-41    (f) Include a general business plan and a [manual for policies and

7-42  procedures for the mortgage broker and his mortgage agents that includes,

7-43  without limitation, the underwriting standards, restrictions and] description

7-44  of the policies and procedures that the mortgage broker and his mortgage

7-45  agents will follow to arrange and service loans and to conduct business

7-46  pursuant to this chapter.

7-47    (g) State the length of time the applicant has been engaged in the

7-48  business of a broker.

8-1    (h) Include a financial statement of the applicant and, if applicable,

8-2  satisfactory proof that the applicant will be able to maintain continuously

8-3  the net worth required pursuant to NRS 645B.115.

8-4    (i) Include any other information required pursuant to the regulations

8-5  adopted by the [commissioner] commission or an order of the

8-6  [commissioner.] commission.

8-7    2.  If a mortgage broker will conduct business at one or more branch

8-8  offices within this state, the mortgage broker must apply for a license for

8-9  each such branch office.

8-10    3.  Except as otherwise provided in this chapter, the [commissioner]

8-11  commission shall issue a license to an applicant as a mortgage broker if:

8-12    (a) The application complies with the requirements of this chapter;

8-13    (b) The applicant submits the statement required pursuant to

8-14  NRS 645B.023, if the applicant is required to do so; and

8-15    (c) The applicant and each general partner, officer or director of the

8-16  applicant, if the applicant is a partnership, corporation or unincorporated

8-17  association:

8-18      (1) Has a good reputation for honesty, trustworthiness and integrity

8-19  and displays competence to transact the business of a mortgage broker in a

8-20  manner which safeguards the interests of the general public. The applicant

8-21  must submit satisfactory proof of these qualifications to the

8-22  [commissioner.] commission.

8-23      (2) Has not been convicted of, or entered a plea of nolo contendere

8-24  to, a felony or any crime involving fraud, misrepresentation or moral

8-25  turpitude.

8-26      (3) Has not made a false statement of material fact on his application.

8-27      (4) Has not had a license that was issued pursuant to the provisions of

8-28  this chapter or chapter 645E of NRS suspended or revoked within the 10

8-29  years immediately preceding the date of his application.

8-30      (5) Has not had a license that was issued in any other state, district or

8-31  territory of the United States or any foreign country suspended or revoked

8-32  within the 10 years immediately preceding the date of his application.

8-33      (6) Has not violated any provision of this chapter or chapter 645E of

8-34  NRS, a regulation adopted pursuant thereto or an order of the

8-35  [commissioner.] commission.

8-36    Sec. 22.  NRS 645B.023 is hereby amended to read as follows:

8-37    645B.023  1.  A natural person who applies for the issuance or

8-38  renewal of a license as a mortgage broker shall submit to the

8-39  [commissioner] commission the statement prescribed by the welfare

8-40  division of the department of human resources pursuant to NRS 425.520.

8-41  The statement must be completed and signed by the applicant.

8-42    2.  The [commissioner] commission shall include the statement

8-43  required pursuant to subsection 1 in:

8-44    (a) The application or any other forms that must be submitted for the

8-45  issuance or renewal of the license; or

8-46    (b) A separate form prescribed by the [commissioner.] commission.

8-47    3.  A license as a mortgage broker may not be issued or renewed by the

8-48  [commissioner] commission if the applicant is a natural person who:

8-49    (a) Fails to submit the statement required pursuant to subsection 1; or

9-1    (b) Indicates on the statement submitted pursuant to subsection 1 that he

9-2  is subject to a court order for the support of a child and is not in

9-3  compliance with the order or a plan approved by the district attorney or

9-4  other public agency enforcing the order for the repayment of the amount

9-5  owed pursuant to the order.

9-6    4.  If an applicant indicates on the statement submitted pursuant to

9-7  subsection 1 that he is subject to a court order for the support of a child and

9-8  is not in compliance with the order or a plan approved by the district

9-9  attorney or other public agency enforcing the order for the repayment of

9-10  the amount owed pursuant to the order, the [commissioner] commission

9-11  shall advise the applicant to contact the district attorney or other public

9-12  agency enforcing the order to determine the actions that the applicant may

9-13  take to satisfy the arrearage.

9-14    Sec. 23.  NRS 645B.0243 is hereby amended to read as follows:

9-15    645B.0243  The [commissioner] commission may refuse to issue a

9-16  license to an applicant if the [commissioner] commission has reasonable

9-17  cause to believe that the applicant or any general partner, officer or director

9-18  of the applicant has, after October 1, 1999, employed or proposed to

9-19  employ a person as a mortgage agent or authorized or proposed to

9-20  authorize a person to be associated with a mortgage broker as a mortgage

9-21  agent at a time when the applicant or the general partner, officer or director

9-22  knew or, in light of all the surrounding facts and circumstances, reasonably

9-23  should have known that the person:

9-24    1.  Had been convicted of, or entered a plea of nolo contendere to, a

9-25  felony or any crime involving fraud, misrepresentation or moral turpitude;

9-26  or

9-27    2.  Had a financial services license or registration suspended or revoked

9-28  within the immediately preceding 10 years.

9-29    Sec. 24.  NRS 645B.0245 is hereby amended to read as follows:

9-30    645B.0245  1.  If an applicant is a natural person, the [commissioner]

9-31  commission may refuse to issue a license to the applicant if the

9-32  [commissioner] commission has reasonable cause to believe that the

9-33  applicant would be subject to control by a relative who would be ineligible

9-34  to be licensed pursuant to this chapter.

9-35    2.  If an applicant is a partnership, corporation or unincorporated

9-36  association, the [commissioner] commission may refuse to issue a license

9-37  to the applicant if:

9-38    (a) Any member of the partnership or any officer or director of the

9-39  corporation or unincorporated association has committed any act or

9-40  omission that would be cause for refusing to issue a license to a natural

9-41  person; or

9-42    (b) The [commissioner] commission has reasonable cause to believe

9-43  that any member of the partnership or any officer or director of the

9-44  corporation or unincorporated association would be subject to control by a

9-45  relative who would be ineligible to be licensed pursuant to this chapter.

9-46    Sec. 25.  NRS 645B.0247 is hereby amended to read as follows:

9-47    645B.0247  The provisions of NRS 645B.0243 and 645B.0245 do not

9-48  limit the authority of the [commissioner] commission to refuse to issue a

10-1  license to an applicant for any other lawful reason or pursuant to any other

10-2  provision of law.

10-3    Sec. 26.  NRS 645B.025 is hereby amended to read as follows:

10-4    645B.025  1.  A mortgage broker shall post each license in a

10-5  conspicuous place in the office to which it pertains.

10-6    2.  A mortgage broker may not transfer or assign a license to another

10-7  person, unless the [commissioner gives his] commission gives its written

10-8  approval.

10-9    Sec. 27.  NRS 645B.035 is hereby amended to read as follows:

10-10  645B.035  1.  A license entitles a licensee to engage only in [the] :

10-11  (a) The activities authorized by this chapter[.] ; and

10-12  (b) The activities authorized by chapter 645E of NRS, unless the

10-13  licensee engages in such activities with the intent to circumvent or avoid

10-14  the provisions of this chapter.

10-15  2.  The provisions of this chapter do not prohibit a licensee from:

10-16  (a) Holding a license as a mortgage company pursuant to chapter 645E

10-17  of NRS; or

10-18  (b) Conducting the business of a mortgage company and the business of

10-19  a mortgage broker in the same office or place of business.

10-20  3.  If a licensee does not hold a license as a mortgage company

10-21  pursuant to chapter 645E of NRS, the licensee is subject to supervision,

10-22  regulation and discipline by the commission for all activities that the

10-23  licensee engages in pursuant to this chapter and chapter 645E of NRS.

10-24  4.  If a licensee holds a license as a mortgage company pursuant to

10-25  chapter 645E of NRS, the licensee is subject to supervision, regulation

10-26  and discipline by:

10-27  (a) The commission for all activities that the licensee engages in

10-28  pursuant to this chapter and chapter 645E of NRS in his capacity as a

10-29  mortgage broker; and

10-30  (b) The commissioner of financial institutions for all activities that the

10-31  licensee engages in pursuant to chapter 645E of NRS in his capacity as a

10-32  mortgage company.

10-33  Sec. 28.  NRS 645B.050 is hereby amended to read as follows:

10-34  645B.050  1.  A license issued pursuant to this chapter expires each

10-35  year on June 30, unless it is renewed. To renew a license, the licensee must

10-36  submit to the [commissioner] commission on or before June 30 of each

10-37  year:

10-38  (a) An application for renewal;

10-39  (b) The fee required to renew the license pursuant to this section; and

10-40  (c) If the licensee is a natural person, the statement required pursuant to

10-41  NRS 645B.023.

10-42  2.  If the licensee fails to submit any item required pursuant to

10-43  subsection 1 to the [commissioner] commission on or before June 30 of

10-44  any year, the license is canceled. The [commissioner] commission may

10-45  reinstate a canceled license if the licensee submits to the [commissioner:]

10-46  commission:

10-47  (a) An application for renewal;

10-48  (b) The fee required to renew the license pursuant to this section;

11-1    (c) If the licensee is a natural person, the statement required pursuant to

11-2  NRS 645B.023; and

11-3    (d) A reinstatement fee of $200.

11-4    3.  Except as otherwise provided in NRS 645B.016, a certificate of

11-5  exemption issued pursuant to this chapter expires each year on December

11-6  31, unless it is renewed. To renew a certificate of exemption, a person must

11-7  submit to the [commissioner] commission on or before December 31 of

11-8  each year:

11-9    (a) An application for renewal that includes satisfactory proof that the

11-10  person meets the requirements for an exemption from the provisions of this

11-11  chapter; and

11-12  (b) The fee required to renew the certificate of exemption.

11-13  4.  If the person fails to submit any item required pursuant to

11-14  subsection 3 to the [commissioner] commission on or before December 31

11-15  of any year, the certificate of exemption is canceled. Except as otherwise

11-16  provided in NRS 645B.016, the [commissioner] commission may reinstate

11-17  a canceled certificate of exemption if the person submits to the

11-18  [commissioner:] commission:

11-19  (a) An application for renewal that includes satisfactory proof that the

11-20  person meets the requirements for an exemption from the provisions of this

11-21  chapter;

11-22  (b) The fee required to renew the certificate of exemption; and

11-23  (c) A reinstatement fee of $100.

11-24  5.  A person must pay the following fees to apply for, to be issued or to

11-25  renew a license as a mortgage broker pursuant to this chapter:

11-26  (a) To file an original application or a license, $1,500 for the principal

11-27  office and $40 for each branch office. The person must also pay such

11-28  additional expenses incurred in the process of investigation as the

11-29  [commissioner] commission deems necessary. All money received by the

11-30  [commissioner] commission pursuant to this paragraph must be placed in

11-31  the investigative account created by NRS 232.545.

11-32  (b) To be issued a license, $1,000 for the principal office and $60 for

11-33  each branch office.

11-34  (c) To renew a license, $500 for the principal office and $100 for each

11-35  branch office.

11-36  6.  A person must pay the following fees to apply for or to renew a

11-37  certificate of exemption pursuant to this chapter:

11-38  (a) To file an application for a certificate of exemption, $200.

11-39  (b) To renew a certificate of exemption, $100.

11-40  7.  To be issued a duplicate copy of any license or certificate of

11-41  exemption, a person must make a satisfactory showing of its loss and pay a

11-42  fee of $10.

11-43  8.  Except as otherwise provided in this chapter, all fees received

11-44  pursuant to this chapter must be deposited in the state treasury for credit to

11-45  the state general fund.

11-46  Sec. 29.  NRS 645B.060 is hereby amended to read as follows:

11-47  645B.060  1.  Subject to the administrative control of the director of

11-48  the department of business and industry, the [commissioner] commission

12-1  shall exercise general supervision and control over mortgage brokers doing

12-2  business in this state.

12-3    2.  In addition to the other duties imposed upon [him] the commission

12-4  by law, the [commissioner] commission shall:

12-5    (a) Adopt any regulations [prescribing standards for determining

12-6  whether a mortgage broker has maintained adequate supervision of a

12-7  mortgage agent pursuant to this chapter.

12-8    (b) Adopt any other regulations] that are necessary to carry out the

12-9  provisions of this chapter, except as to loan brokerage fees.

12-10  [(c)] (b) Conduct such investigations as may be necessary to determine

12-11  whether any person has violated any provision of this chapter, a regulation

12-12  adopted pursuant to this chapter or an order of the [commissioner.

12-13  (d)] commission.

12-14  (c) Conduct an annual examination of each mortgage broker doing

12-15  business in this state.

12-16  [(e)] The annual examination must include, without limitation, a

12-17  formal exit review with the mortgage broker. The commission shall adopt

12-18  regulations prescribing:

12-19     (1) Standards for determining the rating of each mortgage broker

12-20  based upon the results of the annual examination; and

12-21     (2) Procedures for resolving any objections made by the mortgage

12-22  broker to the results of the annual examination. The results of the

12-23  annual examination may not be opened to public inspection pursuant to

12-24  NRS 645B.090 until any objections made by the mortgage broker have

12-25  been decided by the commission.

12-26  (d) Conduct such other examinations, periodic or special audits,

12-27  investigations and hearings as may be necessary and proper for the

12-28  efficient administration of the laws of this state regarding mortgage brokers

12-29  and mortgage agents. The [commissioner] commission shall adopt

12-30  regulations specifying the general guidelines that will be followed when a

12-31  periodic or special audit of a mortgage broker is conducted pursuant to this

12-32  chapter.

12-33  [(f)] (e) Classify as confidential certain records and information

12-34  obtained by the [division] commission when those matters are obtained

12-35  from a governmental agency upon the express condition that they remain

12-36  confidential. This paragraph does not limit examination by the legislative

12-37  auditor.

12-38  [(g)] (f) Conduct such examinations and investigations as are necessary

12-39  to ensure that mortgage brokers meet the requirements of this chapter for

12-40  obtaining a license, both at the time of the application for a license and

12-41  thereafter on a continuing basis.

12-42  3.  For each special audit, investigation or examination, a mortgage

12-43  broker shall pay a fee based on the [rate established] rates that the

12-44  commission establishes by regulation. In establishing such rates, the

12-45  commission shall consider:

12-46  (a) The complexity of the various audits, investigations and

12-47  examinations to which the rates apply;

12-48  (b) The skill required to conduct the audits, investigations and

12-49  examinations;

13-1    (c) The expenses associated with conducting the audits, investigations

13-2  and examinations and preparing reports;

13-3    (d) The rates established by the commissioner of financial institutions

13-4  pursuant to NRS 658.101[.] for supervision and examination of other

13-5  financial institutions; and

13-6    (e) Any other factors the commission deems relevant.

13-7    Sec. 30.  NRS 645B.070 is hereby amended to read as follows:

13-8    645B.070  1.  In the conduct of any examination, periodic or special

13-9  audit, investigation or hearing, the [commissioner] commission may:

13-10  (a) Compel the attendance of any person by subpoena.

13-11  (b) Administer oaths.

13-12  (c) Examine any person under oath concerning the business and conduct

13-13  of affairs of any person subject to the provisions of this chapter and in

13-14  connection therewith require the production of any books, records or

13-15  papers relevant to the inquiry.

13-16  2.  Any person subpoenaed under the provisions of this section who

13-17  willfully refuses or willfully neglects to appear at the time and place named

13-18  in the subpoena or to produce books, records or papers required by the

13-19  [commissioner,] commission, or who refuses to be sworn or answer as a

13-20  witness, is guilty of a misdemeanor and shall be punished as provided in

13-21  NRS 645B.950.

13-22  3.  The [commissioner] commission may assess against and collect

13-23  from a person all costs, including, without limitation, reasonable attorney’s

13-24  fees, that are attributable to any examination, periodic or special audit,

13-25  investigation or hearing that is conducted to examine or investigate the

13-26  conduct, activities or business of the person pursuant to this chapter.

13-27  Sec. 31.  NRS 645B.075 is hereby amended to read as follows:

13-28  645B.075  1.  The commission shall employ a certified public

13-29  accountant to review and conduct independent audits and examinations

13-30  of mortgage brokers. The commission shall levy an assessment upon

13-31  each mortgage broker to cover all the costs related to the employment of

13-32  the certified public accountant and the performance of the audits and

13-33  examinations.

13-34  2.  Each mortgage broker shall pay the assessment levied pursuant to

13-35  [NRS 658.055.] this section.

13-36  3.  Each mortgage broker and mortgage agent shall cooperate fully with

13-37  the audits and examinations performed pursuant [thereto.] to this section.

13-38  4.  The assessments collected by the commission pursuant to this

13-39  section must be deposited in the state treasury for credit to the account

13-40  for auditing mortgage brokers, which is hereby created in the state

13-41  general fund. The commission shall use the money in the account, and

13-42  may advance money from the account, for the purposes set forth in this

13-43  section.

13-44  Sec. 32.  NRS 645B.080 is hereby amended to read as follows:

13-45  645B.080  1.  Each mortgage broker shall keep and maintain at all

13-46  times at each location where the mortgage broker conducts business in this

13-47  state complete and suitable records of all mortgage transactions made by

13-48  the mortgage broker at that location. Each mortgage broker shall also keep

13-49  and maintain at all times at each such location all original books, papers

14-1  and data, or copies thereof, clearly reflecting the financial condition of the

14-2  business of the mortgage broker.

14-3    2.  Each mortgage broker shall submit to the [commissioner]

14-4  commission each month a report of the mortgage broker’s activity for the

14-5  previous month. The report must:

14-6    (a) Specify the volume of loans arranged by the mortgage broker for the

14-7  month or state that no loans were arranged in that month;

14-8    (b) Include any information required pursuant to NRS 645B.260 or

14-9  pursuant to the regulations adopted by the [commissioner;] commission;

14-10  and

14-11  (c) Be submitted to the [commissioner] commission by the 15th day of

14-12  the month following the month for which the report is made.

14-13  3.  The [commissioner] commission may adopt regulations prescribing

14-14  accounting procedures for mortgage brokers handling trust accounts and

14-15  the requirements for keeping records relating to such accounts.

14-16  Sec. 33.  NRS 645B.085 is hereby amended to read as follows:

14-17  645B.085  1.  Except as otherwise provided in this section, not later

14-18  than 60 days after the last day of each fiscal year for a mortgage broker, the

14-19  mortgage broker shall submit to the [commissioner] commission a

14-20  financial statement that:

14-21  (a) Is dated not earlier than the last day of the fiscal year; and

14-22  (b) Has been prepared from the books and records of the mortgage

14-23  broker by an independent public accountant who holds a permit to engage

14-24  in the practice of public accounting in this state that has not been revoked

14-25  or suspended.

14-26  2.  The [commissioner] commission may grant a reasonable extension

14-27  for the submission of a financial statement pursuant to this section if a

14-28  mortgage broker requests such an extension before the date on which the

14-29  financial statement is due.

14-30  3.  If a mortgage broker maintains any accounts described in subsection

14-31  1 of NRS 645B.175, the financial statement submitted pursuant to this

14-32  section must be audited. If a mortgage broker maintains any accounts

14-33  described in subsection 4 of NRS 645B.175, those accounts must be

14-34  audited. The public accountant who prepares the report of an audit shall

14-35  submit a copy of the report to the [commissioner] commission at the same

14-36  time that he submits the report to the mortgage broker.

14-37  4.  The [commissioner] commission shall adopt regulations prescribing

14-38  the scope of an audit conducted pursuant to subsection 3.

14-39  Sec. 34.  NRS 645B.090 is hereby amended to read as follows:

14-40  645B.090  1.  Except as otherwise provided in this section or by

14-41  specific statute, all papers, documents, reports and other written

14-42  instruments filed with the [commissioner] commission pursuant to this

14-43  chapter are open to public inspection.

14-44  2.  Except as otherwise provided in subsection 3, the [commissioner]

14-45  commission may withhold from public inspection or refuse to disclose to a

14-46  person, for such time as the [commissioner] commission considers

14-47  necessary, any information that, in [his judgment,] the judgment of the

14-48  commission, would:

15-1    (a) Impede or otherwise interfere with an investigation that is currently

15-2  pending against a mortgage broker;

15-3    (b) Have an undesirable effect on the welfare of the public or the

15-4  welfare of any mortgage broker or mortgage agent; or

15-5    (c) Give any mortgage broker a competitive advantage over any other

15-6  mortgage broker.

15-7    3.  The [commissioner] commission shall disclose the following

15-8  information concerning a mortgage broker to any person who requests it:

15-9    (a) The findings and results of any investigation which has been

15-10  completed during the immediately preceding 5 years against the mortgage

15-11  broker pursuant to the provisions of this chapter and which has resulted in

15-12  a finding by the [commissioner] commission that the mortgage broker

15-13  committed a violation of a provision of this chapter, a regulation adopted

15-14  pursuant to this chapter or an order of the [commissioner;] commission;

15-15  and

15-16  (b) The nature of any disciplinary action that has been taken during the

15-17  immediately preceding 5 years against the mortgage broker pursuant to the

15-18  provisions of this chapter.

15-19  Sec. 35.  NRS 645B.095 is hereby amended to read as follows:

15-20  645B.095  1.  As used in this section, “change of control” means:

15-21  (a) A transfer of voting stock which results in giving a person, directly

15-22  or indirectly, the power to direct the management and policy of a mortgage

15-23  broker; or

15-24  (b) A transfer of at least 25 percent of the outstanding voting stock of a

15-25  mortgage broker.

15-26  2.  The [commissioner] commission must be notified of a transfer of 5

15-27  percent or more of the outstanding voting stock of a mortgage broker and

15-28  must approve a transfer of voting stock of a mortgage broker which

15-29  constitutes a change of control.

15-30  3.  The person who acquires stock resulting in a change of control of

15-31  the mortgage broker shall apply to the [commissioner] commission for

15-32  approval of the transfer. The application must contain information which

15-33  shows that the requirements of this chapter for obtaining a license will be

15-34  satisfied after the change of control. Except as otherwise provided in

15-35  subsection 4, the [commissioner] commission shall conduct an

15-36  investigation to determine whether those requirements will be satisfied. If,

15-37  after the investigation, the [commissioner] commission denies the

15-38  application, [he] the commission may forbid the applicant from

15-39  participating in the business of the mortgage broker.

15-40  4.  A mortgage broker may submit a written request to the

15-41  [commissioner] commission to waive an investigation pursuant to

15-42  subsection 3. The [commissioner] commission may grant a waiver if the

15-43  applicant has undergone a similar investigation by a state or federal agency

15-44  in connection with the licensing of or his employment with a financial

15-45  institution.

15-46  Sec. 36.  NRS 645B.115 is hereby amended to read as follows:

15-47  645B.115  1.  If a mortgage broker maintains any accounts described

15-48  in NRS 645B.175, the mortgage broker and his mortgage agents shall not

15-49  engage in any activity that is authorized pursuant to this chapter, unless the

16-1  mortgage broker maintains continuously a minimum net worth in the

16-2  following amount based upon the average monthly balance of the accounts

16-3  maintained by the mortgage broker pursuant to NRS 645B.175:

16-4  AVERAGE MONTHLY BALANCE   MINIMUM NET

16-5                                                                                  WORTH REQUIRED

16-6  $100,000 or less   $25,000

16-7  More than $100,000 but not more than $250,000   50,000

16-8  More than $250,000 but not more than $500,000   100,000

16-9  More than $500,000 but not more than $1,000,000   200,000

16-10  More than $1,000,000   250,000

16-11  The [commissioner] commission shall determine the appropriate initial

16-12  minimum net worth that must be maintained by the mortgage broker

16-13  pursuant to this section based upon the expected average monthly balance

16-14  of the accounts maintained by the mortgage broker pursuant to

16-15  NRS 645B.175. After determining the initial minimum net worth that must

16-16  be maintained by the mortgage broker, the [commissioner] commission

16-17  shall, on an annual basis, determine the appropriate minimum net worth

16-18  that must be maintained by the mortgage broker pursuant to this section

16-19  based upon the average monthly balance of the accounts maintained by the

16-20  mortgage broker pursuant to NRS 645B.175.

16-21  2.  If requested by the [commissioner,] commission, a mortgage broker

16-22  who is subject to the provisions of this section and his mortgage agents

16-23  shall submit to the [commissioner] commission or allow the

16-24  [commissioner] commission to examine any documentation or other

16-25  evidence that is related to determining the net worth of the mortgage

16-26  broker.

16-27  3.  The [commissioner:] commission:

16-28  (a) Shall adopt regulations prescribing standards for determining the net

16-29  worth of a mortgage broker; and

16-30  (b) May adopt any other regulations that are necessary to carry out the

16-31  provisions of this section.

16-32  Sec. 37.  NRS 645B.170 is hereby amended to read as follows:

16-33  645B.170  1.  All money paid to a mortgage broker and his mortgage

16-34  agents for payment of taxes or insurance premiums on real property which

16-35  secures any loan arranged by the mortgage broker must be deposited in an

16-36  insured depository financial institution and kept separate, distinct and apart

16-37  from money belonging to the mortgage broker. Such money, when

16-38  deposited, is to be designated as an “impound trust account” or under some

16-39  other appropriate name indicating that the accounts are not the money of

16-40  the mortgage broker.

16-41  2.  The mortgage broker has a fiduciary duty to each debtor with

16-42  respect to the money in an impound trust account.

16-43  3.  The mortgage broker shall, upon reasonable notice, account to any

16-44  debtor whose real property secures a loan arranged by the mortgage broker

16-45  for any money which that person has paid to the mortgage broker for the

16-46  payment of taxes or insurance premiums on the real property.

16-47  4.  The mortgage broker shall, upon reasonable notice, account to the

16-48  [commissioner] commission for all money in an impound trust account.

16-49  5.  A mortgage broker shall:

17-1    (a) Require contributions to an impound trust account in an amount

17-2  reasonably necessary to pay the obligations as they become due.

17-3    (b) Within 30 days after the completion of the annual review of an

17-4  impound trust account, notify the debtor:

17-5      (1) Of the amount by which the contributions exceed the amount

17-6  reasonably necessary to pay the annual obligations due from the account;

17-7  and

17-8      (2) That the debtor may specify the disposition of the excess money

17-9  within 20 days after receipt of the notice. If the debtor fails to specify such

17-10  a disposition within that time, the mortgage broker shall maintain the

17-11  excess money in the account.

17-12  This subsection does not prohibit a mortgage broker from requiring

17-13  additional amounts to be paid into an impound trust account to recover a

17-14  deficiency that exists in the account.

17-15  6.  A mortgage broker shall not make payments from an impound trust

17-16  account in a manner that causes a policy of insurance to be canceled or

17-17  causes property taxes or similar payments to become delinquent.

17-18  Sec. 38.  NRS 645B.175 is hereby amended to read as follows:

17-19  645B.175  1.  Except as otherwise provided in this section, all money

17-20  received by a mortgage broker and his mortgage agents from an investor to

17-21  acquire ownership of or a beneficial interest in a loan secured by a lien on

17-22  real property must:

17-23  (a) Be deposited in:

17-24     (1) An insured depository financial institution; or

17-25     (2) An escrow account which is controlled by a person who is

17-26  independent of the parties and subject to instructions regarding the account

17-27  which are approved by the parties.

17-28  (b) Be kept separate from money:

17-29     (1) Belonging to the mortgage broker in an account appropriately

17-30  named to indicate that the money does not belong to the mortgage broker.

17-31     (2) Received pursuant to subsection 4.

17-32  2.  Except as otherwise provided in this section, the amount held in

17-33  trust pursuant to subsection 1 must be released:

17-34  (a) Upon completion of the loan, including proper recordation of the

17-35  respective interests or release, or upon completion of the transfer of the

17-36  ownership or beneficial interest therein, to the debtor or his designee less

17-37  the amount due the mortgage broker for the payment of any fee or service

17-38  charge;

17-39  (b) If the loan or the transfer thereof is not consummated, to each

17-40  investor who furnished the money held in trust; or

17-41  (c) Pursuant to any instructions regarding the escrow account.

17-42  3.  The amount held in trust pursuant to subsection 1 must not be

17-43  released to the debtor or his designee unless:

17-44  (a) The amount released is equal to the total amount of money which is

17-45  being loaned to the debtor for that loan, less the amount due the mortgage

17-46  broker for the payment of any fee or service charge; and

17-47  (b) The mortgage broker has provided a written instruction to a title

17-48  agent or title insurer requiring that a lender’s policy of title insurance or

17-49  appropriate title endorsement, which names as an insured each investor

18-1  who owns a beneficial interest in the loan, be issued for the real property

18-2  securing the loan.

18-3    4.  Except as otherwise provided in this section, all money paid to a

18-4  mortgage broker and his mortgage agents by a person in full or in partial

18-5  payment of a loan secured by a lien on real property[,] must:

18-6    (a) Be deposited in:

18-7      (1) An insured depository financial institution; or

18-8      (2) An escrow account which is controlled by a person who is subject

18-9  to instructions regarding the account which are approved by the parties.

18-10  (b) Be kept separate from money:

18-11     (1) Belonging to the mortgage broker in an account appropriately

18-12  named to indicate that it does not belong to the mortgage broker.

18-13     (2) Received pursuant to subsection 1.

18-14  5.  Except as otherwise provided in this section, the amount held in

18-15  trust pursuant to subsection 4:

18-16  (a) Must be released, upon the deduction and payment of any fee or

18-17  service charge due the mortgage broker, to each investor who owns a

18-18  beneficial interest in the loan in exact proportion to the beneficial interest

18-19  that he owns in the loan; and

18-20  (b) Must not be released, in any proportion, to an investor who owns a

18-21  beneficial interest in the loan, unless the amount described in paragraph (a)

18-22  is also released to every other investor who owns a beneficial interest in

18-23  the loan.

18-24  6.  An investor may waive, in writing, the right to receive one or more

18-25  payments, or portions thereof, that are released to other investors in the

18-26  manner set forth in subsection 5. A mortgage broker or mortgage agent

18-27  shall not act as the attorney in fact or the agent of an investor with respect

18-28  to the giving of a written waiver pursuant to this subsection. Any such

18-29  written waiver applies only to the payment or payments, or portions

18-30  thereof, that are included in the written waiver and does not affect the right

18-31  of the investor to:

18-32  (a) Receive the waived payment or payments, or portions thereof, at a

18-33  later date; or

18-34  (b) Receive all other payments in full and in accordance with the

18-35  provisions of subsection 5.

18-36  7.  Upon reasonable notice, any mortgage broker described in this

18-37  section shall:

18-38  (a) Account to any investor or debtor who has paid to the mortgage

18-39  broker or his mortgage agents money that is required to be deposited in a

18-40  trust account pursuant to this section; and

18-41  (b) Account to the [commissioner] commission for all money which the

18-42  mortgage broker and his mortgage agents have received from each investor

18-43  or debtor and which the mortgage broker is required to deposit in a trust

18-44  account pursuant to this section.

18-45  8.  Money received by a mortgage broker and his mortgage agents

18-46  pursuant to this section from a person who is not associated with the

18-47  mortgage broker may be held in trust for not more than 45 days before an

18-48  escrow account must be opened in connection with the loan. If, within this

18-49  45-day period, the loan or the transfer therefor is not consummated, the

19-1  money must be returned within 24 hours. If the money is so returned, it

19-2  may not be reinvested with the mortgage broker for at least 15 days.

19-3    9.  If a mortgage broker or a mortgage agent receives any money

19-4  pursuant to this section, the mortgage broker or mortgage agent, after the

19-5  deduction and payment of any fee or service charge due the mortgage

19-6  broker, shall not release the money to:

19-7    (a) Any person who does not have a contractual or legal right to receive

19-8  the money; or

19-9    (b) Any person who has a contractual right to receive the money if the

19-10  mortgage broker or mortgage agent knows or, in light of all the

19-11  surrounding facts and circumstances, reasonably should know that the

19-12  person’s contractual right to receive the money violates any provision of

19-13  this chapter or a regulation adopted pursuant to this chapter.

19-14  Sec. 39.  NRS 645B.185 is hereby amended to read as follows:

19-15  645B.185  1.  A mortgage broker or mortgage agent shall not accept

19-16  money from an investor to acquire ownership of or a beneficial interest in a

19-17  loan secured by a lien on real property unless:

19-18  (a) The investor and the mortgage broker or mortgage agent sign and

19-19  date a disclosure form that complies with the provisions of this section; and

19-20  (b) The mortgage broker or mortgage agent gives the investor the

19-21  original disclosure form that has been signed and dated.

19-22  2.  An investor and a mortgage broker or mortgage agent must sign and

19-23  date a separate disclosure form pursuant to subsection 1 for each loan in

19-24  which the investor invests his money. A mortgage broker or mortgage

19-25  agent shall not act as the attorney in fact or the agent of an investor with

19-26  respect to the signing or dating of any disclosure form.

19-27  3.  In addition to the requirements of subsections 1 and 2, a mortgage

19-28  broker or mortgage agent shall not accept money from an investor to

19-29  acquire ownership of or a beneficial interest in a loan secured by a lien on

19-30  real property, unless the mortgage broker or mortgage agent gives the

19-31  investor a written form by which the investor may request that the

19-32  mortgage broker authorize the [commissioner] commission to release the

19-33  mortgage broker’s financial statement to the investor. Such a form must be

19-34  given to the investor for each loan. If the investor, before giving money to

19-35  the mortgage broker for the loan, requests that the mortgage broker

19-36  authorize the release of a financial statement pursuant to this subsection,

19-37  the mortgage broker and his mortgage agents shall not accept money from

19-38  the investor for that loan until the mortgage broker receives notice from the

19-39  [commissioner] commission that the financial statement has been released

19-40  to the investor.

19-41  4.  An investor and a mortgage broker or mortgage agent may not agree

19-42  to alter or waive the provisions of this section by contract or other

19-43  agreement. Any such contract or agreement is void and must not be given

19-44  effect to the extent that it violates the provisions of this section.

19-45  5.  A mortgage broker shall retain a copy of each disclosure form that is

19-46  signed and dated pursuant to subsection 1 for the period that is prescribed

19-47  in the regulations adopted by the [commissioner.] commission.

19-48  6.  The standard provisions for each such disclosure form must include,

19-49  without limitation, statements:

20-1    (a) Explaining the risks of investing through the mortgage broker,

20-2  including, without limitation:

20-3      (1) The possibility that the debtor may default on the loan;

20-4      (2) The nature of the losses that may result through foreclosure;

20-5      (3) The fact that payments of principal and interest are not guaranteed

20-6  and that the investor may lose the entire amount of principal that he has

20-7  invested;

20-8      (4) The fact that the mortgage broker is not a depository financial

20-9  institution and that the investment is not insured by any depository

20-10  insurance and is not otherwise insured or guaranteed by the federal or state

20-11  government; and

20-12     (5) Any other information required pursuant to the regulations

20-13  adopted by the [commissioner;] commission; and

20-14  (b) Disclosing to the investor the following information if the

20-15  information is known or, in light of all the surrounding facts and

20-16  circumstances, reasonably should be known to the mortgage broker:

20-17     (1) Whether the real property that will secure the loan is encumbered

20-18  by any other liens and, if so, the priority of each such lien, the amount of

20-19  debt secured by each such lien and the current status of that debt,

20-20  including, without limitation, whether the debt is being paid or is in

20-21  default;

20-22     (2) Whether the mortgage broker or any general partner, officer,

20-23  director or mortgage agent of the mortgage broker has any direct or indirect

20-24  interest in the debtor;

20-25     (3) Whether any disciplinary action has been taken by the

20-26  [commissioner] commission against the mortgage broker or any general

20-27  partner, officer or director of the mortgage broker within the preceding 12

20-28  months, and the nature of any such disciplinary action;

20-29     (4) Whether the mortgage broker or any general partner, officer or

20-30  director of the mortgage broker has been convicted within the preceding 12

20-31  months for violating any law, ordinance or regulation that involves fraud,

20-32  misrepresentation or a deceitful, fraudulent or dishonest business practice;

20-33  and

20-34     (5) Any other information required pursuant to the regulations

20-35  adopted by the [commissioner.] commission.

20-36  7.  Whether or not a mortgage broker is required to disclose any

20-37  information to investors through a disclosure form that complies with the

20-38  provisions of this section, the [commissioner] commission may order the

20-39  mortgage broker to disclose to investors or to the general public any

20-40  information concerning the mortgage broker, any general partner, officer,

20-41  director or mortgage agent of the mortgage broker or any loan in which the

20-42  mortgage broker is or has been involved[, if the commissioner, in his

20-43  judgment,] if, in the judgment of the commission, it believes that the

20-44  information:

20-45  (a) Would be of material interest to a reasonable investor who is

20-46  deciding whether to invest money with the mortgage broker; or

20-47  (b) Is necessary to protect the welfare of the public.

21-1    8.  In carrying out the provisions of subsection 7, the [commissioner]

21-2  commission may, without limitation, order a mortgage broker to include

21-3  statements of disclosure prescribed by the [commissioner:] commission:

21-4    (a) In the disclosure form that must be given to investors pursuant to

21-5  subsection 1;

21-6    (b) In additional disclosure forms that must be given to investors before

21-7  or after they have invested money through the mortgage broker; or

21-8    (c) In any advertisement that the mortgage broker uses in carrying on

21-9  his business.

21-10  9.  The [commissioner:] commission:

21-11  (a) Shall adopt regulations prescribing the period for which a mortgage

21-12  broker must retain a copy of each disclosure form that is given to investors;

21-13  and

21-14  (b) May adopt any other regulations that are necessary to carry out the

21-15  provisions of this section, including, without limitation, regulations

21-16  specifying the size of print and any required formatting or typesetting that a

21-17  mortgage broker must use in any form that is given to investors.

21-18  10.  The provisions of this section do not apply to any act or

21-19  transaction with or on behalf of an accredited investor, except that, if

21-20  requested by an accredited investor or ordered by the commission, a

21-21  mortgage broker or mortgage agent shall give an accredited investor any

21-22  information or form that is given to other investors pursuant to this

21-23  section.

21-24  Sec. 40.  NRS 645B.189 is hereby amended to read as follows:

21-25  645B.189  1.  Each mortgage broker shall include in each

21-26  advertisement that the mortgage broker uses in carrying on his business:

21-27  (a) A statement of disclosure in substantially the following form:

 

21-28  Money invested through a mortgage broker is not guaranteed to earn

21-29  any interest or return and is not insured.

 

21-30  (b) Any other statements of disclosure required pursuant to the

21-31  regulations adopted by the [commissioner] commission or required

21-32  pursuant to an order of the [commissioner] commission entered in

21-33  accordance with subsections 7 and 8 of NRS 645B.185.

21-34  2.  Each mortgage broker shall submit any proposed advertisement that

21-35  the mortgage broker intends to use in carrying on his business to the

21-36  [commissioner] commission for approval.

21-37  3.  In addition to the requirements set forth in this chapter, each

21-38  advertisement that a mortgage broker uses in carrying on his business must

21-39  comply with the requirements of:

21-40  (a) NRS 598.0903 to 598.0999, inclusive, concerning deceptive trade

21-41  practices; and

21-42  (b) Any applicable federal statute or regulation concerning deceptive

21-43  advertising and the advertising of interest rates.

21-44  4.  If a mortgage broker violates any provision of NRS 598.0903 to

21-45  598.0999, inclusive, concerning deceptive trade practices or any federal

21-46  statute or regulation concerning deceptive advertising or the advertising of

21-47  interest rates, in addition to any sanction or penalty imposed by state or

22-1  federal law upon the mortgage broker for the violation, the [commissioner]

22-2  commission may take any disciplinary action set forth in subsection 2 of

22-3  NRS 645B.670 against the mortgage broker.

22-4    5.  The [commissioner] commission may adopt any regulations that are

22-5  necessary to carry out the provisions of this section.

22-6    Sec. 41.  NRS 645B.260 is hereby amended to read as follows:

22-7    645B.260  1.  If a mortgage broker maintains any accounts described

22-8  in subsection 4 of NRS 645B.175 in which the mortgage broker deposits

22-9  payments from a debtor on a loan secured by a lien on real property and, on

22-10  the last day of any month, the debtor has failed to make two or more

22-11  consecutive payments in accordance with the terms of the loan, the

22-12  mortgage broker shall:

22-13  (a) Include in the report that the mortgage broker submits to the

22-14  [commissioner] commission pursuant to subsection 2 of NRS 645B.080

22-15  the information relating to delinquencies in payments and defaults that is

22-16  required by the regulations adopted pursuant to subsection 2;

22-17  (b) Not later than 15 days after the last day of each such month, mail to

22-18  the last known address of each investor who owns a beneficial interest in

22-19  the loan a notice containing the information relating to delinquencies in

22-20  payments and defaults that is required by the regulations adopted pursuant

22-21  to subsection 2; and

22-22  (c) Comply with the provisions of this section each month on a

22-23  continuing basis until:

22-24     (1) The debtor or his designee remedies the delinquency in payments

22-25  and any default; or

22-26     (2) The lien securing the loan is extinguished.

22-27  2.  The [commissioner:] commission:

22-28  (a) Shall adopt regulations prescribing the information relating to

22-29  delinquencies in payments and defaults that a mortgage broker must

22-30  include in his report to the [commissioner] commission and in the notice

22-31  mailed to investors pursuant to subsection 1. Such regulations may provide

22-32  for variations between the information that a mortgage broker must include

22-33  in his report to the [commissioner] commission and the information that a

22-34  mortgage broker must include in the notice mailed to investors.

22-35  (b) May adopt any other regulations that are necessary to carry out the

22-36  provisions of this section.

22-37  Sec. 42.  NRS 645B.300 is hereby amended to read as follows:

22-38  645B.300  1.  Except as otherwise provided in subsection 4, a

22-39  mortgage broker or mortgage agent shall not accept money from an

22-40  investor to acquire ownership of or a beneficial interest in a loan secured

22-41  by a lien on real property, unless the mortgage broker has obtained a

22-42  written appraisal of the real property securing the loan.

22-43  2.  The written appraisal of the real property:

22-44  (a) Must be performed by an appraiser who is authorized to perform

22-45  appraisals in this state; and

22-46  (b) Must not be performed by the mortgage broker or a mortgage agent,

22-47  unless the mortgage broker or mortgage agent is certified or licensed to

22-48  perform such an appraisal pursuant to chapter 645C of NRS.

22-49  3.  A copy of the written appraisal of the real property must be:

23-1    (a) Maintained at each office of the mortgage broker where money is

23-2  accepted from an investor to acquire ownership of or a beneficial interest in

23-3  a loan secured by a lien on the real property; and

23-4    (b) Made available during normal business hours for inspection by each

23-5  such investor and the [commissioner.] commission.

23-6    4.  A mortgage broker is not required to obtain a written appraisal of

23-7  the real property pursuant to this section if the mortgage broker obtains a

23-8  written waiver of the appraisal from each investor who acquires ownership

23-9  of or a beneficial interest in a loan secured by a lien on the real property. A

23-10  mortgage broker or mortgage agent shall not act as the attorney in fact or

23-11  the agent of an investor with respect to the giving of a written waiver

23-12  pursuant to this subsection.

23-13  5.  As used in this section, “appraisal” has the meaning ascribed to it in

23-14  NRS 645C.030.

23-15  Sec. 43.  NRS 645B.330 is hereby amended to read as follows:

23-16  645B.330  1.  A mortgage broker or mortgage agent shall not engage

23-17  in any act or transaction on behalf of an investor pursuant to a power of

23-18  attorney unless:

23-19  (a) The power of attorney is executed for the sole purpose of providing

23-20  services for [loans] not more than one specific loan in which the investor

23-21  owns a beneficial interest; and

23-22  (b) The provisions of the power of attorney:

23-23     (1) Have been approved by the [commissioner;] commission;

23-24     (2) Expressly prohibit the mortgage broker and his mortgage agents

23-25  from engaging in any act or transaction that subordinates the priority of a

23-26  recorded deed of trust unless, before such an act or transaction, the

23-27  mortgage broker obtains written approval for the subordination from

23-28  the investor;

23-29     (3) Expressly prohibit the mortgage broker and his mortgage agents

23-30  from using or releasing any money in which the investor owns a beneficial

23-31  interest with regard to [a] the specific loan for a purpose that is not directly

23-32  related to providing services for the loan unless, before any such money is

23-33  used or released for another purpose, the mortgage broker obtains written

23-34  approval from the investor to use or release the money for the other

23-35  purpose; and

23-36     (4) Expressly provide that the power of attorney is effective only for

23-37  [a period of not more than 6 months unless, before the date on which the

23-38  period expires, the mortgage broker obtains written approval from the

23-39  investor to extend the power of attorney for an additional period of not

23-40  more than 6 months. The mortgage broker may, on a continuing basis,

23-41  obtain written approval from the investor to extend the power of attorney

23-42  for one or more consecutive periods of not more than 6 months each,

23-43  except that the investor may execute only one written approval for an

23-44  extension during each such 6-month period.] the term of the specific loan.

23-45  2.  A mortgage broker or mortgage agent shall not act as the attorney in

23-46  fact or the agent of an investor with respect to the giving of written

23-47  approval pursuant to paragraph (b) of subsection 1. An investor and a

23-48  mortgage broker or mortgage agent may not agree to alter or waive the

23-49  provisions of this section by contract or other agreement. Any such

24-1  contract or agreement is void and must not be given effect to the extent that

24-2  it violates the provisions of this section.

24-3    3.  [A] Except as otherwise provided in this section, a power of

24-4  attorney which designates a mortgage broker or mortgage agent as the

24-5  attorney in fact or the agent of an investor and which violates the

24-6  provisions of this section is void and must not be given effect with regard

24-7  to any act or transaction that occurs on or after October 1, 1999, whether or

24-8  not the power of attorney is or has been executed by the investor before, on

24-9  or after October 1, 1999.

24-10  4.  The provisions of subsection 3 do not apply to a power of attorney

24-11  that designates a mortgage broker or mortgage agent as the attorney in

24-12  fact or the agent of an investor if the power of attorney:

24-13  (a) Was executed before July 1, 2001; and

24-14  (b) Complied with the provisions of this section that were in effect on

24-15  October 1, 1999.

24-16  5.  The provisions of this section do not [limit] :

24-17  (a) Apply to any act or transaction with or on behalf of an accredited

24-18  investor pursuant to a power of attorney.

24-19  (b) Limit the right of an investor to include provisions in a power of

24-20  attorney that are more restrictive than the provisions set forth in

24-21  subsection 1.

24-22  Sec. 44.  NRS 645B.450 is hereby amended to read as follows:

24-23  645B.450  1.  A person shall not act as or provide any of the services

24-24  of a mortgage agent or otherwise engage in, carry on or hold himself out as

24-25  engaging in or carrying on the activities of a mortgage agent if the person:

24-26  (a) Has been convicted of, or entered a plea of nolo contendere to, a

24-27  felony or any crime involving fraud, misrepresentation or moral turpitude;

24-28  or

24-29  (b) Has had a financial services license or registration suspended or

24-30  revoked within the immediately preceding 10 years.

24-31  2.  A mortgage agent may not be associated with or employed by more

24-32  than one mortgage broker at the same time.

24-33  3.  A mortgage broker shall register with the [division] commission

24-34  each person who will be associated with or employed by the mortgage

24-35  broker as a mortgage agent. To register a person as a mortgage agent, a

24-36  mortgage broker must:

24-37  (a) Submit to the [division] commission a registration form which is

24-38  provided by the [division] commission and which:

24-39     (1) States the name, residence address and business address of the

24-40  person;

24-41     (2) Is signed by the person;

24-42     (3) Includes a provision by which the person gives his written

24-43  consent to an investigation of his credit history, criminal history and

24-44  background; and

24-45     (4) Includes any other information or supporting materials required

24-46  by the regulations adopted by the [commissioner.] commission. Such

24-47  information or supporting materials may include, without limitation, a

24-48  complete set of fingerprints from the person, the social security number of

24-49  the person and other forms of identification of the person; and

25-1    (b) Pay the actual costs and expenses incurred by the [division]

25-2  commission to investigate the credit history, criminal history and

25-3  background of the person. All money received pursuant to this paragraph

25-4  must be placed in the investigative account created by NRS 232.545.

25-5    4.  A mortgage broker shall not employ a person as a mortgage agent or

25-6  authorize a person to be associated with the mortgage broker as a mortgage

25-7  agent if the mortgage broker has not registered the person with the

25-8  [division] commission pursuant to subsection 3 or if the person:

25-9    (a) Has been convicted of, or entered a plea of nolo contendere to, a

25-10  felony or any crime involving fraud, misrepresentation or moral turpitude;

25-11  or

25-12  (b) Has had a financial services license or registration suspended or

25-13  revoked within the immediately preceding 10 years.

25-14  5.  If a mortgage agent terminates his association or employment with a

25-15  mortgage broker for any reason, the mortgage broker shall, not later than

25-16  the [end of the next] third business day following the date of termination:

25-17  (a) Deliver to the mortgage agent or send by certified mail to the last

25-18  known residence address of the mortgage agent a written statement which

25-19  advises him that his termination is being reported to the [division;]

25-20  commission; and

25-21  (b) Deliver or send by certified mail to the [division:] commission:

25-22     (1) A written statement of the circumstances surrounding the

25-23  termination; and

25-24     (2) A copy of the written statement that the mortgage broker delivers

25-25  or mails to the mortgage agent pursuant to paragraph (a).

25-26  Sec. 45.  NRS 645B.460 is hereby amended to read as follows:

25-27  645B.460  1.  A mortgage broker shall[:

25-28  1.  Teach his mortgage agents the fundamentals of mortgage lending

25-29  and the ethics of the profession; and

25-30  2.  Supervise] exercise reasonable supervision over the activities of his

25-31  mortgage agents . [and the operation of his business.] Such reasonable

25-32  supervision must include, as appropriate:

25-33  (a) The establishment of written or oral policies and procedures for

25-34  his mortgage agents;

25-35  (b) Continuing education and training for his mortgage agents in the

25-36  requirements of this chapter and the regulations of the commission and

25-37  other forms of continuing education and training for his mortgage

25-38  agents; and

25-39  (c) The establishment of a system to review, oversee and inspect the

25-40  activities of his mortgage agents, including, without limitation:

25-41     (1) Transactions handled by his mortgage agents pursuant to this

25-42  chapter;

25-43     (2) Communications between his mortgage agents and a party to

25-44  such a transaction;

25-45     (3) Documents prepared by his mortgage agents that may have a

25-46  material effect upon the rights or obligations of a party to such a

25-47  transaction; and

25-48     (4) The handling by his mortgage agents of any fee, deposit or

25-49  money paid to the mortgage broker or his mortgage agents or held in

26-1  trust by the mortgage broker or his mortgage agents pursuant to this

26-2  chapter.

26-3    2.  The commission shall allow a mortgage broker to take into

26-4  consideration the total number of mortgage agents associated with or

26-5  employed by the mortgage broker when the mortgage broker determines

26-6  the form and extent of the policies and procedures for those mortgage

26-7  agents, the continuing education and training for those mortgage agents,

26-8  and the system to review, oversee and inspect the activities of those

26-9  mortgage agents.

26-10  3.  The commission may adopt regulations prescribing standards for

26-11  determining whether a mortgage broker has exercised reasonable

26-12  supervision over the activities of a mortgage agent pursuant to this

26-13  section.

26-14  Sec. 46.  NRS 645B.600 is hereby amended to read as follows:

26-15  645B.600  1.  A person may[, in accordance with the regulations

26-16  adopted pursuant to subsection 2,] file with the commission a complaint

26-17  [with the commissioner,] alleging that another person has violated a

26-18  provision of this chapter, a regulation adopted pursuant to this chapter or

26-19  an order of the [commissioner.

26-20  2.  The commissioner shall adopt regulations prescribing:

26-21  (a) The form that such a complaint must take;

26-22  (b) The information that must be included in such a complaint; and

26-23  (c) The procedures that a person must follow to file such a complaint.]

26-24  commission.

26-25  2.  A complaint filed pursuant to this section must:

26-26  (a) Be in writing;

26-27  (b) Be signed by the person filing the complaint or the authorized

26-28  representative of the person filing the complaint;

26-29  (c) Contain an address and a telephone number for the person filing

26-30  the complaint or the authorized representative of the person filing the

26-31  complaint;

26-32  (d) Describe the nature of the alleged violation in as much detail as

26-33  possible;

26-34  (e) Include as exhibits copies of all documentation supporting the

26-35  complaint; and

26-36  (f) Include any other information or supporting materials required by

26-37  the regulations adopted by the commission or by an order of the

26-38  commission.

26-39  Sec. 47.  NRS 645B.610 is hereby amended to read as follows:

26-40  645B.610  1.  If a person properly files a complaint with the

26-41  [commissioner] commission pursuant to NRS 645B.600, the

26-42  [commissioner] commission shall investigate each violation alleged in the

26-43  complaint, unless the [commissioner] commission has previously

26-44  investigated the alleged violation.

26-45  2.  Except as otherwise provided in subsection 2 of NRS 645B.090, if

26-46  the [commissioner] commission does not conduct an investigation of an

26-47  alleged violation pursuant to subsection 1 because [he] the commission

26-48  previously has investigated the alleged violation, the [commissioner]

26-49  commission shall provide to the person who filed the complaint a written

27-1  summary of the previous investigation and the nature of any disciplinary

27-2  action that was taken as a result of the previous investigation.

27-3    3.  If the [commissioner] commission conducts an investigation of an

27-4  alleged violation pursuant to subsection 1, the [commissioner] commission

27-5  shall determine from the investigation whether there is reasonable cause to

27-6  believe that the person committed the alleged violation.

27-7    4.  If, upon investigation, the [commissioner] commission determines

27-8  that there is not reasonable cause to believe that the person committed the

27-9  alleged violation, the [commissioner] commission shall provide the reason

27-10  for [his] its determination, in writing, to the person who filed the complaint

27-11  and to the person alleged to have committed the violation.

27-12  5.  Except as otherwise provided in subsection 6, if, upon investigation,

27-13  the [commissioner] commission determines that there is reasonable cause

27-14  to believe that the person committed the alleged violation, the

27-15  [commissioner] commission shall:

27-16  (a) Schedule a hearing concerning the alleged violation;

27-17  (b) Mail to the last known address of the person who filed the complaint

27-18  written notice that must include, without limitation:

27-19     (1) The date, time and place of the hearing; and

27-20     (2) A statement of each alleged violation that will be considered at

27-21  the hearing; and

27-22  (c) By personal service in accordance with the Nevada Rules of Civil

27-23  Procedure and any applicable provision of NRS, serve written notice of the

27-24  hearing to the person alleged to have committed the violation. The written

27-25  notice that is served pursuant to this paragraph must include, without

27-26  limitation:

27-27     (1) The date, time and place of the hearing;

27-28     (2) A copy of the complaint and a statement of each alleged violation

27-29  that will be considered at the hearing; and

27-30     (3) A statement informing the person that, pursuant to

27-31  NRS 645B.760, if he fails to appear, without reasonable cause, at the

27-32  hearing:

27-33       (I) He is guilty of a misdemeanor; and

27-34       (II) The [commissioner] commission is authorized to conduct the

27-35  hearing in his absence, draw any conclusions that the [commissioner]

27-36  commission deems appropriate from his failure to appear and render a

27-37  decision concerning each alleged violation.

27-38  6.  The [commissioner] commission is not required to schedule or

27-39  conduct a hearing concerning an alleged violation pursuant to subsection 5

27-40  if the [commissioner] commission and the person alleged to have

27-41  committed the violation enter into a written consent agreement settling or

27-42  resolving the alleged violation. If such a written consent agreement is

27-43  executed, the [commissioner] commission shall provide a copy of the

27-44  written consent agreement to the person who filed the complaint.

27-45  7.  The [commissioner] commission may:

27-46  (a) Investigate and conduct a hearing concerning any alleged violation,

27-47  whether or not a complaint has been filed.

27-48  (b) Hear and consider more than one alleged violation against a person

27-49  at the same hearing.

28-1    Sec. 48.  NRS 645B.620 is hereby amended to read as follows:

28-2    645B.620  1.  Whether or not a complaint has been filed, the

28-3  [commissioner] commission shall investigate a mortgage broker or other

28-4  person if, for any reason, it appears that:

28-5    (a) The mortgage broker is conducting business in an unsafe and

28-6  injurious manner or in violation of any provision of this chapter, a

28-7  regulation adopted pursuant to this chapter or an order of the

28-8  [commissioner;] commission;

28-9    (b) The person is offering or providing any of the services of a

28-10  mortgage broker or otherwise engaging in, carrying on or holding himself

28-11  out as engaging in or carrying on the business of a mortgage broker

28-12  without being licensed or exempt from licensing pursuant to the provisions

28-13  of this chapter; or

28-14  (c) The person is violating any other provision of this chapter, a

28-15  regulation adopted pursuant to this chapter or an order of the

28-16  [commissioner.] commission.

28-17  2.  If, upon investigation, the [commissioner] commission has

28-18  reasonable cause to believe that the mortgage broker or other person has

28-19  engaged in any conduct or committed any violation described in

28-20  subsection 1:

28-21  (a) The [commissioner] commission shall notify the attorney general of

28-22  the conduct or violation and, if applicable, the [commissioner] commission

28-23  shall immediately take possession of the property of the mortgage broker

28-24  pursuant to NRS 645B.630; and

28-25  (b) The attorney general shall, if appropriate:

28-26     (1) Investigate and prosecute the mortgage broker or other person

28-27  pursuant to NRS 645B.800; and

28-28     (2) Bring a civil action to:

28-29       (I) Enjoin the mortgage broker or other person from engaging in

28-30  the conduct, operating the business or committing the violation; and

28-31       (II) Enjoin any other person who has encouraged, facilitated, aided

28-32  or participated in the conduct, the operation of the business or the

28-33  commission of the violation, or who is likely to engage in such acts, from

28-34  engaging in or continuing to engage in such acts.

28-35  3.  If the attorney general brings a civil action pursuant to subsection 2,

28-36  the district court of any county of this state is hereby vested with the

28-37  jurisdiction in equity to enjoin the conduct, the operation of the business or

28-38  the commission of the violation and may grant any injunctions that are

28-39  necessary to prevent and restrain the conduct, the operation of the business

28-40  or the commission of the violation. During the pendency of the proceedings

28-41  before the district court:

28-42  (a) The court may issue any temporary restraining orders as may appear

28-43  to be just and proper;

28-44  (b) The findings of the [commissioner] commission shall be deemed to

28-45  be prima facie evidence and sufficient grounds, in the discretion of the

28-46  court, for the ex parte issuance of a temporary restraining order; and

28-47  (c) The attorney general may apply for and on due showing is entitled to

28-48  have issued the court’s subpoena requiring forthwith the appearance of any

28-49  person to:

29-1      (1) Produce any documents, books and records as may appear

29-2  necessary for the hearing of the petition; and

29-3      (2) Testify and give evidence concerning the conduct complained of

29-4  in the petition.

29-5    Sec. 49.  NRS 645B.630 is hereby amended to read as follows:

29-6    645B.630  1.  In addition to any other action that is required or

29-7  permitted pursuant to this chapter, if the [commissioner] commission has

29-8  reasonable cause to believe that:

29-9    (a) The assets or capital of a mortgage broker are impaired; or

29-10  (b) A mortgage broker is conducting business in an unsafe and injurious

29-11  manner that may result in danger to the public,

29-12  the [commissioner] commission shall immediately take possession of all

29-13  the property, business and assets of the mortgage broker that are located in

29-14  this state and shall retain possession of them pending further proceedings

29-15  provided for in this chapter.

29-16  2.  If the licensee, the board of directors or any officer or person in

29-17  charge of the offices of the mortgage broker refuses to permit the

29-18  [commissioner] commission to take possession of the property of the

29-19  mortgage broker pursuant to subsection 1:

29-20  (a) The [commissioner] commission shall notify the attorney general;

29-21  and

29-22  (b) The attorney general shall immediately bring such proceedings as

29-23  may be necessary to place the [commissioner] commission in immediate

29-24  possession of the property of the mortgage broker.

29-25  3.  If the [commissioner] commission takes possession of the property

29-26  of the mortgage broker, the [commissioner] commission shall:

29-27  (a) Make or have made an inventory of the assets and known liabilities

29-28  of the mortgage broker;

29-29  (b) File one copy of the inventory in [his] the office of the commission

29-30  and one copy in the office of the clerk of the district court of the county in

29-31  which the principal office of the mortgage broker is located and shall mail

29-32  one copy to each stockholder, partner, officer, director or associate of the

29-33  mortgage broker at his last known address; and

29-34  (c) If the mortgage broker maintains any accounts described in

29-35  NRS 645B.175, not later than 5 business days after the date on which the

29-36  [commissioner] commission takes possession of the property of the

29-37  mortgage broker, mail notice of [his] that possession to the last known

29-38  address of each person whose money is deposited in such an account or

29-39  whose money was or should have been deposited in such an account during

29-40  the preceding 12 months.

29-41  4.  The clerk of the court with which the copy of the inventory is filed

29-42  shall file it as any other case or proceeding pending in the court and shall

29-43  give it a docket number.

29-44  Sec. 50.  NRS 645B.640 is hereby amended to read as follows:

29-45  645B.640  1.  If the [commissioner] commission takes possession of

29-46  the property of a mortgage broker pursuant to NRS 645B.630, the licensee,

29-47  officers, directors, partners, associates or stockholders of the mortgage

29-48  broker may, within 60 days after the date on which the [commissioner]

29-49  commission takes possession of the property, make good any deficit in the

30-1  assets or capital of the mortgage broker or remedy any unsafe and injurious

30-2  conditions or practices of the mortgage broker.

30-3    2.  At the expiration of the 60-day period, if the deficiency in assets or

30-4  capital has not been made good or the unsafe and injurious conditions or

30-5  practices remedied, the [commissioner] commission may apply to the court

30-6  to be appointed receiver and proceed to liquidate the assets of the mortgage

30-7  broker which are located in this state in the same manner as now provided

30-8  by law for liquidation of a private corporation in receivership.

30-9    3.  No other person may be appointed receiver by any court without

30-10  first giving the [commissioner] commission ample notice of his

30-11  application.

30-12  4.  The inventory made by the [commissioner] commission and all

30-13  claims filed by creditors are open at all reasonable times for inspection, and

30-14  any action taken by the receiver upon any of the claims is subject to the

30-15  approval of the court before which the cause is pending.

30-16  5.  The expenses of the receiver and compensation of counsel, as well

30-17  as all expenditures required in the liquidation proceedings, must be fixed

30-18  by the [commissioner] commission subject to the approval of the court and,

30-19  upon certification of the [commissioner,] commission, must be paid out of

30-20  the money in [his] the hands of the commission as the receiver.

30-21  Sec. 51.  NRS 645B.670 is hereby amended to read as follows:

30-22  645B.670  Except as otherwise provided in NRS 645B.690:

30-23  1.  For each violation committed by an applicant, whether or not he is

30-24  issued a license, the [commissioner] commission may impose upon the

30-25  applicant an administrative fine of not more than $10,000, if the applicant:

30-26  (a) Has knowingly made or caused to be made to the [commissioner]

30-27  commission any false representation of material fact;

30-28  (b) Has suppressed or withheld from the [commissioner] commission

30-29  any information which the applicant possesses and which, if submitted by

30-30  him, would have rendered the applicant ineligible to be licensed pursuant

30-31  to the provisions of this chapter; or

30-32  (c) Has violated any provision of this chapter, a regulation adopted

30-33  pursuant to this chapter or an order of the [commissioner] commission in

30-34  completing and filing his application for a license or during the course of

30-35  the investigation of his application for a license.

30-36  2.  For each violation committed by a licensee, the [commissioner]

30-37  commission may impose upon the licensee an administrative fine of not

30-38  more than $10,000, may suspend, revoke or place conditions upon his

30-39  license, or may do both, if the licensee, whether or not acting as such:

30-40  (a) Is insolvent;

30-41  (b) Is grossly negligent or incompetent in performing any act for which

30-42  he is required to be licensed pursuant to the provisions of this chapter;

30-43  (c) Does not conduct his business in accordance with law , [or] has

30-44  violated any provision of this chapter, a regulation adopted pursuant to this

30-45  chapter or an order of the [commissioner;] commission or has violated any

30-46  provision of chapter 645E of NRS while engaged in activities authorized

30-47  by that chapter in his capacity as a mortgage broker;

30-48  (d) Is in such financial condition that he cannot continue in business

30-49  with safety to his customers;

31-1    (e) Has made a material misrepresentation in connection with any

31-2  transaction governed by this chapter;

31-3    (f) Has suppressed or withheld from a client any material facts, data or

31-4  other information relating to any transaction governed by the provisions of

31-5  this chapter which the licensee knew or, by the exercise of reasonable

31-6  diligence, should have known;

31-7    (g) Has knowingly made or caused to be made to the [commissioner]

31-8  commission any false representation of material fact or has suppressed or

31-9  withheld from the [commissioner] commission any information which the

31-10  licensee possesses and which, if submitted by him, would have rendered

31-11  the licensee ineligible to be licensed pursuant to the provisions of this

31-12  chapter;

31-13  (h) Has failed to account to persons interested for all money received

31-14  for a trust account;

31-15  (i) Has refused to permit an examination by the [commissioner]

31-16  commission of his books and affairs or has refused or failed, within a

31-17  reasonable time, to furnish any information or make any report that may be

31-18  required by the [commissioner] commission pursuant to the provisions of

31-19  this chapter or a regulation adopted pursuant to this chapter;

31-20  (j) Has been convicted of, or entered a plea of nolo contendere to, a

31-21  felony or any crime involving fraud, misrepresentation or moral turpitude;

31-22  (k) Has refused or failed to pay, within a reasonable time, any fees,

31-23  assessments, costs or expenses that the licensee is required to pay pursuant

31-24  to this chapter or a regulation adopted pursuant to this chapter;

31-25  (l) Has failed to satisfy a claim made by a client which has been reduced

31-26  to judgment;

31-27  (m) Has failed to account for or to remit any money of a client within a

31-28  reasonable time after a request for an accounting or remittal;

31-29  (n) Has commingled the money or other property of a client with his

31-30  own or has converted the money or property of others to his own use;

31-31  (o) Has engaged in any other conduct constituting a deceitful,

31-32  fraudulent or dishonest business practice;

31-33  (p) Has repeatedly violated the policies and procedures of the mortgage

31-34  broker;

31-35  (q) Has failed to [maintain adequate] exercise reasonable supervision

31-36  over the activities of a mortgage agent[;] as required by NRS 645B.460;

31-37  (r) Has instructed a mortgage agent to commit an act that would be

31-38  cause for the revocation of the license of the mortgage broker, whether or

31-39  not the mortgage agent commits the act;

31-40  (s) Has employed a person as a mortgage agent or authorized a person

31-41  to be associated with the licensee as a mortgage agent at a time when the

31-42  licensee knew or, in light of all the surrounding facts and circumstances,

31-43  reasonably should have known that the person:

31-44     (1) Had been convicted of, or entered a plea of nolo contendere to, a

31-45  felony or any crime involving fraud, misrepresentation or moral turpitude;

31-46  or

31-47     (2) Had a financial services license or registration suspended or

31-48  revoked within the immediately preceding 10 years; or

32-1    (t) Has not conducted verifiable business as a mortgage broker for 12

32-2  consecutive months, except in the case of a new applicant. The

32-3  [commissioner] commission shall determine whether a mortgage broker is

32-4  conducting business by examining the monthly reports of activity

32-5  submitted by the licensee or by conducting an examination of the licensee.

32-6    Sec. 52.  NRS 645B.680 is hereby amended to read as follows:

32-7    645B.680  1.  If the [commissioner] commission receives a copy of a

32-8  court order issued pursuant to NRS 425.540 that provides for the

32-9  suspension of all professional, occupational and recreational licenses,

32-10  certificates and permits issued to a person who is the holder of a license as

32-11  a mortgage broker, the [commissioner] commission shall deem the license

32-12  issued to that person to be suspended at the end of the 30th day after the

32-13  date on which the court order was issued unless the [commissioner]

32-14  commission receives a letter issued to the holder of the license by the

32-15  district attorney or other public agency pursuant to NRS 425.550 stating

32-16  that the holder of the license has complied with the subpoena or warrant or

32-17  has satisfied the arrearage pursuant to NRS 425.560.

32-18  2.  The [commissioner] commission shall reinstate a license as a

32-19  mortgage broker that has been suspended by a district court pursuant to

32-20  NRS 425.540 if the [commissioner] commission receives a letter issued by

32-21  the district attorney or other public agency pursuant to NRS 425.550 to the

32-22  person whose license was suspended stating that the person whose license

32-23  was suspended has complied with the subpoena or warrant or has satisfied

32-24  the arrearage pursuant to NRS 425.560.

32-25  Sec. 53.  NRS 645B.690 is hereby amended to read as follows:

32-26  645B.690  1.  If a person offers or provides any of the services of a

32-27  mortgage broker or otherwise engages in, carries on or holds himself out as

32-28  engaging in or carrying on the business of a mortgage broker and, at the

32-29  time:

32-30  (a) The person was required to have a license pursuant to this chapter

32-31  and the person did not have such a license; or

32-32  (b) The person’s license was suspended or revoked pursuant to this

32-33  chapter,

32-34  the [commissioner] commission shall impose upon the person an

32-35  administrative fine of not more than $10,000 for each violation and, if the

32-36  person has a license, the [commissioner] commission shall revoke it.

32-37  2.  If a person is exempt from the provisions of this chapter pursuant to

32-38  subsection 6 of NRS 645B.015 and the person, while exempt, maintains,

32-39  offers to maintain or holds himself out as maintaining any accounts

32-40  described in subsection 1 of NRS 645B.175 or otherwise engages in, offers

32-41  to engage in or holds himself out as engaging in any activity that would

32-42  remove the person from the exemption set forth in subsection 6 of

32-43  NRS 645B.015, the [commissioner] commission shall impose upon the

32-44  person an administrative fine of not more than $10,000 for each violation

32-45  and the [commissioner] commission shall revoke the person’s exemption.

32-46  If the [commissioner] commission revokes an exemption pursuant to this

32-47  subsection, the person may not again be granted the same or a similar

32-48  exemption from the provisions of this chapter. The person may apply for a

33-1  license pursuant to this chapter unless otherwise prohibited by specific

33-2  statute.

33-3    3.  If a mortgage broker violates any provision of subsection 1 of

33-4  NRS 645B.080 and the mortgage broker fails, without reasonable cause, to

33-5  remedy the violation within 20 business days after being ordered by the

33-6  [commissioner] commission to do so or within such later time as

33-7  prescribed by the [commissioner,] commission, or if the [commissioner]

33-8  commission orders a mortgage broker to provide information, make a

33-9  report or permit an examination of his books or affairs pursuant to this

33-10  chapter and the mortgage broker fails, without reasonable cause, to comply

33-11  with the order within 20 business days or within such later time as

33-12  prescribed by the [commissioner, the commissioner] commission, the

33-13  commission shall:

33-14  (a) Impose upon the mortgage broker an administrative fine of not more

33-15  than $10,000 for each violation;

33-16  (b) Suspend or revoke the license of the mortgage broker; and

33-17  (c) Conduct a hearing to determine whether the mortgage broker is

33-18  conducting business in an unsafe and injurious manner that may result in

33-19  danger to the public and whether it is necessary for the [commissioner]

33-20  commission to take possession of the property of the mortgage broker

33-21  pursuant to NRS 645B.630.

33-22  Sec. 54.  NRS 645B.700 is hereby amended to read as follows:

33-23  645B.700  1.  Except as otherwise provided in subsection 2, for each

33-24  violation that may be committed by a person pursuant to this chapter or the

33-25  regulations adopted pursuant to this chapter, the [commissioner shall]

33-26  commission may adopt regulations:

33-27  (a) Categorizing the violation as a major violation or a minor violation;

33-28  and

33-29  (b) Specifying the disciplinary action that will be taken by the

33-30  [commissioner] commission pursuant to this chapter against a person who

33-31  commits:

33-32     (1) A major violation. The disciplinary action taken by the

33-33  [commissioner] commission for a major violation [must] may include,

33-34  without limitation, suspension or revocation of the person’s license.

33-35     (2) More than two minor violations. The [commissioner] commission

33-36  may establish graduated sanctions for a person who commits more than

33-37  two minor violations based upon the number, the frequency and the

33-38  severity of the minor violations and whether the person previously has

33-39  committed any major violations.

33-40  2.  The provisions of this section do not apply to a violation for which

33-41  the [commissioner] commission is required to take disciplinary action in

33-42  accordance with NRS 645B.690.

33-43  Sec. 55.  NRS 645B.710 is hereby amended to read as follows:

33-44  645B.710  If a person is a partnership, corporation or unincorporated

33-45  association, the [commissioner] commission shall take any disciplinary

33-46  action required pursuant to NRS 645B.690 and may take any other

33-47  disciplinary action set forth in this chapter against the person if any

33-48  member of the partnership or any officer or director of the corporation or

34-1  unincorporated association has committed any act or omission that would

34-2  be cause for taking such disciplinary action against a natural person.

34-3    Sec. 56.  NRS 645B.720 is hereby amended to read as follows:

34-4    645B.720  Before conducting a hearing, the [commissioner]

34-5  commission may, to the fullest extent permitted by the Constitution of the

34-6  United States and the constitution of this state:

34-7    1.  Order a summary suspension of a license pursuant to subsection 3 of

34-8  NRS 233B.127; and

34-9    2.  Take any other action against a licensee or other person that is

34-10  necessary to protect the health, safety or welfare of the public.

34-11  Sec. 57.  NRS 645B.750 is hereby amended to read as follows:

34-12  645B.750  1.  If the [commissioner] commission enters an order

34-13  taking any disciplinary action against a person or denying a person’s

34-14  application for a license, the [commissioner] commission shall cause

34-15  written notice of the order to be served personally or sent by certified mail

34-16  or telegraph to the person.

34-17  2.  Unless a hearing has already been conducted concerning the matter,

34-18  the person, upon application, is entitled to a hearing. If the person does not

34-19  make such an application within 20 days after the date of the initial order,

34-20  the [commissioner] commission shall enter a final order concerning

34-21  the matter.

34-22  3.  A person may appeal a final order of the [commissioner]

34-23  commission in accordance with the provisions of chapter 233B of

34-24  NRS that apply to a contested case.

34-25  Sec. 58.  NRS 645B.760 is hereby amended to read as follows:

34-26  645B.760  If a person is alleged to have engaged in any conduct or

34-27  committed any violation that is described in NRS 645B.620, 645B.630 or

34-28  645B.670 or is alleged to have committed a violation of any other

34-29  provision of this chapter, a regulation adopted pursuant to this chapter or

34-30  an order of the [commissioner,] commission, and the person fails to appear,

34-31  without reasonable cause, at a hearing before the [commissioner]

34-32  commission concerning the alleged conduct or violation:

34-33  1.  The [commissioner] commission shall notify the attorney general

34-34  that the person failed to appear;

34-35  2.  The person is guilty of a misdemeanor and shall be punished as

34-36  provided in NRS 645B.950; and

34-37  3.  The [commissioner] commission may conduct the hearing in the

34-38  person’s absence, draw any conclusions that the [commissioner]

34-39  commission deems appropriate from his failure to appear and render a

34-40  decision concerning the alleged conduct or violation.

34-41  Sec. 59.  NRS 645B.800 is hereby amended to read as follows:

34-42  645B.800  1.  The attorney general has primary jurisdiction for the

34-43  enforcement of this chapter. The attorney general shall, if appropriate,

34-44  investigate and prosecute a person who violates:

34-45  (a) Any provision of this chapter, a regulation adopted pursuant to this

34-46  chapter or an order of the [commissioner,] commission, including, without

34-47  limitation, a violation of any provision of NRS 645B.620 or 645B.670; or

34-48  (b) Any other law or regulation if the violation is committed by the

34-49  person in the course of committing a violation described in paragraph (a).

35-1    2.  The attorney general shall, if appropriate, investigate and prosecute

35-2  a person who is alleged to have committed a violation described in

35-3  subsection 1 whether or not:

35-4    (a) The [commissioner] commission notifies the attorney general of the

35-5  alleged violation;

35-6    (b) The [commissioner] commission takes any disciplinary action

35-7  against the person alleged to have committed the violation;

35-8    (c) Any other person files a complaint against the person alleged to have

35-9  committed the violation; or

35-10  (d) A civil action is commenced against the person alleged to have

35-11  committed the violation.

35-12  3.  When acting pursuant to this section, the attorney general may

35-13  commence his investigation and file a criminal action without leave of

35-14  court, and the attorney general has exclusive charge of the conduct of the

35-15  prosecution.

35-16  4.  Except as otherwise provided by the Constitution of the United

35-17  States, the constitution of this state or a specific statute, a person shall, if

35-18  requested, provide the attorney general with information that would assist

35-19  in the prosecution of any other person who is alleged to have committed a

35-20  violation described in subsection 1. If a person fails, without reasonable

35-21  cause, to provide the attorney general with such information upon request,

35-22  the person is guilty of a misdemeanor and shall be punished as provided in

35-23  NRS 645B.950.

35-24  Sec. 60.  NRS 645B.810 is hereby amended to read as follows:

35-25  645B.810  1.  The attorney general may bring any appropriate civil

35-26  action against a person to enforce any provision of this chapter, a

35-27  regulation adopted pursuant to this chapter or an order of the

35-28  [commissioner,] commission, including, without limitation, an order of the

35-29  [commissioner:] commission:

35-30  (a) Imposing an administrative fine; or

35-31  (b) Suspending, revoking or placing conditions upon a license.

35-32  2.  If the attorney general prevails in any civil action brought pursuant

35-33  to this chapter, the court shall order the person against whom the civil

35-34  action was brought to pay:

35-35  (a) Court costs; and

35-36  (b) Reasonable costs of the investigation and prosecution of the civil

35-37  action.

35-38  3.  Whether or not the attorney general brings a civil action against a

35-39  person pursuant to this chapter, the attorney general may prosecute the

35-40  person for a criminal violation pursuant to this chapter.

35-41  Sec. 61.  NRS 645B.950 is hereby amended to read as follows:

35-42  645B.950  1.  Except as otherwise provided in NRS 645B.960, a

35-43  person, or any general partner, director, officer, agent or employee of a

35-44  person, who violates any provision of this chapter, a regulation adopted

35-45  pursuant to this chapter or an order of the [commissioner] commission is

35-46  guilty of a misdemeanor.

35-47  2.  In addition to any other penalty, if a person is convicted of or enters

35-48  a plea of nolo contendere to a violation described in subsection 1, the court

35-49  shall order the person to pay:

36-1    (a) Court costs; and

36-2    (b) Reasonable costs of the investigation and prosecution of the

36-3  violation.

36-4    Secs. 62-87. (Deleted by amendment.)

36-5    Sec. 87.5.  NRS 645E.230 is hereby amended to read as follows:

36-6    645E.230  1.  A license entitles a licensee to engage only in the

36-7  activities authorized by this chapter.

36-8    2.  The provisions of this chapter do not prohibit a licensee from:

36-9    (a) Holding a license as a mortgage broker pursuant to chapter 645B of

36-10  NRS; or

36-11  (b) Conducting the business of a mortgage company and the business of

36-12  a mortgage broker in the same office or place of business.

36-13  3.  If a licensee does not hold a license as a mortgage broker

36-14  pursuant to chapter 645B of NRS, the licensee is subject to supervision,

36-15  regulation and discipline by the commissioner for all activities that the

36-16  licensee engages in pursuant to this chapter.

36-17  4.  If a licensee holds a license as a mortgage broker pursuant to

36-18  chapter 645B of NRS, the licensee is subject to supervision, regulation

36-19  and discipline by:

36-20  (a) The commissioner for all activities that the licensee engages in

36-21  pursuant to this chapter in his capacity as a mortgage company; and

36-22  (b) The mortgage industry commission for all activities that the

36-23  licensee engages in pursuant this chapter and chapter 645B of NRS in

36-24  his capacity as a mortgage broker.

36-25  Sec. 88.  NRS 78.045 is hereby amended to read as follows:

36-26  78.045  1.  The secretary of state shall not accept for filing any articles

36-27  of incorporation or any certificate of amendment of articles of

36-28  incorporation of any corporation formed pursuant to the laws of this state

36-29  which provides that the name of the corporation contains the word “bank”

36-30  or “trust,” unless:

36-31  (a) It appears from the articles or the certificate of amendment that the

36-32  corporation proposes to carry on business as a banking or trust company,

36-33  exclusively or in connection with its business as a bank or savings and loan

36-34  association; and

36-35  (b) The articles or certificate of amendment is first approved by the

36-36  commissioner of financial institutions.

36-37  2.  The secretary of state shall not accept for filing any articles of

36-38  incorporation or any certificate of amendment of articles of incorporation

36-39  of any corporation formed pursuant to the provisions of this chapter if it

36-40  appears from the articles or the certificate of amendment that the business

36-41  to be carried on by the corporation is subject to supervision by the

36-42  commissioner of insurance , [or by] the commissioner of financial

36-43  institutions, or the mortgage industry commission, unless the articles or

36-44  certificate of amendment is approved by the commissioner [who] or

36-45  commission that will supervise the business of the corporation.

36-46  3.  Except as otherwise provided in subsection 5, the secretary of state

36-47  shall not accept for filing any articles of incorporation or any certificate or

36-48  amendment of articles of incorporation of any corporation formed pursuant

36-49  to the laws of this state if the name of the corporation contains the words

37-1  “engineer,” “engineered,” “engineering,” “professional engineer,”

37-2  “registered engineer” or “licensed engineer” unless:

37-3    (a) The state board of professional engineers and land surveyors

37-4  certifies that the principals of the corporation are licensed to practice

37-5  engineering pursuant to the laws of this state; or

37-6    (b) The state board of professional engineers and land surveyors

37-7  certifies that the corporation is exempt from the prohibitions of

37-8  NRS 625.520.

37-9    4.  The secretary of state shall not accept for filing any articles of

37-10  incorporation or any certificate of amendment of articles of incorporation

37-11  of any corporation formed pursuant to the laws of this state which provides

37-12  that the name of the corporation contains the words “accountant,”

37-13  “accounting,” “accountancy,” “auditor” or “auditing” unless the Nevada

37-14  state board of accountancy certifies that the corporation:

37-15  (a) Is registered pursuant to the provisions of chapter 628 of NRS; or

37-16  (b) Has filed with the state board of accountancy under penalty of

37-17  perjury a written statement that the corporation is not engaged in the

37-18  practice of accounting and is not offering to practice accounting in this

37-19  state.

37-20  5.  The provisions of subsection 3 do not apply to any corporation,

37-21  whose securities are publicly traded and regulated by the Securities

37-22  Exchange Act of 1934, which does not engage in the practice of

37-23  professional engineering.

37-24  6.  The commissioner of financial institutions , the mortgage industry

37-25  commission and the commissioner of insurance may approve or disapprove

37-26  the articles or amendments referred to them pursuant to the provisions of

37-27  this section.

37-28  Sec. 89.  NRS 80.010 is hereby amended to read as follows:

37-29  80.010  1.  Before commencing or doing any business in this state,

37-30  each corporation organized pursuant to the laws of another state, territory,

37-31  the District of Columbia, a possession of the United States or a foreign

37-32  country, that enters this state to do business must:

37-33  (a) File in the office of the secretary of state of this state:

37-34     (1) A certificate of corporate existence issued not more than 90 days

37-35  before the date of filing by an authorized officer of the jurisdiction of its

37-36  incorporation setting forth the filing of documents and instruments related

37-37  to the articles of incorporation, or the governmental acts or other

37-38  instrument or authority by which the corporation was created. If the

37-39  certificate is in a language other than English, a translation, together with

37-40  the oath of the translator and his attestation of its accuracy, must be

37-41  attached to the certificate.

37-42     (2) A certificate of acceptance of appointment executed by its

37-43  resident agent, who must be a resident or located in this state. The

37-44  certificate must set forth the name of the resident agent, his street address

37-45  for the service of process, and his mailing address if different from his

37-46  street address. The street address of the resident agent is the registered

37-47  office of the corporation in this state.

37-48     (3) A statement executed by an officer of the corporation setting

37-49  forth:

38-1        (I) A general description of the purposes of the corporation; and

38-2        (II) The authorized stock of the corporation and the number and

38-3  par value of shares having par value and the number of shares having no

38-4  par value.

38-5    (b) Lodge in the office of the secretary of state a copy of the document

38-6  most recently filed by the corporation in the jurisdiction of its

38-7  incorporation setting forth the authorized stock of the corporation, the

38-8  number of par-value shares and their par value, and the number of no-par-

38-9  value shares.

38-10  2.  The secretary of state shall not file the documents required by

38-11  subsection 1 for any foreign corporation whose name is not distinguishable

38-12  on the records of the secretary of state from the names of all other artificial

38-13  persons formed, organized, registered or qualified pursuant to the

38-14  provisions of this Title that are on file in the office of the secretary of state

38-15  and all names that are reserved in the office of the secretary of state

38-16  pursuant to the provisions of this Title, unless the written, acknowledged

38-17  consent of the holder of the name on file or reserved name to use the same

38-18  name or the requested similar name accompanies the articles of

38-19  incorporation.

38-20  3.  The secretary of state shall not accept for filing the documents

38-21  required by subsection 1 or NRS 80.110 for any foreign corporation if the

38-22  name of the corporation contains the words “engineer,” “engineered,”

38-23  “engineering,” “professional engineer,” “registered engineer” or “licensed

38-24  engineer” unless the state board of professional engineers and land

38-25  surveyors certifies that:

38-26  (a) The principals of the corporation are licensed to practice engineering

38-27  pursuant to the laws of this state; or

38-28  (b) The corporation is exempt from the prohibitions of NRS 625.520.

38-29  4.  The secretary of state shall not accept for filing the documents

38-30  required by subsection 1 or NRS 80.110 for any foreign corporation if it

38-31  appears from the documents that the business to be carried on by the

38-32  corporation is subject to supervision by the commissioner of financial

38-33  institutions[,] or the mortgage industry commission, unless the

38-34  commissioner or commission, as appropriate, certifies that:

38-35  (a) The corporation has obtained the authority required to do business in

38-36  this state; or

38-37  (b) The corporation is not subject to or is exempt from the requirements

38-38  for obtaining such authority.

38-39  5.  The secretary of state shall not accept for filing the documents

38-40  required by subsection 1 or NRS 80.110 for any foreign corporation if the

38-41  name of the corporation contains the words “accountant,” “accounting,”

38-42  “accountancy,” “auditor” or “auditing” unless the Nevada state board of

38-43  accountancy certifies that the foreign corporation:

38-44  (a) Is registered pursuant to the provisions of chapter 628 of NRS; or

38-45  (b) Has filed with the state board of accountancy under penalty of

38-46  perjury a written statement that the foreign corporation is not engaged in

38-47  the practice of accounting and is not offering to practice accounting in this

38-48  state.

39-1    6.  The secretary of state may adopt regulations that interpret the

39-2  requirements of this section.

39-3    Sec. 90.  NRS 232.510 is hereby amended to read as follows:

39-4    232.510  1.  The department of business and industry is hereby

39-5  created.

39-6    2.  The department consists of a director and the following:

39-7    (a) Consumer affairs division.

39-8    (b) Division of financial institutions.

39-9    (c) Housing division.

39-10  (d) Manufactured housing division.

39-11  (e) Real estate division.

39-12  (f) Division of unclaimed property.

39-13  (g) Division of insurance.

39-14  (h) Division of industrial relations.

39-15  (i) Office of labor commissioner.

39-16  (j) Taxicab authority.

39-17  (k) Nevada athletic commission.

39-18  (l) Office of the Nevada attorney for injured workers.

39-19  (m) Transportation services authority.

39-20  (n) Mortgage industry commission.

39-21  (o) Any other office, commission, board, agency or entity created or

39-22  placed within the department pursuant to a specific statute, the budget

39-23  approved by the legislature or an executive order, or an entity whose

39-24  budget or activities have been placed within the control of the department

39-25  by a specific statute.

39-26  Sec. 91.  NRS 232.520 is hereby amended to read as follows:

39-27  232.520  The director:

39-28  1.  Shall appoint a chief or executive director, or both of them, of each

39-29  of the divisions, offices, commissions, boards, agencies or other entities of

39-30  the department, unless the authority to appoint such a chief or executive

39-31  director, or both of them, is expressly vested in another person, board or

39-32  commission by a specific statute. In making the appointments, the director

39-33  may obtain lists of qualified persons from professional organizations,

39-34  associations or other groups recognized by the department, if any. The

39-35  chiefs within the department are as follows:

39-36  (a) The chief of the consumer affairs division is the commissioner of

39-37  consumer affairs . [, the]

39-38  (b) The chief of the division of financial institutions is the

39-39  commissioner of financial institutions . [, the]

39-40  (c) The chief of the housing division is the administrator of the housing

39-41  division . [, the]

39-42  (d) The chief of the manufactured housing division is the administrator

39-43  of the manufactured housing division . [, the]

39-44  (e) The chief of the real estate division is the real estate administrator .

39-45  [, the]

39-46  (f) The chief of the division of unclaimed property is the administrator

39-47  of unclaimed property . [, the]

39-48  (g) The chief of the division of insurance is the commissioner of

39-49  insurance . [, the]

40-1    (h) The chief of the division of industrial relations is the administrator

40-2  of the division of industrial relations . [, the]

40-3    (i) The chief of the office of labor commissioner is the labor

40-4  commissioner . [, the]

40-5    (j) The chief of the taxicab authority is the taxicab administrator . [, the]

40-6    (k) The chief of the transportation services authority is the chairman of

40-7  the authority . [and the]

40-8    (l) The chief of the mortgage industry commission is the executive

40-9  director of the commission.

40-10  (m) The chief of any other entity of the department has the title

40-11  specified by the director, unless a different title is specified by a specific

40-12  statute.

40-13  2.  Is responsible for the administration of all provisions of law relating

40-14  to the jurisdiction, duties and functions of all divisions and other entities

40-15  within the department. The director may, if he deems it necessary to carry

40-16  out his administrative responsibilities, be considered as a member of the

40-17  staff of any division or other entity of the department for the purpose of

40-18  budget administration or for carrying out any duty or exercising any power

40-19  necessary to fulfill the responsibilities of the director pursuant to this

40-20  subsection. The provisions of this subsection do not authorize the director

40-21  to preempt any authority or jurisdiction granted by statute to any division

40-22  or other entity within the department or authorize the director to act or take

40-23  on a function that would contravene a rule of court or a statute.

40-24  3.  May:

40-25  (a) Establish uniform policies for the department, consistent with the

40-26  policies and statutory responsibilities and duties of the divisions and other

40-27  entities within the department, relating to matters concerning budgeting,

40-28  accounting, planning, program development, personnel, information

40-29  services, dispute resolution, travel, workplace safety, the acceptance of

40-30  gifts or donations, the management of records and any other subject for

40-31  which a uniform departmental policy is necessary to ensure the efficient

40-32  operation of the department.

40-33  (b) Provide coordination among the divisions and other entities within

40-34  the department, in a manner which does not encroach upon their statutory

40-35  powers and duties, as they adopt and enforce regulations, execute

40-36  agreements, purchase goods, services or equipment, prepare legislative

40-37  requests and lease or use office space.

40-38  (c) Define the responsibilities of any person designated to carry out the

40-39  duties of the director relating to financing, industrial development or

40-40  business support services.

40-41  4.  May, within the limits of the financial resources made available to

40-42  him, promote, participate in the operation of, and create or cause to be

40-43  created, any nonprofit corporation, pursuant to chapter 82 of NRS, which

40-44  he determines is necessary or convenient for the exercise of the powers and

40-45  duties of the department. The purposes, powers and operation of the

40-46  corporation must be consistent with the purposes, powers and duties of the

40-47  department.

41-1    5.  For any bonds which he is otherwise authorized to issue, may issue

41-2  bonds the interest on which is not exempt from federal income tax or

41-3  excluded from gross revenue for the purposes of federal income tax.

41-4    6.  May, except as otherwise provided by specific statute, adopt by

41-5  regulation a schedule of fees and deposits to be charged in connection with

41-6  the programs administered by him pursuant to chapters 348A and 349 of

41-7  NRS. Except as otherwise provided, the amount of any such fee or deposit

41-8  must not exceed 2 percent of the principal amount of the financing.

41-9    7.  May designate any person within the department to perform any of

41-10  the duties or responsibilities, or exercise any of the authority, of the

41-11  director on his behalf.

41-12  8.  May negotiate and execute agreements with public or private

41-13  entities which are necessary to the exercise of the powers and duties of the

41-14  director or the department.

41-15  9.  May establish a trust account in the state treasury for depositing and

41-16  accounting for money that is held in escrow or is on deposit with the

41-17  department for the payment of any direct expenses incurred by the director

41-18  in connection with any bond programs administered by the director. The

41-19  interest and income earned on money in the trust account, less any amount

41-20  deducted to pay for applicable charges, must be credited to the trust

41-21  account. Any balance remaining in the account at the end of a fiscal year

41-22  may be:

41-23  (a) Carried forward to the next fiscal year for use in covering the

41-24  expense for which it was originally received; or

41-25  (b) Returned to any person entitled thereto in accordance with

41-26  agreements or regulations of the director relating to those bond programs.

41-27  Sec. 92.  NRS 686A.350 is hereby amended to read as follows:

41-28  686A.350  1.  A license to engage in the business of a company is not

41-29  required of any:

41-30  (a) State or federally chartered building association or savings and loan

41-31  association.

41-32  (b) State or federally chartered bank.

41-33  (c) State or federally chartered credit union.

41-34  (d) Thrift company licensed pursuant to chapter 677 of NRS.

41-35  (e) Insurance agent financing his own accounts.

41-36  (f) Insurer authorized to do business in this state financing its own

41-37  policies or those of an affiliated company.

41-38  (g) Business, in addition to those included in paragraphs (a) to (d),

41-39  inclusive, which is licensed and regulated by the mortgage industry

41-40  commission or the division of financial institutions of the department of

41-41  business and industry.

41-42  2.  The provisions of NRS 686A.330 to 686A.520, inclusive, other than

41-43  those which concern licensing, apply to persons exempt from licensing

41-44  pursuant to subsection 1.

41-45  Sec. 93.  Section 139 of chapter 646, Statutes of Nevada 1999, at page

41-46  3816, is hereby amended to read as follows:

41-47           Sec. 139.  1.  This section and section 130.5 of this act become

41-48  effective upon passage and approval for the purpose of adopting any

42-1  regulations necessary to carry out the provisions of this act, and on

42-2  September 30, 1999, for all other purposes.

42-3  2.  Sections 1 to 101, inclusive, 103, 105 to 117, inclusive, 119 to

42-4  130, inclusive, and 131 to 138, inclusive, of this act become effective

42-5  upon passage and approval for the purpose of adopting any

42-6  regulations necessary to carry out the provisions of this act, and on

42-7  October 1, 1999, for all other purposes.

42-8  3.  Sections 102, 104 and 118 of this act become effective upon

42-9  passage and approval for the purpose of adopting any regulations

42-10  necessary to carry out the provisions of this act, and at 12:01 a.m. on

42-11  October 1, 1999, for all other purposes.

42-12           4.  Sections 15 and 33 of this act expire by limitation on the date

42-13  on which the provisions of 42 U.S.C. § 666 requiring each state to

42-14  establish procedures under which the state has authority to withhold

42-15  or suspend, or to restrict the use of professional, occupational and

42-16  recreational licenses of persons who:

42-17           (a) Have failed to comply with a subpoena or warrant relating to a

42-18  procedure to determine the paternity of a child or to establish or

42-19  enforce an obligation for the support of a child; or

42-20           (b) Are in arrears in the payment for the support of one or more

42-21  children,

42-22  are repealed by the Congress of the United States.

42-23           [5.  Section 78.5 of this act expires by limitation on October 1,

42-24  2001.]

42-25  Sec. 94.  NRS 645B.860, 645B.865 and 645B.870 are hereby repealed.

42-26  Sec. 95.  On July 1, 2001, or as soon as practicable thereafter, the

42-27  governor shall appoint five persons as members of the mortgage industry

42-28  commission, whose terms commence on July 1, 2001. For the initial terms

42-29  of the members of the mortgage industry commission, the governor shall

42-30  appoint:

42-31  1.  Two members whose terms expire on June 30, 2002;

42-32  2.  Two members whose terms expire on June 30, 2003; and

42-33  3.  One member whose term expires on June 30, 2004.

42-34  Sec. 96.  1.  Notwithstanding the provisions of this act and except as

42-35  otherwise provided in subsection 2, the commissioner of financial

42-36  institutions shall exercise all the power and perform all the duties that are

42-37  assigned to the mortgage industry commission and its executive director

42-38  pursuant to the provisions of this act, until the date on which the director of

42-39  the department of business and industry certifies to the governor that the

42-40  mortgage industry commission and its executive director are prepared to

42-41  carry out the provisions of this act, or until January 1, 2002, whichever

42-42  occurs sooner.

42-43  2.  During the period described in subsection 1, the mortgage industry

42-44  commission and its executive director may exercise any power and perform

42-45  any duty assigned to them pursuant to the provisions of this act if the

42-46  exercise of the power or the performance of the duty is necessary as an

42-47  organizational, preparatory or preliminary measure to prepare the mortgage

42-48  industry commission and its executive director to carry out the provisions

42-49  of this act.

43-1    Sec. 97.  1.  Any administrative regulations adopted by an officer or

43-2  an agency whose name has been changed or whose responsibilities have

43-3  been transferred pursuant to the provisions of this act to another officer or

43-4  agency remain in force until amended by the officer or agency to which the

43-5  responsibility for the adoption of the regulations has been transferred.

43-6    2.  Any contracts or other agreements entered into by an officer or

43-7  agency whose name has been changed or whose responsibilities have been

43-8  transferred pursuant to the provisions of this act to another officer or

43-9  agency are binding upon the officer or agency to which the responsibility

43-10  for the administration of the provisions of the contract or other agreement

43-11  has been transferred. Such contracts and other agreements may be enforced

43-12  by the officer or agency to which the responsibility for the enforcement of

43-13  the provisions of the contract or other agreement has been transferred.

43-14  3.  Any action taken by an officer or agency whose name has been

43-15  changed or whose responsibilities have been transferred pursuant to the

43-16  provisions of this act to another officer or agency remains in effect as if

43-17  taken by the officer or agency to which the responsibility for the

43-18  enforcement of such actions has been transferred.

43-19  Sec. 98.  This act becomes effective on July 1, 2001.

43-20  Sec. 99.  1.  The legislative counsel shall:

43-21  (a) In preparing the reprint and supplements to the Nevada Revised

43-22  Statutes, appropriately change any references to an officer or agency whose

43-23  name is changed or whose responsibilities have been transferred pursuant

43-24  to the provisions of this act to refer to the appropriate officer or agency.

43-25  (b) In preparing supplements to the Nevada Administrative Code,

43-26  appropriately change any references to an officer or agency whose name is

43-27  changed or whose responsibilities have been transferred pursuant to the

43-28  provisions of this act to refer to the appropriate officer or agency.

43-29  2.  Any reference in a bill or resolution passed by the 71st session of

43-30  the Nevada legislature to an officer or agency whose name is changed or

43-31  whose responsibilities have been transferred pursuant to the provisions of

43-32  this act to another officer or agency shall be deemed to refer to the officer

43-33  or agency to which the responsibility is transferred.

 

43-34  TEXT OF REPEALED SECTIONS

 

43-35  645B.860  Creation; members; appointment; terms and vacancies;

43-36   no compensation or per diem allowance; protections afforded

43-37   members who are public officers or employees.

43-38  1.  The advisory council on mortgage investments and mortgage

43-39   lending is hereby created.

43-40  2.  The advisory council consists of five members appointed by the

43-41   legislative commission from a list of persons provided by the

43-42   commissioner.

43-43  3.  The members of the advisory council:

43-44  (a) Must be persons who have experience with, an interest in or a

43-45   knowledge of issues relating to mortgage investments or mortgage

43-46   lending.

44-1  Such persons may include, without limitation, investors, public officers and

44-2  employees, licensees and persons who have engaged in or been involved

44-3   with any business, profession or occupation relating to mortgage

44-4   investments or mortgage lending.

44-5    (b) Serve terms of 2 years and at the pleasure of the legislative

44-6   commission.

44-7    (c) May be reappointed.

44-8    (d) Serve without compensation and may not receive a per diem

44-9   allowance or travel expenses.

44-10  4.  Any vacancy in the membership of the advisory council must be

44-11   filled for the remainder of the unexpired term in the same manner as the

44-12   original appointment.

44-13  5.  A member of the advisory council who is an officer or employee of

44-14   this state or a political subdivision of this state must be relieved from his

44-15   duties without loss of his regular compensation so that he may prepare for

44-16   and attend meetings of the advisory council and perform any work

44-17   necessary to carry out the duties of the advisory council in the most timely

44-18   manner practicable. A state agency or political subdivision of this state

44-19   shall not require an officer or employee who is a member of the advisory

44-20   council to make up the time he is absent from work to carry out his duties

44-21   as a member of the advisory council or use annual vacation or

44-22   compensatory time for the absence.

44-23  6.  Notwithstanding any other provision of law, a member of the

44-24   advisory council:

44-25  (a) Is not disqualified from public employment or holding a public

44-26   office because of his membership on the advisory council; and

44-27  (b) Does not forfeit his public office or public employment because of

44-28   his membership on the advisory council.

44-29  645B.865  Chairman and vice chairman; meetings; quorum;

44-30   subcommittees.

44-31  1.  The members of the advisory council on mortgage investments and

44-32   mortgage lending shall elect a chairman and a vice chairman from among

44-33   their membership. The vice chairman shall perform the duties of the

44-34   chairman during any absence of the chairman.

44-35  2.  The advisory council may meet at least once each calendar quarter

44-36   and at other times on the call of the chairman or a majority of its members.

44-37  3.  The meetings of the advisory council may be held at any location

44-38   designated by the chairman or a majority of its members.

44-39  4.  A majority of the members of the advisory council constitutes a

44-40   quorum for the transaction of all business.

44-41  5.  The chairman may appoint subcommittees of the members of the

44-42   advisory council to consider specific problems relating to mortgage

44-43   investments or mortgage lending.

44-44  645B.870  Purpose.  The purpose of the advisory council on

44-45   mortgage investments and mortgage lending is to:

44-46  1.  Consult with, advise and make recommendations to the

44-47   commissioner in all matters relating to mortgage investments and

44-48   mortgage lending.

45-1    2.  Make recommendations to the legislature concerning the enactment

45-2  of any legislation relating to mortgage investments and mortgage lending.

45-3    3.  Make recommendations to the legislature and the commissioner

45-4   concerning educational requirements and other qualifications for persons

45-5   who are engaged in any business, profession or occupation relating to

45-6   mortgage investments and mortgage lending.

45-7    4.  Conduct hearings, conferences and special studies on all matters

45-8   relating to mortgage investments and mortgage lending.

45-9    5.  Provide a forum for the consideration and discussion of all matters

45-10   relating to mortgage investments and mortgage lending.

45-11  6.  Gather and disseminate information relating to mortgage

45-12   investments and mortgage lending.

45-13  7.  Engage in other activities that are designed to promote, improve and

45-14   protect the reliability and stability of mortgage investments and mortgage

45-15   lending in this state.

 

45-16  H