REQUIRES TWO-THIRDS MAJORITY VOTE (§ 28) exempt
(REPRINTED WITH ADOPTED AMENDMENTS)
SECOND REPRINT A.B. 324
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.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
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; authorizing the mortgage industry commission to increase fees by regulation in certain circumstances; 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.
2-1 Sec. 4. “Mortgage company” has the meaning ascribed to it in
2-2 NRS 645E.100.
2-3 Sec. 5. For the purposes of this chapter:
2-4 1. The southern district of Nevada consists of the counties of Clark,
2-5 Esmeralda, Lincoln and Nye; and
2-6 2. The northern district of Nevada consists of all other counties of
2-7 this state.
2-8 Sec. 6. 1. The mortgage industry commission is hereby created.
2-9 2. The commission consists of five members appointed by the
2-10 governor. The governor shall appoint to the commission:
2-11 (a) Three members who are residents of the southern district of
2-12 Nevada; and
2-13 (b) Two members who are residents of the northern district of Nevada.
2-14 3. If, during his term, a member changes his residency to a location
2-15 outside of the district from which he was appointed, the member shall be
2-16 deemed to have resigned from his office, and the office shall be deemed
2-17 to be vacant.
2-18 4. A person may not be appointed to the commission unless the
2-19 person:
2-20 (a) Is a citizen of the United States;
2-21 (b) Has been a resident of this state for at least 5 years immediately
2-22 preceding the date of his appointment; and
2-23 (c) For at least 3 years immediately preceding the date of his
2-24 appointment:
2-25 (1) Has held a valid license issued by this state as a mortgage
2-26 broker or mortgage company or has been a general partner, director or
2-27 officer of such a mortgage broker or mortgage company; or
2-28 (2) Has been actively and legally engaged in this state in the
2-29 business of mortgage lending or in the activities of a mortgage agent.
2-30 5. Before entering upon the duties of his office, a member shall take:
2-31 (a) The constitutional oath of office; and
2-32 (b) An oath that he is legally qualified to serve as a member of the
2-33 commission.
2-34 Sec. 7. 1. After the initial terms, the members of the commission
2-35 must be appointed to terms of 3 years. Upon the expiration of his term, a
2-36 member continues to serve on the commission until a qualified person
2-37 has been appointed as his successor.
2-38 2. Members of the commission may not be appointed to serve more
2-39 than two consecutive terms, excluding any appointment to:
2-40 (a) An initial term of less than 3 years; and
2-41 (b) An unexpired term that does not exceed 18 months.
2-42 3. A person who has been appointed to serve two consecutive terms
2-43 on the commission may be appointed to the commission if, on the date of
2-44 his most recent appointment, more than 3 years have elapsed since the
2-45 expiration of his last term.
2-46 4. Any vacancy in the membership of the commission must be filled
2-47 for the remainder of the unexpired term in the same manner as the
2-48 original appointment.
3-1 Sec. 8. 1. The commission shall:
3-2 (a) Operate on the basis of a fiscal year beginning on July 1 and
3-3 ending on June 30.
3-4 (b) At the first meeting of each fiscal year, select one member as
3-5 chairman and one member as vice chairman. The chairmanship of the
3-6 commission must alternate each fiscal year between a member who is a
3-7 resident of the southern district of Nevada and a member who is a
3-8 resident of the northern district of Nevada. The vice chairman may not
3-9 be a resident of the same district as the chairman. If a vacancy occurs in
3-10 the chairmanship or vice chairmanship, the vacancy must be filled for
3-11 the remainder of the unexpired term by a member who is a resident of
3-12 the same district as his predecessor. The vice chairman shall perform the
3-13 duties of the chairman during any absence of the chairman.
3-14 2. The commission:
3-15 (a) Shall hold at least two meetings each year, one in the southern
3-16 district of Nevada and one in the northern district of Nevada; and
3-17 (b) May hold additional meetings each year at the call of the
3-18 chairman or upon a written request submitted to the executive director by
3-19 two members of the commission.
3-20 3. The chairman shall designate the time and place for each meeting
3-21 of the commission. Not later than 3 working days before each meeting,
3-22 the executive director shall give each member of the commission written
3-23 notice of the time, place and purpose of the meeting.
3-24 4. Three members of the commission constitute a quorum. A
3-25 majority of the members present during a quorum may take any action or
3-26 make any decision as the commission.
3-27 5. The commission shall:
3-28 (a) Prepare and maintain a record of its transactions and
3-29 proceedings; and
3-30 (b) Adopt a seal of which each court of this state shall take judicial
3-31 notice.
3-32 6. While engaged in the business of the commission, each member of
3-33 the commission is entitled to receive:
3-34 (a) A salary of not more than $80 per day, as fixed by the commission;
3-35 and
3-36 (b) A per diem allowance and travel expenses at a rate fixed by the
3-37 commission. The rate must not exceed the rate provided for officers and
3-38 employees of this state generally.
3-39 Sec. 9. 1. The commission shall designate the location of the
3-40 principal office of the commission. If the principal office of the
3-41 commission is located in:
3-42 (a) The southern district of Nevada, the commission shall establish at
3-43 least one branch office in the northern district of Nevada.
3-44 (b) The northern district of Nevada, the commission shall establish at
3-45 least one branch office in the southern district of Nevada.
3-46 2. Within the limits of legislative appropriation, the commission may
3-47 establish such additional branch offices in this state as it considers
3-48 necessary to carry out its functions and duties.
4-1 3. The executive director shall conduct business primarily in the
4-2 principal office of the commission.
4-3 Sec. 10. The commission may delegate to the executive director:
4-4 1. The authority of the commission to take any disciplinary action
4-5 and to impose any fines and penalties; and
4-6 2. Any other authority conferred on the commission by this chapter
4-7 and any other specific statute relating to the powers and duties of the
4-8 commission.
4-9 Sec. 11. 1. The director of the department of business and industry
4-10 shall appoint an executive director who:
4-11 (a) Within the limits of legislative appropriation, is entitled to receive
4-12 such compensation as is fixed by the commission;
4-13 (b) Is in the unclassified service of the state; and
4-14 (c) Serves at the pleasure of the director of the department of business
4-15 and industry.
4-16 2. The executive director may not be:
4-17 (a) A member of the commission; or
4-18 (b) A licensed mortgage broker or mortgage company, a partner,
4-19 director or officer of a licensed mortgage broker or mortgage company
4-20 or, directly or indirectly, interested in, employed by or associated with a
4-21 licensed mortgage broker or mortgage company.
4-22 3. Except as otherwise provided in NRS 284.143, the executive
4-23 director shall devote his entire time and attention to the business of his
4-24 office and shall not pursue any other business or occupation or hold any
4-25 other office of profit.
4-26 4. The executive director:
4-27 (a) Is subject to the supervision of the director of the department of
4-28 business and industry;
4-29 (b) Is responsible for administering and carrying out the policies and
4-30 administrative functions of the commission;
4-31 (c) Shall direct and supervise all the technical and administrative
4-32 functions of the commission;
4-33 (d) Shall report to the commission all relevant and important matters
4-34 concerning the administration of the office of the commission;
4-35 (e) Shall perform the duties set forth in this chapter and the duties
4-36 delegated to the executive director by the commission pursuant to section
4-37 10 of this act; and
4-38 (f) Shall perform any lawful act that the executive director considers
4-39 necessary or desirable to carry out the purposes and provisions of this
4-40 chapter and any other specific statute relating to the powers and duties of
4-41 the commission.
4-42 Sec. 12. 1. Within the limits of legislative appropriation, the
4-43 executive director may employ such persons as he deems necessary to
4-44 carry out the functions and duties of the commission.
4-45 2. A person employed by the executive director may not be:
4-46 (a) A member of the commission; or
4-47 (b) A licensed mortgage broker or mortgage company, a partner,
4-48 director or officer of a licensed mortgage broker or mortgage company
5-1 or, directly or indirectly, interested in, employed by or associated with a
5-2 licensed mortgage broker or mortgage company.
5-3 3. While engaged in the business of the commission, the executive
5-4 director and each person employed by the executive director is entitled to
5-5 receive a per diem allowance and travel expenses at a rate fixed by the
5-6 commission. The rate must not exceed the rate provided for officers and
5-7 employees of this state generally.
5-8 Sec. 13. The commission, the commissioner of financial institutions
5-9 and the division of financial institutions shall cooperate with, share
5-10 records and information with and assist each other to the extent
5-11 necessary to carry out the provisions of this chapter, chapter 645E of
5-12 NRS and any other specific statute relating to the powers and duties of
5-13 the commission, the commissioner of financial institutions and the
5-14 division of financial institutions.
5-15 Sec. 14. 1. The attorney general is the attorney for the commission
5-16 and the executive director.
5-17 2. The attorney general shall designate one or more of his deputies to
5-18 conduct actions, proceedings and hearings for the commission and the
5-19 executive director. Such deputies shall advise the commission and the
5-20 executive director on all matters relating to the commission.
5-21 Sec. 14.5. The commission shall adopt regulations that set forth the
5-22 procedures that a mortgage broker or mortgage agent must follow to
5-23 determine whether an investor is an accredited investor.
5-24 Sec. 15. NRS 645B.010 is hereby amended to read as follows:
5-25 645B.010 As used in this chapter, unless the context otherwise
5-26 requires, the words and terms defined in NRS 645B.0103 to 645B.0135,
5-27 inclusive, and sections 2, 3 and 4 of this act have the meanings ascribed to
5-28 them in those sections.
5-29 Sec. 16. NRS 645B.0105 is hereby amended to read as follows:
5-30 645B.0105 [“Commissioner” means the commissioner of financial
5-31 institutions.] “Commission” means:
5-32 1. The mortgage industry commission created pursuant to section 6
5-33 of this act; and
5-34 2. The executive director if the mortgage industry commission has
5-35 delegated its authority to the executive director pursuant to section 10 of
5-36 this act.
5-37 Sec. 17. NRS 645B.0111 is hereby amended to read as follows:
5-38 645B.0111 “Division[”] of financial institutions” means the division
5-39 of financial institutions of the department of business and industry.
5-40 Sec. 18. NRS 645B.0127 is hereby amended to read as follows:
5-41 645B.0127 1. “Mortgage broker” means a person who, directly or
5-42 indirectly:
5-43 (a) Holds himself out for hire to serve as an agent for any person in an
5-44 attempt to obtain a loan which will be secured by a lien on real property;
5-45 (b) Holds himself out for hire to serve as an agent for any person who
5-46 has money to lend, if the loan is or will be secured by a lien on real
5-47 property;
5-48 (c) Holds himself out as being able to make loans secured by liens on
5-49 real property;
6-1 (d) Holds himself out as being able to buy or sell notes secured by liens
6-2 on real property; or
6-3 (e) Offers for sale in this state any security which is exempt from
6-4 registration under state or federal law and purports to make investments in
6-5 promissory notes secured by liens on real property.
6-6 2. The term does not include a person who is licensed as a mortgage
6-7 company[, as defined in NRS 645E.100,] pursuant to chapter 645E of
6-8 NRS, unless the person is also licensed as a mortgage broker pursuant to
6-9 this chapter.
6-10 Sec. 19. NRS 645B.016 is hereby amended to read as follows:
6-11 645B.016 Except as otherwise provided in NRS 645B.690:
6-12 1. A person who claims an exemption from the provisions of this
6-13 chapter pursuant to subsection 1 or 6 of NRS 645B.015 must:
6-14 (a) File a written application for a certificate of exemption with the
6-15 office of the [commissioner;] commission;
6-16 (b) Pay the fee required pursuant to NRS 645B.050; and
6-17 (c) Include with the written application satisfactory proof that the
6-18 person meets the requirements of subsection 1 or 6 of NRS 645B.015.
6-19 2. The [commissioner] commission may require a person who claims
6-20 an exemption from the provisions of this chapter pursuant to subsections 2
6-21 to 5, inclusive, or 7 to 10, inclusive, of NRS 645B.015 to:
6-22 (a) File a written application for a certificate of exemption with the
6-23 office of the [commissioner;] commission;
6-24 (b) Pay the fee required pursuant to NRS 645B.050; and
6-25 (c) Include with the written application satisfactory proof that the
6-26 person meets the requirements of at least one of those exemptions.
6-27 3. A certificate of exemption expires automatically if, at any time, the
6-28 person who claims the exemption no longer meets the requirements of at
6-29 least one exemption set forth in the provisions of NRS 645B.015.
6-30 4. If a certificate of exemption expires automatically pursuant to this
6-31 section, the person shall not provide any of the services of a mortgage
6-32 broker or otherwise engage in, carry on or hold himself out as engaging in
6-33 or carrying on the business of a mortgage broker, unless the person applies
6-34 for and is issued:
6-35 (a) A license as a mortgage broker pursuant to this chapter; or
6-36 (b) Another certificate of exemption.
6-37 5. The [commissioner] commission may impose upon a person who is
6-38 required to apply for a certificate of exemption or who holds a certificate of
6-39 exemption an administrative fine of not more than $10,000 for each
6-40 violation that he commits, if the person:
6-41 (a) Has knowingly made or caused to be made to the [commissioner]
6-42 commission any false representation of material fact;
6-43 (b) Has suppressed or withheld from the [commissioner] commission
6-44 any information which the person possesses and which, if submitted by
6-45 him, would have rendered the person ineligible to hold a certificate of
6-46 exemption; or
6-47 (c) Has violated any provision of this chapter, a regulation adopted
6-48 pursuant to this chapter or an order of the [commissioner] commission that
7-1 applies to a person who is required to apply for a certificate of exemption
7-2 or who holds a certificate of exemption.
7-3 Sec. 20. NRS 645B.018 is hereby amended to read as follows:
7-4 645B.018 1. A person may apply to the [commissioner] commission
7-5 for an exemption from the provisions of this chapter governing the making
7-6 of a loan of money.
7-7 2. The [commissioner] commission may grant the exemption if [he]
7-8 the commission finds that:
7-9 (a) The making of the loan would not be detrimental to the financial
7-10 condition of the lender, the debtor or the person who is providing the
7-11 money for the loan;
7-12 (b) The lender, the debtor or the person who is providing the money for
7-13 the loan has established a record of sound performance, efficient
7-14 management, financial responsibility and integrity;
7-15 (c) The making of the loan is likely to increase the availability of capital
7-16 for a sector of the state economy; and
7-17 (d) The making of the loan is not detrimental to the public interest.
7-18 3. The [commissioner:] commission:
7-19 (a) May revoke an exemption unless the loan for which the exemption
7-20 was granted has been made; and
7-21 (b) Shall issue a written statement setting forth the reasons for [his] its
7-22 decision to grant, deny or revoke an exemption.
7-23 Sec. 21. NRS 645B.020 is hereby amended to read as follows:
7-24 645B.020 1. A person who wishes to be licensed as a mortgage
7-25 broker must file a written application for a license with the office of the
7-26 [commissioner] commission and pay the fee required pursuant to
7-27 NRS 645B.050. An application for a license as a mortgage broker must:
7-28 (a) Be verified.
7-29 (b) State the name, residence address and business address of the
7-30 applicant and the location of each principal office and branch office at
7-31 which the mortgage broker will conduct business within this state.
7-32 (c) State the name under which the applicant will conduct business as a
7-33 mortgage broker.
7-34 (d) List the name, residence address and business address of each
7-35 person who will:
7-36 (1) If the applicant is not a natural person, have an interest in the
7-37 mortgage broker as a principal, partner, officer, director or trustee,
7-38 specifying the capacity and title of each such person.
7-39 (2) Be associated with or employed by the mortgage broker as a
7-40 mortgage agent.
7-41 (e) If the applicant is a natural person, include the social security
7-42 number of the applicant.
7-43 (f) Include a general business plan and a [manual for policies and
7-44 procedures for the mortgage broker and his mortgage agents that includes,
7-45 without limitation, the underwriting standards, restrictions and] description
7-46 of the policies and procedures that the mortgage broker and his mortgage
7-47 agents will follow to arrange and service loans and to conduct business
7-48 pursuant to this chapter.
8-1 (g) State the length of time the applicant has been engaged in the
8-2 business of a broker.
8-3 (h) Include a financial statement of the applicant and, if applicable,
8-4 satisfactory proof that the applicant will be able to maintain continuously
8-5 the net worth required pursuant to NRS 645B.115.
8-6 (i) Include any other information required pursuant to the regulations
8-7 adopted by the [commissioner] commission or an order of the
8-8 [commissioner.] commission.
8-9 2. If a mortgage broker will conduct business at one or more branch
8-10 offices within this state, the mortgage broker must apply for a license for
8-11 each such branch office.
8-12 3. Except as otherwise provided in this chapter, the [commissioner]
8-13 commission shall issue a license to an applicant as a mortgage broker if:
8-14 (a) The application complies with the requirements of this chapter;
8-15 (b) The applicant submits the statement required pursuant to
8-16 NRS 645B.023, if the applicant is required to do so; and
8-17 (c) The applicant and each general partner, officer or director of the
8-18 applicant, if the applicant is a partnership, corporation or unincorporated
8-19 association:
8-20 (1) Has a good reputation for honesty, trustworthiness and integrity
8-21 and displays competence to transact the business of a mortgage broker in a
8-22 manner which safeguards the interests of the general public. The applicant
8-23 must submit satisfactory proof of these qualifications to the
8-24 [commissioner.] commission.
8-25 (2) Has not been convicted of, or entered a plea of nolo contendere
8-26 to, a felony or any crime involving fraud, misrepresentation or moral
8-27 turpitude.
8-28 (3) Has not made a false statement of material fact on his application.
8-29 (4) Has not had a license that was issued pursuant to the provisions of
8-30 this chapter or chapter 645E of NRS suspended or revoked within the 10
8-31 years immediately preceding the date of his application.
8-32 (5) Has not had a license that was issued in any other state, district or
8-33 territory of the United States or any foreign country suspended or revoked
8-34 within the 10 years immediately preceding the date of his application.
8-35 (6) Has not violated any provision of this chapter or chapter 645E of
8-36 NRS, a regulation adopted pursuant thereto or an order of the
8-37 [commissioner.] commission.
8-38 Sec. 22. NRS 645B.023 is hereby amended to read as follows:
8-39 645B.023 1. A natural person who applies for the issuance or
8-40 renewal of a license as a mortgage broker shall submit to the
8-41 [commissioner] commission the statement prescribed by the welfare
8-42 division of the department of human resources pursuant to NRS 425.520.
8-43 The statement must be completed and signed by the applicant.
8-44 2. The [commissioner] commission shall include the statement
8-45 required pursuant to subsection 1 in:
8-46 (a) The application or any other forms that must be submitted for the
8-47 issuance or renewal of the license; or
8-48 (b) A separate form prescribed by the [commissioner.] commission.
9-1 3. A license as a mortgage broker may not be issued or renewed by the
9-2 [commissioner] commission if the applicant is a natural person who:
9-3 (a) Fails to submit the statement required pursuant to subsection 1; or
9-4 (b) Indicates on the statement submitted pursuant to subsection 1 that he
9-5 is subject to a court order for the support of a child and is not in
9-6 compliance with the order or a plan approved by the district attorney or
9-7 other public agency enforcing the order for the repayment of the amount
9-8 owed pursuant to the order.
9-9 4. If an applicant indicates on the statement submitted pursuant to
9-10 subsection 1 that he is subject to a court order for the support of a child and
9-11 is not in compliance with the order or a plan approved by the district
9-12 attorney or other public agency enforcing the order for the repayment of
9-13 the amount owed pursuant to the order, the [commissioner] commission
9-14 shall advise the applicant to contact the district attorney or other public
9-15 agency enforcing the order to determine the actions that the applicant may
9-16 take to satisfy the arrearage.
9-17 Sec. 23. NRS 645B.0243 is hereby amended to read as follows:
9-18 645B.0243 The [commissioner] commission may refuse to issue a
9-19 license to an applicant if the [commissioner] commission has reasonable
9-20 cause to believe that the applicant or any general partner, officer or director
9-21 of the applicant has, after October 1, 1999, employed or proposed to
9-22 employ a person as a mortgage agent or authorized or proposed to
9-23 authorize a person to be associated with a mortgage broker as a mortgage
9-24 agent at a time when the applicant or the general partner, officer or director
9-25 knew or, in light of all the surrounding facts and circumstances, reasonably
9-26 should have known that the person:
9-27 1. Had been convicted of, or entered a plea of nolo contendere to, a
9-28 felony or any crime involving fraud, misrepresentation or moral turpitude;
9-29 or
9-30 2. Had a financial services license or registration suspended or revoked
9-31 within the immediately preceding 10 years.
9-32 Sec. 24. NRS 645B.0245 is hereby amended to read as follows:
9-33 645B.0245 1. If an applicant is a natural person, the [commissioner]
9-34 commission may refuse to issue a license to the applicant if the
9-35 [commissioner] commission has reasonable cause to believe that the
9-36 applicant would be subject to control by a relative who would be ineligible
9-37 to be licensed pursuant to this chapter.
9-38 2. If an applicant is a partnership, corporation or unincorporated
9-39 association, the [commissioner] commission may refuse to issue a license
9-40 to the applicant if:
9-41 (a) Any member of the partnership or any officer or director of the
9-42 corporation or unincorporated association has committed any act or
9-43 omission that would be cause for refusing to issue a license to a natural
9-44 person; or
9-45 (b) The [commissioner] commission has reasonable cause to believe
9-46 that any member of the partnership or any officer or director of the
9-47 corporation or unincorporated association would be subject to control by a
9-48 relative who would be ineligible to be licensed pursuant to this chapter.
10-1 Sec. 25. NRS 645B.0247 is hereby amended to read as follows:
10-2 645B.0247 The provisions of NRS 645B.0243 and 645B.0245 do not
10-3 limit the authority of the [commissioner] commission to refuse to issue a
10-4 license to an applicant for any other lawful reason or pursuant to any other
10-5 provision of law.
10-6 Sec. 26. NRS 645B.025 is hereby amended to read as follows:
10-7 645B.025 1. A mortgage broker shall post each license in a
10-8 conspicuous place in the office to which it pertains.
10-9 2. A mortgage broker may not transfer or assign a license to another
10-10 person, unless the [commissioner gives his] commission gives its written
10-11 approval.
10-12 Sec. 27. NRS 645B.035 is hereby amended to read as follows:
10-13 645B.035 1. A license entitles a licensee to engage only in [the] :
10-14 (a) The activities authorized by this chapter[.] ; and
10-15 (b) The activities authorized by chapter 645E of NRS, unless the
10-16 licensee engages in such activities with the intent to circumvent or avoid
10-17 the provisions of this chapter.
10-18 2. The provisions of this chapter do not prohibit a licensee from:
10-19 (a) Holding a license as a mortgage company pursuant to chapter 645E
10-20 of NRS; or
10-21 (b) Conducting the business of a mortgage company and the business of
10-22 a mortgage broker in the same office or place of business.
10-23 3. If a licensee does not hold a license as a mortgage company
10-24 pursuant to chapter 645E of NRS, the licensee is subject to supervision,
10-25 regulation and discipline by the commission for all activities that the
10-26 licensee engages in pursuant to this chapter and chapter 645E of NRS.
10-27 4. If a licensee holds a license as a mortgage company pursuant to
10-28 chapter 645E of NRS, the licensee is subject to supervision, regulation
10-29 and discipline by:
10-30 (a) The commission for all activities that the licensee engages in
10-31 pursuant to this chapter and chapter 645E of NRS in his capacity as a
10-32 mortgage broker; and
10-33 (b) The commissioner of financial institutions for all activities that the
10-34 licensee engages in pursuant to chapter 645E of NRS in his capacity as a
10-35 mortgage company.
10-36 Sec. 28. NRS 645B.050 is hereby amended to read as follows:
10-37 645B.050 1. A license issued pursuant to this chapter expires each
10-38 year on June 30, unless it is renewed. To renew a license, the licensee must
10-39 submit to the [commissioner] commission on or before June 30 of each
10-40 year:
10-41 (a) An application for renewal;
10-42 (b) The fee required to renew the license pursuant to this section; and
10-43 (c) If the licensee is a natural person, the statement required pursuant to
10-44 NRS 645B.023.
10-45 2. If the licensee fails to submit any item required pursuant to
10-46 subsection 1 to the [commissioner] commission on or before June 30 of
10-47 any year, the license is canceled. The [commissioner] commission may
10-48 reinstate a canceled license if the licensee submits to the [commissioner:]
10-49 commission:
11-1 (a) An application for renewal;
11-2 (b) The fee required to renew the license pursuant to this section;
11-3 (c) If the licensee is a natural person, the statement required pursuant to
11-4 NRS 645B.023; and
11-5 (d) [A] Except as otherwise provided in this section, a reinstatement
11-6 fee of $200.
11-7 3. Except as otherwise provided in NRS 645B.016, a certificate of
11-8 exemption issued pursuant to this chapter expires each year on December
11-9 31, unless it is renewed. To renew a certificate of exemption, a person must
11-10 submit to the [commissioner] commission on or before December 31 of
11-11 each year:
11-12 (a) An application for renewal that includes satisfactory proof that the
11-13 person meets the requirements for an exemption from the provisions of this
11-14 chapter; and
11-15 (b) The fee required to renew the certificate of exemption.
11-16 4. If the person fails to submit any item required pursuant to
11-17 subsection 3 to the [commissioner] commission on or before December 31
11-18 of any year, the certificate of exemption is canceled. Except as otherwise
11-19 provided in NRS 645B.016, the [commissioner] commission may reinstate
11-20 a canceled certificate of exemption if the person submits to the
11-21 [commissioner:] commission:
11-22 (a) An application for renewal that includes satisfactory proof that the
11-23 person meets the requirements for an exemption from the provisions of this
11-24 chapter;
11-25 (b) The fee required to renew the certificate of exemption; and
11-26 (c) [A] Except as otherwise provided in this section, a reinstatement
11-27 fee of $100.
11-28 5. [A] Except as otherwise provided in this section, a person must pay
11-29 the following fees to apply for, to be issued or to renew a license as a
11-30 mortgage broker pursuant to this chapter:
11-31 (a) To file an original application or a license, $1,500 for the principal
11-32 office and $40 for each branch office. The person must also pay such
11-33 additional expenses incurred in the process of investigation as the
11-34 [commissioner] commission deems necessary. All money received by the
11-35 [commissioner] commission pursuant to this paragraph must be placed in
11-36 the investigative account created by NRS 232.545.
11-37 (b) To be issued a license, $1,000 for the principal office and $60 for
11-38 each branch office.
11-39 (c) To renew a license, $500 for the principal office and $100 for each
11-40 branch office.
11-41 6. [A] Except as otherwise provided in this section, a person must pay
11-42 the following fees to apply for or to renew a certificate of exemption
11-43 pursuant to this chapter:
11-44 (a) To file an application for a certificate of exemption, $200.
11-45 (b) To renew a certificate of exemption, $100.
11-46 7. To be issued a duplicate copy of any license or certificate of
11-47 exemption, a person must make a satisfactory showing of its loss and pay a
11-48 fee of $10.
12-1 8. Except as otherwise provided in this chapter, all fees received
12-2 pursuant to this chapter must be deposited in the state treasury for credit to
12-3 the state general fund.
12-4 9. The commission may, by regulation, increase any fee set forth in
12-5 this section if the commission determines that the increase in fees is
12-6 necessary for the commission to carry out its duties prescribed by this
12-7 chapter. The amount of an increase in fees pursuant to this subsection
12-8 must not exceed the amount determined to be necessary for the
12-9 commission to carry out its prescribed duties.
12-10 Sec. 29. NRS 645B.060 is hereby amended to read as follows:
12-11 645B.060 1. Subject to the administrative control of the director of
12-12 the department of business and industry, the [commissioner] commission
12-13 shall exercise general supervision and control over mortgage brokers doing
12-14 business in this state.
12-15 2. In addition to the other duties imposed upon [him] the commission
12-16 by law, the [commissioner] commission shall:
12-17 (a) Adopt any regulations [prescribing standards for determining
12-18 whether a mortgage broker has maintained adequate supervision of a
12-19 mortgage agent pursuant to this chapter.
12-20 (b) Adopt any other regulations] that are necessary to carry out the
12-21 provisions of this chapter, except as to loan brokerage fees.
12-22 [(c)] (b) Conduct such investigations as may be necessary to determine
12-23 whether any person has violated any provision of this chapter, a regulation
12-24 adopted pursuant to this chapter or an order of the [commissioner.
12-25 (d)] commission.
12-26 (c) Conduct an annual examination of each mortgage broker doing
12-27 business in this state.
12-28 [(e)] The annual examination must include, without limitation, a
12-29 formal exit review with the mortgage broker. The commission shall adopt
12-30 regulations prescribing:
12-31 (1) Standards for determining the rating of each mortgage broker
12-32 based upon the results of the annual examination; and
12-33 (2) Procedures for resolving any objections made by the mortgage
12-34 broker to the results of the annual examination. The results of the
12-35 annual examination may not be opened to public inspection pursuant to
12-36 NRS 645B.090 until any objections made by the mortgage broker have
12-37 been decided by the commission.
12-38 (d) Conduct such other examinations, periodic or special audits,
12-39 investigations and hearings as may be necessary and proper for the
12-40 efficient administration of the laws of this state regarding mortgage brokers
12-41 and mortgage agents. The [commissioner] commission shall adopt
12-42 regulations specifying the general guidelines that will be followed when a
12-43 periodic or special audit of a mortgage broker is conducted pursuant to this
12-44 chapter.
12-45 [(f)] (e) Classify as confidential certain records and information
12-46 obtained by the [division] commission when those matters are obtained
12-47 from a governmental agency upon the express condition that they remain
12-48 confidential. This paragraph does not limit examination by the legislative
12-49 auditor.
13-1 [(g)] (f) Conduct such examinations and investigations as are necessary
13-2 to ensure that mortgage brokers meet the requirements of this chapter for
13-3 obtaining a license, both at the time of the application for a license and
13-4 thereafter on a continuing basis.
13-5 3. For each special audit, investigation or examination, a mortgage
13-6 broker shall pay a fee based on the [rate established] rates that the
13-7 commission establishes by regulation. In establishing such rates, the
13-8 commission shall consider:
13-9 (a) The complexity of the various audits, investigations and
13-10 examinations to which the rates apply;
13-11 (b) The skill required to conduct the audits, investigations and
13-12 examinations;
13-13 (c) The expenses associated with conducting the audits, investigations
13-14 and examinations and preparing reports;
13-15 (d) The rates established by the commissioner of financial institutions
13-16 pursuant to NRS 658.101[.] for supervision and examination of other
13-17 financial institutions; and
13-18 (e) Any other factors the commission deems relevant.
13-19 Sec. 30. NRS 645B.070 is hereby amended to read as follows:
13-20 645B.070 1. In the conduct of any examination, periodic or special
13-21 audit, investigation or hearing, the [commissioner] commission may:
13-22 (a) Compel the attendance of any person by subpoena.
13-23 (b) Administer oaths.
13-24 (c) Examine any person under oath concerning the business and conduct
13-25 of affairs of any person subject to the provisions of this chapter and in
13-26 connection therewith require the production of any books, records or
13-27 papers relevant to the inquiry.
13-28 2. Any person subpoenaed under the provisions of this section who
13-29 willfully refuses or willfully neglects to appear at the time and place named
13-30 in the subpoena or to produce books, records or papers required by the
13-31 [commissioner,] commission, or who refuses to be sworn or answer as a
13-32 witness, is guilty of a misdemeanor and shall be punished as provided in
13-33 NRS 645B.950.
13-34 3. The [commissioner] commission may assess against and collect
13-35 from a person all costs, including, without limitation, reasonable attorney’s
13-36 fees, that are attributable to any examination, periodic or special audit,
13-37 investigation or hearing that is conducted to examine or investigate the
13-38 conduct, activities or business of the person pursuant to this chapter.
13-39 Sec. 31. NRS 645B.075 is hereby amended to read as follows:
13-40 645B.075 1. The commission shall employ a certified public
13-41 accountant to review and conduct independent audits and examinations
13-42 of mortgage brokers. The commission shall levy an assessment upon
13-43 each mortgage broker to cover all the costs related to the employment of
13-44 the certified public accountant and the performance of the audits and
13-45 examinations.
13-46 2. Each mortgage broker shall pay the assessment levied pursuant to
13-47 [NRS 658.055.] this section.
13-48 3. Each mortgage broker and mortgage agent shall cooperate fully with
13-49 the audits and examinations performed pursuant [thereto.] to this section.
14-1 4. The assessments collected by the commission pursuant to this
14-2 section must be deposited in the state treasury for credit to the account
14-3 for auditing mortgage brokers, which is hereby created in the state
14-4 general fund. The commission shall use the money in the account, and
14-5 may advance money from the account, for the purposes set forth in this
14-6 section.
14-7 Sec. 32. NRS 645B.080 is hereby amended to read as follows:
14-8 645B.080 1. Each mortgage broker shall keep and maintain at all
14-9 times at each location where the mortgage broker conducts business in this
14-10 state complete and suitable records of all mortgage transactions made by
14-11 the mortgage broker at that location. Each mortgage broker shall also keep
14-12 and maintain at all times at each such location all original books, papers
14-13 and data, or copies thereof, clearly reflecting the financial condition of the
14-14 business of the mortgage broker.
14-15 2. Each mortgage broker shall submit to the [commissioner]
14-16 commission each month a report of the mortgage broker’s activity for the
14-17 previous month. The report must:
14-18 (a) Specify the volume of loans arranged by the mortgage broker for the
14-19 month or state that no loans were arranged in that month;
14-20 (b) Include any information required pursuant to NRS 645B.260 or
14-21 pursuant to the regulations adopted by the [commissioner;] commission;
14-22 and
14-23 (c) Be submitted to the [commissioner] commission by the 15th day of
14-24 the month following the month for which the report is made.
14-25 3. The [commissioner] commission may adopt regulations prescribing
14-26 accounting procedures for mortgage brokers handling trust accounts and
14-27 the requirements for keeping records relating to such accounts.
14-28 Sec. 33. NRS 645B.085 is hereby amended to read as follows:
14-29 645B.085 1. Except as otherwise provided in this section, not later
14-30 than 60 days after the last day of each fiscal year for a mortgage broker, the
14-31 mortgage broker shall submit to the [commissioner] commission a
14-32 financial statement that:
14-33 (a) Is dated not earlier than the last day of the fiscal year; and
14-34 (b) Has been prepared from the books and records of the mortgage
14-35 broker by an independent public accountant who holds a permit to engage
14-36 in the practice of public accounting in this state that has not been revoked
14-37 or suspended.
14-38 2. The [commissioner] commission may grant a reasonable extension
14-39 for the submission of a financial statement pursuant to this section if a
14-40 mortgage broker requests such an extension before the date on which the
14-41 financial statement is due.
14-42 3. If a mortgage broker maintains any accounts described in subsection
14-43 1 of NRS 645B.175, the financial statement submitted pursuant to this
14-44 section must be audited. If a mortgage broker maintains any accounts
14-45 described in subsection 4 of NRS 645B.175, those accounts must be
14-46 audited. The public accountant who prepares the report of an audit shall
14-47 submit a copy of the report to the [commissioner] commission at the same
14-48 time that he submits the report to the mortgage broker.
15-1 4. The [commissioner] commission shall adopt regulations prescribing
15-2 the scope of an audit conducted pursuant to subsection 3.
15-3 Sec. 34. NRS 645B.090 is hereby amended to read as follows:
15-4 645B.090 1. Except as otherwise provided in this section or by
15-5 specific statute, all papers, documents, reports and other written
15-6 instruments filed with the [commissioner] commission pursuant to this
15-7 chapter are open to public inspection.
15-8 2. Except as otherwise provided in subsection 3, the [commissioner]
15-9 commission may withhold from public inspection or refuse to disclose to a
15-10 person, for such time as the [commissioner] commission considers
15-11 necessary, any information that, in [his judgment,] the judgment of the
15-12 commission, would:
15-13 (a) Impede or otherwise interfere with an investigation that is currently
15-14 pending against a mortgage broker;
15-15 (b) Have an undesirable effect on the welfare of the public or the
15-16 welfare of any mortgage broker or mortgage agent; or
15-17 (c) Give any mortgage broker a competitive advantage over any other
15-18 mortgage broker.
15-19 3. The [commissioner] commission shall disclose the following
15-20 information concerning a mortgage broker to any person who requests it:
15-21 (a) The findings and results of any investigation which has been
15-22 completed during the immediately preceding 5 years against the mortgage
15-23 broker pursuant to the provisions of this chapter and which has resulted in
15-24 a finding by the [commissioner] commission that the mortgage broker
15-25 committed a violation of a provision of this chapter, a regulation adopted
15-26 pursuant to this chapter or an order of the [commissioner;] commission;
15-27 and
15-28 (b) The nature of any disciplinary action that has been taken during the
15-29 immediately preceding 5 years against the mortgage broker pursuant to the
15-30 provisions of this chapter.
15-31 Sec. 35. NRS 645B.095 is hereby amended to read as follows:
15-32 645B.095 1. As used in this section, “change of control” means:
15-33 (a) A transfer of voting stock which results in giving a person, directly
15-34 or indirectly, the power to direct the management and policy of a mortgage
15-35 broker; or
15-36 (b) A transfer of at least 25 percent of the outstanding voting stock of a
15-37 mortgage broker.
15-38 2. The [commissioner] commission must be notified of a transfer of 5
15-39 percent or more of the outstanding voting stock of a mortgage broker and
15-40 must approve a transfer of voting stock of a mortgage broker which
15-41 constitutes a change of control.
15-42 3. The person who acquires stock resulting in a change of control of
15-43 the mortgage broker shall apply to the [commissioner] commission for
15-44 approval of the transfer. The application must contain information which
15-45 shows that the requirements of this chapter for obtaining a license will be
15-46 satisfied after the change of control. Except as otherwise provided in
15-47 subsection 4, the [commissioner] commission shall conduct an
15-48 investigation to determine whether those requirements will be satisfied. If,
15-49 after the investigation, the [commissioner] commission denies the
16-1 application, [he] the commission may forbid the applicant from
16-2 participating in the business of the mortgage broker.
16-3 4. A mortgage broker may submit a written request to the
16-4 [commissioner] commission to waive an investigation pursuant to
16-5 subsection 3. The [commissioner] commission may grant a waiver if the
16-6 applicant has undergone a similar investigation by a state or federal agency
16-7 in connection with the licensing of or his employment with a financial
16-8 institution.
16-9 Sec. 36. NRS 645B.115 is hereby amended to read as follows:
16-10 645B.115 1. If a mortgage broker maintains any accounts described
16-11 in NRS 645B.175, the mortgage broker and his mortgage agents shall not
16-12 engage in any activity that is authorized pursuant to this chapter, unless the
16-13 mortgage broker maintains continuously a minimum net worth in the
16-14 following amount based upon the average monthly balance of the accounts
16-15 maintained by the mortgage broker pursuant to NRS 645B.175:
16-16 AVERAGE MONTHLY BALANCE MINIMUM NET
16-17 WORTH REQUIRED
16-18 $100,000 or less $25,000
16-19 More than $100,000 but not more than $250,000............. 50,000
16-20 More than $250,000 but not more than $500,000............ 100,000
16-21 More than $500,000 but not more than $1,000,000......... 200,000
16-22 More than $1,000,000 250,000
16-23 The [commissioner] commission shall determine the appropriate initial
16-24 minimum net worth that must be maintained by the mortgage broker
16-25 pursuant to this section based upon the expected average monthly balance
16-26 of the accounts maintained by the mortgage broker pursuant to
16-27 NRS 645B.175. After determining the initial minimum net worth that must
16-28 be maintained by the mortgage broker, the [commissioner] commission
16-29 shall, on an annual basis, determine the appropriate minimum net worth
16-30 that must be maintained by the mortgage broker pursuant to this section
16-31 based upon the average monthly balance of the accounts maintained by the
16-32 mortgage broker pursuant to NRS 645B.175.
16-33 2. If requested by the [commissioner,] commission, a mortgage broker
16-34 who is subject to the provisions of this section and his mortgage agents
16-35 shall submit to the [commissioner] commission or allow the
16-36 [commissioner] commission to examine any documentation or other
16-37 evidence that is related to determining the net worth of the mortgage
16-38 broker.
16-39 3. The [commissioner:] commission:
16-40 (a) Shall adopt regulations prescribing standards for determining the net
16-41 worth of a mortgage broker; and
16-42 (b) May adopt any other regulations that are necessary to carry out the
16-43 provisions of this section.
16-44 Sec. 37. NRS 645B.170 is hereby amended to read as follows:
16-45 645B.170 1. All money paid to a mortgage broker and his mortgage
16-46 agents for payment of taxes or insurance premiums on real property which
16-47 secures any loan arranged by the mortgage broker must be deposited in an
16-48 insured depository financial institution and kept separate, distinct and apart
16-49 from money belonging to the mortgage broker. Such money, when
17-1 deposited, is to be designated as an “impound trust account” or under some
17-2 other appropriate name indicating that the accounts are not the money of
17-3 the mortgage broker.
17-4 2. The mortgage broker has a fiduciary duty to each debtor with
17-5 respect to the money in an impound trust account.
17-6 3. The mortgage broker shall, upon reasonable notice, account to any
17-7 debtor whose real property secures a loan arranged by the mortgage broker
17-8 for any money which that person has paid to the mortgage broker for the
17-9 payment of taxes or insurance premiums on the real property.
17-10 4. The mortgage broker shall, upon reasonable notice, account to the
17-11 [commissioner] commission for all money in an impound trust account.
17-12 5. A mortgage broker shall:
17-13 (a) Require contributions to an impound trust account in an amount
17-14 reasonably necessary to pay the obligations as they become due.
17-15 (b) Within 30 days after the completion of the annual review of an
17-16 impound trust account, notify the debtor:
17-17 (1) Of the amount by which the contributions exceed the amount
17-18 reasonably necessary to pay the annual obligations due from the account;
17-19 and
17-20 (2) That the debtor may specify the disposition of the excess money
17-21 within 20 days after receipt of the notice. If the debtor fails to specify such
17-22 a disposition within that time, the mortgage broker shall maintain the
17-23 excess money in the account.
17-24 This subsection does not prohibit a mortgage broker from requiring
17-25 additional amounts to be paid into an impound trust account to recover a
17-26 deficiency that exists in the account.
17-27 6. A mortgage broker shall not make payments from an impound trust
17-28 account in a manner that causes a policy of insurance to be canceled or
17-29 causes property taxes or similar payments to become delinquent.
17-30 Sec. 38. NRS 645B.175 is hereby amended to read as follows:
17-31 645B.175 1. Except as otherwise provided in this section, all money
17-32 received by a mortgage broker and his mortgage agents from an investor to
17-33 acquire ownership of or a beneficial interest in a loan secured by a lien on
17-34 real property must:
17-35 (a) Be deposited in:
17-36 (1) An insured depository financial institution; or
17-37 (2) An escrow account which is controlled by a person who is
17-38 independent of the parties and subject to instructions regarding the account
17-39 which are approved by the parties.
17-40 (b) Be kept separate from money:
17-41 (1) Belonging to the mortgage broker in an account appropriately
17-42 named to indicate that the money does not belong to the mortgage broker.
17-43 (2) Received pursuant to subsection 4.
17-44 2. Except as otherwise provided in this section, the amount held in
17-45 trust pursuant to subsection 1 must be released:
17-46 (a) Upon completion of the loan, including proper recordation of the
17-47 respective interests or release, or upon completion of the transfer of the
17-48 ownership or beneficial interest therein, to the debtor or his designee less
18-1 the amount due the mortgage broker for the payment of any fee or service
18-2 charge;
18-3 (b) If the loan or the transfer thereof is not consummated, to each
18-4 investor who furnished the money held in trust; or
18-5 (c) Pursuant to any instructions regarding the escrow account.
18-6 3. The amount held in trust pursuant to subsection 1 must not be
18-7 released to the debtor or his designee unless:
18-8 (a) The amount released is equal to the total amount of money which is
18-9 being loaned to the debtor for that loan, less the amount due the mortgage
18-10 broker for the payment of any fee or service charge; and
18-11 (b) The mortgage broker has provided a written instruction to a title
18-12 agent or title insurer requiring that a lender’s policy of title insurance or
18-13 appropriate title endorsement, which names as an insured each investor
18-14 who owns a beneficial interest in the loan, be issued for the real property
18-15 securing the loan.
18-16 4. Except as otherwise provided in this section, all money paid to a
18-17 mortgage broker and his mortgage agents by a person in full or in partial
18-18 payment of a loan secured by a lien on real property[,] must:
18-19 (a) Be deposited in:
18-20 (1) An insured depository financial institution; or
18-21 (2) An escrow account which is controlled by a person who is subject
18-22 to instructions regarding the account which are approved by the parties.
18-23 (b) Be kept separate from money:
18-24 (1) Belonging to the mortgage broker in an account appropriately
18-25 named to indicate that it does not belong to the mortgage broker.
18-26 (2) Received pursuant to subsection 1.
18-27 5. Except as otherwise provided in this section, the amount held in
18-28 trust pursuant to subsection 4:
18-29 (a) Must be released, upon the deduction and payment of any fee or
18-30 service charge due the mortgage broker, to each investor who owns a
18-31 beneficial interest in the loan in exact proportion to the beneficial interest
18-32 that he owns in the loan; and
18-33 (b) Must not be released, in any proportion, to an investor who owns a
18-34 beneficial interest in the loan, unless the amount described in paragraph (a)
18-35 is also released to every other investor who owns a beneficial interest in
18-36 the loan.
18-37 6. An investor may waive, in writing, the right to receive one or more
18-38 payments, or portions thereof, that are released to other investors in the
18-39 manner set forth in subsection 5. A mortgage broker or mortgage agent
18-40 shall not act as the attorney in fact or the agent of an investor with respect
18-41 to the giving of a written waiver pursuant to this subsection. Any such
18-42 written waiver applies only to the payment or payments, or portions
18-43 thereof, that are included in the written waiver and does not affect the right
18-44 of the investor to:
18-45 (a) Receive the waived payment or payments, or portions thereof, at a
18-46 later date; or
18-47 (b) Receive all other payments in full and in accordance with the
18-48 provisions of subsection 5.
19-1 7. Upon reasonable notice, any mortgage broker described in this
19-2 section shall:
19-3 (a) Account to any investor or debtor who has paid to the mortgage
19-4 broker or his mortgage agents money that is required to be deposited in a
19-5 trust account pursuant to this section; and
19-6 (b) Account to the [commissioner] commission for all money which the
19-7 mortgage broker and his mortgage agents have received from each investor
19-8 or debtor and which the mortgage broker is required to deposit in a trust
19-9 account pursuant to this section.
19-10 8. Money received by a mortgage broker and his mortgage agents
19-11 pursuant to this section from a person who is not associated with the
19-12 mortgage broker may be held in trust for not more than 45 days before an
19-13 escrow account must be opened in connection with the loan. If, within this
19-14 45-day period, the loan or the transfer therefor is not consummated, the
19-15 money must be returned within 24 hours. If the money is so returned, it
19-16 may not be reinvested with the mortgage broker for at least 15 days.
19-17 9. If a mortgage broker or a mortgage agent receives any money
19-18 pursuant to this section, the mortgage broker or mortgage agent, after the
19-19 deduction and payment of any fee or service charge due the mortgage
19-20 broker, shall not release the money to:
19-21 (a) Any person who does not have a contractual or legal right to receive
19-22 the money; or
19-23 (b) Any person who has a contractual right to receive the money if the
19-24 mortgage broker or mortgage agent knows or, in light of all the
19-25 surrounding facts and circumstances, reasonably should know that the
19-26 person’s contractual right to receive the money violates any provision of
19-27 this chapter or a regulation adopted pursuant to this chapter.
19-28 Sec. 39. NRS 645B.185 is hereby amended to read as follows:
19-29 645B.185 1. A mortgage broker or mortgage agent shall not accept
19-30 money from an investor to acquire ownership of or a beneficial interest in a
19-31 loan secured by a lien on real property unless:
19-32 (a) The investor and the mortgage broker or mortgage agent sign and
19-33 date a disclosure form that complies with the provisions of this section; and
19-34 (b) The mortgage broker or mortgage agent gives the investor the
19-35 original disclosure form that has been signed and dated.
19-36 2. An investor and a mortgage broker or mortgage agent must sign and
19-37 date a separate disclosure form pursuant to subsection 1 for each loan in
19-38 which the investor invests his money. A mortgage broker or mortgage
19-39 agent shall not act as the attorney in fact or the agent of an investor with
19-40 respect to the signing or dating of any disclosure form.
19-41 3. In addition to the requirements of subsections 1 and 2, a mortgage
19-42 broker or mortgage agent shall not accept money from an investor to
19-43 acquire ownership of or a beneficial interest in a loan secured by a lien on
19-44 real property, unless the mortgage broker or mortgage agent gives the
19-45 investor a written form by which the investor may request that the
19-46 mortgage broker authorize the [commissioner] commission to release the
19-47 mortgage broker’s financial statement to the investor. Such a form must be
19-48 given to the investor for each loan. If the investor, before giving money to
19-49 the mortgage broker for the loan, requests that the mortgage broker
20-1 authorize the release of a financial statement pursuant to this subsection,
20-2 the mortgage broker and his mortgage agents shall not accept money from
20-3 the investor for that loan until the mortgage broker receives notice from the
20-4 [commissioner] commission that the financial statement has been released
20-5 to the investor.
20-6 4. An investor and a mortgage broker or mortgage agent may not agree
20-7 to alter or waive the provisions of this section by contract or other
20-8 agreement. Any such contract or agreement is void and must not be given
20-9 effect to the extent that it violates the provisions of this section.
20-10 5. A mortgage broker shall retain a copy of each disclosure form that is
20-11 signed and dated pursuant to subsection 1 for the period that is prescribed
20-12 in the regulations adopted by the [commissioner.] commission.
20-13 6. The standard provisions for each such disclosure form must include,
20-14 without limitation, statements:
20-15 (a) Explaining the risks of investing through the mortgage broker,
20-16 including, without limitation:
20-17 (1) The possibility that the debtor may default on the loan;
20-18 (2) The nature of the losses that may result through foreclosure;
20-19 (3) The fact that payments of principal and interest are not guaranteed
20-20 and that the investor may lose the entire amount of principal that he has
20-21 invested;
20-22 (4) The fact that the mortgage broker is not a depository financial
20-23 institution and that the investment is not insured by any depository
20-24 insurance and is not otherwise insured or guaranteed by the federal or state
20-25 government; and
20-26 (5) Any other information required pursuant to the regulations
20-27 adopted by the [commissioner;] commission; and
20-28 (b) Disclosing to the investor the following information if the
20-29 information is known or, in light of all the surrounding facts and
20-30 circumstances, reasonably should be known to the mortgage broker:
20-31 (1) Whether the real property that will secure the loan is encumbered
20-32 by any other liens and, if so, the priority of each such lien, the amount of
20-33 debt secured by each such lien and the current status of that debt,
20-34 including, without limitation, whether the debt is being paid or is in
20-35 default;
20-36 (2) Whether the mortgage broker or any general partner, officer,
20-37 director or mortgage agent of the mortgage broker has any direct or indirect
20-38 interest in the debtor;
20-39 (3) Whether any disciplinary action has been taken by the
20-40 [commissioner] commission against the mortgage broker or any general
20-41 partner, officer or director of the mortgage broker within the preceding 12
20-42 months, and the nature of any such disciplinary action;
20-43 (4) Whether the mortgage broker or any general partner, officer or
20-44 director of the mortgage broker has been convicted within the preceding 12
20-45 months for violating any law, ordinance or regulation that involves fraud,
20-46 misrepresentation or a deceitful, fraudulent or dishonest business practice;
20-47 and
20-48 (5) Any other information required pursuant to the regulations
20-49 adopted by the [commissioner.] commission.
21-1 7. Whether or not a mortgage broker is required to disclose any
21-2 information to investors through a disclosure form that complies with the
21-3 provisions of this section, the [commissioner] commission may order the
21-4 mortgage broker to disclose to investors or to the general public any
21-5 information concerning the mortgage broker, any general partner, officer,
21-6 director or mortgage agent of the mortgage broker or any loan in which the
21-7 mortgage broker is or has been involved[, if the commissioner, in his
21-8 judgment,] if, in the judgment of the commission, it believes that the
21-9 information:
21-10 (a) Would be of material interest to a reasonable investor who is
21-11 deciding whether to invest money with the mortgage broker; or
21-12 (b) Is necessary to protect the welfare of the public.
21-13 8. In carrying out the provisions of subsection 7, the [commissioner]
21-14 commission may, without limitation, order a mortgage broker to include
21-15 statements of disclosure prescribed by the [commissioner:] commission:
21-16 (a) In the disclosure form that must be given to investors pursuant to
21-17 subsection 1;
21-18 (b) In additional disclosure forms that must be given to investors before
21-19 or after they have invested money through the mortgage broker; or
21-20 (c) In any advertisement that the mortgage broker uses in carrying on
21-21 his business.
21-22 9. The [commissioner:] commission:
21-23 (a) Shall adopt regulations prescribing the period for which a mortgage
21-24 broker must retain a copy of each disclosure form that is given to investors;
21-25 and
21-26 (b) May adopt any other regulations that are necessary to carry out the
21-27 provisions of this section, including, without limitation, regulations
21-28 specifying the size of print and any required formatting or typesetting that a
21-29 mortgage broker must use in any form that is given to investors.
21-30 10. The provisions of this section do not apply to any act or
21-31 transaction with or on behalf of an accredited investor, except that, if
21-32 requested by an accredited investor or ordered by the commission, a
21-33 mortgage broker or mortgage agent shall give an accredited investor any
21-34 information or form that is given to other investors pursuant to this
21-35 section.
21-36 Sec. 40. NRS 645B.189 is hereby amended to read as follows:
21-37 645B.189 1. Each mortgage broker shall include in each
21-38 advertisement that the mortgage broker uses in carrying on his business:
21-39 (a) A statement of disclosure in substantially the following form:
21-40 Money invested through a mortgage broker is not guaranteed to earn
21-41 any interest or return and is not insured.
21-42 (b) Any other statements of disclosure required pursuant to the
21-43 regulations adopted by the [commissioner] commission or required
21-44 pursuant to an order of the [commissioner] commission entered in
21-45 accordance with subsections 7 and 8 of NRS 645B.185.
22-1 2. Each mortgage broker shall submit any proposed advertisement that
22-2 the mortgage broker intends to use in carrying on his business to the
22-3 [commissioner] commission for approval.
22-4 3. In addition to the requirements set forth in this chapter, each
22-5 advertisement that a mortgage broker uses in carrying on his business must
22-6 comply with the requirements of:
22-7 (a) NRS 598.0903 to 598.0999, inclusive, concerning deceptive trade
22-8 practices; and
22-9 (b) Any applicable federal statute or regulation concerning deceptive
22-10 advertising and the advertising of interest rates.
22-11 4. If a mortgage broker violates any provision of NRS 598.0903 to
22-12 598.0999, inclusive, concerning deceptive trade practices or any federal
22-13 statute or regulation concerning deceptive advertising or the advertising of
22-14 interest rates, in addition to any sanction or penalty imposed by state or
22-15 federal law upon the mortgage broker for the violation, the [commissioner]
22-16 commission may take any disciplinary action set forth in subsection 2 of
22-17 NRS 645B.670 against the mortgage broker.
22-18 5. The [commissioner] commission may adopt any regulations that are
22-19 necessary to carry out the provisions of this section.
22-20 Sec. 41. NRS 645B.260 is hereby amended to read as follows:
22-21 645B.260 1. If a mortgage broker maintains any accounts described
22-22 in subsection 4 of NRS 645B.175 in which the mortgage broker deposits
22-23 payments from a debtor on a loan secured by a lien on real property and, on
22-24 the last day of any month, the debtor has failed to make two or more
22-25 consecutive payments in accordance with the terms of the loan, the
22-26 mortgage broker shall:
22-27 (a) Include in the report that the mortgage broker submits to the
22-28 [commissioner] commission pursuant to subsection 2 of NRS 645B.080
22-29 the information relating to delinquencies in payments and defaults that is
22-30 required by the regulations adopted pursuant to subsection 2;
22-31 (b) Not later than 15 days after the last day of each such month, mail to
22-32 the last known address of each investor who owns a beneficial interest in
22-33 the loan a notice containing the information relating to delinquencies in
22-34 payments and defaults that is required by the regulations adopted pursuant
22-35 to subsection 2; and
22-36 (c) Comply with the provisions of this section each month on a
22-37 continuing basis until:
22-38 (1) The debtor or his designee remedies the delinquency in payments
22-39 and any default; or
22-40 (2) The lien securing the loan is extinguished.
22-41 2. The [commissioner:] commission:
22-42 (a) Shall adopt regulations prescribing the information relating to
22-43 delinquencies in payments and defaults that a mortgage broker must
22-44 include in his report to the [commissioner] commission and in the notice
22-45 mailed to investors pursuant to subsection 1. Such regulations may provide
22-46 for variations between the information that a mortgage broker must include
22-47 in his report to the [commissioner] commission and the information that a
22-48 mortgage broker must include in the notice mailed to investors.
23-1 (b) May adopt any other regulations that are necessary to carry out the
23-2 provisions of this section.
23-3 Sec. 42. NRS 645B.300 is hereby amended to read as follows:
23-4 645B.300 1. Except as otherwise provided in subsection 4, a
23-5 mortgage broker or mortgage agent shall not accept money from an
23-6 investor to acquire ownership of or a beneficial interest in a loan secured
23-7 by a lien on real property, unless the mortgage broker has obtained a
23-8 written appraisal of the real property securing the loan.
23-9 2. The written appraisal of the real property:
23-10 (a) Must be performed by an appraiser who is authorized to perform
23-11 appraisals in this state; and
23-12 (b) Must not be performed by the mortgage broker or a mortgage agent,
23-13 unless the mortgage broker or mortgage agent is certified or licensed to
23-14 perform such an appraisal pursuant to chapter 645C of NRS.
23-15 3. A copy of the written appraisal of the real property must be:
23-16 (a) Maintained at each office of the mortgage broker where money is
23-17 accepted from an investor to acquire ownership of or a beneficial interest in
23-18 a loan secured by a lien on the real property; and
23-19 (b) Made available during normal business hours for inspection by each
23-20 such investor and the [commissioner.] commission.
23-21 4. A mortgage broker is not required to obtain a written appraisal of
23-22 the real property pursuant to this section if the mortgage broker obtains a
23-23 written waiver of the appraisal from each investor who acquires ownership
23-24 of or a beneficial interest in a loan secured by a lien on the real property. A
23-25 mortgage broker or mortgage agent shall not act as the attorney in fact or
23-26 the agent of an investor with respect to the giving of a written waiver
23-27 pursuant to this subsection.
23-28 5. As used in this section, “appraisal” has the meaning ascribed to it in
23-29 NRS 645C.030.
23-30 Sec. 43. NRS 645B.330 is hereby amended to read as follows:
23-31 645B.330 1. A mortgage broker or mortgage agent shall not engage
23-32 in any act or transaction on behalf of an investor pursuant to a power of
23-33 attorney unless:
23-34 (a) The power of attorney is executed for the sole purpose of providing
23-35 services for [loans] not more than one specific loan in which the investor
23-36 owns a beneficial interest; and
23-37 (b) The provisions of the power of attorney:
23-38 (1) Have been approved by the [commissioner;] commission;
23-39 (2) Expressly prohibit the mortgage broker and his mortgage agents
23-40 from engaging in any act or transaction that subordinates the priority of a
23-41 recorded deed of trust unless, before such an act or transaction, the
23-42 mortgage broker obtains written approval for the subordination from
23-43 the investor;
23-44 (3) Expressly prohibit the mortgage broker and his mortgage agents
23-45 from using or releasing any money in which the investor owns a beneficial
23-46 interest with regard to [a] the specific loan for a purpose that is not directly
23-47 related to providing services for the loan unless, before any such money is
23-48 used or released for another purpose, the mortgage broker obtains written
24-1 approval from the investor to use or release the money for the other
24-2 purpose; and
24-3 (4) Expressly provide that the power of attorney is effective only for
24-4 [a period of not more than 6 months unless, before the date on which the
24-5 period expires, the mortgage broker obtains written approval from the
24-6 investor to extend the power of attorney for an additional period of not
24-7 more than 6 months. The mortgage broker may, on a continuing basis,
24-8 obtain written approval from the investor to extend the power of attorney
24-9 for one or more consecutive periods of not more than 6 months each,
24-10 except that the investor may execute only one written approval for an
24-11 extension during each such 6-month period.] the term of the specific loan.
24-12 2. A mortgage broker or mortgage agent shall not act as the attorney in
24-13 fact or the agent of an investor with respect to the giving of written
24-14 approval pursuant to paragraph (b) of subsection 1. An investor and a
24-15 mortgage broker or mortgage agent may not agree to alter or waive the
24-16 provisions of this section by contract or other agreement. Any such
24-17 contract or agreement is void and must not be given effect to the extent that
24-18 it violates the provisions of this section.
24-19 3. [A] Except as otherwise provided in this section, a power of
24-20 attorney which designates a mortgage broker or mortgage agent as the
24-21 attorney in fact or the agent of an investor and which violates the
24-22 provisions of this section is void and must not be given effect with regard
24-23 to any act or transaction that occurs on or after October 1, 1999, whether or
24-24 not the power of attorney is or has been executed by the investor before, on
24-25 or after October 1, 1999.
24-26 4. The provisions of subsection 3 do not apply to a power of attorney
24-27 that designates a mortgage broker or mortgage agent as the attorney in
24-28 fact or the agent of an investor if the power of attorney:
24-29 (a) Was executed before July 1, 2001; and
24-30 (b) Complied with the provisions of this section that were in effect on
24-31 October 1, 1999.
24-32 5. The provisions of this section do not [limit] :
24-33 (a) Apply to any act or transaction with or on behalf of an accredited
24-34 investor pursuant to a power of attorney.
24-35 (b) Limit the right of an investor to include provisions in a power of
24-36 attorney that are more restrictive than the provisions set forth in
24-37 subsection 1.
24-38 Sec. 44. NRS 645B.450 is hereby amended to read as follows:
24-39 645B.450 1. A person shall not act as or provide any of the services
24-40 of a mortgage agent or otherwise engage in, carry on or hold himself out as
24-41 engaging in or carrying on the activities of a mortgage agent if the person:
24-42 (a) Has been convicted of, or entered a plea of nolo contendere to, a
24-43 felony or any crime involving fraud, misrepresentation or moral turpitude;
24-44 or
24-45 (b) Has had a financial services license or registration suspended or
24-46 revoked within the immediately preceding 10 years.
24-47 2. A mortgage agent may not be associated with or employed by more
24-48 than one mortgage broker at the same time.
25-1 3. A mortgage broker shall register with the [division] commission
25-2 each person who will be associated with or employed by the mortgage
25-3 broker as a mortgage agent. To register a person as a mortgage agent, a
25-4 mortgage broker must:
25-5 (a) Submit to the [division] commission a registration form which is
25-6 provided by the [division] commission and which:
25-7 (1) States the name, residence address and business address of the
25-8 person;
25-9 (2) Is signed by the person;
25-10 (3) Includes a provision by which the person gives his written
25-11 consent to an investigation of his credit history, criminal history and
25-12 background; and
25-13 (4) Includes any other information or supporting materials required
25-14 by the regulations adopted by the [commissioner.] commission. Such
25-15 information or supporting materials may include, without limitation, a
25-16 complete set of fingerprints from the person, the social security number of
25-17 the person and other forms of identification of the person; and
25-18 (b) Pay the actual costs and expenses incurred by the [division]
25-19 commission to investigate the credit history, criminal history and
25-20 background of the person. All money received pursuant to this paragraph
25-21 must be placed in the investigative account created by NRS 232.545.
25-22 4. A mortgage broker shall not employ a person as a mortgage agent or
25-23 authorize a person to be associated with the mortgage broker as a mortgage
25-24 agent if the mortgage broker has not registered the person with the
25-25 [division] commission pursuant to subsection 3 or if the person:
25-26 (a) Has been convicted of, or entered a plea of nolo contendere to, a
25-27 felony or any crime involving fraud, misrepresentation or moral turpitude;
25-28 or
25-29 (b) Has had a financial services license or registration suspended or
25-30 revoked within the immediately preceding 10 years.
25-31 5. If a mortgage agent terminates his association or employment with a
25-32 mortgage broker for any reason, the mortgage broker shall, not later than
25-33 the [end of the next] third business day following the date of termination:
25-34 (a) Deliver to the mortgage agent or send by certified mail to the last
25-35 known residence address of the mortgage agent a written statement which
25-36 advises him that his termination is being reported to the [division;]
25-37 commission; and
25-38 (b) Deliver or send by certified mail to the [division:] commission:
25-39 (1) A written statement of the circumstances surrounding the
25-40 termination; and
25-41 (2) A copy of the written statement that the mortgage broker delivers
25-42 or mails to the mortgage agent pursuant to paragraph (a).
25-43 Sec. 45. NRS 645B.460 is hereby amended to read as follows:
25-44 645B.460 1. A mortgage broker shall[:
25-45 1. Teach his mortgage agents the fundamentals of mortgage lending
25-46 and the ethics of the profession; and
25-47 2. Supervise] exercise reasonable supervision over the activities
of his
25-48 mortgage agents . [and the operation of his business.] Such reasonable
25-49 supervision must include, as appropriate:
26-1 (a) The establishment of written or oral policies and procedures for
26-2 his mortgage agents;
26-3 (b) Continuing education and training for his mortgage agents in the
26-4 requirements of this chapter and the regulations of the commission and
26-5 other forms of continuing education and training for his mortgage
26-6 agents; and
26-7 (c) The establishment of a system to review, oversee and inspect the
26-8 activities of his mortgage agents, including, without limitation:
26-9 (1) Transactions handled by his mortgage agents pursuant to this
26-10 chapter;
26-11 (2) Communications between his mortgage agents and a party to
26-12 such a transaction;
26-13 (3) Documents prepared by his mortgage agents that may have a
26-14 material effect upon the rights or obligations of a party to such a
26-15 transaction; and
26-16 (4) The handling by his mortgage agents of any fee, deposit or
26-17 money paid to the mortgage broker or his mortgage agents or held in
26-18 trust by the mortgage broker or his mortgage agents pursuant to this
26-19 chapter.
26-20 2. The commission shall allow a mortgage broker to take into
26-21 consideration the total number of mortgage agents associated with or
26-22 employed by the mortgage broker when the mortgage broker determines
26-23 the form and extent of the policies and procedures for those mortgage
26-24 agents, the continuing education and training for those mortgage agents,
26-25 and the system to review, oversee and inspect the activities of those
26-26 mortgage agents.
26-27 3. The commission may adopt regulations prescribing standards for
26-28 determining whether a mortgage broker has exercised reasonable
26-29 supervision over the activities of a mortgage agent pursuant to this
26-30 section.
26-31 Sec. 46. NRS 645B.600 is hereby amended to read as follows:
26-32 645B.600 1. A person may[, in accordance with the regulations
26-33 adopted pursuant to subsection 2,] file with the commission a complaint
26-34 [with the commissioner,] alleging that another person has violated a
26-35 provision of this chapter, a regulation adopted pursuant to this chapter or
26-36 an order of the [commissioner.
26-37 2. The commissioner shall adopt regulations prescribing:
26-38 (a) The form that such a complaint must take;
26-39 (b) The information that must be included in such a complaint; and
26-40 (c) The procedures that a person must follow to file such a complaint.]
26-41 commission.
26-42 2. A complaint filed pursuant to this section must:
26-43 (a) Be in writing;
26-44 (b) Be signed by the person filing the complaint or the authorized
26-45 representative of the person filing the complaint;
26-46 (c) Contain an address and a telephone number for the person filing
26-47 the complaint or the authorized representative of the person filing the
26-48 complaint;
27-1 (d) Describe the nature of the alleged violation in as much detail as
27-2 possible;
27-3 (e) Include as exhibits copies of all documentation supporting the
27-4 complaint; and
27-5 (f) Include any other information or supporting materials required by
27-6 the regulations adopted by the commission or by an order of the
27-7 commission.
27-8 Sec. 47. NRS 645B.610 is hereby amended to read as follows:
27-9 645B.610 1. If a person properly files a complaint with the
27-10 [commissioner] commission pursuant to NRS 645B.600, the
27-11 [commissioner] commission shall investigate each violation alleged in the
27-12 complaint, unless the [commissioner] commission has previously
27-13 investigated the alleged violation.
27-14 2. Except as otherwise provided in subsection 2 of NRS 645B.090, if
27-15 the [commissioner] commission does not conduct an investigation of an
27-16 alleged violation pursuant to subsection 1 because [he] the commission
27-17 previously has investigated the alleged violation, the [commissioner]
27-18 commission shall provide to the person who filed the complaint a written
27-19 summary of the previous investigation and the nature of any disciplinary
27-20 action that was taken as a result of the previous investigation.
27-21 3. If the [commissioner] commission conducts an investigation of an
27-22 alleged violation pursuant to subsection 1, the [commissioner] commission
27-23 shall determine from the investigation whether there is reasonable cause to
27-24 believe that the person committed the alleged violation.
27-25 4. If, upon investigation, the [commissioner] commission determines
27-26 that there is not reasonable cause to believe that the person committed the
27-27 alleged violation, the [commissioner] commission shall provide the reason
27-28 for [his] its determination, in writing, to the person who filed the complaint
27-29 and to the person alleged to have committed the violation.
27-30 5. Except as otherwise provided in subsection 6, if, upon investigation,
27-31 the [commissioner] commission determines that there is reasonable cause
27-32 to believe that the person committed the alleged violation, the
27-33 [commissioner] commission shall:
27-34 (a) Schedule a hearing concerning the alleged violation;
27-35 (b) Mail to the last known address of the person who filed the complaint
27-36 written notice that must include, without limitation:
27-37 (1) The date, time and place of the hearing; and
27-38 (2) A statement of each alleged violation that will be considered at
27-39 the hearing; and
27-40 (c) By personal service in accordance with the Nevada Rules of Civil
27-41 Procedure and any applicable provision of NRS, serve written notice of the
27-42 hearing to the person alleged to have committed the violation. The written
27-43 notice that is served pursuant to this paragraph must include, without
27-44 limitation:
27-45 (1) The date, time and place of the hearing;
27-46 (2) A copy of the complaint and a statement of each alleged violation
27-47 that will be considered at the hearing; and
28-1 (3) A statement informing the person that, pursuant to
28-2 NRS 645B.760, if he fails to appear, without reasonable cause, at the
28-3 hearing:
28-4 (I) He is guilty of a misdemeanor; and
28-5 (II) The [commissioner] commission is authorized to conduct the
28-6 hearing in his absence, draw any conclusions that the [commissioner]
28-7 commission deems appropriate from his failure to appear and render a
28-8 decision concerning each alleged violation.
28-9 6. The [commissioner] commission is not required to schedule or
28-10 conduct a hearing concerning an alleged violation pursuant to subsection 5
28-11 if the [commissioner] commission and the person alleged to have
28-12 committed the violation enter into a written consent agreement settling or
28-13 resolving the alleged violation. If such a written consent agreement is
28-14 executed, the [commissioner] commission shall provide a copy of the
28-15 written consent agreement to the person who filed the complaint.
28-16 7. The [commissioner] commission may:
28-17 (a) Investigate and conduct a hearing concerning any alleged violation,
28-18 whether or not a complaint has been filed.
28-19 (b) Hear and consider more than one alleged violation against a person
28-20 at the same hearing.
28-21 Sec. 48. NRS 645B.620 is hereby amended to read as follows:
28-22 645B.620 1. Whether or not a complaint has been filed, the
28-23 [commissioner] commission shall investigate a mortgage broker or other
28-24 person if, for any reason, it appears that:
28-25 (a) The mortgage broker is conducting business in an unsafe and
28-26 injurious manner or in violation of any provision of this chapter, a
28-27 regulation adopted pursuant to this chapter or an order of the
28-28 [commissioner;] commission;
28-29 (b) The person is offering or providing any of the services of a
28-30 mortgage broker or otherwise engaging in, carrying on or holding himself
28-31 out as engaging in or carrying on the business of a mortgage broker
28-32 without being licensed or exempt from licensing pursuant to the provisions
28-33 of this chapter; or
28-34 (c) The person is violating any other provision of this chapter, a
28-35 regulation adopted pursuant to this chapter or an order of the
28-36 [commissioner.] commission.
28-37 2. If, upon investigation, the [commissioner] commission has
28-38 reasonable cause to believe that the mortgage broker or other person has
28-39 engaged in any conduct or committed any violation described in
28-40 subsection 1:
28-41 (a) The [commissioner] commission shall notify the attorney general of
28-42 the conduct or violation and, if applicable, the [commissioner] commission
28-43 shall immediately take possession of the property of the mortgage broker
28-44 pursuant to NRS 645B.630; and
28-45 (b) The attorney general shall, if appropriate:
28-46 (1) Investigate and prosecute the mortgage broker or other person
28-47 pursuant to NRS 645B.800; and
28-48 (2) Bring a civil action to:
29-1 (I) Enjoin the mortgage broker or other person from engaging in
29-2 the conduct, operating the business or committing the violation; and
29-3 (II) Enjoin any other person who has encouraged, facilitated, aided
29-4 or participated in the conduct, the operation of the business or the
29-5 commission of the violation, or who is likely to engage in such acts, from
29-6 engaging in or continuing to engage in such acts.
29-7 3. If the attorney general brings a civil action pursuant to subsection 2,
29-8 the district court of any county of this state is hereby vested with the
29-9 jurisdiction in equity to enjoin the conduct, the operation of the business or
29-10 the commission of the violation and may grant any injunctions that are
29-11 necessary to prevent and restrain the conduct, the operation of the business
29-12 or the commission of the violation. During the pendency of the proceedings
29-13 before the district court:
29-14 (a) The court may issue any temporary restraining orders as may appear
29-15 to be just and proper;
29-16 (b) The findings of the [commissioner] commission shall be deemed to
29-17 be prima facie evidence and sufficient grounds, in the discretion of the
29-18 court, for the ex parte issuance of a temporary restraining order; and
29-19 (c) The attorney general may apply for and on due showing is entitled to
29-20 have issued the court’s subpoena requiring forthwith the appearance of any
29-21 person to:
29-22 (1) Produce any documents, books and records as may appear
29-23 necessary for the hearing of the petition; and
29-24 (2) Testify and give evidence concerning the conduct complained of
29-25 in the petition.
29-26 Sec. 49. NRS 645B.630 is hereby amended to read as follows:
29-27 645B.630 1. In addition to any other action that is required or
29-28 permitted pursuant to this chapter, if the [commissioner] commission has
29-29 reasonable cause to believe that:
29-30 (a) The assets or capital of a mortgage broker are impaired; or
29-31 (b) A mortgage broker is conducting business in an unsafe and injurious
29-32 manner that may result in danger to the public,
29-33 the [commissioner] commission shall immediately take possession of all
29-34 the property, business and assets of the mortgage broker that are located in
29-35 this state and shall retain possession of them pending further proceedings
29-36 provided for in this chapter.
29-37 2. If the licensee, the board of directors or any officer or person in
29-38 charge of the offices of the mortgage broker refuses to permit the
29-39 [commissioner] commission to take possession of the property of the
29-40 mortgage broker pursuant to subsection 1:
29-41 (a) The [commissioner] commission shall notify the attorney general;
29-42 and
29-43 (b) The attorney general shall immediately bring such proceedings as
29-44 may be necessary to place the [commissioner] commission in immediate
29-45 possession of the property of the mortgage broker.
29-46 3. If the [commissioner] commission takes possession of the property
29-47 of the mortgage broker, the [commissioner] commission shall:
29-48 (a) Make or have made an inventory of the assets and known liabilities
29-49 of the mortgage broker;
30-1 (b) File one copy of the inventory in [his] the office of the commission
30-2 and one copy in the office of the clerk of the district court of the county in
30-3 which the principal office of the mortgage broker is located and shall mail
30-4 one copy to each stockholder, partner, officer, director or associate of the
30-5 mortgage broker at his last known address; and
30-6 (c) If the mortgage broker maintains any accounts described in
30-7 NRS 645B.175, not later than 5 business days after the date on which the
30-8 [commissioner] commission takes possession of the property of the
30-9 mortgage broker, mail notice of [his] that possession to the last known
30-10 address of each person whose money is deposited in such an account or
30-11 whose money was or should have been deposited in such an account during
30-12 the preceding 12 months.
30-13 4. The clerk of the court with which the copy of the inventory is filed
30-14 shall file it as any other case or proceeding pending in the court and shall
30-15 give it a docket number.
30-16 Sec. 50. NRS 645B.640 is hereby amended to read as follows:
30-17 645B.640 1. If the [commissioner] commission takes possession of
30-18 the property of a mortgage broker pursuant to NRS 645B.630, the licensee,
30-19 officers, directors, partners, associates or stockholders of the mortgage
30-20 broker may, within 60 days after the date on which the [commissioner]
30-21 commission takes possession of the property, make good any deficit in the
30-22 assets or capital of the mortgage broker or remedy any unsafe and injurious
30-23 conditions or practices of the mortgage broker.
30-24 2. At the expiration of the 60-day period, if the deficiency in assets or
30-25 capital has not been made good or the unsafe and injurious conditions or
30-26 practices remedied, the [commissioner] commission may apply to the court
30-27 to be appointed receiver and proceed to liquidate the assets of the mortgage
30-28 broker which are located in this state in the same manner as now provided
30-29 by law for liquidation of a private corporation in receivership.
30-30 3. No other person may be appointed receiver by any court without
30-31 first giving the [commissioner] commission ample notice of his
30-32 application.
30-33 4. The inventory made by the [commissioner] commission and all
30-34 claims filed by creditors are open at all reasonable times for inspection, and
30-35 any action taken by the receiver upon any of the claims is subject to the
30-36 approval of the court before which the cause is pending.
30-37 5. The expenses of the receiver and compensation of counsel, as well
30-38 as all expenditures required in the liquidation proceedings, must be fixed
30-39 by the [commissioner] commission subject to the approval of the court and,
30-40 upon certification of the [commissioner,] commission, must be paid out of
30-41 the money in [his] the hands of the commission as the receiver.
30-42 Sec. 51. NRS 645B.670 is hereby amended to read as follows:
30-43 645B.670 Except as otherwise provided in NRS 645B.690:
30-44 1. For each violation committed by an applicant, whether or not he is
30-45 issued a license, the [commissioner] commission may impose upon the
30-46 applicant an administrative fine of not more than $10,000, if the applicant:
30-47 (a) Has knowingly made or caused to be made to the [commissioner]
30-48 commission any false representation of material fact;
31-1 (b) Has suppressed or withheld from the [commissioner] commission
31-2 any information which the applicant possesses and which, if submitted by
31-3 him, would have rendered the applicant ineligible to be licensed pursuant
31-4 to the provisions of this chapter; or
31-5 (c) Has violated any provision of this chapter, a regulation adopted
31-6 pursuant to this chapter or an order of the [commissioner] commission in
31-7 completing and filing his application for a license or during the course of
31-8 the investigation of his application for a license.
31-9 2. For each violation committed by a licensee, the [commissioner]
31-10 commission may impose upon the licensee an administrative fine of not
31-11 more than $10,000, may suspend, revoke or place conditions upon his
31-12 license, or may do both, if the licensee, whether or not acting as such:
31-13 (a) Is insolvent;
31-14 (b) Is grossly negligent or incompetent in performing any act for which
31-15 he is required to be licensed pursuant to the provisions of this chapter;
31-16 (c) Does not conduct his business in accordance with law , [or] has
31-17 violated any provision of this chapter, a regulation adopted pursuant to this
31-18 chapter or an order of the [commissioner;] commission or has violated any
31-19 provision of chapter 645E of NRS while engaged in activities authorized
31-20 by that chapter in his capacity as a mortgage broker;
31-21 (d) Is in such financial condition that he cannot continue in business
31-22 with safety to his customers;
31-23 (e) Has made a material misrepresentation in connection with any
31-24 transaction governed by this chapter;
31-25 (f) Has suppressed or withheld from a client any material facts, data or
31-26 other information relating to any transaction governed by the provisions of
31-27 this chapter which the licensee knew or, by the exercise of reasonable
31-28 diligence, should have known;
31-29 (g) Has knowingly made or caused to be made to the [commissioner]
31-30 commission any false representation of material fact or has suppressed or
31-31 withheld from the [commissioner] commission any information which the
31-32 licensee possesses and which, if submitted by him, would have rendered
31-33 the licensee ineligible to be licensed pursuant to the provisions of this
31-34 chapter;
31-35 (h) Has failed to account to persons interested for all money received
31-36 for a trust account;
31-37 (i) Has refused to permit an examination by the [commissioner]
31-38 commission of his books and affairs or has refused or failed, within a
31-39 reasonable time, to furnish any information or make any report that may be
31-40 required by the [commissioner] commission pursuant to the provisions of
31-41 this chapter or a regulation adopted pursuant to this chapter;
31-42 (j) Has been convicted of, or entered a plea of nolo contendere to, a
31-43 felony or any crime involving fraud, misrepresentation or moral turpitude;
31-44 (k) Has refused or failed to pay, within a reasonable time, any fees,
31-45 assessments, costs or expenses that the licensee is required to pay pursuant
31-46 to this chapter or a regulation adopted pursuant to this chapter;
31-47 (l) Has failed to satisfy a claim made by a client which has been reduced
31-48 to judgment;
32-1 (m) Has failed to account for or to remit any money of a client within a
32-2 reasonable time after a request for an accounting or remittal;
32-3 (n) Has commingled the money or other property of a client with his
32-4 own or has converted the money or property of others to his own use;
32-5 (o) Has engaged in any other conduct constituting a deceitful,
32-6 fraudulent or dishonest business practice;
32-7 (p) Has repeatedly violated the policies and procedures of the mortgage
32-8 broker;
32-9 (q) Has failed to [maintain adequate] exercise reasonable supervision
32-10 over the activities of a mortgage agent[;] as required by NRS 645B.460;
32-11 (r) Has instructed a mortgage agent to commit an act that would be
32-12 cause for the revocation of the license of the mortgage broker, whether or
32-13 not the mortgage agent commits the act;
32-14 (s) Has employed a person as a mortgage agent or authorized a person
32-15 to be associated with the licensee as a mortgage agent at a time when the
32-16 licensee knew or, in light of all the surrounding facts and circumstances,
32-17 reasonably should have known that the person:
32-18 (1) Had been convicted of, or entered a plea of nolo contendere to, a
32-19 felony or any crime involving fraud, misrepresentation or moral turpitude;
32-20 or
32-21 (2) Had a financial services license or registration suspended or
32-22 revoked within the immediately preceding 10 years; or
32-23 (t) Has not conducted verifiable business as a mortgage broker for 12
32-24 consecutive months, except in the case of a new applicant. The
32-25 [commissioner] commission shall determine whether a mortgage broker is
32-26 conducting business by examining the monthly reports of activity
32-27 submitted by the licensee or by conducting an examination of the licensee.
32-28 Sec. 52. NRS 645B.680 is hereby amended to read as follows:
32-29 645B.680 1. If the [commissioner] commission receives a copy of a
32-30 court order issued pursuant to NRS 425.540 that provides for the
32-31 suspension of all professional, occupational and recreational licenses,
32-32 certificates and permits issued to a person who is the holder of a license as
32-33 a mortgage broker, the [commissioner] commission shall deem the license
32-34 issued to that person to be suspended at the end of the 30th day after the
32-35 date on which the court order was issued unless the [commissioner]
32-36 commission receives a letter issued to the holder of the license by the
32-37 district attorney or other public agency pursuant to NRS 425.550 stating
32-38 that the holder of the license has complied with the subpoena or warrant or
32-39 has satisfied the arrearage pursuant to NRS 425.560.
32-40 2. The [commissioner] commission shall reinstate a license as a
32-41 mortgage broker that has been suspended by a district court pursuant to
32-42 NRS 425.540 if the [commissioner] commission receives a letter issued by
32-43 the district attorney or other public agency pursuant to NRS 425.550 to the
32-44 person whose license was suspended stating that the person whose license
32-45 was suspended has complied with the subpoena or warrant or has satisfied
32-46 the arrearage pursuant to NRS 425.560.
32-47 Sec. 53. NRS 645B.690 is hereby amended to read as follows:
32-48 645B.690 1. If a person offers or provides any of the services of a
32-49 mortgage broker or otherwise engages in, carries on or holds himself out as
33-1 engaging in or carrying on the business of a mortgage broker and, at the
33-2 time:
33-3 (a) The person was required to have a license pursuant to this chapter
33-4 and the person did not have such a license; or
33-5 (b) The person’s license was suspended or revoked pursuant to this
33-6 chapter,
33-7 the [commissioner] commission shall impose upon the person an
33-8 administrative fine of not more than $10,000 for each violation and, if the
33-9 person has a license, the [commissioner] commission shall revoke it.
33-10 2. If a person is exempt from the provisions of this chapter pursuant to
33-11 subsection 6 of NRS 645B.015 and the person, while exempt, maintains,
33-12 offers to maintain or holds himself out as maintaining any accounts
33-13 described in subsection 1 of NRS 645B.175 or otherwise engages in, offers
33-14 to engage in or holds himself out as engaging in any activity that would
33-15 remove the person from the exemption set forth in subsection 6 of
33-16 NRS 645B.015, the [commissioner] commission shall impose upon the
33-17 person an administrative fine of not more than $10,000 for each violation
33-18 and the [commissioner] commission shall revoke the person’s exemption.
33-19 If the [commissioner] commission revokes an exemption pursuant to this
33-20 subsection, the person may not again be granted the same or a similar
33-21 exemption from the provisions of this chapter. The person may apply for a
33-22 license pursuant to this chapter unless otherwise prohibited by specific
33-23 statute.
33-24 3. If a mortgage broker violates any provision of subsection 1 of
33-25 NRS 645B.080 and the mortgage broker fails, without reasonable cause, to
33-26 remedy the violation within 20 business days after being ordered by the
33-27 [commissioner] commission to do so or within such later time as
33-28 prescribed by the [commissioner,] commission, or if the [commissioner]
33-29 commission orders a mortgage broker to provide information, make a
33-30 report or permit an examination of his books or affairs pursuant to this
33-31 chapter and the mortgage broker fails, without reasonable cause, to comply
33-32 with the order within 20 business days or within such later time as
33-33 prescribed by the [commissioner, the commissioner] commission, the
33-34 commission shall:
33-35 (a) Impose upon the mortgage broker an administrative fine of not more
33-36 than $10,000 for each violation;
33-37 (b) Suspend or revoke the license of the mortgage broker; and
33-38 (c) Conduct a hearing to determine whether the mortgage broker is
33-39 conducting business in an unsafe and injurious manner that may result in
33-40 danger to the public and whether it is necessary for the [commissioner]
33-41 commission to take possession of the property of the mortgage broker
33-42 pursuant to NRS 645B.630.
33-43 Sec. 54. NRS 645B.700 is hereby amended to read as follows:
33-44 645B.700 1. Except as otherwise provided in subsection 2, for each
33-45 violation that may be committed by a person pursuant to this chapter or the
33-46 regulations adopted pursuant to this chapter, the [commissioner shall]
33-47 commission may adopt regulations:
33-48 (a) Categorizing the violation as a major violation or a minor violation;
33-49 and
34-1 (b) Specifying the disciplinary action that will be taken by the
34-2 [commissioner] commission pursuant to this chapter against a person who
34-3 commits:
34-4 (1) A major violation. The disciplinary action taken by the
34-5 [commissioner] commission for a major violation [must] may include,
34-6 without limitation, suspension or revocation of the person’s license.
34-7 (2) More than two minor violations. The [commissioner] commission
34-8 may establish graduated sanctions for a person who commits more than
34-9 two minor violations based upon the number, the frequency and the
34-10 severity of the minor violations and whether the person previously has
34-11 committed any major violations.
34-12 2. The provisions of this section do not apply to a violation for which
34-13 the [commissioner] commission is required to take disciplinary action in
34-14 accordance with NRS 645B.690.
34-15 Sec. 55. NRS 645B.710 is hereby amended to read as follows:
34-16 645B.710 If a person is a partnership, corporation or unincorporated
34-17 association, the [commissioner] commission shall take any disciplinary
34-18 action required pursuant to NRS 645B.690 and may take any other
34-19 disciplinary action set forth in this chapter against the person if any
34-20 member of the partnership or any officer or director of the corporation or
34-21 unincorporated association has committed any act or omission that would
34-22 be cause for taking such disciplinary action against a natural person.
34-23 Sec. 56. NRS 645B.720 is hereby amended to read as follows:
34-24 645B.720 Before conducting a hearing, the [commissioner]
34-25 commission may, to the fullest extent permitted by the Constitution of the
34-26 United States and the constitution of this state:
34-27 1. Order a summary suspension of a license pursuant to subsection 3 of
34-28 NRS 233B.127; and
34-29 2. Take any other action against a licensee or other person that is
34-30 necessary to protect the health, safety or welfare of the public.
34-31 Sec. 57. NRS 645B.750 is hereby amended to read as follows:
34-32 645B.750 1. If the [commissioner] commission enters an order
34-33 taking any disciplinary action against a person or denying a person’s
34-34 application for a license, the [commissioner] commission shall cause
34-35 written notice of the order to be served personally or sent by certified mail
34-36 or telegraph to the person.
34-37 2. Unless a hearing has already been conducted concerning the matter,
34-38 the person, upon application, is entitled to a hearing. If the person does not
34-39 make such an application within 20 days after the date of the initial order,
34-40 the [commissioner] commission shall enter a final order concerning
34-41 the matter.
34-42 3. A person may appeal a final order of the [commissioner]
34-43 commission in accordance with the provisions of chapter 233B of
34-44 NRS that apply to a contested case.
34-45 Sec. 58. NRS 645B.760 is hereby amended to read as follows:
34-46 645B.760 If a person is alleged to have engaged in any conduct or
34-47 committed any violation that is described in NRS 645B.620, 645B.630 or
34-48 645B.670 or is alleged to have committed a violation of any other
34-49 provision of this chapter, a regulation adopted pursuant to this chapter or
35-1 an order of the [commissioner,] commission, and the person fails to appear,
35-2 without reasonable cause, at a hearing before the [commissioner]
35-3 commission concerning the alleged conduct or violation:
35-4 1. The [commissioner] commission shall notify the attorney general
35-5 that the person failed to appear;
35-6 2. The person is guilty of a misdemeanor and shall be punished as
35-7 provided in NRS 645B.950; and
35-8 3. The [commissioner] commission may conduct the hearing in the
35-9 person’s absence, draw any conclusions that the [commissioner]
35-10 commission deems appropriate from his failure to appear and render a
35-11 decision concerning the alleged conduct or violation.
35-12 Sec. 59. NRS 645B.800 is hereby amended to read as follows:
35-13 645B.800 1. The attorney general has primary jurisdiction for the
35-14 enforcement of this chapter. The attorney general shall, if appropriate,
35-15 investigate and prosecute a person who violates:
35-16 (a) Any provision of this chapter, a regulation adopted pursuant to this
35-17 chapter or an order of the [commissioner,] commission, including, without
35-18 limitation, a violation of any provision of NRS 645B.620 or 645B.670; or
35-19 (b) Any other law or regulation if the violation is committed by the
35-20 person in the course of committing a violation described in paragraph (a).
35-21 2. The attorney general shall, if appropriate, investigate and prosecute
35-22 a person who is alleged to have committed a violation described in
35-23 subsection 1 whether or not:
35-24 (a) The [commissioner] commission notifies the attorney general of the
35-25 alleged violation;
35-26 (b) The [commissioner] commission takes any disciplinary action
35-27 against the person alleged to have committed the violation;
35-28 (c) Any other person files a complaint against the person alleged to have
35-29 committed the violation; or
35-30 (d) A civil action is commenced against the person alleged to have
35-31 committed the violation.
35-32 3. When acting pursuant to this section, the attorney general may
35-33 commence his investigation and file a criminal action without leave of
35-34 court, and the attorney general has exclusive charge of the conduct of the
35-35 prosecution.
35-36 4. Except as otherwise provided by the Constitution of the United
35-37 States, the constitution of this state or a specific statute, a person shall, if
35-38 requested, provide the attorney general with information that would assist
35-39 in the prosecution of any other person who is alleged to have committed a
35-40 violation described in subsection 1. If a person fails, without reasonable
35-41 cause, to provide the attorney general with such information upon request,
35-42 the person is guilty of a misdemeanor and shall be punished as provided in
35-43 NRS 645B.950.
35-44 Sec. 60. NRS 645B.810 is hereby amended to read as follows:
35-45 645B.810 1. The attorney general may bring any appropriate civil
35-46 action against a person to enforce any provision of this chapter, a
35-47 regulation adopted pursuant to this chapter or an order of the
35-48 [commissioner,] commission, including, without limitation, an order of the
35-49 [commissioner:] commission:
36-1 (a) Imposing an administrative fine; or
36-2 (b) Suspending, revoking or placing conditions upon a license.
36-3 2. If the attorney general prevails in any civil action brought pursuant
36-4 to this chapter, the court shall order the person against whom the civil
36-5 action was brought to pay:
36-6 (a) Court costs; and
36-7 (b) Reasonable costs of the investigation and prosecution of the civil
36-8 action.
36-9 3. Whether or not the attorney general brings a civil action against a
36-10 person pursuant to this chapter, the attorney general may prosecute the
36-11 person for a criminal violation pursuant to this chapter.
36-12 Sec. 61. NRS 645B.950 is hereby amended to read as follows:
36-13 645B.950 1. Except as otherwise provided in NRS 645B.960, a
36-14 person, or any general partner, director, officer, agent or employee of a
36-15 person, who violates any provision of this chapter, a regulation adopted
36-16 pursuant to this chapter or an order of the [commissioner] commission is
36-17 guilty of a misdemeanor.
36-18 2. In addition to any other penalty, if a person is convicted of or enters
36-19 a plea of nolo contendere to a violation described in subsection 1, the court
36-20 shall order the person to pay:
36-21 (a) Court costs; and
36-22 (b) Reasonable costs of the investigation and prosecution of the
36-23 violation.
36-24 Secs. 62-87. (Deleted by amendment.)
36-25 Sec. 87.5. NRS 645E.230 is hereby amended to read as follows:
36-26 645E.230 1. A license entitles a licensee to engage only in the
36-27 activities authorized by this chapter.
36-28 2. The provisions of this chapter do not prohibit a licensee from:
36-29 (a) Holding a license as a mortgage broker pursuant to chapter 645B of
36-30 NRS; or
36-31 (b) Conducting the business of a mortgage company and the business of
36-32 a mortgage broker in the same office or place of business.
36-33 3. If a licensee does not hold a license as a mortgage broker
36-34 pursuant to chapter 645B of NRS, the licensee is subject to supervision,
36-35 regulation and discipline by the commissioner for all activities that the
36-36 licensee engages in pursuant to this chapter.
36-37 4. If a licensee holds a license as a mortgage broker pursuant to
36-38 chapter 645B of NRS, the licensee is subject to supervision, regulation
36-39 and discipline by:
36-40 (a) The commissioner for all activities that the licensee engages in
36-41 pursuant to this chapter in his capacity as a mortgage company; and
36-42 (b) The mortgage industry commission for all activities that the
36-43 licensee engages in pursuant this chapter and chapter 645B of NRS in
36-44 his capacity as a mortgage broker.
36-45 Sec. 88. NRS 78.045 is hereby amended to read as follows:
36-46 78.045 1. The secretary of state shall not accept for filing any articles
36-47 of incorporation or any certificate of amendment of articles of
36-48 incorporation of any corporation formed pursuant to the laws of this state
37-1 which provides that the name of the corporation contains the word “bank”
37-2 or “trust,” unless:
37-3 (a) It appears from the articles or the certificate of amendment that the
37-4 corporation proposes to carry on business as a banking or trust company,
37-5 exclusively or in connection with its business as a bank or savings and loan
37-6 association; and
37-7 (b) The articles or certificate of amendment is first approved by the
37-8 commissioner of financial institutions.
37-9 2. 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 provisions of this chapter if it
37-12 appears from the articles or the certificate of amendment that the business
37-13 to be carried on by the corporation is subject to supervision by the
37-14 commissioner of insurance , [or by] the commissioner of financial
37-15 institutions, or the mortgage industry commission, unless the articles or
37-16 certificate of amendment is approved by the commissioner [who] or
37-17 commission that will supervise the business of the corporation.
37-18 3. Except as otherwise provided in subsection 5, the secretary of state
37-19 shall not accept for filing any articles of incorporation or any certificate or
37-20 amendment of articles of incorporation of any corporation formed pursuant
37-21 to the laws of this state if the name of the corporation contains the words
37-22 “engineer,” “engineered,” “engineering,” “professional engineer,”
37-23 “registered engineer” or “licensed engineer” unless:
37-24 (a) The state board of professional engineers and land surveyors
37-25 certifies that the principals of the corporation are licensed to practice
37-26 engineering pursuant to the laws of this state; or
37-27 (b) The state board of professional engineers and land surveyors
37-28 certifies that the corporation is exempt from the prohibitions of
37-29 NRS 625.520.
37-30 4. The secretary of state shall not accept for filing any articles of
37-31 incorporation or any certificate of amendment of articles of incorporation
37-32 of any corporation formed pursuant to the laws of this state which provides
37-33 that the name of the corporation contains the words “accountant,”
37-34 “accounting,” “accountancy,” “auditor” or “auditing” unless the Nevada
37-35 state board of accountancy certifies that the corporation:
37-36 (a) Is registered pursuant to the provisions of chapter 628 of NRS; or
37-37 (b) Has filed with the state board of accountancy under penalty of
37-38 perjury a written statement that the corporation is not engaged in the
37-39 practice of accounting and is not offering to practice accounting in this
37-40 state.
37-41 5. The provisions of subsection 3 do not apply to any corporation,
37-42 whose securities are publicly traded and regulated by the Securities
37-43 Exchange Act of 1934, which does not engage in the practice of
37-44 professional engineering.
37-45 6. The commissioner of financial institutions , the mortgage industry
37-46 commission and the commissioner of insurance may approve or disapprove
37-47 the articles or amendments referred to them pursuant to the provisions of
37-48 this section.
38-1 Sec. 89. NRS 80.010 is hereby amended to read as follows:
38-2 80.010 1. Before commencing or doing any business in this state,
38-3 each corporation organized pursuant to the laws of another state, territory,
38-4 the District of Columbia, a possession of the United States or a foreign
38-5 country, that enters this state to do business must:
38-6 (a) File in the office of the secretary of state of this state:
38-7 (1) A certificate of corporate existence issued not more than 90 days
38-8 before the date of filing by an authorized officer of the jurisdiction of its
38-9 incorporation setting forth the filing of documents and instruments related
38-10 to the articles of incorporation, or the governmental acts or other
38-11 instrument or authority by which the corporation was created. If the
38-12 certificate is in a language other than English, a translation, together with
38-13 the oath of the translator and his attestation of its accuracy, must be
38-14 attached to the certificate.
38-15 (2) A certificate of acceptance of appointment executed by its
38-16 resident agent, who must be a resident or located in this state. The
38-17 certificate must set forth the name of the resident agent, his street address
38-18 for the service of process, and his mailing address if different from his
38-19 street address. The street address of the resident agent is the registered
38-20 office of the corporation in this state.
38-21 (3) A statement executed by an officer of the corporation setting
38-22 forth:
38-23 (I) A general description of the purposes of the corporation; and
38-24 (II) The authorized stock of the corporation and the number and
38-25 par value of shares having par value and the number of shares having no
38-26 par value.
38-27 (b) Lodge in the office of the secretary of state a copy of the document
38-28 most recently filed by the corporation in the jurisdiction of its
38-29 incorporation setting forth the authorized stock of the corporation, the
38-30 number of par-value shares and their par value, and the number of no-par-
38-31 value shares.
38-32 2. The secretary of state shall not file the documents required by
38-33 subsection 1 for any foreign corporation whose name is not distinguishable
38-34 on the records of the secretary of state from the names of all other artificial
38-35 persons formed, organized, registered or qualified pursuant to the
38-36 provisions of this Title that are on file in the office of the secretary of state
38-37 and all names that are reserved in the office of the secretary of state
38-38 pursuant to the provisions of this Title, unless the written, acknowledged
38-39 consent of the holder of the name on file or reserved name to use the same
38-40 name or the requested similar name accompanies the articles of
38-41 incorporation.
38-42 3. The secretary of state shall not accept for filing the documents
38-43 required by subsection 1 or NRS 80.110 for any foreign corporation if the
38-44 name of the corporation contains the words “engineer,” “engineered,”
38-45 “engineering,” “professional engineer,” “registered engineer” or “licensed
38-46 engineer” unless the state board of professional engineers and land
38-47 surveyors certifies that:
38-48 (a) The principals of the corporation are licensed to practice engineering
38-49 pursuant to the laws of this state; or
39-1 (b) The corporation is exempt from the prohibitions of NRS 625.520.
39-2 4. The secretary of state shall not accept for filing the documents
39-3 required by subsection 1 or NRS 80.110 for any foreign corporation if it
39-4 appears from the documents that the business to be carried on by the
39-5 corporation is subject to supervision by the commissioner of financial
39-6 institutions[,] or the mortgage industry commission, unless the
39-7 commissioner or commission, as appropriate, certifies that:
39-8 (a) The corporation has obtained the authority required to do business in
39-9 this state; or
39-10 (b) The corporation is not subject to or is exempt from the requirements
39-11 for obtaining such authority.
39-12 5. The secretary of state shall not accept for filing the documents
39-13 required by subsection 1 or NRS 80.110 for any foreign corporation if the
39-14 name of the corporation contains the words “accountant,” “accounting,”
39-15 “accountancy,” “auditor” or “auditing” unless the Nevada state board of
39-16 accountancy certifies that the foreign corporation:
39-17 (a) Is registered pursuant to the provisions of chapter 628 of NRS; or
39-18 (b) Has filed with the state board of accountancy under penalty of
39-19 perjury a written statement that the foreign corporation is not engaged in
39-20 the practice of accounting and is not offering to practice accounting in this
39-21 state.
39-22 6. The secretary of state may adopt regulations that interpret the
39-23 requirements of this section.
39-24 Sec. 90. NRS 232.510 is hereby amended to read as follows:
39-25 232.510 1. The department of business and industry is hereby
39-26 created.
39-27 2. The department consists of a director and the following:
39-28 (a) Consumer affairs division.
39-29 (b) Division of financial institutions.
39-30 (c) Housing division.
39-31 (d) Manufactured housing division.
39-32 (e) Real estate division.
39-33 (f) Division of unclaimed property.
39-34 (g) Division of insurance.
39-35 (h) Division of industrial relations.
39-36 (i) Office of labor commissioner.
39-37 (j) Taxicab authority.
39-38 (k) Nevada athletic commission.
39-39 (l) Office of the Nevada attorney for injured workers.
39-40 (m) Transportation services authority.
39-41 (n) Mortgage industry commission.
39-42 (o) Any other office, commission, board, agency or entity created or
39-43 placed within the department pursuant to a specific statute, the budget
39-44 approved by the legislature or an executive order, or an entity whose
39-45 budget or activities have been placed within the control of the department
39-46 by a specific statute.
40-1 Sec. 91. NRS 232.520 is hereby amended to read as follows:
40-2 232.520 The director:
40-3 1. Shall appoint a chief or executive director, or both of them, of each
40-4 of the divisions, offices, commissions, boards, agencies or other entities of
40-5 the department, unless the authority to appoint such a chief or executive
40-6 director, or both of them, is expressly vested in another person, board or
40-7 commission by a specific statute. In making the appointments, the director
40-8 may obtain lists of qualified persons from professional organizations,
40-9 associations or other groups recognized by the department, if any. The
40-10 chiefs within the department are as follows:
40-11 (a) The chief of the consumer affairs division is the commissioner of
40-12 consumer affairs . [, the]
40-13 (b) The chief of the division of financial institutions is the
40-14 commissioner of financial institutions . [, the]
40-15 (c) The chief of the housing division is the administrator of the housing
40-16 division . [, the]
40-17 (d) The chief of the manufactured housing division is the administrator
40-18 of the manufactured housing division . [, the]
40-19 (e) The chief of the real estate division is the real estate administrator .
40-20 [, the]
40-21 (f) The chief of the division of unclaimed property is the administrator
40-22 of unclaimed property . [, the]
40-23 (g) The chief of the division of insurance is the commissioner of
40-24 insurance . [, the]
40-25 (h) The chief of the division of industrial relations is the administrator
40-26 of the division of industrial relations . [, the]
40-27 (i) The chief of the office of labor commissioner is the labor
40-28 commissioner . [, the]
40-29 (j) The chief of the taxicab authority is the taxicab administrator . [, the]
40-30 (k) The chief of the transportation services authority is the chairman of
40-31 the authority . [and the]
40-32 (l) The chief of the mortgage industry commission is the executive
40-33 director of the commission.
40-34 (m) The chief of any other entity of the department has the title
40-35 specified by the director, unless a different title is specified by a specific
40-36 statute.
40-37 2. Is responsible for the administration of all provisions of law relating
40-38 to the jurisdiction, duties and functions of all divisions and other entities
40-39 within the department. The director may, if he deems it necessary to carry
40-40 out his administrative responsibilities, be considered as a member of the
40-41 staff of any division or other entity of the department for the purpose of
40-42 budget administration or for carrying out any duty or exercising any power
40-43 necessary to fulfill the responsibilities of the director pursuant to this
40-44 subsection. The provisions of this subsection do not authorize the director
40-45 to preempt any authority or jurisdiction granted by statute to any division
40-46 or other entity within the department or authorize the director to act or take
40-47 on a function that would contravene a rule of court or a statute.
40-48 3. May:
41-1 (a) Establish uniform policies for the department, consistent with the
41-2 policies and statutory responsibilities and duties of the divisions and other
41-3 entities within the department, relating to matters concerning budgeting,
41-4 accounting, planning, program development, personnel, information
41-5 services, dispute resolution, travel, workplace safety, the acceptance of
41-6 gifts or donations, the management of records and any other subject for
41-7 which a uniform departmental policy is necessary to ensure the efficient
41-8 operation of the department.
41-9 (b) Provide coordination among the divisions and other entities within
41-10 the department, in a manner which does not encroach upon their statutory
41-11 powers and duties, as they adopt and enforce regulations, execute
41-12 agreements, purchase goods, services or equipment, prepare legislative
41-13 requests and lease or use office space.
41-14 (c) Define the responsibilities of any person designated to carry out the
41-15 duties of the director relating to financing, industrial development or
41-16 business support services.
41-17 4. May, within the limits of the financial resources made available to
41-18 him, promote, participate in the operation of, and create or cause to be
41-19 created, any nonprofit corporation, pursuant to chapter 82 of NRS, which
41-20 he determines is necessary or convenient for the exercise of the powers and
41-21 duties of the department. The purposes, powers and operation of the
41-22 corporation must be consistent with the purposes, powers and duties of the
41-23 department.
41-24 5. For any bonds which he is otherwise authorized to issue, may issue
41-25 bonds the interest on which is not exempt from federal income tax or
41-26 excluded from gross revenue for the purposes of federal income tax.
41-27 6. May, except as otherwise provided by specific statute, adopt by
41-28 regulation a schedule of fees and deposits to be charged in connection with
41-29 the programs administered by him pursuant to chapters 348A and 349 of
41-30 NRS. Except as otherwise provided, the amount of any such fee or deposit
41-31 must not exceed 2 percent of the principal amount of the financing.
41-32 7. May designate any person within the department to perform any of
41-33 the duties or responsibilities, or exercise any of the authority, of the
41-34 director on his behalf.
41-35 8. May negotiate and execute agreements with public or private
41-36 entities which are necessary to the exercise of the powers and duties of the
41-37 director or the department.
41-38 9. May establish a trust account in the state treasury for depositing and
41-39 accounting for money that is held in escrow or is on deposit with the
41-40 department for the payment of any direct expenses incurred by the director
41-41 in connection with any bond programs administered by the director. The
41-42 interest and income earned on money in the trust account, less any amount
41-43 deducted to pay for applicable charges, must be credited to the trust
41-44 account. Any balance remaining in the account at the end of a fiscal year
41-45 may be:
41-46 (a) Carried forward to the next fiscal year for use in covering the
41-47 expense for which it was originally received; or
41-48 (b) Returned to any person entitled thereto in accordance with
41-49 agreements or regulations of the director relating to those bond programs.
42-1 Sec. 92. NRS 686A.350 is hereby amended to read as follows:
42-2 686A.350 1. A license to engage in the business of a company is not
42-3 required of any:
42-4 (a) State or federally chartered building association or savings and loan
42-5 association.
42-6 (b) State or federally chartered bank.
42-7 (c) State or federally chartered credit union.
42-8 (d) Thrift company licensed pursuant to chapter 677 of NRS.
42-9 (e) Insurance agent financing his own accounts.
42-10 (f) Insurer authorized to do business in this state financing its own
42-11 policies or those of an affiliated company.
42-12 (g) Business, in addition to those included in paragraphs (a) to (d),
42-13 inclusive, which is licensed and regulated by the mortgage industry
42-14 commission or the division of financial institutions of the department of
42-15 business and industry.
42-16 2. The provisions of NRS 686A.330 to 686A.520, inclusive, other than
42-17 those which concern licensing, apply to persons exempt from licensing
42-18 pursuant to subsection 1.
42-19 Sec. 93. Section 139 of chapter 646, Statutes of Nevada 1999, at page
42-20 3816, is hereby amended to read as follows:
42-21 Sec. 139. 1. This section and section 130.5 of this act become
42-22 effective upon passage and approval for the purpose of adopting any
42-23 regulations necessary to carry out the provisions of this act, and on
42-24 September 30, 1999, for all other purposes.
42-25 2. Sections 1 to 101, inclusive, 103, 105 to 117, inclusive, 119 to
42-26 130, inclusive, and 131 to 138, inclusive, of this act become effective
42-27 upon passage and approval for the purpose of adopting any
42-28 regulations necessary to carry out the provisions of this act, and on
42-29 October 1, 1999, for all other purposes.
42-30 3. Sections 102, 104 and 118 of this act become effective upon
42-31 passage and approval for the purpose of adopting any regulations
42-32 necessary to carry out the provisions of this act, and at 12:01 a.m. on
42-33 October 1, 1999, for all other purposes.
42-34 4. Sections 15 and 33 of this act expire by limitation on the date
42-35 on which the provisions of 42 U.S.C. § 666 requiring each state to
42-36 establish procedures under which the state has authority to withhold
42-37 or suspend, or to restrict the use of professional, occupational and
42-38 recreational licenses of persons who:
42-39 (a) Have failed to comply with a subpoena or warrant relating to a
42-40 procedure to determine the paternity of a child or to establish or
42-41 enforce an obligation for the support of a child; or
42-42 (b) Are in arrears in the payment for the support of one or more
42-43 children,
42-44 are repealed by the Congress of the United States.
42-45 [5. Section 78.5 of this act expires by limitation on October 1,
42-46 2001.]
42-47 Sec. 94. NRS 645B.860, 645B.865 and 645B.870 are hereby repealed.
43-1 Sec. 95. On July 1, 2001, or as soon as practicable thereafter, the
43-2 governor shall appoint five persons as members of the mortgage industry
43-3 commission, whose terms commence on July 1, 2001. For the initial terms
43-4 of the members of the mortgage industry commission, the governor shall
43-5 appoint:
43-6 1. Two members whose terms expire on June 30, 2002;
43-7 2. Two members whose terms expire on June 30, 2003; and
43-8 3. One member whose term expires on June 30, 2004.
43-9 Sec. 96. 1. Notwithstanding the provisions of this act and except as
43-10 otherwise provided in subsection 2, the commissioner of financial
43-11 institutions shall exercise all the power and perform all the duties that are
43-12 assigned to the mortgage industry commission and its executive director
43-13 pursuant to the provisions of this act, until the date on which the director of
43-14 the department of business and industry certifies to the governor that the
43-15 mortgage industry commission and its executive director are prepared to
43-16 carry out the provisions of this act, or until January 1, 2002, whichever
43-17 occurs sooner.
43-18 2. During the period described in subsection 1, the mortgage industry
43-19 commission and its executive director may exercise any power and perform
43-20 any duty assigned to them pursuant to the provisions of this act if the
43-21 exercise of the power or the performance of the duty is necessary as an
43-22 organizational, preparatory or preliminary measure to prepare the mortgage
43-23 industry commission and its executive director to carry out the provisions
43-24 of this act.
43-25 Sec. 96.3. Not later than November 1, 2001, the director of the
43-26 department of business and industry shall:
43-27 1. Identify in the budget of the division of financial institutions of the
43-28 department the revenues and expenditures attributable to the regulation and
43-29 licensing of mortgage brokers and mortgage agents; and
43-30 2. Submit, to the governor and interim finance committee for approval,
43-31 revised budgets for the division of financial institutions and the mortgage
43-32 industry commission, in which the identified revenues and expenditures
43-33 have been appropriately transferred from the budget of the division to the
43-34 budget of the commission.
43-35 Sec. 96.5. 1. Before the date on which the director of the department
43-36 of business and industry certifies to the governor that the mortgage
43-37 industry commission and its executive director are prepared to carry out the
43-38 provisions of this act, or January 1, 2002, whichever occurs first, the state
43-39 treasurer shall place any money deposited in the state general fund relating
43-40 to the regulation and licensing of mortgage brokers and mortgage agents
43-41 into the account for use by the division of financial institutions of the
43-42 department for the regulation and licensing of mortgage brokers and
43-43 mortgage agents.
43-44 2. On and after the date on which the director of the department of
43-45 business and industry certifies to the governor that the mortgage industry
43-46 commission and its executive director are prepared to carry out the
43-47 provisions of this act, or January 1, 2002, as appropriate, the state treasurer
43-48 shall place any money deposited in the state general fund relating to the
44-1 regulation and licensing of mortgage brokers and mortgage agents into the
44-2 account for use by the commission.
44-3 3. The director of the department of business and industry shall
44-4 identify for the state treasurer that portion of the money being deposited in
44-5 the state general fund which relates to the regulation and licensing of
44-6 mortgage brokers and agents.
44-7 Sec. 96.7. The division of financial institutions of the department of
44-8 business and industry and the mortgage industry commission shall enter
44-9 into an interagency agreement to facilitate the transfer of the responsibility
44-10 for the collection of the fees relating to the regulation and licensing of
44-11 mortgage brokers and mortgage agents, and of all related fees with respect
44-12 to which responsibility for the collection has been transferred from the
44-13 division to the commission pursuant to this act. The agreement must
44-14 include, without limitation, provisions which address:
44-15 1. The exchange of books and records between the division and the
44-16 commission, as necessary; and
44-17 2. The allocation of costs between the division and the commission for
44-18 services performed interdepartmentally.
44-19 Sec. 97. 1. Any administrative regulations adopted by an officer or
44-20 an agency whose name has been changed or whose responsibilities have
44-21 been transferred pursuant to the provisions of this act to another officer or
44-22 agency remain in force until amended by the officer or agency to which the
44-23 responsibility for the adoption of the regulations has been transferred.
44-24 2. Any contracts or other agreements entered into by an officer or
44-25 agency whose name has been changed or whose responsibilities have been
44-26 transferred pursuant to the provisions of this act to another officer or
44-27 agency are binding upon the officer or agency to which the responsibility
44-28 for the administration of the provisions of the contract or other agreement
44-29 has been transferred. Such contracts and other agreements may be enforced
44-30 by the officer or agency to which the responsibility for the enforcement of
44-31 the provisions of the contract or other agreement has been transferred.
44-32 3. Any action taken by an officer or agency whose name has been
44-33 changed or whose responsibilities have been transferred pursuant to the
44-34 provisions of this act to another officer or agency remains in effect as if
44-35 taken by the officer or agency to which the responsibility for the
44-36 enforcement of such actions has been transferred.
44-37 Sec. 98. This act becomes effective on July 1, 2001.
44-38 Sec. 99. 1. The legislative counsel shall:
44-39 (a) In preparing the reprint and supplements to the Nevada Revised
44-40 Statutes, appropriately change any references to an officer or agency whose
44-41 name is changed or whose responsibilities have been transferred pursuant
44-42 to the provisions of this act to refer to the appropriate officer or agency.
44-43 (b) In preparing supplements to the Nevada Administrative Code,
44-44 appropriately change any references to an officer or agency whose name is
44-45 changed or whose responsibilities have been transferred pursuant to the
44-46 provisions of this act to refer to the appropriate officer or agency.
45-1 2. Any reference in a bill or resolution passed by the 71st session of
45-2 the Nevada legislature to an officer or agency whose name is changed or
45-3 whose responsibilities have been transferred pursuant to the provisions of
45-4 this act to another officer or agency shall be deemed to refer to the officer
45-5 or agency to which the responsibility is transferred.
45-6 TEXT OF REPEALED SECTIONS
45-7 645B.860 Creation; members; appointment; terms and vacancies;
45-8 no compensation or per diem allowance; protections afforded
45-9 members who are public officers or employees.
45-10 1. The advisory council on mortgage investments and mortgage
45-11 lending is hereby created.
45-12 2. The advisory council consists of five members appointed by the
45-13 legislative commission from a list of persons provided by the
45-14 commissioner.
45-15 3. The members of the advisory council:
45-16 (a) Must be persons who have experience with, an interest in or a
45-17 knowledge of issues relating to mortgage investments or mortgage lending.
45-18 Such persons may include, without limitation, investors, public officers and
45-19 employees, licensees and persons who have engaged in or been involved
45-20 with any business, profession or occupation relating to mortgage
45-21 investments or mortgage lending.
45-22 (b) Serve terms of 2 years and at the pleasure of the legislative
45-23 commission.
45-24 (c) May be reappointed.
45-25 (d) Serve without compensation and may not receive a per diem
45-26 allowance or travel expenses.
45-27 4. Any vacancy in the membership of the advisory council must be
45-28 filled for the remainder of the unexpired term in the same manner as the
45-29 original appointment.
45-30 5. A member of the advisory council who is an officer or employee of
45-31 this state or a political subdivision of this state must be relieved from his
45-32 duties without loss of his regular compensation so that he may prepare for
45-33 and attend meetings of the advisory council and perform any work
45-34 necessary to carry out the duties of the advisory council in the most timely
45-35 manner practicable. A state agency or political subdivision of this state
45-36 shall not require an officer or employee who is a member of the advisory
45-37 council to make up the time he is absent from work to carry out his duties
45-38 as a member of the advisory council or use annual vacation or
45-39 compensatory time for the absence.
45-40 6. Notwithstanding any other provision of law, a member of the
45-41 advisory council:
45-42 (a) Is not disqualified from public employment or holding a public
45-43 office because of his membership on the advisory council; and
45-44 (b) Does not forfeit his public office or public employment because of
45-45 his membership on the advisory council.
46-1 645B.865 Chairman and vice chairman; meetings; quorum;
46-2 subcommittees.
46-3 1. The members of the advisory council on mortgage investments and
46-4 mortgage lending shall elect a chairman and a vice chairman from among
46-5 their membership. The vice chairman shall perform the duties of the
46-6 chairman during any absence of the chairman.
46-7 2. The advisory council may meet at least once each calendar quarter
46-8 and at other times on the call of the chairman or a majority of its members.
46-9 3. The meetings of the advisory council may be held at any location
46-10 designated by the chairman or a majority of its members.
46-11 4. A majority of the members of the advisory council constitutes a
46-12 quorum for the transaction of all business.
46-13 5. The chairman may appoint subcommittees of the members of the
46-14 advisory council to consider specific problems relating to mortgage
46-15 investments or mortgage lending.
46-16 645B.870 Purpose. The purpose of the advisory council on
46-17 mortgage investments and mortgage lending is to:
46-18 1. Consult with, advise and make recommendations to the
46-19 commissioner in all matters relating to mortgage investments and mortgage
46-20 lending.
46-21 2. Make recommendations to the legislature concerning the enactment
46-22 of any legislation relating to mortgage investments and mortgage lending.
46-23 3. Make recommendations to the legislature and the commissioner
46-24 concerning educational requirements and other qualifications for persons
46-25 who are engaged in any business, profession or occupation relating to
46-26 mortgage investments and mortgage lending.
46-27 4. Conduct hearings, conferences and special studies on all matters
46-28 relating to mortgage investments and mortgage lending.
46-29 5. Provide a forum for the consideration and discussion of all matters
46-30 relating to mortgage investments and mortgage lending.
46-31 6. Gather and disseminate information relating to mortgage
46-32 investments and mortgage lending.
46-33 7. Engage in other activities that are designed to promote, improve and
46-34 protect the reliability and stability of mortgage investments and mortgage
46-35 lending in this state.
46-36 H