(REPRINTED WITH ADOPTED AMENDMENTS)

 

Senate Bill No. 330–Senator Shaffer

 

March 13, 2001

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes relating to financial businesses. (BDR 54‑748)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                             Effect on the State: No.

 

~

 

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

 

AN ACT relating to financial businesses; authorizing certain mortgage companies and lending businesses to be licensed to conduct business in this state from locations outside this state under certain circumstances; establishing certain procedures for a mortgage company to notify the commissioner of financial institutions of a change of address of its licensed place of business; changing the procedures for a lending business to notify the commissioner of financial institutions of a change of address of its licensed place of business; authorizing the commissioner of financial institutions to impose a fine on a mortgage company or lending business for failing to notify the commissioner of a proposed change of address; removing the requirement that the commissioner of financial institutions notify lending businesses of his receipt of an application for licensure of a lending business; requiring the commissioner of financial institutions to charge a fee for certain services; providing a penalty; 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 645E of NRS is hereby amended by adding thereto

1-2  a new section to read as follows:

1-3    1.  A licensee who wishes to change the address of an office or other

1-4  place of business for which he has a license pursuant to this chapter

1-5  must, at least 10 days before changing the address, give written notice of

1-6  the proposed change to the commissioner.

1-7    2.  Upon receipt of the proposed change of address pursuant to

1-8  subsection 1, the commissioner shall provide written approval of the

1-9  change and the date of the approval.

1-10  3.  If a licensee fails to provide notice as required pursuant to

1-11  subsection 1, the commissioner may impose an administrative fine in an

1-12  amount not to exceed $500.

 

 

2-1    Sec. 2.  NRS 645E.130 is hereby amended to read as follows:

2-2    645E.130  The provisions of this chapter do not:

2-3    1.  Limit any statutory or common law right of a person to bring a civil

2-4  action against a mortgage company for any act or omission involved in the

2-5  transaction of business by or on behalf of the mortgage company;

2-6    2.  Limit the right of the state to punish a person for the violation of any

2-7  law, ordinance or regulation; [or]

2-8    3.  Establish a basis for a person to bring a civil action against the state

2-9  or its officers or employees for any act or omission in carrying out the

2-10  provisions of this chapter, including, without limitation, any act or

2-11  omission relating to the disclosure of information or the failure to disclose

2-12  information pursuant to the provisions of this chapter[.] ;

2-13  4.  Require a mortgage company which is located outside this state

2-14  and which does not conduct business in this state to be licensed pursuant

2-15  to this chapter; or

2-16  5.  Apply to transactions that are exclusively between a licensee

2-17  located outside this state and a person who is located outside this state.

2-18  Sec. 3.  NRS 645E.200 is hereby amended to read as follows:

2-19  645E.200  1.  A person who wishes to be licensed as a mortgage

2-20  company must file a written application for a license with the office of the

2-21  commissioner and pay the fee required pursuant to NRS 645E.280. An

2-22  application for a license as a mortgage company must:

2-23  (a) Be verified.

2-24  (b) State the name, residence address and business address of the

2-25  applicant and the location of each principal office and branch office at

2-26  which the mortgage company will conduct business [within] in this state[.]

2-27  , including, without limitation, any office or other place of business

2-28  located outside this state from which the mortgage company will conduct

2-29  business in this state.

2-30  (c) State the name under which the applicant will conduct business as a

2-31  mortgage company.

2-32  (d) If the applicant is not a natural person, list the name, residence

2-33  address and business address of each person who will have an interest in

2-34  the mortgage company as a principal, partner, officer, director or trustee,

2-35  specifying the capacity and title of each such person.

2-36  (e) Indicate the general plan and character of the business.

2-37  (f) State the length of time the applicant has been engaged in the

2-38  business of a mortgage company.

2-39  (g) Include a financial statement of the applicant.

2-40  (h) Include any other information required pursuant to the regulations

2-41  adopted by the commissioner or an order of the commissioner.

2-42  2.  If a mortgage company will conduct business in this state at one or

2-43  more branch offices , [within this state,] the mortgage company must apply

2-44  for a license for each such branch office.

2-45  3.  Except as otherwise provided in this chapter, the commissioner shall

2-46  issue a license to an applicant as a mortgage company if:

2-47  (a) The application complies with the requirements of this chapter; and

3-1    (b) The applicant and each general partner, officer or director of the

3-2  applicant, if the applicant is a partnership, corporation or unincorporated

3-3  association:

3-4       (1) Has a good reputation for honesty, trustworthiness and integrity

3-5  and displays competence to transact the business of a mortgage company in

3-6  a manner which safeguards the interests of the general public. The

3-7  applicant must submit satisfactory proof of these qualifications to the

3-8  commissioner.

3-9       (2) Has not been convicted of, or entered a plea of nolo contendere

3-10  to, a felony or any crime involving fraud, misrepresentation or moral

3-11  turpitude.

3-12      (3) Has not made a false statement of material fact on his application.

3-13      (4) Has not had a license that was issued pursuant to the provisions of

3-14  this chapter or chapter 645B of NRS suspended or revoked within the 10

3-15  years immediately preceding the date of his application.

3-16      (5) Has not had a license that was issued in any other state, district or

3-17  territory of the United States or any foreign country suspended or revoked

3-18  within the 10 years immediately preceding the date of his application.

3-19      (6) Has not violated any provision of this chapter or chapter 645B of

3-20  NRS, a regulation adopted pursuant thereto or an order of the

3-21  commissioner.

3-22  4.  If an applicant is a partnership, corporation or unincorporated

3-23  association, the commissioner may refuse to issue a license to the applicant

3-24  if any member of the partnership or any officer or director of the

3-25  corporation or unincorporated association has committed any act or

3-26  omission that would be cause for refusing to issue a license to a natural

3-27  person.

3-28  5.  A person may apply for a license for an office or other place of

3-29  business located outside this state from which the applicant will conduct

3-30  business in this state if the applicant or a subsidiary or affiliate of the

3-31  applicant has a license issued pursuant to this chapter for an office or

3-32  other place of business located in this state and if the applicant submits

3-33  with the application for a license a statement signed by the applicant

3-34  which states that the applicant agrees to:

3-35  (a) Make available at a location within this state the books, accounts,

3-36  papers, records and files of the office or place of business located outside

3-37  this state to the commissioner or a representative of the commissioner; or

3-38  (b) Pay the reasonable expenses for travel, meals and lodging of the

3-39  commissioner or a representative of the commissioner incurred during

3-40  any investigation or examination made at the office or place of business

3-41  located outside this state.

3-42  The applicant must be allowed to choose between paragraph (a) or (b) in

3-43  complying with the provisions of this subsection.

3-44  Sec. 4.  NRS 645E.350 is hereby amended to read as follows:

3-45  645E.350  1.  Each mortgage company shall keep and maintain at all

3-46  times at each location where the mortgage company conducts business in

3-47  this state complete and suitable records of all mortgage transactions made

3-48  by the mortgage company at that location. Each mortgage company shall

3-49  also keep and maintain at all times at each such location all original books,

4-1  papers and data, or copies thereof, clearly reflecting the financial condition

4-2  of the business of the mortgage company.

4-3    2.  Each mortgage company shall submit to the commissioner each

4-4  month a report of the mortgage company’s activity for the previous month.

4-5  The report must:

4-6    (a) Specify the volume of loans made by the mortgage company for the

4-7  month or state that no loans were made in that month;

4-8    (b) Include any information required pursuant to the regulations adopted

4-9  by the commissioner; and

4-10  (c) Be submitted to the commissioner by the 15th day of the month

4-11  following the month for which the report is made.

4-12  3.  The commissioner may adopt regulations prescribing accounting

4-13  procedures for mortgage companies handling trust accounts and the

4-14  requirements for keeping records relating to such accounts.

4-15  4.  A licensee who operates outside this state an office or other place

4-16  of business which is licensed pursuant to this chapter shall:

4-17  (a) Make available at a location within this state the books, accounts,

4-18  papers, records and files of the office or place of business located outside

4-19  this state to the commissioner or a representative of the commissioner; or

4-20  (b) Pay the reasonable expenses for travel, meals and lodging of the

4-21  commissioner or a representative of the commissioner incurred during

4-22  any investigation or examination made at the office or place of business

4-23  located outside this state.

4-24  The licensee must be allowed to choose between paragraph (a) or (b) in

4-25  complying with the provisions of this subsection.

4-26  Sec. 5.  NRS 675.040 is hereby amended to read as follows:

4-27  675.040  This chapter does not apply to:

4-28  1.  A person doing business under the authority of any law of this state

4-29  or of the United States relating to banks, savings banks, trust companies,

4-30  savings and loan associations, credit unions, development corporations,

4-31  mortgage brokers, mortgage companies, thrift companies, pawnbrokers or

4-32  insurance companies.

4-33  2.  A real estate investment trust, as defined in 26 U.S.C. § 856.

4-34  3.  An employee benefit plan, as defined in 29 U.S.C. § 1002(3), if the

4-35  loan is made directly from money in the plan by the plan’s trustee.

4-36  4.  An attorney at law rendering services in the performance of his

4-37  duties as an attorney at law if the loan is secured by real property.

4-38  5.  A real estate broker rendering services in the performance of his

4-39  duties as a real estate broker if the loan is secured by real property.

4-40  6.  Except as otherwise provided in this subsection, any firm or

4-41  corporation:

4-42  (a) Whose principal purpose or activity is lending money on real

4-43  property which is secured by a mortgage;

4-44  (b) Approved by the Federal National Mortgage Association as a seller

4-45  or servicer; and

4-46  (c) Approved by the Department of Housing and Urban Development

4-47  and the Department of Veterans Affairs.

4-48  7.  A person who provides money for investment in loans secured by a

4-49  lien on real property, on his own account.

5-1    8.  A seller of real property who offers credit secured by a mortgage of

5-2  the property sold.

5-3    9.  A person holding a nonrestricted state gaming license issued

5-4  pursuant to the provisions of chapter 463 of NRS.

5-5    10.  A person who engages in the business of lending but who does

5-6  not engage in the business of lending in this state.

5-7    11.  Transactions exclusively between a licensee located outside this

5-8  state and a person located outside this state.

5-9    Sec. 6.  NRS 675.060 is hereby amended to read as follows:

5-10  675.060  1.  No person may engage in the business of lending in this

5-11  state without first having obtained a license from the commissioner[.] for

5-12  each office or other place of business at which the person engages in

5-13  such business.

5-14  2.  For the purpose of this section, a person engages in the business of

5-15  lending in this state if he:

5-16  (a) Solicits loans in this state or makes loans to persons in this state,

5-17  unless these are isolated, incidental or occasional transactions; or

5-18  (b) Is located in this state and solicits loans outside of this state or

5-19  makes loans to persons located outside of this state, unless these are

5-20  isolated, incidental or occasional transactions.

5-21  Sec. 7.  NRS 675.090 is hereby amended to read as follows:

5-22  675.090  1.  Application for a license must be in writing, under oath,

5-23  and in the form prescribed by the commissioner.

5-24  2.  The application must:

5-25  (a) [Give the general location where the business is to be conducted.]

5-26  Provide the address of the office or other place of business for which the

5-27  application is submitted.

5-28  (b) Contain such further relevant information as the commissioner may

5-29  require, including the names and addresses of the partners, officers,

5-30  directors or trustees, and of such of the principal owners or members as

5-31  will provide the basis for the investigations and findings contemplated by

5-32  NRS 675.110 and 675.120.

5-33  3.  A person may apply for a license for an office or other place of

5-34  business located outside this state from which the applicant will conduct

5-35  business in this state if the applicant or a subsidiary or affiliate of the

5-36  applicant has a license issued pursuant to this chapter for an office or

5-37  other place of business located in this state and if the applicant submits

5-38  with the application for a license a statement signed by the applicant

5-39  which states that the applicant agrees to:

5-40  (a) Make available at a location within this state the books, accounts,

5-41  papers, records and files of the office or place of business located outside

5-42  this state to the commissioner or a representative of the commissioner; or

5-43  (b) Pay the reasonable expenses for travel, meals and lodging of the

5-44  commissioner or a representative of the commissioner incurred during

5-45  any investigation or examination made at the office or place of business

5-46  located outside this state.

5-47  The person must be allowed to choose between paragraph (a) or (b) in

5-48  complying with the provisions of this subsection.

 

6-1    Sec. 8.  NRS 675.110 is hereby amended to read as follows:

6-2    675.110  1.  Upon the filing of the application and the payment of the

6-3  fees, the commissioner shall investigate the facts concerning the

6-4  application and the requirements provided for in NRS 675.120.

6-5    2.  [At least 20 days before entering the order granting or denying the

6-6  application, he shall mail a notice of the receipt of the application to each

6-7  licensee having a place of business in the community where the applicant

6-8  proposes to do business and he may mail such a notice to such other

6-9  persons, associations and institutions as he may see fit.

6-10  3.] The commissioner may hold a hearing on the application at a time

6-11  not less than 30 days [from] after the date the application was filed nor

6-12  more than 60 days [from] after that date. The hearing must be held in the

6-13  office of the commissioner or such other place as he may designate. Notice

6-14  in writing of the hearing must be sent to the applicant and to any licensee

6-15  to which a notice of the application had been given and to such other

6-16  persons as the commissioner may see fit, at least 10 days before the date

6-17  set for the hearing.

6-18  [4.] 3.  The commissioner shall make his order granting or denying the

6-19  application within 10 days [from] after the date of the closing of the

6-20  hearing, unless the period is extended by written agreement between the

6-21  applicant and the commissioner.

6-22  Sec. 9.  NRS 675.120 is hereby amended to read as follows:

6-23  675.120  If the commissioner finds:

6-24  1.  That the financial responsibility, experience, character and general

6-25  fitness of the applicant are such as to command the confidence of the

6-26  public and to warrant belief that the business will be operated lawfully,

6-27  honestly, fairly and efficiently, within the purposes of this chapter; and

6-28  2.  [That allowing the applicant to engage in business will promote the

6-29  convenience and advantage of the community in which the licensed office

6-30  is to be located; and

6-31  3.] That the applicant, unless he will function solely as a loan broker,

6-32  has available for the operation of the business at the specified location

6-33  liquid assets of at least $50,000,

6-34  he shall thereupon enter an order granting the application, and file his

6-35  findings of fact together with the transcript of any hearing held under this

6-36  chapter, and forthwith issue and deliver a license to the applicant.

6-37  Sec. 10.  NRS 675.220 is hereby amended to read as follows:

6-38  675.220  1.  [No change in the place of business of a licensee to a

6-39  location outside of the original city or town may be permitted under the

6-40  same license.

6-41  2.  When a] A licensee who wishes to change [his] the address of an

6-42  office or other place of business [within the same city or town, he shall]

6-43  for which he has a license pursuant to this chapter must, at least 10 days

6-44  before changing the address, give written notice [thereof] of the proposed

6-45  change to the commissioner . [, who shall investigate the facts. If the

6-46  commissioner finds:

6-47  (a) That allowing the licensee to engage in business in the proposed

6-48  location is not detrimental to the convenience and advantage of the

6-49  community; and

7-1    (b) That the proposed location is reasonably accessible to borrowers

7-2  under existing loan contracts,

7-3  he shall enter an order permitting the change and shall amend the license

7-4  accordingly.

7-5    3.  If the commissioner does not so find he shall enter an order denying

7-6  the licensee such permission in the manner specified in and subject to the

7-7  provisions of NRS 675.150.]

7-8    2.  Upon receipt of the proposed change of address pursuant to

7-9  subsection 1, the commissioner shall provide written approval of the

7-10  change and the date of the approval.

7-11  3.  If a licensee fails to provide notice as required pursuant to

7-12  subsection 1, the commissioner may impose a fine in an amount not to

7-13  exceed $500.

7-14  Sec. 11.  NRS 675.250 is hereby amended to read as follows:

7-15  675.250  1.  Each licensee shall keep and use in his business such

7-16  books and accounting records as are in accord with sound and accepted

7-17  accounting practices.

7-18  2.  Each licensee shall maintain a separate record or ledger card for the

7-19  account of each borrower and shall set forth separately the amount of cash

7-20  advance and the total amount of interest and charges , [;] but such a record

7-21  may set forth precomputed declining balances based on the scheduled

7-22  payments, without a separation of principal and charges.

7-23  3.  Each licensee shall preserve all such books and accounting records

7-24  for at least 2 years after making the final entry therein.

7-25  4.  Each licensee who operates outside this state an office or other

7-26  place of business that is licensed pursuant to this chapter shall:

7-27  (a) Make available at a location within this state the books, accounts,

7-28  papers, records and files of the office or place of business located outside

7-29  this state to the commissioner or a representative of the commissioner; or

7-30  (b) Pay the reasonable expenses for travel, meals and lodging of the

7-31  commissioner or a representative of the commissioner incurred during

7-32  any investigation or examination made at the office or place of business

7-33  located outside this state.

7-34  The licensee must be allowed to choose between paragraph (a) or (b) in

7-35  complying with the provisions of this subsection.

7-36  Sec. 12.  Chapter 604 of NRS is hereby amended by adding thereto a

7-37  new section to read as follows:

7-38  1.  The commissioner shall charge and collect from each registrant a

7-39  fee of $40 per hour for any supervision, examination, audit, investigation

7-40  or hearing conducted pursuant to this chapter or any regulations adopted

7-41  pursuant to this chapter.

7-42  2.  The commissioner shall bill each registrant upon the completion

7-43  of the activity for the fee established pursuant to subsection 1. The fee

7-44  must be paid within 30 days after the date the bill is received. Except as

7-45  otherwise provided in this subsection, any payment received after the date

7-46  due must include a penalty of 10 percent of the fee plus an additional 1

7-47  percent of the fee for each month, or portion of a month, that the fee is

7-48  not paid. The commissioner may waive the penalty for good cause.

8-1    3.  The failure of a registrant to pay the fee required pursuant to

8-2  subsection 1 as provided in this section constitutes grounds for

8-3  revocation of the certificate of registration of the registrant.

 

8-4  H