(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; including check-cashing and deferred deposit services in the definition of “financial institution” for purposes of the investigative account for financial institutions; requiring the commissioner of financial institutions to charge a fee for certain services; 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; authorizing a credit union to exercise authority and perform acts that a federal credit union may exercise or perform under certain circumstances; 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.

2-1    3.  If a licensee fails to provide notice as required pursuant to

2-2  subsection 1, the commissioner may impose an administrative fine in an

2-3  amount not to exceed $500.

2-4    Sec. 2.  NRS 645E.200 is hereby amended to read as follows:

2-5    645E.200  1.  A person who wishes to be licensed as a mortgage

2-6  company must file a written application for a license with the office of the

2-7  commissioner and pay the fee required pursuant to NRS 645E.280. An

2-8  application for a license as a mortgage company must:

2-9    (a) Be verified.

2-10  (b) State the name, residence address and business address of the

2-11  applicant and the location of each principal office and branch office at

2-12  which the mortgage company will conduct business [within] in this state[.]

2-13  , including, without limitation, any office or other place of business

2-14  located outside this state from which the mortgage company will conduct

2-15  business in this state.

2-16  (c) State the name under which the applicant will conduct business as a

2-17  mortgage company.

2-18  (d) If the applicant is not a natural person, list the name, residence

2-19  address and business address of each person who will have an interest in

2-20  the mortgage company as a principal, partner, officer, director or trustee,

2-21  specifying the capacity and title of each such person.

2-22  (e) Indicate the general plan and character of the business.

2-23  (f) State the length of time the applicant has been engaged in the

2-24  business of a mortgage company.

2-25  (g) Include a financial statement of the applicant.

2-26  (h) Include any other information required pursuant to the regulations

2-27  adopted by the commissioner or an order of the commissioner.

2-28  2.  If a mortgage company will conduct business in this state at one or

2-29  more branch offices , [within this state,] the mortgage company must apply

2-30  for a license for each such branch office.

2-31  3.  Except as otherwise provided in this chapter, the commissioner shall

2-32  issue a license to an applicant as a mortgage company if:

2-33  (a) The application complies with the requirements of this chapter; and

2-34  (b) The applicant and each general partner, officer or director of the

2-35  applicant, if the applicant is a partnership, corporation or unincorporated

2-36  association:

2-37      (1) Has a good reputation for honesty, trustworthiness and integrity

2-38  and displays competence to transact the business of a mortgage company in

2-39  a manner which safeguards the interests of the general public. The

2-40  applicant must submit satisfactory proof of these qualifications to the

2-41  commissioner.

2-42      (2) Has not been convicted of, or entered a plea of nolo contendere

2-43  to, a felony or any crime involving fraud, misrepresentation or moral

2-44  turpitude.

2-45      (3) Has not made a false statement of material fact on his application.

2-46      (4) Has not had a license that was issued pursuant to the provisions of

2-47  this chapter or chapter 645B of NRS suspended or revoked within the 10

2-48  years immediately preceding the date of his application.

3-1       (5) Has not had a license that was issued in any other state, district or

3-2  territory of the United States or any foreign country suspended or revoked

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

3-4       (6) Has not violated any provision of this chapter or chapter 645B of

3-5  NRS, a regulation adopted pursuant thereto or an order of the

3-6  commissioner.

3-7    4.  If an applicant is a partnership, corporation or unincorporated

3-8  association, the commissioner may refuse to issue a license to the applicant

3-9  if any member of the partnership or any officer or director of the

3-10  corporation or unincorporated association has committed any act or

3-11  omission that would be cause for refusing to issue a license to a natural

3-12  person.

3-13  5.  A person may apply for a license for an office or other place of

3-14  business located outside this state from which the applicant will conduct

3-15  business in this state if the applicant or a subsidiary or affiliate of the

3-16  applicant has a license issued pursuant to this chapter for an office or

3-17  other place of business located in this state and if the applicant submits

3-18  with the application for a license a statement signed by the applicant

3-19  which states that the applicant agrees to:

3-20  (a) Make available at a location within this state the books, accounts,

3-21  papers, records and files of the office or place of business located outside

3-22  this state to the commissioner or a representative of the commissioner; or

3-23  (b) Pay the reasonable expenses for travel, meals and lodging of the

3-24  commissioner or a representative of the commissioner incurred during

3-25  any investigation or examination made at the office or place of business

3-26  located outside this state.

3-27  The applicant must be allowed to choose between paragraph (a) or (b) in

3-28  complying with the provisions of this subsection.

3-29  Sec. 3.  NRS 645E.350 is hereby amended to read as follows:

3-30  645E.350  1.  Each mortgage company shall keep and maintain at all

3-31  times at each location where the mortgage company conducts business in

3-32  this state complete and suitable records of all mortgage transactions made

3-33  by the mortgage company at that location. Each mortgage company shall

3-34  also keep and maintain at all times at each such location all original books,

3-35  papers and data, or copies thereof, clearly reflecting the financial condition

3-36  of the business of the mortgage company.

3-37  2.  Each mortgage company shall submit to the commissioner each

3-38  month a report of the mortgage company’s activity for the previous month.

3-39  The report must:

3-40  (a) Specify the volume of loans made by the mortgage company for the

3-41  month or state that no loans were made in that month;

3-42  (b) Include any information required pursuant to the regulations adopted

3-43  by the commissioner; and

3-44  (c) Be submitted to the commissioner by the 15th day of the month

3-45  following the month for which the report is made.

3-46  3.  The commissioner may adopt regulations prescribing accounting

3-47  procedures for mortgage companies handling trust accounts and the

3-48  requirements for keeping records relating to such accounts.

4-1    4.  A licensee who operates outside this state an office or other place

4-2  of business which is licensed pursuant to this chapter shall:

4-3    (a) Make available at a location within this state the books, accounts,

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

4-5  this state to the commissioner or a representative of the commissioner; or

4-6    (b) Pay the reasonable expenses for travel, meals and lodging of the

4-7  commissioner or a representative of the commissioner incurred during

4-8  any investigation or examination made at the office or place of business

4-9  located outside this state.

4-10  The licensee must be allowed to choose between paragraph (a) or (b) in

4-11  complying with the provisions of this subsection.

4-12      Sec. 4.  NRS 232.545 is hereby amended to read as follows:

4-13    232.545  1.  An investigative account for financial institutions is

4-14  hereby created in the state general fund. The account consists of money

4-15  which is:

4-16    (a) Received by the department of business and industry in connection

4-17  with the licensing of financial institutions and the investigation of persons

4-18  associated with those institutions; and

4-19    (b) Required by law to be placed therein.

4-20    2.  The director of the department of business and industry or his

4-21  designee may authorize expenditures from the investigative account to pay

4-22  the expenses incurred:

4-23    (a) In investigating applications for licensing of financial institutions

4-24  and in investigating persons associated with those institutions;

4-25    (b) In conducting special investigations relating to financial institutions

4-26  and persons associated with those institutions; and

4-27    (c) In connection with mergers, consolidations, conversions,

4-28  receiverships and liquidations of financial institutions.

4-29  3.  As used in this section, “financial institution” means an institution

4-30  for which licensing or registration is required by the provisions of Titles

4-31  55 and 56 and chapters 604, 645B, 645E and 649 of NRS.

4-32  Sec. 5.  Chapter 604 of NRS is hereby amended by adding thereto a

4-33  new section to read as follows:

4-34  1.  The commissioner shall charge and collect from each registrant a

4-35  fee of $40 per hour for any supervision, examination, audit, investigation

4-36  or hearing conducted pursuant to this chapter or any regulations adopted

4-37  pursuant to this chapter.

4-38  2.  The commissioner shall bill each registrant upon the completion

4-39  of the activity for the fee established pursuant to subsection 1. The fee

4-40  must be paid within 30 days after the date the bill is received. Except as

4-41  otherwise provided in this subsection, any payment received after the date

4-42  due must include a penalty of 10 percent of the fee plus an additional 1

4-43  percent of the fee for each month, or portion of a month, that the fee is

4-44  not paid. The commissioner may waive the penalty for good cause.

4-45  3.  The failure of a registrant to pay the fee required pursuant to

4-46  subsection 1 as provided in this section constitutes grounds for

4-47  revocation of the certificate of registration of the registrant.

 

 

5-1    Sec. 6.  NRS 675.060 is hereby amended to read as follows:

5-2    675.060  1.  No person may engage in the business of lending in this

5-3  state without first having obtained a license from the commissioner[.] for

5-4  each office or other place of business at which the person engages in

5-5  such business.

5-6    2.  For the purpose of this section, a person engages in the business of

5-7  lending in this state if he:

5-8    (a) Solicits loans in this state or makes loans to persons in this state,

5-9  unless these are isolated, incidental or occasional transactions; or

5-10  (b) Is located in this state and solicits loans outside of this state or

5-11  makes loans to persons located outside of this state, unless these are

5-12  isolated, incidental or occasional transactions.

5-13  Sec. 7.  NRS 675.090 is hereby amended to read as follows:

5-14  675.090  1.  Application for a license must be in writing, under oath,

5-15  and in the form prescribed by the commissioner.

5-16  2.  The application must:

5-17  (a) [Give the general location where the business is to be conducted.]

5-18  Provide the address of the office or other place of business for which the

5-19  application is submitted.

5-20  (b) Contain such further relevant information as the commissioner may

5-21  require, including the names and addresses of the partners, officers,

5-22  directors or trustees, and of such of the principal owners or members as

5-23  will provide the basis for the investigations and findings contemplated by

5-24  NRS 675.110 and 675.120.

5-25  3.  A person may apply for a license for an office or other place of

5-26  business located outside this state from which the applicant will conduct

5-27  business in this state if the applicant or a subsidiary or affiliate of the

5-28  applicant has a license issued pursuant to this chapter for an office or

5-29  other place of business located in this state and if the applicant submits

5-30  with the application for a license a statement signed by the applicant

5-31  which states that the applicant agrees to:

5-32  (a) Make available at a location within this state the books, accounts,

5-33  papers, records and files of the office or place of business located outside

5-34  this state to the commissioner or a representative of the commissioner; or

5-35  (b) Pay the reasonable expenses for travel, meals and lodging of the

5-36  commissioner or a representative of the commissioner incurred during

5-37  any investigation or examination made at the office or place of business

5-38  located outside this state.

5-39  The person must be allowed to choose between paragraph (a) or (b) in

5-40  complying with the provisions of this subsection.

5-41  Sec. 8.  NRS 675.110 is hereby amended to read as follows:

5-42  675.110  1.  Upon the filing of the application and the payment of the

5-43  fees, the commissioner shall investigate the facts concerning the

5-44  application and the requirements provided for in NRS 675.120.

5-45  2.  [At least 20 days before entering the order granting or denying the

5-46  application, he shall mail a notice of the receipt of the application to each

5-47  licensee having a place of business in the community where the applicant

5-48  proposes to do business and he may mail such a notice to such other

5-49  persons, associations and institutions as he may see fit.

6-1    3.] The commissioner may hold a hearing on the application at a time

6-2  not less than 30 days [from] after the date the application was filed nor

6-3  more than 60 days [from] after that date. The hearing must be held in the

6-4  office of the commissioner or such other place as he may designate. Notice

6-5  in writing of the hearing must be sent to the applicant and to any licensee

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

6-7  persons as the commissioner may see fit, at least 10 days before the date

6-8  set for the hearing.

6-9    [4.] 3.  The commissioner shall make his order granting or denying the

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

6-11  hearing, unless the period is extended by written agreement between the

6-12  applicant and the commissioner.

6-13  Sec. 9.  NRS 675.120 is hereby amended to read as follows:

6-14  675.120  If the commissioner finds:

6-15  1.  That the financial responsibility, experience, character and general

6-16  fitness of the applicant are such as to command the confidence of the

6-17  public and to warrant belief that the business will be operated lawfully,

6-18  honestly, fairly and efficiently, within the purposes of this chapter; and

6-19  2.  [That allowing the applicant to engage in business will promote the

6-20  convenience and advantage of the community in which the licensed office

6-21  is to be located; and

6-22  3.] That the applicant, unless he will function solely as a loan broker,

6-23  has available for the operation of the business at the specified location

6-24  liquid assets of at least $50,000,

6-25  he shall thereupon enter an order granting the application, and file his

6-26  findings of fact together with the transcript of any hearing held under this

6-27  chapter, and forthwith issue and deliver a license to the applicant.

6-28  Sec. 10.  NRS 675.220 is hereby amended to read as follows:

6-29  675.220  1.  [No change in the place of business of a licensee to a

6-30  location outside of the original city or town may be permitted under the

6-31  same license.

6-32  2.  When a] A licensee who wishes to change [his] the address of an

6-33  office or other place of business [within the same city or town, he shall]

6-34  for which he has a license pursuant to this chapter must, at least 10 days

6-35  before changing the address, give written notice [thereof] of the proposed

6-36  change to the commissioner . [, who shall investigate the facts. If the

6-37  commissioner finds:

6-38  (a) That allowing the licensee to engage in business in the proposed

6-39  location is not detrimental to the convenience and advantage of the

6-40  community; and

6-41  (b) That the proposed location is reasonably accessible to borrowers

6-42  under existing loan contracts,

6-43  he shall enter an order permitting the change and shall amend the license

6-44  accordingly.

6-45  3.  If the commissioner does not so find he shall enter an order denying

6-46  the licensee such permission in the manner specified in and subject to the

6-47  provisions of NRS 675.150.]

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

7-2  subsection 1, the commissioner shall provide written approval of the

7-3  change and the date of the approval.

7-4    3.  If a licensee fails to provide notice as required pursuant to

7-5  subsection 1, the commissioner may impose a fine in an amount not to

7-6  exceed $500.

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

7-8    675.250  1.  Each licensee shall keep and use in his business such

7-9  books and accounting records as are in accord with sound and accepted

7-10  accounting practices.

7-11  2.  Each licensee shall maintain a separate record or ledger card for the

7-12  account of each borrower and shall set forth separately the amount of cash

7-13  advance and the total amount of interest and charges , [;] but such a record

7-14  may set forth precomputed declining balances based on the scheduled

7-15  payments, without a separation of principal and charges.

7-16  3.  Each licensee shall preserve all such books and accounting records

7-17  for at least 2 years after making the final entry therein.

7-18  4.  Each licensee who operates outside this state an office or other

7-19  place of business that is licensed pursuant to this chapter shall:

7-20  (a) Make available at a location within this state the books, accounts,

7-21  papers, records and files of the office or place of business located outside

7-22  this state to the commissioner or a representative of the commissioner; or

7-23  (b) Pay the reasonable expenses for travel, meals and lodging of the

7-24  commissioner or a representative of the commissioner incurred during

7-25  any investigation or examination made at the office or place of business

7-26  located outside this state.

7-27  The licensee must be allowed to choose between paragraph (a) or (b) in

7-28  complying with the provisions of this subsection.

7-29    Sec. 12.  NRS 678.460 is hereby amended to read as follows:

7-30    678.460  Every credit union organized under the provisions of this

7-31  chapter [has] :

7-32    1.  Has all the powers granted by NRS 81.500 that are not inconsistent

7-33  with the provisions of this chapter and in addition thereto, the powers

7-34  enumerated in NRS 678.470 to 678.500, inclusive [.] ; and

7-35    2.  May exercise any authority and perform all acts that a federal

7-36  credit union may exercise or perform, with the consent and written

7-37  approval of the commissioner. The commissioner may, by regulation,

7-38  waive or modify a requirement of Nevada law if the corresponding

7-39  requirement for federal credit unions has been or is eliminated or

7-40  modified.

 

7-41  H