requires two-thirds majority vote (§§ 5, 6)
A.B. 490
Assembly
Bill No. 490–Committee on
Commerce and Labor
March 24, 2003
____________
Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions governing mortgage brokers and mortgage agents. (BDR 54‑998)
FISCAL NOTE: Effect on Local Government: Yes.
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 mortgage investments; creating the Board for the Regulation of Mortgage Brokers and Mortgage Agents; authorizing the Board to direct the Commissioner of Financial Institutions in regulating mortgage brokers and mortgage agents; providing for the licensure of mortgage agents; providing that advertising spokespersons for mortgage brokers are jointly and severally liable for damages caused by the mortgage brokers under certain circumstances; increasing the amount of continuing education annually required of mortgage brokers and mortgage agents; 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
1-2 thereto the provisions set forth as sections 2 to 10, inclusive, of this
1-3 act.
1-4 Sec. 2. “Board” means the Board for the Regulation of
1-5 Mortgage Brokers and Mortgage Agents created by section 8 of
1-6 this act.
1-7 Sec. 3. 1. An advertising spokesperson for a mortgage
1-8 broker is jointly and severally liable with the mortgage broker for
1-9 damages caused by the mortgage broker by fraud, embezzlement,
2-1 misappropriation of property, a violation of the provisions of this
2-2 chapter or the regulations adopted pursuant thereto, or an action
2-3 of the mortgage broker that is grounds for disciplinary action, if:
2-4 (a) The advertising spokesperson knew or should have known
2-5 of the fraud, embezzlement, misappropriation of property,
2-6 violation of the provisions of this chapter or the regulations
2-7 adopted pursuant thereto, or action of the mortgage broker that is
2-8 grounds for disciplinary action; or
2-9 (b) In advertising for the mortgage broker, the advertising
2-10 spokesperson knew or should have known that:
2-11 (1) The conduct of the advertising spokesperson was likely
2-12 to deceive, defraud or harm the public or any person who engaged
2-13 in business with the mortgage broker; or
2-14 (2) The advertising spokesperson was disseminating
2-15 material information concerning the mortgage broker or the
2-16 business, products or services of the mortgage broker, which was
2-17 false or misleading.
2-18 2. As used in this section:
2-19 (a) “Advertising for a mortgage broker” means advertising or
2-20 otherwise promoting a mortgage broker or the business, products
2-21 or services of the mortgage broker using any medium of
2-22 communication.
2-23 (b) “Advertising spokesperson for a mortgage broker” or
2-24 “advertising spokesperson” means a person who consents to and
2-25 receives compensation for using his name or likeness in
2-26 advertising for a mortgage broker.
2-27 Sec. 4. A person shall not act as or provide any of the
2-28 services of a mortgage agent or otherwise engage in, carry on or
2-29 hold himself out as engaging in or carrying on the activities of a
2-30 mortgage agent unless the person:
2-31 1. Has a license as a mortgage agent issued pursuant to
2-32 section 5 of this act; and
2-33 2. Is registered pursuant to NRS 645B.450.
2-34 Sec. 5. 1. To obtain a license as a mortgage agent, a person
2-35 must:
2-36 (a) Be a natural person;
2-37 (b) File a written application for a license as a mortgage agent
2-38 with the office of the Commissioner;
2-39 (c) Comply with the applicable requirements of this chapter;
2-40 and
2-41 (d) Pay an application fee set by the Commissioner of not more
2-42 than $1,500.
2-43 2. An application for a license as a mortgage agent must:
2-44 (a) Be verified;
2-45 (b) State the name and residence address of the applicant;
3-1 (c) Include a provision by which the applicant gives his written
3-2 consent to an investigation of his credit history, criminal history
3-3 and background; and
3-4 (d) Include any other information or supporting materials
3-5 required pursuant to the regulations adopted by the Commissioner
3-6 or an order of the Commissioner. Such information or supporting
3-7 materials may include, without limitation, a complete set of
3-8 fingerprints from the person and other forms of identification of
3-9 the person.
3-10 3. Except as otherwise provided in this chapter, the
3-11 Commissioner shall issue a license as a mortgage agent to an
3-12 applicant if:
3-13 (a) The application complies with the applicable requirements
3-14 of this chapter; and
3-15 (b) The applicant:
3-16 (1) Has not been convicted of, or entered a plea of nolo
3-17 contendere to, a felony or any crime involving fraud,
3-18 misrepresentation or moral turpitude;
3-19 (2) Has not had a financial services license suspended or
3-20 revoked within the immediately preceding 10 years;
3-21 (3) Has not made a false statement of material fact on his
3-22 application;
3-23 (4) Has not violated any provision of this chapter or
3-24 chapter 645E of NRS, a regulation adopted pursuant thereto or an
3-25 order of the Commissioner; and
3-26 (5) Has a good reputation for honesty, trustworthiness and
3-27 integrity and displays competence to transact the business of a
3-28 mortgage agent in a manner which safeguards the interests of the
3-29 general public. The applicant must submit satisfactory proof of
3-30 these qualifications to the Commissioner.
3-31 4. Money received by the Commissioner pursuant to this
3-32 section must be placed in the Investigative Account created by
3-33 NRS 232.545.
3-34 Sec. 6. 1. A license as a mortgage agent issued pursuant to
3-35 section 5 of this act expires each year on June 30, unless it is
3-36 renewed. To renew a license as a mortgage agent, the holder of the
3-37 license must submit to the Commissioner on or before June 30 of
3-38 each year:
3-39 (a) An application for renewal;
3-40 (b) Satisfactory proof that the holder of the license as a
3-41 mortgage agent attended at least 10 hours of certified courses of
3-42 continuing education during the 12 months immediately preceding
3-43 the date on which the license expires; and
3-44 (c) A renewal fee set by the Commissioner of not more than
3-45 $500.
4-1 2. If the holder of the license as a mortgage agent fails to
4-2 submit any item required pursuant to subsection 1 to the
4-3 Commissioner on or before June 30 of any year, the license is
4-4 cancelled. The Commissioner may reinstate a cancelled license if
4-5 the holder of the license submits to the Commissioner:
4-6 (a) An application for renewal;
4-7 (b) The fee required to renew the license pursuant to this
4-8 section; and
4-9 (c) A reinstatement fee of $200.
4-10 3. To be issued a duplicate copy of a license as a mortgage
4-11 agent, a person must make a satisfactory showing of its loss and
4-12 pay a fee of $10.
4-13 4. Money received by the Commissioner pursuant to this
4-14 section must be deposited in the State Treasury for credit to the
4-15 State General Fund.
4-16 5. As used in this section, “certified course of continuing
4-17 education” has the meaning ascribed to it in NRS 645B.051.
4-18 Sec. 7. 1. In addition to any other requirement for the
4-19 issuance of a license as a mortgage agent pursuant to section 5 of
4-20 this act, an applicant for the issuance of the license must include
4-21 his social security number in his application.
4-22 2. In addition to any other requirement for the issuance or
4-23 renewal of a license as a mortgage agent pursuant to section 5 or
4-24 6 of this act, an applicant for the issuance or renewal of the
4-25 license shall submit to the Commissioner the statement prescribed
4-26 by the Welfare Division of the Department of Human Resources
4-27 pursuant to NRS 425.520. The statement must be completed and
4-28 signed by the applicant.
4-29 3. The Commissioner shall include the statement required
4-30 pursuant to subsection 2 in:
4-31 (a) The application or any other forms that must be submitted
4-32 for the issuance or renewal of the license as a mortgage agent; or
4-33 (b) A separate form prescribed by the Commissioner.
4-34 4. The license as a mortgage agent may not be issued or
4-35 renewed by the Commissioner if the applicant:
4-36 (a) Fails to submit the statement required pursuant to
4-37 subsection 2; or
4-38 (b) Indicates on the statement submitted pursuant to
4-39 subsection 2 that he is subject to a court order for the support of a
4-40 child and is not in compliance with the order or a plan approved
4-41 by the district attorney or other public agency enforcing the order
4-42 for the repayment of the amount owed pursuant to the order.
4-43 5. If an applicant indicates on the statement submitted
4-44 pursuant to subsection 2 that he is subject to a court order for the
4-45 support of a child and is not in compliance with the order or a
5-1 plan approved by the district attorney or other public agency
5-2 enforcing the order for the repayment of the amount owed
5-3 pursuant to the order, the Commissioner shall advise the applicant
5-4 to contact the district attorney or other public agency enforcing
5-5 the order to determine the actions that the applicant may take to
5-6 satisfy the arrearage.
5-7 Sec. 8. 1. The Board for the Regulation of Mortgage
5-8 Brokers and Mortgage Agents is hereby created. The Board
5-9 consists of five members appointed by the Governor. Two of the
5-10 members must hold a license issued pursuant to this chapter.
5-11 Three of the members must be representatives of the general
5-12 public. A member may not serve more than two consecutive terms.
5-13 2. The Governor shall appoint the Chairman of the Board
5-14 from among the members of the Board who are representatives of
5-15 the general public.
5-16 3. A majority of the members constitutes a quorum, and a
5-17 majority of those present must concur in any decision.
5-18 4. Each member is entitled to receive a salary of not more
5-19 than $80, as fixed by the Board, for each day’s attendance at a
5-20 meeting of the Board.
5-21 5. While engaged in the business of the Board, each member
5-22 is entitled to receive the per diem allowance and travel expenses
5-23 provided for state officers and employees generally.
5-24 6. The Commissioner and Division shall provide technical
5-25 advice, support and assistance to the Board.
5-26 Sec. 9. The Board shall:
5-27 1. Establish policies and standards for the administration and
5-28 enforcement of the provisions of this chapter.
5-29 2. Meet not less than once each quarter to review the actions
5-30 and decisions of the Commissioner and Division in administering
5-31 and enforcing the provisions of this chapter.
5-32 Sec. 10. The Board may:
5-33 1. Direct the actions and decisions of the Commissioner and
5-34 Division with regard to the administration and enforcement of the
5-35 provisions of this chapter.
5-36 2. Adopt regulations as necessary to administer and enforce
5-37 this chapter, including, without limitation, regulations which
5-38 revise or repeal any regulations adopted by the Commissioner
5-39 pursuant to this chapter.
5-40 3. Require the Commissioner or Division to provide any
5-41 records or information deemed necessary or useful to the Board in
5-42 exercising its powers.
5-43 Sec. 11. NRS 645B.010 is hereby amended to read as follows:
5-44 645B.010 As used in this chapter, unless the context otherwise
5-45 requires, the words and terms defined in NRS [645B.0103]
6-1 645B.0105 to 645B.0135, inclusive, and section 2 of this act, have
6-2 the meanings ascribed to them in those sections.
6-3 Sec. 12. NRS 645B.0123 is hereby amended to read as
6-4 follows:
6-5 645B.0123 “Licensee” means a person who is licensed as a
6-6 mortgage broker pursuant to this chapter. The term does not include
6-7 a person issued a license as a mortgage agent pursuant to section
6-8 5 of this act.
6-9 Sec. 13. NRS 645B.016 is hereby amended to read as follows:
6-10 645B.016 Except as otherwise provided in NRS 645B.690:
6-11 1. A person who claims an exemption from the provisions of
6-12 this chapter pursuant to subsection 1 or 6 of NRS 645B.015 must:
6-13 (a) File a written application for a certificate of exemption with
6-14 the office of the Commissioner;
6-15 (b) Pay the fee required pursuant to NRS 645B.050; and
6-16 (c) Include with the written application satisfactory proof that
6-17 the person meets the requirements of subsection 1 or 6 of
6-18 NRS 645B.015.
6-19 2. The Commissioner may require a person who claims an
6-20 exemption from the provisions of this chapter pursuant to
6-21 subsections 2 to 5, inclusive, or 7 to 10, inclusive, of NRS 645B.015
6-22 to:
6-23 (a) File a written application for a certificate of exemption with
6-24 the office of the Commissioner;
6-25 (b) Pay the fee required pursuant to NRS 645B.050; and
6-26 (c) Include with the written application satisfactory proof that
6-27 the person meets the requirements of at least one of those
6-28 exemptions.
6-29 3. A certificate of exemption expires automatically if, at any
6-30 time, the person who claims the exemption no longer meets the
6-31 requirements of at least one exemption set forth in the provisions of
6-32 NRS 645B.015.
6-33 4. If a certificate of exemption expires automatically pursuant
6-34 to this section, the person shall not provide any of the services of a
6-35 mortgage broker or mortgage agent or otherwise engage in, carry
6-36 on or hold himself out as engaging in or carrying on the business of
6-37 a mortgage broker[,] or mortgage agent unless the person applies
6-38 for and is issued:
6-39 (a) A license as a mortgage broker or mortgage agent, as
6-40 applicable, pursuant to this chapter; or
6-41 (b) Another certificate of exemption.
6-42 5. The Commissioner may impose upon a person who is
6-43 required to apply for a certificate of exemption or who holds a
6-44 certificate of exemption an administrative fine of not more than
6-45 $10,000 for each violation that he commits, if the person:
7-1 (a) Has knowingly made or caused to be made to the
7-2 Commissioner any false representation of material fact;
7-3 (b) Has suppressed or withheld from the Commissioner any
7-4 information which the person possesses and which, if submitted by
7-5 him, would have rendered the person ineligible to hold a certificate
7-6 of exemption; or
7-7 (c) Has violated any provision of this chapter, a regulation
7-8 adopted pursuant to this chapter or an order of the Commissioner
7-9 that applies to a person who is required to apply for a certificate of
7-10 exemption or who holds a certificate of exemption.
7-11 6. A certificate of exemption does not exempt the holder from
7-12 the requirements of NRS 645B.450.
7-13 Sec. 14. NRS 645B.035 is hereby amended to read as follows:
7-14 645B.035 1. A license as a mortgage broker entitles a
7-15 licensee to engage only in the activities authorized by this chapter.
7-16 2. The provisions of this chapter do not prohibit a licensee
7-17 from:
7-18 (a) Holding a license as a mortgage company pursuant to
7-19 chapter 645E of NRS; or
7-20 (b) Conducting the business of a mortgage company and the
7-21 business of a mortgage broker in the same office or place of
7-22 business.
7-23 Sec. 15. NRS 645B.050 is hereby amended to read as follows:
7-24 645B.050 1. A license as a mortgage broker issued pursuant
7-25 to this chapter expires each year on June 30, unless it is renewed. To
7-26 renew such a license, the licensee must submit to the Commissioner
7-27 on or before June 30 of each year:
7-28 (a) An application for renewal;
7-29 (b) The fee required to renew the license pursuant to this
7-30 section;
7-31 (c) If the licensee is a natural person, the statement required
7-32 pursuant to NRS 645B.023; and
7-33 (d) The information required pursuant to NRS 645B.051.
7-34 2. If the licensee fails to submit any item required pursuant to
7-35 subsection 1 to the Commissioner on or before June 30 of any year,
7-36 the license is cancelled. The Commissioner may reinstate a
7-37 cancelled license if the licensee submits to the Commissioner:
7-38 (a) An application for renewal;
7-39 (b) The fee required to renew the license pursuant to this
7-40 section;
7-41 (c) If the licensee is a natural person, the statement required
7-42 pursuant to NRS 645B.023;
7-43 (d) The information required pursuant to NRS 645B.051; and
7-44 (e) Except as otherwise provided in this section, a reinstatement
7-45 fee of $200.
8-1 3. Except as otherwise provided in NRS 645B.016, a certificate
8-2 of exemption issued pursuant to this chapter expires each year on
8-3 December 31, unless it is renewed. To renew a certificate of
8-4 exemption, a person must submit to the Commissioner on or before
8-5 December 31 of each year:
8-6 (a) An application for renewal that includes satisfactory proof
8-7 that the person meets the requirements for an exemption from the
8-8 provisions of this chapter; and
8-9 (b) The fee required to renew the certificate of exemption.
8-10 4. If the person fails to submit any item required pursuant to
8-11 subsection 3 to the Commissioner on or before December 31 of any
8-12 year, the certificate of exemption is cancelled. Except as otherwise
8-13 provided in NRS 645B.016, the Commissioner may reinstate a
8-14 cancelled certificate of exemption if the person submits to the
8-15 Commissioner:
8-16 (a) An application for renewal that includes satisfactory proof
8-17 that the person meets the requirements for an exemption from the
8-18 provisions of this chapter;
8-19 (b) The fee required to renew the certificate of exemption; and
8-20 (c) Except as otherwise provided in this section, a reinstatement
8-21 fee of $100.
8-22 5. Except as otherwise provided in this section, a person must
8-23 pay the following fees to apply for, to be issued or to renew a
8-24 license as a mortgage broker pursuant to this chapter:
8-25 (a) To file an original application or a license, $1,500 for the
8-26 principal office and $40 for each branch office. The person must
8-27 also pay such additional expenses incurred in the process of
8-28 investigation as the Commissioner deems necessary. All money
8-29 received by the Commissioner pursuant to this paragraph must be
8-30 placed in the Investigative Account created by NRS 232.545.
8-31 (b) To be issued a license, $1,000 for the principal office and
8-32 $60 for each branch office.
8-33 (c) To renew a license, $500 for the principal office and $100
8-34 for each branch office.
8-35 6. Except as otherwise provided in this section, a person must
8-36 pay the following fees to apply for or to renew a certificate of
8-37 exemption pursuant to this chapter:
8-38 (a) To file an application for a certificate of exemption, $200.
8-39 (b) To renew a certificate of exemption, $100.
8-40 7. To be issued a duplicate copy of any license or certificate of
8-41 exemption, a person must make a satisfactory showing of its loss
8-42 and pay a fee of $10.
8-43 8. Except as otherwise provided in this chapter, all fees
8-44 received pursuant to this chapter must be deposited in the State
8-45 Treasury for credit to the State General Fund.
9-1 9. The Commissioner may, by regulation, increase any fee set
9-2 forth in this section if the Commissioner determines that such an
9-3 increase is necessary for the Commissioner to carry out his duties
9-4 pursuant to this chapter. The amount of any increase in a fee
9-5 pursuant to this subsection must not exceed the amount determined
9-6 to be necessary for the Commissioner to carry out his duties
9-7 pursuant to this chapter.
9-8 Sec. 16. NRS 645B.050 is hereby amended to read as follows:
9-9 645B.050 1. A license as a mortgage broker issued pursuant
9-10 to this chapter expires each year on June 30, unless it is renewed. To
9-11 renew such a license, the licensee must submit to the Commissioner
9-12 on or before June 30 of each year:
9-13 (a) An application for renewal;
9-14 (b) The fee required to renew the license pursuant to this
9-15 section; and
9-16 (c) The information required pursuant to NRS 645B.051.
9-17 2. If the licensee fails to submit any item required pursuant to
9-18 subsection 1 to the Commissioner on or before June 30 of any year,
9-19 the license is cancelled. The Commissioner may reinstate a
9-20 cancelled license if the licensee submits to the Commissioner:
9-21 (a) An application for renewal;
9-22 (b) The fee required to renew the license pursuant to this
9-23 section;
9-24 (c) The information required pursuant to NRS 645B.051; and
9-25 (d) Except as otherwise provided in this section, a reinstatement
9-26 fee of $200.
9-27 3. Except as otherwise provided in NRS 645B.016, a certificate
9-28 of exemption issued pursuant to this chapter expires each year on
9-29 December 31, unless it is renewed. To renew a certificate of
9-30 exemption, a person must submit to the Commissioner on or before
9-31 December 31 of each year:
9-32 (a) An application for renewal that includes satisfactory proof
9-33 that the person meets the requirements for an exemption from the
9-34 provisions of this chapter; and
9-35 (b) The fee required to renew the certificate of exemption.
9-36 4. If the person fails to submit any item required pursuant to
9-37 subsection 3 to the Commissioner on or before December 31 of any
9-38 year, the certificate of exemption is cancelled. Except as otherwise
9-39 provided in NRS 645B.016, the Commissioner may reinstate a
9-40 cancelled certificate of exemption if the person submits to the
9-41 Commissioner:
9-42 (a) An application for renewal that includes satisfactory proof
9-43 that the person meets the requirements for an exemption from the
9-44 provisions of this chapter;
9-45 (b) The fee required to renew the certificate of exemption; and
10-1 (c) Except as otherwise provided in this section, a reinstatement
10-2 fee of $100.
10-3 5. Except as otherwise provided in this section, a person must
10-4 pay the following fees to apply for, to be issued or to renew a
10-5 license as a mortgage broker pursuant to this chapter:
10-6 (a) To file an original application for a license, $1,500 for the
10-7 principal office and $40 for each branch office. The person must
10-8 also pay such additional expenses incurred in the process of
10-9 investigation as the Commissioner deems necessary. All money
10-10 received by the Commissioner pursuant to this paragraph must be
10-11 placed in the Investigative Account created by NRS 232.545.
10-12 (b) To be issued a license, $1,000 for the principal office and
10-13 $60 for each branch office.
10-14 (c) To renew a license, $500 for the principal office and $100
10-15 for each branch office.
10-16 6. Except as otherwise provided in this section, a person must
10-17 pay the following fees to apply for or to renew a certificate of
10-18 exemption pursuant to this chapter:
10-19 (a) To file an application for a certificate of exemption, $200.
10-20 (b) To renew a certificate of exemption, $100.
10-21 7. To be issued a duplicate copy of any license or certificate of
10-22 exemption, a person must make a satisfactory showing of its loss
10-23 and pay a fee of $10.
10-24 8. Except as otherwise provided in this chapter, all fees
10-25 received pursuant to this chapter must be deposited in the State
10-26 Treasury for credit to the State General Fund.
10-27 9. The Commissioner may, by regulation, increase any fee set
10-28 forth in this section if the Commissioner determines that such an
10-29 increase is necessary for the Commissioner to carry out his duties
10-30 pursuant to this chapter. The amount of any increase in a fee
10-31 pursuant to this subsection must not exceed the amount determined
10-32 to be necessary for the Commissioner to carry out his duties
10-33 pursuant to this chapter.
10-34 Sec. 17. NRS 645B.051 is hereby amended to read as follows:
10-35 645B.051 1. In addition to the requirements set forth in NRS
10-36 645B.050, to renew a license[:] as a mortgage broker:
10-37 (a) If the licensee is a natural person, the licensee must submit to
10-38 the Commissioner satisfactory proof that the licensee attended at
10-39 least [5] 10 hours of certified courses of continuing education during
10-40 the 12 months immediately preceding the date on which the license
10-41 expires.
10-42 (b) If the licensee is not a natural person, the licensee must
10-43 submit to the Commissioner satisfactory proof that each natural
10-44 person who supervises the daily business of the licensee attended at
10-45 least [5] 10 hours of certified courses of continuing education during
11-1 the 12 months immediately preceding the date on which the license
11-2 expires.
11-3 2. As used in this section, “certified course of continuing
11-4 education” means a course of continuing education which relates to
11-5 the mortgage industry or mortgage transactions and which is:
11-6 (a) Certified by the National Association of Mortgage Brokers
11-7 or any successor in interest to that organization; or
11-8 (b) Certified in a manner established by the Commissioner, if
11-9 the National Association of Mortgage Brokers or any successor in
11-10 interest to that organization ceases to exist.
11-11 Sec. 18. NRS 645B.060 is hereby amended to read as follows:
11-12 645B.060 1. Subject to the administrative control of the
11-13 Board and the Director of the Department of Business and Industry,
11-14 the Commissioner shall exercise general supervision and control
11-15 over mortgage brokers doing business in this state.
11-16 2. In addition to the other duties imposed upon him by law, the
11-17 Commissioner shall:
11-18 (a) Adopt any regulations that are necessary to carry out the
11-19 provisions of this chapter, except as to loan brokerage fees.
11-20 (b) Conduct such investigations as may be necessary to
11-21 determine whether any person has violated any provision of this
11-22 chapter, a regulation adopted pursuant to this chapter or an order of
11-23 the Commissioner.
11-24 (c) Conduct an annual examination of each mortgage broker
11-25 doing business in this state. The annual examination must include,
11-26 without limitation, a formal exit review with the mortgage broker.
11-27 The Commissioner shall adopt regulations prescribing:
11-28 (1) Standards for determining the rating of each mortgage
11-29 broker based upon the results of the annual examination; and
11-30 (2) Procedures for resolving any objections made by the
11-31 mortgage broker to the results of the annual examination. The
11-32 results of the annual examination may not be opened to public
11-33 inspection pursuant to NRS 645B.090 until any objections made by
11-34 the mortgage broker have been decided by the Commissioner.
11-35 (d) Conduct such other examinations, periodic or special audits,
11-36 investigations and hearings as may be necessary and proper for the
11-37 efficient administration of the laws of this state regarding mortgage
11-38 brokers and mortgage agents. The Commissioner shall adopt
11-39 regulations specifying the general guidelines that will be followed
11-40 when a periodic or special audit of a mortgage broker is conducted
11-41 pursuant to this chapter.
11-42 (e) Classify as confidential certain records and information
11-43 obtained by the Division when those matters are obtained from a
11-44 governmental agency upon the express condition that they remain
12-1 confidential. This paragraph does not limit examination by the
12-2 Legislative Auditor.
12-3 (f) Conduct such examinations and investigations as are
12-4 necessary to ensure that mortgage brokers and mortgage agents
12-5 meet the requirements of this chapter for obtaining a license, both at
12-6 the time of the application for a license and thereafter on a
12-7 continuing basis.
12-8 3. For each special audit, investigation or examination, a
12-9 mortgage broker or mortgage agent shall pay a fee based on the rate
12-10 established pursuant to NRS 658.101.
12-11 Sec. 19. NRS 645B.450 is hereby amended to read as follows:
12-12 645B.450 1. A person [shall not act as or provide any of the
12-13 services of a mortgage agent or otherwise engage in, carry on or
12-14 hold himself out as engaging in or carrying on the activities of a
12-15 mortgage agent if the person:
12-16 (a) Has been convicted of, or entered a plea of nolo contendere
12-17 to, a felony or any crime involving fraud, misrepresentation or
12-18 moral turpitude; or
12-19 (b) Has had a financial services license or registration suspended
12-20 or revoked within the immediately preceding 10 years.] may not be
12-21 registered pursuant to this section unless he has been issued a
12-22 license as a mortgage agent pursuant to section 5 of this act.
12-23 2. A mortgage agent may not be associated with or employed
12-24 by more than one mortgage broker at the same time.
12-25 3. A mortgage broker shall register with the Division each
12-26 person who will be associated with or employed by the mortgage
12-27 broker as a mortgage agent. A mortgage broker shall register each
12-28 such person with the Division when the person begins his
12-29 association or employment with the mortgage broker and annually
12-30 thereafter. A registration expires 12 months after its effective date.
12-31 4. To register a person as a mortgage agent, a mortgage broker
12-32 must[:
12-33 (a) Submit] submit to the Division a registration form which is
12-34 provided by the Division and which:
12-35 [(1)] (a) States the name, residence address and business
12-36 address of the person;
12-37 [(2)] (b) Is signed by the person;
12-38 [(3) Includes a provision by which the person gives his
12-39 written consent to an investigation of his credit history, criminal
12-40 history and background; and
12-41 (4)] and
12-42 (c) Includes any other information or supporting materials
12-43 required by the regulations adopted by the Commissioner. [Such
12-44 information or supporting materials may include, without limitation,
13-1 a complete set of fingerprints from the person, the social security
13-2 number of the person and other forms of identification of the person.
13-3 (b) For each initial registration, pay the actual costs and
13-4 expenses incurred by the Division to investigate the credit history,
13-5 criminal history and background of the person. All money received
13-6 pursuant to this paragraph must be placed in the Investigative
13-7 Account created by NRS 232.545.
13-8 (c) For each annual registration, submit to the Division
13-9 satisfactory proof that the person attended at least 5 hours of
13-10 certified courses of continuing education during the 12 months
13-11 immediately preceding the date on which the registration expires.
13-12 5. Not later than the date on which the mortgage broker
13-13 submits the information for annual registration required by
13-14 subsection 4, the person being registered shall pay an annual
13-15 registration fee of $125. If the person does not pay the annual
13-16 registration fee, the person shall be deemed to be unregistered for
13-17 the purposes of this chapter.
13-18 6.] 5. A mortgage broker shall not employ a person as a
13-19 mortgage agent or authorize a person to be associated with the
13-20 mortgage broker as a mortgage agent if the mortgage broker has not
13-21 registered the person with the Division pursuant to this section . [or
13-22 if the person:
13-23 (a) Has been convicted of, or entered a plea of nolo contendere
13-24 to, a felony or any crime involving fraud, misrepresentation or
13-25 moral turpitude; or
13-26 (b) Has had a financial services license or registration suspended
13-27 or revoked within the immediately preceding 10 years.
13-28 7.] 6. If a mortgage agent terminates his association or
13-29 employment with a mortgage broker for any reason, the mortgage
13-30 broker shall, not later than the third business day following the date
13-31 of termination:
13-32 (a) Deliver to the mortgage agent or send by certified mail to the
13-33 last known residence address of the mortgage agent a written
13-34 statement which advises him that his termination is being reported
13-35 to the Division; and
13-36 (b) Deliver or send by certified mail to the Division:
13-37 (1) A written statement of the circumstances surrounding the
13-38 termination; and
13-39 (2) A copy of the written statement that the mortgage broker
13-40 delivers or mails to the mortgage agent pursuant to paragraph (a).
13-41 [8. As used in this section, “certified course of continuing
13-42 education” has the meaning ascribed to it in NRS 645B.051.]
13-43 7. As used in this section, “mortgage broker” includes a
13-44 person who is required to apply for a certificate of exemption or
13-45 who holds a certificate of exemption.
14-1 Sec. 20. NRS 645B.620 is hereby amended to read as follows:
14-2 645B.620 1. Whether or not a complaint has been filed, the
14-3 Commissioner shall investigate a mortgage broker , mortgage agent
14-4 or other person if, for any reason, it appears that:
14-5 (a) The mortgage broker or mortgage agent is conducting
14-6 business in an unsafe and injurious manner or in violation of any
14-7 provision of this chapter, a regulation adopted pursuant to this
14-8 chapter or an order of the Commissioner;
14-9 (b) The person is offering or providing any of the services of a
14-10 mortgage broker or mortgage agent or otherwise engaging in,
14-11 carrying on or holding himself out as engaging in or carrying on the
14-12 business of a mortgage broker or mortgage agent without being
14-13 appropriately licensed or exempt from licensing pursuant to the
14-14 provisions of this chapter; or
14-15 (c) The person is violating any other provision of this chapter, a
14-16 regulation adopted pursuant to this chapter or an order of the
14-17 Commissioner.
14-18 2. If, upon investigation, the Commissioner has reasonable
14-19 cause to believe that the mortgage broker , mortgage agent or other
14-20 person has engaged in any conduct or committed any violation
14-21 described in subsection 1:
14-22 (a) The Commissioner shall notify the Attorney General of the
14-23 conduct or violation and, if applicable, the Commissioner shall
14-24 immediately take possession of the property of the mortgage broker
14-25 pursuant to NRS 645B.630; and
14-26 (b) The Attorney General shall, if appropriate:
14-27 (1) Investigate and prosecute the mortgage broker , mortgage
14-28 agent or other person pursuant to NRS 645B.800; and
14-29 (2) Bring a civil action to:
14-30 (I) Enjoin the mortgage broker , mortgage agent or other
14-31 person from engaging in the conduct, operating the business or
14-32 committing the violation; and
14-33 (II) Enjoin any other person who has encouraged,
14-34 facilitated, aided or participated in the conduct, the operation of the
14-35 business or the commission of the violation, or who is likely to
14-36 engage in such acts, from engaging in or continuing to engage in
14-37 such acts.
14-38 3. If the Attorney General brings a civil action pursuant to
14-39 subsection 2, the district court of any county of this state is hereby
14-40 vested with the jurisdiction in equity to enjoin the conduct, the
14-41 operation of the business or the commission of the violation and
14-42 may grant any injunctions that are necessary to prevent and restrain
14-43 the conduct, the operation of the business or the commission of the
14-44 violation. During the pendency of the proceedings before the district
14-45 court:
15-1 (a) The court may issue any temporary restraining orders as may
15-2 appear to be just and proper;
15-3 (b) The findings of the Commissioner shall be deemed to be
15-4 prima facie evidence and sufficient grounds, in the discretion of the
15-5 court, for the ex parte issuance of a temporary restraining order; and
15-6 (c) The Attorney General may apply for and on due showing is
15-7 entitled to have issued the court’s subpoena requiring forthwith the
15-8 appearance of any person to:
15-9 (1) Produce any documents, books and records as may
15-10 appear necessary for the hearing of the petition; and
15-11 (2) Testify and give evidence concerning the conduct
15-12 complained of in the petition.
15-13 Sec. 21. NRS 645B.670 is hereby amended to read as follows:
15-14 645B.670 Except as otherwise provided in NRS 645B.690:
15-15 1. For each violation committed by an applicant[,] for a
15-16 license pursuant to this chapter, whether or not he is issued a
15-17 license, the Commissioner may impose upon the applicant an
15-18 administrative fine of not more than $10,000, if the applicant:
15-19 (a) Has knowingly made or caused to be made to the
15-20 Commissioner any false representation of material fact;
15-21 (b) Has suppressed or withheld from the Commissioner any
15-22 information which the applicant possesses and which, if submitted
15-23 by him, would have rendered the applicant ineligible to be licensed
15-24 pursuant to the provisions of this chapter; or
15-25 (c) Has violated any provision of this chapter, a regulation
15-26 adopted pursuant to this chapter or an order of the Commissioner in
15-27 completing and filing his application for a license or during the
15-28 course of the investigation of his application for a license.
15-29 2. For each violation committed by a licensee, the
15-30 Commissioner may impose upon the licensee an administrative fine
15-31 of not more than $10,000, may suspend, revoke or place conditions
15-32 upon his license, or may do both, if the licensee, whether or not
15-33 acting as such:
15-34 (a) Is insolvent;
15-35 (b) Is grossly negligent or incompetent in performing any act for
15-36 which he is required to be licensed pursuant to the provisions of this
15-37 chapter;
15-38 (c) Does not conduct his business in accordance with law or has
15-39 violated any provision of this chapter, a regulation adopted pursuant
15-40 to this chapter or an order of the Commissioner;
15-41 (d) Is in such financial condition that he cannot continue in
15-42 business with safety to his customers;
15-43 (e) Has made a material misrepresentation in connection with
15-44 any transaction governed by this chapter;
16-1 (f) Has suppressed or withheld from a client any material facts,
16-2 data or other information relating to any transaction governed by the
16-3 provisions of this chapter which the licensee knew or, by the
16-4 exercise of reasonable diligence, should have known;
16-5 (g) Has knowingly made or caused to be made to the
16-6 Commissioner any false representation of material fact or has
16-7 suppressed or withheld from the Commissioner any information
16-8 which the licensee possesses and which, if submitted by him, would
16-9 have rendered the licensee ineligible to be licensed pursuant to the
16-10 provisions of this chapter;
16-11 (h) Has failed to account to persons interested for all money
16-12 received for a trust account;
16-13 (i) Has refused to permit an examination by the Commissioner
16-14 of his books and affairs or has refused or failed, within a reasonable
16-15 time, to furnish any information or make any report that may be
16-16 required by the Commissioner pursuant to the provisions of this
16-17 chapter or a regulation adopted pursuant to this chapter;
16-18 (j) Has been convicted of, or entered a plea of nolo contendere
16-19 to, a felony or any crime involving fraud, misrepresentation or
16-20 moral turpitude;
16-21 (k) Has refused or failed to pay, within a reasonable time, any
16-22 fees, assessments, costs or expenses that the licensee is required to
16-23 pay pursuant to this chapter or a regulation adopted pursuant to this
16-24 chapter;
16-25 (l) Has failed to satisfy a claim made by a client which has been
16-26 reduced to judgment;
16-27 (m) Has failed to account for or to remit any money of a client
16-28 within a reasonable time after a request for an accounting or
16-29 remittal;
16-30 (n) Has commingled the money or other property of a client
16-31 with his own or has converted the money or property of others to his
16-32 own use;
16-33 (o) Has engaged in any other conduct constituting a deceitful,
16-34 fraudulent or dishonest business practice;
16-35 (p) Has repeatedly violated the policies and procedures of the
16-36 mortgage broker;
16-37 (q) Has failed to exercise reasonable supervision over the
16-38 activities of a mortgage agent as required by NRS 645B.460;
16-39 (r) Has instructed a mortgage agent to commit an act that would
16-40 be cause for the revocation of the license of the mortgage broker,
16-41 whether or not the mortgage agent commits the act;
16-42 (s) Has employed a person as a mortgage agent or authorized a
16-43 person to be associated with the licensee as a mortgage agent at a
16-44 time when the licensee knew or, in light of all the surrounding facts
16-45 and circumstances, reasonably should have known that the person:
17-1 (1) Had been convicted of, or entered a plea of nolo
17-2 contendere to, a felony or any crime involving fraud,
17-3 misrepresentation or moral turpitude; or
17-4 (2) Had a financial services license or registration suspended
17-5 or revoked within the immediately preceding 10 years; or
17-6 (t) Has not conducted verifiable business as a mortgage broker
17-7 for 12 consecutive months, except in the case of a new applicant.
17-8 The Commissioner shall determine whether a mortgage broker is
17-9 conducting business by examining the monthly reports of activity
17-10 submitted by the licensee or by conducting an examination of the
17-11 licensee.
17-12 Sec. 22. NRS 645B.680 is hereby amended to read as follows:
17-13 645B.680 1. If the Commissioner receives a copy of a court
17-14 order issued pursuant to NRS 425.540 that provides for the
17-15 suspension of all professional, occupational and recreational
17-16 licenses, certificates and permits issued to a person who is the
17-17 holder of a license as a mortgage broker[,] or mortgage agent, the
17-18 Commissioner shall deem the license issued to that person to be
17-19 suspended at the end of the 30th day after the date on which the
17-20 court order was issued unless the Commissioner receives a letter
17-21 issued to the holder of the license by the district attorney or other
17-22 public agency pursuant to NRS 425.550 stating that the holder of the
17-23 license has complied with the subpoena or warrant or has satisfied
17-24 the arrearage pursuant to NRS 425.560.
17-25 2. The Commissioner shall reinstate a license as a mortgage
17-26 broker or mortgage agent that has been suspended by a district
17-27 court pursuant to NRS 425.540 if the Commissioner receives a letter
17-28 issued by the district attorney or other public agency pursuant to
17-29 NRS 425.550 to the person whose license was suspended stating
17-30 that the person whose license was suspended has complied with the
17-31 subpoena or warrant or has satisfied the arrearage pursuant to
17-32 NRS 425.560.
17-33 Sec. 23. NRS 645B.690 is hereby amended to read as follows:
17-34 645B.690 1. If a person offers or provides any of the services
17-35 of a mortgage broker or mortgage agent or otherwise engages in,
17-36 carries on or holds himself out as engaging in or carrying on the
17-37 business of a mortgage broker or mortgage agent and, at the time:
17-38 (a) The person was required to have a license pursuant to this
17-39 chapter and the person did not have such a license; or
17-40 (b) The person’s license was suspended or revoked pursuant to
17-41 this chapter,
17-42 the Commissioner shall impose upon the person an administrative
17-43 fine of not more than $10,000 for each violation and, if the person
17-44 has a license, the Commissioner shall revoke it.
18-1 2. If a person is exempt from the provisions of this chapter
18-2 pursuant to subsection 6 of NRS 645B.015 and the person, while
18-3 exempt, maintains, offers to maintain or holds himself out as
18-4 maintaining any accounts described in subsection 1 of NRS
18-5 645B.175 or otherwise engages in, offers to engage in or holds
18-6 himself out as engaging in any activity that would remove the
18-7 person from the exemption set forth in subsection 6 of NRS
18-8 645B.015, the Commissioner shall impose upon the person an
18-9 administrative fine of not more than $10,000 for each violation and
18-10 the Commissioner shall revoke the person’s exemption. If the
18-11 Commissioner revokes an exemption pursuant to this subsection, the
18-12 person may not again be granted the same or a similar exemption
18-13 from the provisions of this chapter. The person may apply for a
18-14 license pursuant to this chapter unless otherwise prohibited by
18-15 specific statute.
18-16 3. If a mortgage broker violates any provision of subsection 1
18-17 of NRS 645B.080 and the mortgage broker fails, without reasonable
18-18 cause, to remedy the violation within 20 business days after being
18-19 ordered by the Commissioner to do so or within such later time as
18-20 prescribed by the Commissioner, or if the Commissioner orders a
18-21 mortgage broker to provide information, make a report or permit an
18-22 examination of his books or affairs pursuant to this chapter and the
18-23 mortgage broker fails, without reasonable cause, to comply with the
18-24 order within 20 business days or within such later time as prescribed
18-25 by the Commissioner, the Commissioner shall:
18-26 (a) Impose upon the mortgage broker an administrative fine of
18-27 not more than $10,000 for each violation;
18-28 (b) Suspend or revoke the license of the mortgage broker; and
18-29 (c) Conduct a hearing to determine whether the mortgage broker
18-30 is conducting business in an unsafe and injurious manner that may
18-31 result in danger to the public and whether it is necessary for the
18-32 Commissioner to take possession of the property of the mortgage
18-33 broker pursuant to NRS 645B.630.
18-34 Sec. 24. NRS 645B.900 is hereby amended to read as follows:
18-35 645B.900 It is unlawful for any person to offer or provide any
18-36 of the services of a mortgage broker or mortgage agent or otherwise
18-37 to engage in, carry on or hold himself out as engaging in or carrying
18-38 on the business of a mortgage broker or mortgage agent without
18-39 first obtaining [a license as a mortgage broker] the applicable
18-40 license pursuant to this chapter, unless the person:
18-41 1. Is exempt from the provisions of this chapter; and
18-42 2. Complies with the requirements for that exemption.
18-43 Sec. 25. NRS 645B.0103 is hereby repealed.
18-44 Sec. 26. 1. On October 1, 2003, the Commissioner of
18-45 Financial Institutions may begin accepting applications for, and
19-1 issuing, licenses as mortgage agents pursuant to section 5 of this act.
19-2 Any such license issued before July 1, 2004:
19-3 (a) Becomes effective on July 1, 2004; and
19-4 (b) Expires on June 30, 2005, pursuant to section 6 of this act.
19-5 2. On July 1, 2004, the registration of a mortgage agent who is
19-6 registered pursuant to NRS 645B.450 expires unless the mortgage
19-7 agent has obtained a license as a mortgage agent issued pursuant to
19-8 section 5 of this act.
19-9 3. As used in this section, “mortgage agent” has the meaning
19-10 ascribed to it in NRS 645B.0125.
19-11 Sec. 27. Not later than July 1, 2004, the Governor shall
19-12 appoint to the Board for the Regulation of Mortgage Brokers and
19-13 Mortgage Agents created by section 8 of this act:
19-14 1. Two members whose terms expire on July 1, 2006,
19-15 including:
19-16 (a) One member who holds a license as a mortgage broker or
19-17 mortgage agent; and
19-18 (b) One member who is a representative of the general public.
19-19 2. Three members whose terms expire on July 1, 2007.
19-20 Sec. 28. 1. This section becomes effective upon passage and
19-21 approval.
19-22 2. Sections 1 to 15, inclusive, and 17 to 27, inclusive, of this
19-23 act become effective upon passage and approval for the purposes of
19-24 adopting regulations, appointing members to the Board for the
19-25 Regulation of Mortgage Brokers and Mortgage Agents created by
19-26 section 8 of this act, and performing any other preparatory
19-27 administrative tasks that are necessary to carry out the provisions of
19-28 this act, and:
19-29 (a) Sections 1 and 3 of this act become effective on October 1,
19-30 2003, for all other purposes.
19-31 (b) Sections 2, 4 to 15, inclusive, and 17 to 27, inclusive, of this
19-32 act become effective on July 1, 2004, for all other purposes.
19-33 3. Sections 7, 15 and 22 of this act expire by limitation on the
19-34 date on which the provisions of 42 U.S.C. § 666 requiring each state
19-35 to establish procedures under which the State has authority to
19-36 withhold or suspend, or to restrict the use of professional,
19-37 occupational and recreational licenses of persons who:
19-38 (a) Have failed to comply with a subpoena or warrant relating to
19-39 a proceeding to determine the paternity of a child or to establish or
19-40 enforce an obligation for the support of a child; or
19-41 (b) Are in arrears in the payment for the support of one or more
19-42 children,
19-43 are repealed by the Congress of the United States.
19-44 4. Section 16 of this act becomes effective on the date on
19-45 which the provisions of 42 U.S.C. § 666 requiring each state to
20-1 establish procedures under which the State has authority to withhold
20-2 or suspend, or to restrict the use of professional, occupational and
20-3 recreational licenses of persons who:
20-4 (a) Have failed to comply with a subpoena or warrant relating to
20-5 a proceeding to determine the paternity of a child or to establish or
20-6 enforce an obligation for the support of a child; or
20-7 (b) Are in arrears in the payment for the support of one or more
20-8 children,
20-9 are repealed by the Congress of the United States.
20-10 TEXT OF REPEALED SECTION
20-11 645B.0103 “Applicant” defined. “Applicant” means a
20-12 person who applies for licensure as a mortgage broker pursuant to
20-13 this chapter.
20-14 H