Oregon Bulletin
Rule
Caption: Repeals duplicative and unneeded
rules relating to credit service organizations.
Adm.
Order No.: FCS 10-2011
Filed with Sec. of
State: 11-23-2011
Certified to be
Effective: 11-23-11
Notice Publication
Date: 10-1-2011
Rules Repealed: 441-830-0010, 441-830-0015, 441-830-0020,
441-830-0030, 441-830-0040
Subject: Until 2009, Oregon law required credit service
organizations – entities registered improve a consumer’s credit record or
to help obtain an extension of credit for a consumer – to register with
DCBS. In 2009, the Legislature enacted House Bill 2191 (2009 OR Laws Ch. 604;
the Act). The Act consolidated statutes regulating the practices of credit
service organization and debt consolidation agencies into a single series. As
part of the consolidation section 27 of the Act, a provision that was not
codified in the Oregon Revised Statutes, repealed the existing provisions of
law governing credit service organizations. However, several existing rules
that implemented the credit service organization statutes remained in the
administrative rules compilation This rulemaking removes these duplicative and
unneeded rules relating to credit service organizations.
Rules Coordinator: Shelley Greiner—(503) 947-7484
Rule
Caption: Establishes process and criteria
for determining applicability of mortgage loan originator licensing to
nonprofit organizations.
Adm.
Order No.: FCS 11-2011
Filed with Sec. of
State: 11-23-2011
Certified to be
Effective: 11-23-11
Notice Publication
Date: 10-1-2011
Rules Adopted: 441-880-0005, 441-880-0006, 441-880-0007, 441-880-0008
Subject: In response to the recent housing crisis, the Congress
enacted the S.A.F.E. Mortgage Licensing Act of 2008 (Pub. L. 110-289). The
S.A.F.E. Act sets minimum standards for the states to adopt for the licensing
of mortgage loan originators; i.e., individuals that take mortgage loan
applications and negotiate mortgage loan terms. After passage of the federal
law and implementation at the state level, various groups raised concerns that
the S.A.F.E. Act could apply to nonprofit organizations and government entities
engaged in loan origination activities. In response, the U.S. Department of
Housing and Urban Development issued final regulations in July 2011 (see 76
Fed. Reg. 38464). HUD determined that the S.A.F.E. Act applies to businesses,
not “bona fide” nonprofit organizations and government entities. HUD’s
interpretation required states to establish criteria for the nonprofit
organization to be considered bona fide, for purposes of the S.A.F.E. Act, and
to establish a basic process for making the determination. The adopted rules
establish the process and criteria used to determine when a nonprofit
organization is bona fide and clarifies that certain government employees need
not obtain mortgage loan originator licenses.
Rules Coordinator: Shelley Greiner—(503) 947-7484
441-880-0005
Application of ORS 86A.200 to
86A.239 to Employees of Agencies of the United States, State Agencies, Local
Governments and Housing Authorities
As permitted by 24 C.F.R. § 3400.103(e)(6), the
licensing provisions of ORS 86A.200 to 86A.239 do not apply to an employee of
an agency of the United States, the executive department, a local government, a
special government body, or a housing authority. The application of this rule
is self-executing. For purposes of this rule:
(1) “Executive department” has the same meaning as the
term is defined in ORS 174.112.
(2) “Local government” has the same meaning as the term
is defined in ORS 174.116.
(3) “Special government body” has the same meaning as
the term is defined in ORS 174.117.
(4) “Housing authority” has the same meaning as that
term is used in ORS chapter 456.
Stat. Auth.: ORS 86A.242
Stat. Implemented: ORS 86A.203
Hist.: FCS 11-2011, f. & cert.
ef. 11-23-11
441-880-0006
Application of ORS 86A.200 to
86A.239 to Employees of Bona Fide Nonprofit Organizations
(1) As permitted by 24 C.F.R. § 3400.103(e)(7), the
licensing provisions of ORS 86A.200 to 86A.239 do not apply to an employee of a
bona fide nonprofit organization as that term is described by criteria
established in OAR 441-880-0008, including a limited liability company of which
the nonprofit corporation is the sole member, and subject to the following
conditions:
(a) The employee may not originate residential mortgage
loans outside the scope of the employee’s duties and employment at the bona
fide nonprofit organization without obtaining a mortgage loan originator
license.
(b) The employee shall act as a mortgage loan
originator only with respect to residential mortgage loans with terms that are
in the best interest of the borrower, as that term is described by criteria
established in OAR 441-880-0008.
(2) For purposes of OAR 441-880-0006 through
441-880-0008, “employee” has the same meaning as the criteria listed in OAR
441-850-0005, as applied to the nonprofit organization.
Stat. Auth.: ORS 86A.242
Stat. Implemented: ORS 86A.203
Hist.: FCS 11-2011, f. & cert.
ef. 11-23-11
441-880-0007
Process for Determining if
Nonprofit Organization is Bona Fide
As required by 24 C.F.R. § 3400.103(e)(7)(ii), the
process for determining whether a nonprofit organization is a bona fide
nonprofit organization is as follows:
(1) A nonprofit organization may request in writing
that the director determine whether the nonprofit organization is a bona fide
nonprofit organization with respect to the licensing of employees as mortgage
loan originators under ORS 86A.200 to 86A.239. The nonprofit organization shall
supply all information and documentation necessary for the director to make a
determination that the nonprofit organization meets the criteria established in
441-880-0008 in a timely manner. If the nonprofit organization registers a
member-managed limited liability company for the purpose of loan origination
activities, the determination request and supporting documentation must be
provided by and address the limited liability company. The request will be
denied if the nonprofit organization fails to provide documents requested by
the director within 30 days following the request.
(2) A nonprofit organization shall submit, at a
minimum, all the following information:
(a) The determination letter or other indicia from the
Internal Revenue Service recognizing the nonprofit organization as exempt from
taxation under section 501(c)(3) of the Internal Revenue Code of 1986, 26
U.S.C. § 501(c)(3).
(b) The nonprofit organization’s organizing documents,
including articles of incorporation filed under ORS 65.047 and bylaws filed
under ORS 65.061.
(c) The nonprofit organization’s evidence of
registration as a charitable organization with the Attorney General under ORS
128.650.
(d) The most recent report filed with the Attorney
General under ORS 128.670 detailing the nature of the assets held by the
nonprofit organization and the administration of those assets by the
organization.
(e) The nonprofit organization’s most recent Form 990,
Return of Organization Exempt from Income Tax, filed by the nonprofit
organization.
(f) If not included within the nonprofit organization’s
Form 990 tax return, a description of the compensation and incentive structure
for employees subject to any determination under these rules.
(g) A description of each loan program provided by the
nonprofit organization, including a description of eligibility, purpose, loan
terms, key features and servicing or securitization plans, if any.
(h) A copy of the nonprofit organization’s complaint
process, as required by 441-880-0008.
(i) Other information as requested by the director.
(3)(a) An employee of a nonprofit organization that has
requested that the director make a determination that the organization is a
bona fide nonprofit organization, and where the statements in such application
are true and correct at the time made, is not subject to the licensing
requirements of ORS 86A.200 to 86A.239 during the time that the director is
making the determination.
(b) An employee of a nonprofit organization entity that
has not requested that the director determine if the organization is a bona
fide nonprofit organization is subject to the licensing requirements of ORS
86A.200 to 86A.239.
(4) A determination by the director on the application
of ORS 86A.200 to 86A.239 to employees of bona fide nonprofit organizations, or
during the period of time when the director is making a determination under
(2)(a) of this rule, does not relieve the nonprofit organization from meeting any
applicable requirements of laws other than ORS 86A.200 to 86A.239, including
but not limited to federal and state laws related to lending, charitable
activities or consumer protection.
(5)(a) A nonprofit organization determined by the
director to be a bona fide nonprofit organization with respect to the licensing
of employees as mortgage loan originators under ORS 86A.200 to 86A.239 shall
submit to the director at least annually a certification that the nonprofit
organization continues to meet the criteria under which the nonprofit
organization requested a determination under this rule.
(b) The nonprofit organization shall attach with the
certification the most recent financial audit performed by an independent
third-party auditor including, but not limited to, audits performed on
nonprofit organizations receiving federal funds according to OMB Circular
A-133, published by the Office of Management and Budget and in effect as of the
adoption of this rule.
(c) A nonprofit organization determined by the director
to be a bona fide nonprofit organization with respect to the licensing of
employees as mortgage loan originators under ORS 86A.200 to 86A.239 shall
disclose to the director any significant changes to the materials submitted
under this rule or to the nonprofit organization’s operations affecting a
determination under ORS 441-880-0008 as soon as is practicable.
(6)(a) In addition to the certifications required under
this section, the director shall be authorized to periodically examine the
books and activities of an organization determined to be a bona fide nonprofit
organization by the director for compliance with OAR 441-880-0008.
(b) If the director determines that a nonprofit
organization no longer satisfies the criteria established in OAR 441-880-0008,
the director shall, subject to ORS chapter 183, rescind the director’s
determination that the organization’s is a bona fide nonprofit organization
with respect to the licensing of employees as mortgage loan originators under
ORS 86A.200 to 86A.239.
(c) An examination under this section is an audit or
examination for purposes of OAR 441-860-0110.
Stat. Auth.: ORS 86A.242
Stat. Implemented: ORS 86A.203
Hist.: FCS 11-2011, f. & cert.
ef. 11-23-11
441-880-0008
Criteria for Determining if
Nonprofit Organization is Bona Fide
As required by 24 C.F.R. § 3400.103(e)(7)(ii), a bona
fide nonprofit organization is an organization that meets all of the following
criteria:
(1) The nonprofit organization has been granted a
tax-exempt status under section 501(c)(3) of the Internal Revenue Code of 1986,
26 U.S.C. § 501(c)(3).
(2) The nonprofit organization promotes affordable
housing, provides homeownership education, or provides similar services.
(3) The nonprofit organization conducts its activities
in a manner that serves public or charitable purposes.
(a) The director may consider the following activities
conclusive when making a determination under this section:(A) Making loans for
the purpose of providing assistance for downpayments, closing costs, or other
home purchase subsidies;
(B) Making loans for the purpose of funding housing
rehabilitation projects;
(C) Making loans for the purpose of providing energy
efficiency assistance; or
(D) Making loans for the purpose of avoiding or
preventing foreclosure.
(b) For purposes of this section, organizations that
engage in the brokering of mortgage loans in a manner that would require a
license under ORS 86A.100(5) will not be considered to have conclusively met
the presumption in subsection (a).
(4) The nonprofit organization charges no more in fees
than is necessary to support the organization’s loan origination program
activities. The director may consider recordation fees, application fees and
housing counseling fees that together do not exceed one percent of the principal
of loan as conclusive when making a determination under this section.
(5) The nonprofit organization compensates its
employees in a manner that does not incentivize employees to act other than in
the best interests of the borrower. For purposes of this section, compensation
based on loan volume, loan terms, or other measures of performance will not be
considered to have conclusively met the presumption that the nonprofit
organization compensates employees in a manner that does not incentivize employees
to act other than in the best interests of the borrower.
(6) The nonprofit organization provides for the
borrower residential mortgage loans that are consistent with loan origination
in a public or charitable context, that contain terms in the best interest of
the borrower, and that are comparable to mortgage loans and housing assistance
provided under government housing assistance programs. The director may
consider any one of the following loan terms conclusive when making a
determination that a loan is made in the best interest of the borrower:
(a) Loan terms that do not charge a recipient for the
accrual of interest;
(b) Loan terms that charge interest at below market
rates;
(c) Loan terms that require a borrower to qualify for
the loan by the contribution of sweat equity;
(d) Loan terms that forgive repayment in whole or in
part, whether over a period of time, on a specified date, or subject to
ownership or occupancy conditions; or
(e) Loan terms that defer repayment for a minimum
amount of time, until the residential dwelling is sold, or until the recipient
no longer occupies the residential dwelling. This subsection does not apply to
home equity conversion mortgages, commonly known as reverse mortgages.
(f) A loan whose terms restrict the use of the property
by the borrower to the borrower’s principal residence shall not be deemed to be
a term that is unfavorable to the borrower so long as the loan otherwise
qualifies under subsections (a) through (e) of this rule.
(7) The nonprofit organization requires or provides to
employees subject to 441-880-0006 training on state and federal fair lending
laws and consumer protection laws that are relevant to the loan origination
services that the nonprofit organization provides to its borrowers. The
director may consider training in one or more of the following laws directly
related to the nonprofit organization’s loan origination activities conclusive
when making a determination under this section:
(a) The Equal Credit Opportunity Act, 15 U.S.C. § 1601
et seq. and Regulation B, 12 C.F.R. Part 202.
(b) The Truth in Lending Act, 15 U.S.C. § 1601 et seq.
and Regulation Z, 12 C.F.R. Part 226.
(c) The Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et
seq. and Regulation V, 12 C.F.R. Part 216.
(d) The Home Ownership and Equity Protection Act, 15
U.S.C. § 1639 et seq.
(e) The Home Mortgage Disclosure Act, 12 U.S.C. § 2801
et seq. and Regulation C, 12 C.F.R. Part 203.
(f) The Real Estate Settlement Procedures Act, 12
U.S.C. § 2601 et seq. and regulations implementing the Act, 24 C.F.R. Part
3500.
(g) The Fair Debt Collection Practices Act, 15 U.S.C. §
1692 et seq.
(h) Portions of the Gramm-Leach-Bliley Act, 15 U.S.C. §§
6801-6809 and §§ 6821-6827, and regulations implementing the Act, 16 CFR Part
314, that relate to the privacy of consumers’ personal financial information.
(i) The S.A.F.E. Mortgage Licensing Act of 2008, 12
U.S.C. § 5101 et seq., and regulations implementing the Act, 12 C.F.R. Part
3400.
(8) The nonprofit organization requires a state
criminal records check of each individual employed by the nonprofit
organization to engage, in whole or in part, in loan origination activities.
(9) The nonprofit organization requires or provides
continuing education on state and federal fair lending laws and consumer protection
laws referenced under section (8) of this rule that are relevant to the loan
origination services that the nonprofit organization provides to its borrowers.
(10) The nonprofit organization implements and
administers a complaint process that, at a minimum, provides a process for
receiving complaints from borrowers and creates a record of the resolution of
the complaint, if any.
Stat. Auth.: ORS 86A.242
Stat. Implemented: ORS 86A.203
Hist.: FCS 11-2011, f. & cert.
ef. 11-23-11
Rule
Caption: Repeals additional counseling fee
for debt management service providers in accordance with statutory sunset.
Adm.
Order No.: FCS 12-2011
Filed with Sec. of
State: 12-15-2011
Certified to be
Effective: 1-1-12
Notice Publication
Date: 11-1-2011
Rules Amended: 441-910-0000
Rules Repealed: 441-910-0092
Subject: During the 2009 regular session, the Legislature
passed House Bill 2191 to govern the activities of debt management service
providers. As part of the updated law, the Legislature placed statutory limits
on the amount of fees that a registered debt management service provider could
charge, including for counseling clients. During deliberations on the fee
limits, the Legislature authorized a temporary, additional counseling fee that
a registered debt management service provider may charge. In implementing the
bill, the Department of Consumer and Business Services (DCBS) adopted rules
clarifying under what circumstances a registered debt management service
provider could charge the additional counseling fee. On January 1, 2012, the
authority in statute for the additional counseling fee sunsets and will no
longer be in force. Because the underlying authority for the rules will no
longer be in force, DCBS is repealing these implementing rules. The repeal itself
will be effective as of January 1, 2012.
Rules Coordinator: Shelley Greiner—(503) 947-7484
441-910-0000
Definitions
The definitions of terms used in ORS 697.602 and the
rules of OAR chapter 441, division 910 are:
(1) “Act as a broker” or “brokering” includes any of
the following activities undertaken for the payment of money or other valuable
consideration:
(a) Soliciting or receiving an application from a
consumer for a debt management service;
(b) Providing a consumer’s name, address or other
information that identifies the consumer to a debt management service provider
for the purpose of arranging the provision of a debt management service;
(c) Referring a consumer to another debt management
service provider, if the person is a debt management service provider; or
(d) Forwarding or providing a completed application for
a debt management service to a debt management service provider.
(2) “Advantageous to the consumer” means a plan for a
debt management service that places a consumer in a more favorable or
beneficial position in relation to the consumer’s debt than if the consumer did
not agree to debt management services, taking into consideration the
suitability of the proposed services and the customer’s ability to pay for
services. A plan under this section includes, but is not limited to, the
following:
(a) A plan that improves or preserves a consumer’s
credit record, history or rating;
(b) A plan that enables a consumer to obtain or use
credit in the future; or
(c) A plan that obtains favorable or beneficial changes
to the principal, interest, loan term, or other key terms of an existing debt
obligation.
(3) “An activity for which a person receives money or
other valuable consideration or expects to receive money or other valuable
consideration” under ORS 697.602 does not include a negotiation, an offer, an
attempt or an agreement to negotiate the sale, exchange, purchase, rental or
leasing of real estate by a licensed real estate broker if:
(a) The sale price of the real estate is for an amount
that is less than the amount of the seller’s outstanding obligation on the home
loan, commonly known as a short sale; and
(b) The real estate broker receives compensation that
is usual and customary for a real estate broker and under the terms of an
executed real estate contract with the debtor as a real estate seller.
(4) “Director” means the Director of the Department of
Consumer and Business Services.
(5) “Trust account” means an account held at an insured
institution taking deposits at its headquarters in Oregon or a branch in Oregon
into which all funds received or handled on behalf of Oregon consumers by the
debt management service provider are initially deposited.
Stat. Auth.: ORS 697, 2009 OL ch.
604, § 21
Stats. Implemented: ORS 697.632
Hist.: DC 2-1984, f. & ef.
1-16-84; Renumbered from 814-106-0000; FCS 4-2005, f. 12-8-05, cert. ef.
1-1-06; FCS 5-2009(Temp), f. & cert. ef. 8-14-09 thru 2-9-10; FCS 13-2009,
f. 12-18-09, cert. ef. 1-1-10; FCS 12-2011, f. 12-15-11, cert. ef. 1-1-12
Rule
Caption: Amends contact information
required for inclusion in foreclosure notice form to meet statutory sunset.
Adm.
Order No.: FCS 13-2011(Temp)
Filed with Sec. of
State: 12-15-2011
Certified to be
Effective: 12-15-11 thru 6-12-12
Notice Publication
Date:
Rules Amended: 441-505-3046, 441-710-0540, 441-730-0246, 441-850-0042
Subject: Since 2008, Oregon law on nonjudicial foreclosures has
required a trustee recording a notice of default with a county clerk to deliver
to a homeowner a foreclosure notice form. The foreclosure notice form is
written into state statute, but contains blanks for certain contact information
that the sender must provide in the foreclosure notice. This contact
information includes a statewide contact telephone number, the telephone
numbers and a website address for the Oregon State Bar’s Lawyer Referral
Service, and a website address for a directory of legal aid programs. The
Department of Consumer and Business Services (DCBS) by law is required to
provide the resource telephone contact numbers and website addresses the sender
is to insert in completing the notice.
In 2009, the
Oregon Legislature added new information on loan modification resources to the
foreclosure warning form. Uncodified provisions of the law (Section 9)
repealed, among other things, the new requirement to include information loan
modification resources as of January 2, 2012. This rulemaking activity
implements the sunset provision by removing the loan modification information
required to be displayed on the foreclosure warning form. Because the sunset
provision takes effect on January 2, 2012, failure to adopt rules promptly will
result in serious prejudice to users receiving a foreclosure notice form and
recipients filling out and providing a foreclosure notice form.
Rules Coordinator: Shelley Greiner—(503) 947-7484
441-505-3046
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws,
ch. 19, § 20 and as amended by 2009 Or Laws ch. 864, § 1 (Enrolled Senate Bill
628) must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling
consumer queries as 800-SAFENET (800-723-3638)
(2) The telephone number of the Oregon State Bar’s
Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service
toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing
more information and a directory of legal aid programs as http://www.oregonlawhelp.org;
Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08,
cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f.
12-2-09, cert. ef. 12-7-09; FCS 13-2011(Temp), f. & cert. ef. 12-15-11 thru
6-12-12
441-710-0540
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws,
ch. 19, § 20 and as amended by 2009 Or Laws ch. 864, § 1 (Enrolled Senate Bill
628) must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling
consumer queries as 800-SAFENET (800-723-3638)
(2) The telephone number of the Oregon State Bar’s
Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service
toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing
more information and a directory of legal aid programs as http://www.oregonlawhelp.org
Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08,
cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f.
12-2-09, cert. ef. 12-7-09; FCS 13-2011(Temp), f. & cert. ef. 12-15-11 thru
6-12-12
441-730-0246
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws,
ch. 19, § 20 and as amended by 2009 Or Laws ch. 864, § 1 (Enrolled Senate Bill
628) must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling
consumer queries as 800-SAFENET (800-723-3638)
(2) The telephone number of the Oregon State Bar’s
Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service
toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing
more information and a directory of legal aid programs as http://www.oregonlawhelp.org
Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08,
cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f.
12-2-09, cert. ef. 12-7-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS
13-2011(Temp), f. & cert. ef. 12-15-11 thru 6-12-12
441-850-0042
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws,
ch. 19, § 20 and as amended by 2009 Or Laws ch.864, § 1 (Enrolled Senate Bill
628) must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling
consumer queries as 800-SAFENET (800-723-3638)
(2) The telephone number of the Oregon State Bar’s
Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service
toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing
more information and a directory of legal aid programs as http://www.oregonlawhelp.org
Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08,
cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f.
12-2-09, cert. ef. 12-7-09; FCS 13-2011(Temp), f. & cert. ef. 12-15-11 thru
6-12-12
Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.
2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use |