Oregon Bulletin

February 1, 2014

Department of Consumer and Business Services, Division of Finance and Corporate Securities, Chapter 441

Rule Caption: Establishes the process for accepting consumer finance licensing applications, renewals, and administrative actions via NMLS

Adm. Order No.: FCS 7-2013(Temp)

Filed with Sec. of State: 12-31-2013

Certified to be Effective: 1-1-14 thru 6-30-14

Notice Publication Date:

Rules Amended: 441-730-0010, 441-730-0025, 441-730-0030

Subject: This temporary rule establishes the process by which licensees and prospective applicants must submit applications, renewals, and other administrative actions through the Nationwide Mortgage Licensing System and Registry (NMLS). At present, consumer finance lending licensees and prospective applicants submit licensing materials via paper documentation or by the state’s own online system. This rule modifies the present licensing and application procedures and makes mandatory the transition of all licensing activity for consumer finance lenders to NMLS. A temporary rule is necessary to avoid missing key mandatory deadlines with NMLS that would allow for implementation and result in greater costs to the state and industry.

Rules Coordinator: Shelley Greiner—(503) 947-7484



(1) “Annual percentage rate” or “APR” means the annual percentage rate that every licensee is required by Regulation Z of the Federal Truth in Lending Act (Title I of the Consumer Credit Protection Act) to disclose to each of its credit customers.

(2) “Borrower” means a natural person.

(3) “Charges” means any one or more of the fees, premiums or other charges described by ORS 725.340(2)(a), (3) and (4), and other items charged to a borrower’s account; but the term does not include interest or deferral charges.

(4) “Deferral charges” means the additional charge assessed by a licensee made for deferring all unpaid installments as provided by ORS 725.340(2)(b). Deferral charges do not apply to loans with a single payment payback feature.

(5) “Director” means the Director of the Department of Consumer and Business Services.

(6) “Finance charge” means the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.

(7) “Formalized grading system” means a formula or computer program that determines the creditworthiness of individual borrowers based on information regarding the borrower’s financial condition, such as the borrower’s income, assets, debts and financial obligations, and the nature and value of any collateral used to secure the loan.

(8) “Fully amortized” means characterized by periodic payments, that if made as scheduled, result in full repayment of the principal and interest owed on a loan by the end of the loan term.

(9) “License” means a consumer finance license issued under ORS 725.140.

(10) “Legally qualified in this state” means a business is qualified to conduct business in this state, having made the appropriate filings with the Secretary of State.

(11) “Licensee” means a person in the business of making loans for periods of more than 60 days that have periodic payments.

(12) “Loan” means a loan that is subject to the Oregon Consumer Finance Act.

(13) “Loan underwriting” means a written or otherwise documented evaluation of the assumption of risk preceding the granting of a loan to a specific borrower, and may be fulfilled through use of a formalized grading system. Loan underwriting may be based on one or more of the following:

(a) Credit information furnished by the borrower, such as employment history, income, and outstanding obligations;

(b) A financial statement that includes income, assets and debts;

(c) Publicly available information concerning the borrower, that may include the borrower’s credit report;

(d) The borrower’s credit needs and willingness and ability to pay, including the nature and value of any collateral used to secure the loan.

(14) “Nationwide Mortgage Licensing System and Registry”, or “NMLS” means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and successors maintain to register and license mortgage loan originators and non-depository companies and made available at www.nationwidelicensingsystem.org.

(15) “Periodic payments” means loan repayments scheduled for monthly or more frequent periods of time.

(16) “Person” means a natural person or an organization, including a corporation, partnership, proprietorship, association, limited liability company, or cooperative.

Stat. Auth.: ORS 725.320 & 725.505

Stats. Implemented: ORS 725.110, 725.140, 725.340, & 725.360

Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0007; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14


License Applications

(1) For purposes of the investigation described in ORS 725.140(1), an applicant for a license must submit the application via the Nationwide Mortgage Licensing System and Registry, attested to by an authorized owner or officer of the applicant.

(2)(a) An applicant, including a person that currently has a license, must provide the employment history for the proposed manager of the licensed office for the five years immediately preceding the date of the application. A licensee employing a new manager may be required to submit a resume to meet the requirements of this section.

(b) The employment history for a license applicant’s proposed manager must demonstrate verifiable recent experience in traditional lending, including but not limited to, experience obtained in banking, consumer finance, or mortgage lending. For purposes of this rule, “recent” means no less than three years out of the five years immediately preceding the date of application. Short-term lending experience alone is not a sufficient substitute for the required experience.

(c) At the request of the applicant and in the sole discretion of the director, education, extensive training, or other business experience may be substituted for the three out of five years of traditional lending experience. Factors that the director may consider include relevance of the education, or the number, complexity and types of transactions handled in the substituted business experience. Short-term lending experience alone is not a sufficient substitute for the required experience.

(3) A person that is not currently licensed with the director to make loans must submit:

(a) The employment history for all executive officers, owners, directors, or managing partners. A resume may be required to meet this requirement. At least one-half of the executive officers, owners, directors, or managing partners must have verifiable recent lending experience in banking, consumer finance, or mortgage lending;

(b) A business plan, including but not limited to:

(A) Financial and operational history of the applicant, if any;

(B) Copies of any loan documents that are proposed to be used;

(C) A description of the types of loans and the percentage of the different types of loans the applicant proposes to make, the length of the loans the applicant proposes to make, the interest rates or range of rates the applicant proposes to charge, and any other business activities the licensee will engage in at the location;

(D) The process by which the applicant will determine that loans to be made comply with requirements in OAR 441-730-0015(1); and

(E) Funding sources for the loans, including third-party financial institutions.

(4) Applicants and licensees must comply with the application and licensing process set forth through NMLS.

(5) A consumer finance lending license shall expire on December 31 of each calendar year. At least 30 days prior to the expiration of the license, the licensee shall submit a complete renewal request and all prescribed renewal fees at OAR 441-730-0030 via NMLS. The renewal is not deemed effective until approved by the Director.

(6) In the event a licensee does not receive renewal approval from the Director by December 31, the license is deemed to have lapsed in NMLS. In order to reinstate the license, the licensee must apply for a license reinstatement using NMLS. Reinstatement is available through NMLS through the last day of February of the renewal year.

(7) For purposes of ORS 725.140 and this rule, the filing date of an application is the date the application is complete. An application is deemed complete on the date:

(a) All required fees have been paid; and

(b) All fully completed documents that are part of an application or required to be submitted by this rule have been received.

(8) An initial application for licensing is deemed abandoned if:

(a) The director has had one or more incomplete documents as part of an application for a minimum of 60 days; and

(b) The applicant has not responded within 30 days following a written notice from the director requesting submission of all fees, documents, or information necessary to make the application complete.

(9) An applicant whose initial application has been abandoned may reapply by submitting a new application including new fees.

(10) Conducting consumer finance activity in the state after an annual license expires and before the license approved for renewal by the Director constitutes unlicensed consumer finance activity in violation of ORS 725.045.

(11) The Director may refuse to renew a license if a reason exists under ORS 725.230.

(12) NMLS shall collect any fees on behalf of the Director that are required to be paid to the Director by applicants and licensees as authorized by ORS 725.185(1). NMLS is required to forward to the Department of Consumer and Business Services, pursuant to the terms of the written agreement between the Department of Consumer and Business Services and the Conference of State Bank Supervisors and its subsidiaries.

Stat. Auth.: ORS 725.505

Stats. Implemented: ORS 725.120 & 725.140

Hist.: FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14


Fees, Charges Licensees Pay the Director

(1) In addition to any fees required to participate in NMLS, an applicant or licensee shall pay:

(a) $600 for an initial application for each location to be licensed; and

(b) $600 for renewal for each licensed location, due and payable on January 1 of each calendar year.

(2) The rate of charge payable by a licensee is $75 an hour per person payable by the licensee for the director and each examiner and other division employee used in an examination conducted under ORS 725.312 and for extra services provided a licensee under 725.185(2).

(3) Notwithstanding the rate of charge fixed by section (2) of this rule:

(a) If an examiner from the division or the director is required to travel out of state to conduct the examination or provide extra services, the rate of charge payable by the licensee is $75 an hour per person, plus actual cost of travel. Actual travel costs include air fare, lodging, food, car usage out of state, mileage to the Oregon airport and return, and travel time beginning from the departure time and ending at the departure time at the destination city;

(b) If the extra services or examination is performed by a consultant hired by contract for the particular service or examination, the charge payable by the licensee is the actual cost to the division of the contract consultant.

(4) As used in this rule, “extra services” means any attention other than an examination given under ORS 725.310.

(5) In addition to the charges fixed by sections (2) and (3) of this rule, the director will collect from a licensee any additional costs directly attributable to extra services given the licensee under ORS 725.185 or a special examination given the licensee under 725.310.

(6) The director may by order reduce the fees assessed for any specific year.

Stat. Auth.: ORS 725.185

Stats. Implemented: ORS 725.185

Hist.: FID 8-1985, f. & ef. 12-31-85; FCS 2-1988, f. 1-29-88, cert. ef. 2-1-88; Renumbered from 805-075-0015; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 1-1989, f. 1-18-89, cert. ef. 2-1-89; FCS 1-2001, f. 1-22-01, cert. ef. 2-1-01; FCS 4-2003, f. 12-30-03 cert. ef. 1-1-04; FCS 4-2004, f. 11-1-04, cert. ef. 1-1-05; FCS 3-2005, f. & cert. ef. 9-6-05; FCS 1-2008, f.& cert. ef. 1-28-08; FCS 2-2009, f. & cert. ef. 2-3-09; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14

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