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The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 910

DEBT MANAGEMENT

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

Registration

441-910-0005

Exemptions from Debt Management Service Provider Registration

(1) An attorney provides debt management services only incidentally to the practice of law if:

(a) The attorney only provides the services to a client of the attorney and only while acting as an attorney on behalf of the client;

(b) The attorney does not act as a broker for debt management services;

(c) If the attorney refers a consumer who is a client of the attorney to a third party debt management services provider, the attorney does not receive compensation, directly or indirectly, for the referral and in the attorney’s professional judgment the attorney believes the referral will be beneficial to the client;

(d) The attorney does not provide debt management services to a third party on behalf of a consumer who is a client of the attorney; and

(e) Any advertisement used by the attorney concerning debt management services complies with the Oregon Rules of Professional Conduct and formal ethics opinions published by the Oregon State Bar applicable to advertising.

(2) An individual licensed as a real estate broker under ORS 696.020 may negotiate, offer, attempt or agree to negotiate the sale, exchange, purchase, rental or leasing of real estate without being registered as a debt management service provider if the licensed real estate broker only receives the usual and customary fees of a real estate broker under the terms of an executed real estate contract with the debtor as a real estate seller.

(3) A nonprofit budget and credit counseling agency approved by the United States trustee overseeing the administration of bankruptcy cases may claim the exemption in ORS 697.612(3)(L) if:

(a) The nonprofit budget and credit counseling agency provides an individual or group briefing that outlines the opportunities for available credit counseling and assisted such individual in performing a related budget analysis that is not a budget analysis under OAR 441-910-0140;

(b) An individual or group briefing is provided only for persons likely to become debtors under 11 U.S.C. § 109(h); and

(c) The nonprofit budget and credit counseling agency does not otherwise engage in any activity constituting debt management services or act as a broker for debt management services.

(4) A nonprofit entity that only provides advice, assistance, instruction or instructional materials to a consumer in return for a fee reasonably calculated to pay the cost of making the advice, assistance, instruction or instructional materials available may claim the exemption in ORS 697.612(3)(m) if:

(a) The nonprofit entity does not conduct any activities constituting debt management services or act as a broker for debt management services;

(b) The nonprofit entity does not advise a consumer in whole or in part by conducting a budget analysis described in OAR 441-910-0415; and

(c) The nonprofit entity’s reasonably calculated fee to pay the cost of making the advice, assistance, instruction or instructional materials available does not in any case exceed $25.

(5) An organization or a counselor approved by the United States Department of Housing and Urban Development may claim the exemption in ORS 697.612(3)(n) if the organization or counselor:

(a) Is under contract or receiving a grant through the Department of Housing and Urban Development’s Housing Counseling program;

(b) The contract or grant under subsection (a) of this section is made or funded only for the purposes of:

(A) Providing assistance to eligible homebuyers to find and purchase homes;

(B) Helping renters locate and qualify for assisted rental units;

(C) Helping eligible homebuyers obtain affordable housing;

(D) Assisting homeowners to avoid or mitigate foreclosures;

(E) Assisting renters to avoid evictions;

(F) Helping the homeless find temporary or permanent shelter;

(G) Reporting fair housing and discrimination complaints; or

(H) Addressing housing problems; and

(c) The organization or counselor does not otherwise engage in any activity constituting debt management services or act as a broker for debt management services.

Stat. Auth.: 2009 Or Laws ch. 604, § 21
Stats. Implemented: ORS 697.612
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0010

Registration Requirements

(1) All persons performing debt management services shall apply for registration on a form provided by the director. The application form shall require the person to supply the information required by ORS 697.632 and the following:

(a) The identification number of the applicant’s Oregon issued certified public accountant or law license, if the applicant holds a certified public accountant or law license;

(b) The name and identifying number, if any, of an applicant’s license, registration, or similar indicia of permission as a debt management service provider or similar form of license or registration in any other state;

(c) A description of any other business activities not constituting debt management services and a description or depiction of the debt management service provider’s organizational structure;

(d) Any assumed business name registered with the Secretary of State under which the applicant will conduct business as a debt management service provider; and

(e) The name and the location of the insured institution the applicant establishes to keep the consumer funds that the debt management service provider holds.

(2) The person shall attach to the application for registration as a debt management service provider the following:

(a) A correct and true copy of the surety bond required by ORS 697.642 in a form and on terms approved by the director in the amount of $25,000.

(b) A copy of any disclosure documents, agreements, or contracts to be signed by a consumer for any debt management services.

(c) A sample budget analysis conforming to the minimum requirements in OAR 441-910-0415.

(d) A copy of the applicant's proposed fee schedule.

(e) A resume of the debt management service provider’s managing members, managing partners, executive officers, directors, principals, or persons authorized to enter into contracts or make changes in policy for a debt management service provider.

(f) Financial statements prepared in accordance with generally accepted accounting principles, consisting of a balance sheet and a statement of income or operations and are dated not more than 12 months prior to submission of the application; and

(g) A signed disclosure for the applicant and each person identified in subsection (e) of this section of the following occurring within the five year period prior to application:

(A) Any adverse judgment by a state or federal court;

(B) Any pending bankruptcy proceedings or any bankruptcy judgments;

(C) Any injunctions issued to stop an act involving a debt management practice;

(D) Any arbitration award made in favor of another person;

(E) Any adverse final order issued by a federal or state agency;

(F) Any cease and desist order issued by the director; and

(G) Any criminal convictions, if an essential element of the crime involved fraud.

(3) An application for registration as a debt management service provider shall be considered 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.

(4) The director shall not issue a registration as a debt management service provider unless the applicant pays any applicable fee specified in OAR 441-910-0605.

(5) A debt management services provider registration expires on December 31 two years after issuance.

Stat. Auth.: 2009 OL Ch. 604, § 21
Stats. Implemented: ORS 697.632 & 697.752
Hist.: DC 16-1983(Temp), f. & ef. 6-28-83; DC 2-1984, f. & ef. 1-16-84; Renumbered from 814-106-0005; FCS 9-1988, f. 4-12-88, cert. ef. 5-1-88; FCS 5-2000, f. & cert. ef. 3-9-00; FCS 4-2005, f. 12-8-05, cert. ef. 1-1-06; FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0030

Renewal

A debt management service provider shall renew a registration by completing the following on or before December 31 of the year the debt management service provider’s registration expires:

(1) Completing the renewal form supplied by the director; and

(2) Paying any required fee for renewal under OAR 441-910-0600.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.632
Hist.: DC 16-1983(Temp), f. & ef. 6-28-83; DC 2-1984, f. & ef. 1-16-84; Renumbered from 814-106-0015; FCS 9-1988, f. 4-12-88, cert. ef. 5-1-88; FCS 4-2005, f. 12-8-05, cert. ef. 1-1-06; FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0050

Update Filings

(1) At least ten days prior to a change in ownership, address, bonding company, or information relating to the trust or operating account, the debt management service provider shall notify the director in writing of the changes.

(2) Within ten days after learning of an arrest of any debt management service provider owner, supervisor, or employee on a charge an essential element of which is fraud, the debt management service provider shall notify the director in writing of the known allegations.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.632
Hist.: DC 16-1983(Temp), f. & ef. 6-28-83; DC 2-1984, f. & ef. 1-16-84; Renumbered from 814-106-0030; FCS 9-1988, f. 4-12-88, cert. ef. 5-1-88; FCS 4-2005, f. 12-8-05, cert. ef. 1-1-06; FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0055

Fees Payable to the Director

(1) A debt management service provider shall pay to the director the following fees:

(a) At the initial application for a registration, a nonrefundable application fee of $350.

(b) On or before the date in which a debt management service provider’s registration expires, a nonrefundable renewal fee of $350.

(2) When the director conducts an examination under ORS 697.732, the debt management service provider shall pay an examination fee of $75 per hour for each person conducting the examination.

(3) Notwithstanding section (2) of this rule:

(a) When the director conducts an examination under ORS 697.732 outside of Oregon, the debt management service provider shall pay an examination fee of $75 per hour for each person conducting the examination plus the actual cost associated with the examination, including travel.

(b) If the work described in section (2) of this rule is performed by a consultant hired by contract for the particular work, the charge payable by the debt management service provider is the actual cost to the director for the contract consultant.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.732
Hist.: DC 2-1984, f. & ef. 1-16-84; Renumbered from 814-106-0055; FCS 9-1988, f. 4-12-88, cert. ef. 5-1-88; Renumbered from 441-910-0100, FCS 4-2005, f. 12-8-05, cert. ef. 1-1-06; FCS 8-2008, f. & cert. ef. 8-28-08; FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

Business Activities

441-910-0080

Joint Trust Accounts

An account at an insured institution may not be used jointly as a trust account and an operating account.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.682
Hist.: DC 2-1984, f. & ef. 1-16-84; Renumbered from 814-106-0045; FCS 4-2005, f. 12-8-05, cert. ef. 1-1-06; FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0091

Initial Counseling Fees

If a debt management service provider charges an initial fee for debt management services as allowed under ORS 697.692(1)(a), the debt management service provider shall charge the fee within 120 days of signing a contract with the consumer for debt management services.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.692
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0094

Contracts for Debt Management Services

(1) A debt management service provider may not enter into separate contracts for each debt or obligation due by a consumer. A debt management service provider may enter into a single contract with a consumer for debt management services that specifies the provision of different debt management services for each debt or obligation. If a debt management service provider enters into an agreement with more than one consumer for debt management services, each consumer party to the agreement shall be considered one consumer.

(2) For purposes of this rule, “consumer” means an individual that has entered into a contract for debt management services.

(a) However, when a contract covers jointly-held debt and the services will be provided to the co-debtors, such as husband and wife or domestic partners, then “consumer” shall be both of the co-debtors and they shall only be charged a single set of fees.

(3) Notwithstanding subsection (2)(a), a debt management provider may enter into separate debt management service contracts and charge separate fees for each spouse and domestic partners if the spouses or domestic partners seek services for individually held debt. The burden will be upon the debt management service provider to establish the basis for charging two sets of fees.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.652
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0096

Business Activities

Fees for services shall be construed as all fees charged in connection with the debt management service provider transaction or activity, including but not limited to “escrow” fees.

Stat. Auth.: ORS 697.840
Implemented: ORS 697.692
Hist.: FCS 2-2014, f. & cert. ef. 4-8-14

441-910-0099

Fee Schedules

Appendix A is incorporated by reference for the purpose of illustrating the fee structure in ORS 697.692 and OAR 441-910-0092.

[ED. NOTE: Appendices referenced are available from the agency.]

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.692
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0100 [Renumbered to 441-910-0055]

441-910-0135

Loan Modifications

(1) A person registered as a debt management service provider may modify or offer to modify the terms and conditions of a consumer’s existing loan or obligation as described in ORS 697.602 if the modification meets all the following conditions:

(a) The existing loan or obligation is in default, is in imminent danger of default, or there is an objectively reasonable basis to believe that the loan or obligation will default;

(b) The borrower is not required to pay fees normally assessed for a new loan or obligation to receive the modification; and

(c) The contract or agreement makes or is anticipated to make permanent or long-term changes to the principal, interest, length of the loan or obligation, or other key terms of the existing loan or obligation.

(2) A debt management service provider meeting the requirements of section (1) of this rule may charge the fees allowed under ORS 697.692.

(3) Section (1) of this rule shall not be construed to allow a debt management service provider to make or offer to make a new loan or obligation, including residential mortgage loans.

(4) Notwithstanding section (3) of this rule, a mortgage loan originator regulated by the director under applicable law may modify or offer to modify the terms and conditions of an existing residential mortgage loan without a registration as a debt management service provider.

(5) The term “modifying or offering to modify terms and conditions of an existing loan or obligation” does not include an individual who negotiates with a consumer to modify a loan if:

(a) The individual is either an employee or has contracted to represent a lender or loan servicer;

(b) The loan modification activity is within the scope of the individual’s responsibilities for the lender or loan servicer; and

(c) The individual receives no direct compensation from the consumer for the individual’s services.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.602
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0145

Budget Analysis

(1) A debt management service provider shall not enter into an agreement for debt management services with a consumer until the debt management service provider completes a budget analysis that conforms to the requirements of this rule and determines that debt management services will be feasible and advantageous to the consumer. The budget analysis shall be in writing or be in a form easily reducible to written form. The budget analysis shall be include, but not be limited to, the following information:

(a) The name and address of the consumer;

(b) The consumer’s number of dependents;

(c) All wages, salary, and other income;

(d) The number of exemptions claimed for federal income tax withholding;

(e) Any payroll deductions and net take-home pay;

(f)(A) Housing costs, including rents, leases or other consideration paid for the use of property; or

(B) If the consumer is the owner of a home, any liens, mortgages or other claims or liabilities attached to the consumer’s property other than taxes and monthly payment on the residence;

(g) The type and amount of other fixed periodic payments;

(h) A complete list of reasonable and necessary living expenses for food, clothing, utilities, transportation, insurance, and other items;

(i) A complete list of creditors, showing accounts subject to debt management services and accounts not subject to debt management services;

(j) Information on any existing garnishments and judgments;

(k) Periodic amount available for payment toward the plan; and

(L) Anticipated near-term changes in the consumer’s economic circumstances.

(2) If a debt management service provider enters into an agreement for debt management services with a consumer to improve or preserve a consumer’s credit record, history or rating, the budget analysis shall be include, but not be limited to, the following information:

(a) The name and address of the consumer;

(b) All wages, salary, and other income;

(c)(A) Housing costs, including rents, leases or other consideration paid for the use of property; or

(B) If the consumer is the owner of a home, any liens, mortgages or other claims or liabilities attached to the consumer’s property other than taxes and monthly payment on the residence;

(d) The type and amount of other fixed periodic payments;

(e) A complete list of creditors, showing accounts subject to debt management services and accounts not subject to debt management services; and

(f) Anticipated near-term changes in the consumer’s economic circumstances.

(3) A debt management service provider that completes a budget analysis shall give the consumer a written document that:

(a) Informs the consumer that the budget analysis is conditioned on the information provided by the consumer;

(b) Includes a statement that discusses the options for debt management services that may be advantageous for the consumer.

(c) Includes a copy of the budget that formed the basis for the analysis

(d) Warns the consumer that a creditor may not accept a plan for debt management services based on the budget analysis.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.652
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0150

Disclosure of Pass-Through Charges by Debt Management Service Providers

(1) When a debt management service provider is required to disclose information under ORS 697.707(3)(b), the debt management service provider must disclose

(a) Any credit report costs that they will pass on to the consumer.

(b) Any actual insufficient funds fees the debt management service provider is charged and that they will pass on to the consumer, but in no case may a debt management service provider pass on to a consumer more than $25 in insufficient fund fees.

(2) If a debt management service provider does not disclose the information required by section (1) of this rule, a consumer shall not be obligated to pay such costs.

Stat. Auth.: 2009 OL Ch 604 § 21
Stats. Implemented: ORS 697.707
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

441-910-0151

Advertisements

(1) A debt management service provider shall disclose the debt management service provider’s registration number on an advertisement, presentation or other communication or promotional material designed or made to promote the debt management provider’s services.

(2) Failure to meet the requirements of section (1) of this rule constitutes a misrepresentation of the debt management service provider’s qualifications under ORS 697.662 and a dishonest, fraudulent or illegal practices or conduct in a business or profession, or unfair or unethical practices or conduct in connection with a debt management service under ORS 697.752.

Stat. Auth.: 2009 OL Ch 604 § 21
Stats. Implemented: ORS 697.662
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

Records; Reports

441-910-0200

Records Retained by Registrants

(1) In addition to any records required to be kept and maintained under applicable law, a debt management service provider shall retain records on consumers that paid fees and signed a contract for debt management services. Documents that a debt management services must keep under this rule include, but is not limited to, the following:

(a) Copies of disclosure documents signed by the consumer prior to entering into a contract for debt management services.

(b) Copies of all written agreements for debt management services with a consumer.

(c) Copies of written authorizations by a consumer to withdraw fees for debt management services.

(d) Copies of contract cancellation notices by either a consumer or the debt management service provider.

(e) Copies of budget analyses performed for a consumer and kept in the consumer’s file.

(f) Copies of all correspondence or notes of conversations between the debt management service provider and a consumer’s creditor.

(g) Copies of all correspondence between the debt management service provider and the consumer.

(2) In addition to any records required to be kept and maintained under applicable law, a debt management service provider shall retain general records related to their debt management services. Documents that a debt management services must keep under this rule include, but is not limited to, the following:

(a) Copies of the debt management service provider fee schedule for debt management services.

(b) A accounting ledger separately showing each consumer trust account, including entries for debits, credits and any interest in excess of banking fees to maintain the trust account.

(c) An account ledger separately recording the receipt of all funds the debt management service provider agrees to remit to the creditors of a consumer.

(d) An account ledger separately recording the disbursement of all funds the debt management service provider agrees to remit to the creditors of a consumer.

(e) The original surety bond that the debt management service provider certifies as correct and true under OAR 441-910-0010.

(f) Copies of all advertisements for debt management services.

(g) Copies of all consumer complaints and notes, correspondence and memoranda generated as a result of the consumer complaint.

(3) A debt management service provider shall maintain records in written form or in a format that can be easily reduced to written form.

(4) A debt management service provider shall maintain records for a period of three years after the last entry is made into the record. After the three year period, a debt management service provider may dispose of the records in accordance with applicable law.

Stat. Auth.: 2009 OL Ch 604, § 21
Stats. Implemented: ORS 697.672, 697.682
Hist.: FCS 13-2009, f. 12-18-09, cert. ef. 1-1-10

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