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Financial Services Law Insights and Observations

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  • New Jersey now accepting student loan servicer licenses through NMLS

    On September 15, the New Jersey Department of Banking and Insurance (Department) began accepting applications for the NJ Student Loan Servicer license through the NMLS. The license is governed by the Student Loan Servicing Act, which was enacted in July 2019, and establishes the Office of the Student Loan Ombudsman within the Department and provides licensing requirements for student loan servicers (covered by InfoBytes here). A recently released bulletin by the Department describes the process for licensing and details persons exempt from the licensing requirements, including federal or state chartered banks, savings banks, savings and loan associations, and credit unions, as well as their wholly owned subsidiaries. The Bulletin notes that all non-exempt student loan servicers must submit all requirements for a license by December 31 and may continue to operate in New Jersey while their applications are pending.

    Licensing State Issues State Regulators Student Lending Student Loan Servicer NMLS

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  • California enacts the Debt Collection Licensing Act

    On September 25, California governor signed SB 908, which includes the “Debt Collection Licensing Act” (the Act). The Act requires a person engaging in the business of debt collecting in the state of California to be licensed and provides for the regulation and oversight of debt collectors by the Department of Financial Protection and Innovation (DFPI) (the legislation refers to the DFPI as its previous name Department of Business Oversight). Debt collection licenses will be required starting January 1, 2022. Debt collectors who submit applications before January 1, 2022 will be allowed to operate while their application is pending.

    The Act details the process of licensure, including application fees and background checks, and requires each licensee to (i) file reports under oath with the Commissioner; (ii) maintain a surety bond; (iii) and pay to the Commissioner its pro rata share of all costs and expenses to administer the licensing provisions. The Act requires the Commissioner to “take all actions necessary” in preparation “to fully enforce the licensing and regulatory provisions of this division, including, but not limited to, adoption of all necessary regulations” by January 1, 2022.

    Moreover, in addition to the FDCPA’s general prohibition on engaging in unfair or deceptive acts or practices in the collection of consumer debts, SB 908 also prohibits California debt collectors from, among other things, (i) using profane language; (ii) placing telephone calls without disclosing the caller’s identity; (iii) communicating with debtors at a frequency that is “unreasonable,” and would “constitute harassment of the debtor under the circumstances;” and (iv) sending written or digital communications without their California license number displayed in at least 12-point sized font.

    Licensing State Issues State Regulator Debt Collection State Legislation

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  • Georgia adds installment lender and branch approval licenses to NMLS

    On September 1, NMLS announced that it is now accepting installment lender and branch approval license applications and transition filings for Georgia licensees. New applicants and existing licensees may now make submissions for Georgia Department of Banking and Finance licenses directly through NMLS. According to the announcement, “[c]ompanies holding these license types are required to submit a license transition request through NMLS by filing a Company Form (MU1) and an Individual Form (MU2) for each of their control persons by October 15.” The transition follows the enactment of SB 462, which took effect June 30. The statute transferred all “duties, powers, responsibilities, and other authority relative to industrial loans from the Industrial Loan Commissioner to the Department of Banking and Finance,” which utilizes the NMLS to manage its licensees. Specific details on the licensing requirements in Georgia can be accessed here.

    Licensing State Issues Installment Loans NMLS

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  • South Dakota requires mortgage licensees to register branches

    On July 1, the South Dakota Division of Banking began accepting mortgage branch registration applications via NMLS. Previously, the division did not require branches of South Dakota mortgage lender licensees, mortgage brokerage licensees, or non-residential mortgage lender licensees to be registered in this fashion. 

    The NMLS description of the registration provides that it is required for any branch of a South Dakota mortgage lender licensee, mortgage brokerage licensee, or non-residential mortgage lender licensee that “for valuable consideration, originates, sells, or services mortgages, or holds himself, herself, or itself out as a person who, for valuable consideration, originates, sells, or services mortgages.”

    Licensees have until December 31, 2021 (more than 17 months) to register their applicable branches. No items are required outside of NMLS regarding the application. However, branch managers must be licensed as South Dakota mortgage loan originators, which could take several months to coordinate.

    Licensing Mortgages NMLS State Issues

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  • Missouri amends mortgage broker licensing requirements

    On July 6, the Missouri governor signed SB 599, which, among other things, modifies the state’s mortgage broker licensing requirements. Specifically, the legislation (i) provides that a prelicensing education course that is completed by an applicant will not satisfy the state’s education requirement if the course precedes an application “by a certain period” as established by the Nationwide Multi-State Licensing System and Registry (NMLSR); (ii) requires persons with various financial relationships with a business applicant for a residential mortgage loan broker license to furnish fingerprints to the NMLSR for submission to the FBI and any other authorized government entity for a background check; and (iii) allows the Director of the Division of Finance to waive the requirement that residential mortgage loan brokers maintain at least one full-service office in the state of Missouri for persons “exclusively engaged in the business of loan processing or underwriting,” or providing mortgage loan servicing. The legislation is effective August 28.

    Licensing State Issues State Regulator Mortgages Mortgage Broker Mortgage Servicing Underwriting State Legislation

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  • Louisiana requires licensing for virtual currency businesses

    On June 13, the Louisiana governor signed HB 701, which provides for the licensing and regulation of virtual currency businesses in the state. Subject to certain exceptions, the bill establishes licensing and registration requirements, and, among other things, (i) authorizes reciprocity of licensure with other states; (ii) specifies that licensee applications must be submitted through the Nationwide Multi-State Licensing System; (iii) adds provisions related to licensee examinations; (iv) outlines licensee surety bond requirements “based on the nature and extent of risks in the applicant’s virtual currency business model”; (v) provides the state’s office of financial institutions with enforcement authority; and (vi) prohibits licensees from engaging in unfair, deceptive, or fraudulent practices. The act is effective August 1.

    Licensing State Issues Virtual Currency Fintech

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  • Texas amends residential MLO application procedures

    On May 1, the Texas Finance Commission adopted amendments related to application procedures for regulated residential mortgage loan originators (MLO). The amendments are intended to reduce costs for residential MLOs and to ensure consistency with current licensing procedures and processes. Among other things, the amendments lower MLO application and annual renewal fees from $300 to $200, and implement statutory changes from HB 1342 (enacted last year) related to criminal background checks for residential MLOs. Specifically, the amendments (i) repeal a provision that allowed for the “denial, suspension, or revocation for any offense occurring in the five years preceding the application”; (ii) add provisions requiring an agency to consider the correlation between the element of a crime and a licensed occupation’s duties and responsibilities; and (iii) remove language related to letters of recommendation provided on behalf of an MLO applicant. The amendments are effective as of May 7.

    Licensing State Issues State Regulator MLO Texas

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  • Delaware check seller and money transmitter license required to transition to NMLS by June 15

    On April 15, NMLS published a Delaware Check Seller and Money Transmitter License requirements checklist for a new application, amendment, surrender, and license transition to NMLS. Per Delaware’s recent mandate, as detailed in APPROVED’s post from April 7, new license applicants and existing licensees will be required to use NMLS beginning April 15, 2020. All existing licensees have until June 15, 2020 to submit their license transition requests through NMLS.

    Please see the full requirements for transitioning the license to NMLS here

    Licensing State Issues Money Service / Money Transmitters NMLS

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  • Delaware directs check sales and money transmitter licensees to use NMLS

    The Delaware Office of the State Bank Commissioner issued a directive that, beginning on April 15, all Chapter 23, Sale of Checks and Transmission of Money Licensees are advised to use the Nationwide Mortgage Licensing System for applications, renewals, surrenders and amendments.

    Licensing NMLS Covid-19 State Issues Money Service / Money Transmitters

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  • NMLS updates temporary policy for reporting deadlines

    On March 30, the NMLS Policy Committee amended its temporary policy for submitting reports in NMLS. Instead of the original 60-day deadline extension, the committee encourages regulators to be lenient and not take administrative action if reports are filed within 30 days of the placement of the license item (based on the standard due date). This appears to provide greater flexibility to agencies utilizing NMLS to deviate from the initial extended deadline.

    Click here to read the full update.

    Licensing State Issues State Regulator NMLS Covid-19

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