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Financial Services Law Insights and Observations


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  • Nebraska notifies entities of background check and notification requirement changes

    On June 17, the Nebraska Department of Banking and Finance issued a letter identifying two updates to Nebraska’s consumer financial services licensing laws that apply to entities with either the Nebraska Delayed Deposit Services License, the Nebraska Installment Loan License, the Nebraska Installment Sales License, the Nebraska Money Transmitter License, or the Nebraska Mortgage Banker License. The first change will require consumer financial licensees to utilize NMLS-based background checks to ensure greater uniformity for all consumer financial services licensees. Second, the state will now require a licensed company to notify the state’s Department within three business days of becoming aware that a data breach involving Nebraska residents had occurred. As previously covered by InfoBytes, these changes were included in Nebraska LB 1074 – a 2024 bill that established new consumer data privacy laws. The changes described in the letter will become effective on July 19.

    Licensing Nebraska Consumer Finance NMLS

  • CSBS seeks comments on its 2025 NMLS fee increases proposals

    On May 20, CSBS requested public feedback on a proposal to raise NMLS fees for the first time since the registry’s launch in 2008. This proposed fee increase will ensure NMLS remains functional and up to date while balancing the need for cost-effectiveness for its 600,000 users. The proposed fee hikes will impact companies, individual licensees, and branches, across industries like mortgage, debt, consumer finance, and money services. For example, the annual processing fee for state licensure would increase from $100 to $120 for companies, from $20 to $25 for branches, and from $30 to $35 for individuals. NMLS fees for federal registration will experience similar price hikes. The proposed fee structure will also include adjustments for initial set-up fees, annual processing fees, and fees associated with changes in sponsorship or employment.

    Licensing CSBS NMLS

  • Maine enacts new money transmission law in line with the Money Transmission Modernization Act

    On April 22, the Governor of Maine signed into law LD 2112 (the “Act”) which will codify a new law titled the “Maine Money Transmission Modernization Act.” The Act will amend and repeal many parts of the state’s money transmission laws and brought the law more in alignment with the Money Transmission Modernization Act, the model law drafted with a goal of creating a single set of nationwide standards and requirements. The stated purpose of the Act will be to coordinate with states to reduce the regulatory burden, protect the public from financial crimes, and standardize licensing activities allowed and exempted by Maine.

    Among many other new provisions, the Act will require any person which engages in the business of money transmission or advertises, solicits, or holds itself out as providing money transmission to obtain a license. The Act will define “money transmission” as “(i) [s]elling or issuing payment instruments to a person located in [Maine]; (ii) [s]elling or issuing stored value to a person located in [Maine]; or (iii) [r]eceiving money for transmission from a person located in [Maine].” However, the Act will exempt, an agent of the payee to collect and process a payment from a payor to the payee for goods or services, other than money transmission services, provided certain criteria are met. Additionally, the Act will exempt certain persons acting as intermediaries, persons expressly appointed as third-party service providers to an exempt entity, payroll processors, registered futures commission merchants and securities broker-dealers, among others. Anyone claiming to be exempt from licensing may be required to provide information and documentation demonstrating their qualification for the claimed exemption.

    The Act also will include a section on virtual currency, which will be defined as “a digital representation of value that: (i) [i]s used as a medium of exchange, unit of account or store of value, and (ii) [i]s not money, whether or not denominated in money.” The Act will specify that “virtual currency business activity” will include, among other activities, exchanging, transferring, storing, or engaging in virtual currency administration, whereas “virtual currency administration” will be defined as issuing virtual currency with the authority to redeem the currency for money, bank credit or other virtual currency.

    The Act will require certain reporting, including about the licensee’s condition, financial information, and money transmission transactions from every jurisdiction, among other types of information. The amendments will also outline numerous licensing application and renewal procedures including net worth, surety bond, and permissible investment requirements. Maine will now join several other states that adopted the model law. The Act takes effect on July 16 of this year.

    Licensing Money Service / Money Transmitters Maine State Legislation NMLS State Issues Cryptocurrency Digital Currency

  • Wisconsin updates licensing and regulation of financial services providers

    On April 4, Wisconsin enacted SB 668 (the “Act”) which will amend many provisions to the Wisconsin Department of Financial Institution’s (DFI) regulation of non-banks. According to an analysis by the state’s Legislative Reference Bureau, the Act will change how multiple financial practices are regulated and rely on the Nationwide Multistate Licensing System and Registry (NMLS). The Act will allow Wisconsin to use NMLS to administer licensing needs concerning consumer lenders, payday lenders, collection agencies, sales finance companies, money transmitters, mortgage bankers and brokers, adjustment service companies, community currency exchanges, and insurance premium finance companies. The amendments were modeled after the Model Money Transmission Modernization Act approved by the CSBS.

    The Act will require licensees to provide information directly to NMLS. For collection agencies, the Act will eliminate the requirement that a collector hold a separate license from the one held by his employer, update the definition of collection agency to add the exception for mortgage bankers, and require separate collection agency licenses for each place of business, among others – including repeals. As to consumer lenders, the Act will better define consumer loans, specify provisions governing licensed lenders, and specify which activities require licensure. With respect to sellers of checks and money transmitters, the Reference Bureau noted three provisions governing licensing and regulation of money transmitters will be replaced by the MTMA. This will include registering a license through the NMLS; granting the power to suspend, revoke, or refuse renewal of a license to the DFI; and allowing a licensed money transmitter to conduct business through an authorized delegate; among others. The Act also updated NMLSR requirements and DFI powers concerning payday lenders, sales finance companies, adjustment service companies, community currency exchanges, and insurance premium finance companies. 

    Licensing State Issues State Legislation NMLS Money Service / Money Transmitters Nonbank

  • Utah amends provisions on notifications and definitions of commercial financing transactions

    State Issues

    On March 13, the Governor of Utah signed into law SB 25, a bill that amended certain provisions related to commercial financing transactions, specifically repealing provisions related to disclosing commercial financing transactions and adding the requirement that a party subject to the notification requirement must submit evidence of registration with the NMLS. The bill also amended Section 7-27-101 of the Laws of Utah, to update the definition of the term “broker” and separate it from the term “provider.” Under Section 7-27-202, the bill removed certain disclosures for commercial financing transactions, including disclosures previously required for open-end credit plans after disbursing funds. Additionally, under Section 70C-1-302, the bill updated two more defined terms: “Commissioner” and “Nationwide database.” Lastly, under Section 70C-8-202, the bill amended certain notification requirements, specifically indicating the party shall file a notification via the NMLS, and such notification will be required annually on or before December 31. The bill will go into effect on May 1. 

    State Issues State Legislation Utah Commercial Finance NMLS

  • CSBS offers guidance for licensees to prepare for NMLS renewal

    Federal Issues

    On October 24, CSBS released tips for licensees to prepare for NMLS renewal. As previously covered by InfoBytes, NMLS announced it will be rolling out a new version of its mortgage call report which will include new requirements for many licensees. Kelly O'Sullivan, the chair of the NMLS Policy Committee and deputy commissioner of the Montana Division of Banking and Financial Institutions, advises licensees to proactively update their information in NMLS and make use of available training and resources to address their queries before the renewal period begins. This is particularly crucial for those individuals who typically only engage with NMLS during the license renewal phase.

    CSBS recommended five essential tips for licensees:

    • Licensees should log into NMLS and thoroughly review and update their profile record to ensure accuracy;
    • Licensees should reset their NMLS password in advance to have a current password ready for accessing NMLS when needed;
    • Licensees should provide and maintain a current email address to receive essential updates from NMLS during the renewal process;
    • Licensees should review state-specific renewal requirements, as state agencies typically begin publishing details, including deadlines and fees, in September;
    • Licensees are encouraged to take advantage of the free, on-demand renewal training resources provided by CSBS to become familiar with the renewal process.

    Federal Issues Licensing NMLS Mortgages Consumer Finance CSBS Supervision

  • CSBS announces release of NMLS MCR Version 6 in Q1 2024

    On October 13, 2023, the Conference of State Bank Supervisors (CSBS) announced the Nationwide Multistate Licensing System & Registry (NMLS) will be rolling out a new version of its Mortgage Call Report (MCR). In an effort to standardize mortgage company data at the state level, and minimize the amount of reporting outside the system, NMLS will be launching an updated version of the MCR, Version 6 (FV6) on March 16, 2024.

    Licensees will see three main improvements in Version 6:

    • FV6 eliminates standard and expanded forms and consolidates them into one form. All servicers will complete the servicer schedule and all lenders will complete the lender schedule. Lenders and servicers will file financials quarterly, and brokers will file financials annually.
    • Commercial and consumer lending licensees will complete a separate state-specific form, removing the obligation to report mortgage information.
    • The revision of line-item definitions will improve the overall quality of the data and help implement more completeness and accuracy checks.

    FV6 will go into effect for all data collected on transactions dated on and after January 1, 2024. Additionally, NMLS will provide companies with the XML specifications no later than October 23. CSBS estimates that approximately 24,000 brokers, lenders, and servicers will experience reduced requirements, and approximately 3,100 lenders will have additional filing requirements.

    The Mortgage Bankers Association sent a letter to CSBS in July, raising concerns with the new version, including (i) the lack of technical specifications needed for full consideration of the proposal and its implementation; and (ii) the significant expansion and burden of reporting requirements on smaller filers resulting from the replacement of standard and expanded forms in favor of the new and more detailed FV6. CSBS noted mortgage industry concerns surrounding the timing of the rollout of FV6 ahead of Q1 2024, and shared that details for leniency to the filing deadline will be provided in future communications. NMLS will provide regular updates on the Mortgage Call Report page, targeted learning opportunities and Q&A sessions.

    Visit here for additional guidance on FV6 from APPROVED.

    Licensing NMLS CSBS Mortgages Consumer Finance

  • Illinois amends mortgage licensing provisions

    On June 30, HB 2325 (the “Act”) was signed by the Illinois governor to amend The Residential Mortgage License Act of 1987. According to the amendments, residential mortgage licensees in Illinois must register every physical office where they conduct business with the Secretary of Financial and Professional Regulation. However, they are allowed to permit mortgage loan originators to work from a remote location if certain conditions are fulfilled. Conditions include but are not limited to: (i) the licensee must have written policies and procedures for supervising remote mortgage loan originators; (ii) access to company platforms and customer information must comply with the licensee's information security plan; (iii) mortgage originators' residences cannot be used for in-person customer interactions unless the residence is a licensed location; (iv) physical records cannot be stored at remote locations; and (v) electronics used at remote locations must be able to securely access the company’s systems. Moreover, "remote location" is not considered a full-service office as defined by the regulations. If the loan originator works remotely, their primary office is the office registered on the Nationwide Multistate Licensing System and Registry record, unless they choose another licensed branch.

    The Act is effective January 1, 2024.

    Licensing State Issues State Legislation Mortgages Loan Origination Illinois NMLS

  • Nevada requires licenses for EWA providers

    The Nevada governor recently signed SB 290 (the “Act”) outlining several requirements for providers of earned wage access (EWA) products. EWA products allow individuals to access their earned income before receiving their regular paycheck. To operate such services in Nevada, providers must obtain a license from the Nevada Commissioner of Financial Institutions. The licensing requirements apply to both “employer-integrated” services, where the provider receives verified data directly from the employer or the employer’s payroll service to deliver unpaid wages, and “direct-to-consumer” services where the provider delivers unpaid wages after verifying the earned income based on data not obtained from the employer or their payroll service. Notably, the Act specifies that EWA products are not loans or money transmissions under Nevada law and are not subject to existing laws governing these products. The Act outlines application and fee requirements (licenses will be issued via the Nationwide Multistate Licensing System and Registry) and requires licensed EWA providers to submit annual reports to the commissioner by April 15 of each year.

    Providers of EWA products are also subject to certain prohibitions, which include: (i) sharing any fees, voluntary tips, gratuities, or other donations with an employer; (ii) the use of credit reports or credit scores to determine eligibility for an EWA service; (iii) the imposition of late fees or penalties for nonpayment by users; (iv) the reporting of a user’s nonpayment to a consumer reporting agency or a debt collector; (v) coercion of users to make payments through civil action; and (vi) restrictions on using a third-party collector or debt buyer to pursue collections from a user.

    Additionally, EWA providers must, among other things, (i) implement policies and procedures to respond to questions and complaints raised by users (responses must be provided within 10-business days of receipt); (ii) disclose to the user his or her rights, as well as all related fees, prior to entering an agreement; (iii) allow users to cancel their EWA agreements at any time without being charged a fee; (iv) conspicuously disclose that any tips, gratuities, or donations paid by the user do not directly benefit any specific employee of the EWA provider or any other person (providers must also allow users to select $0 as an amount for such a tip); (v) comply with the EFTA when seeking payment of outstanding proceeds, fees, or other payments from a user’s depository account; and (vi) reimburse users for any overdraft or non-sufficient funds fees incurred as a result of the provider attempting to collect payment on a date earlier than disclosed to the user or in an amount different from what was disclosed.

    On or before September 30, the commissioner is required to prescribe application requirements. EWA providers who were engaged in the offering of EWA services as of January 1, 2023, may continue to provide services until December 31, 2024, if the provider submits an application for licensure by January 1, 2024, and otherwise complies with the Act’s provisions. The Act becomes effective immediately for the purpose of adopting any regulations and performing any preparatory administrative tasks that are necessary to carry out the provisions of the Act and on July 1, 2024, for all other purposes.

    Licensing State Issues State Legislation Nevada Earned Wage Access Consumer Finance NMLS

  • Nevada to regulate student loan servicers and lenders

    On June 14, the Nevada governor signed AB 332 (the “Act”) which provides for the licensing and regulation of student loan servicers. The Act also implements provisions for the regulation of private education loans and lenders. Among other things, the Act requires, subject to certain exemptions, persons servicing student loans to obtain a license from the Commissioner of Financial Institutions. Specifically, the Act states that a person seeking to act as a student loan servicer is exempt from the application requirements only if the commissioner determines that the person’s servicing performed in the state is conducted pursuant to a contract awarded by the U.S. Secretary of Education.

    The Act also outlines numerous requirements relating to licensing applications, including that the commissioner may participate in the Nationwide Multistate Licensing System and Registry (NMLS), and may instruct NMLS to act on his or her behalf to, among other things, collect and maintain records of applicants and licensees, collect and process fees, process applications, and perform background checks. The commissioner is also permitted to enter into agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, the State Regulatory Registry, or other such associations. Additional licensing provisions set forth requirements relating to licensing renewals, reinstatements, surrenders, and denials; liquidity standards; and bond requirements. The commissioner is also granted general supervisory, investigative, and enforcement authority relating to student loan servicers and student education loans and may impose civil penalties for violations of the Act’s provisions. The commissioner must conduct investigations and examinations at least once a year (with licensees being required to pay for such investigations and examinations). The Act further provides that the student loan ombudsman shall enter into an information sharing agreement with the office of the attorney general to facilitate the sharing of borrower complaints.

    With respect to private education lenders, the Act establishes certain protections for cosigners of private education loans and prohibits private education lenders from accelerating the repayment of a private education loan, in whole or in part, except in cases of payment default. A lender may be able to accelerate payments on loans made prior to January 1, 2024, provided the promissory note or loan agreement explicitly authorizes an acceleration based on established criteria. The Act also sets forth responsibilities for lenders in the case of the total and permanent disability of a private education loan borrower or cosigner, including cosigner release requirements. Additional provisions outline prohibited conduct and create requirements and prohibitions governing lenders’ business practices. Furthermore, private education lenders are not exempt from any applicable licensing requirements imposed by any other specific statute.

    The Act becomes effective immediately for the purpose of adopting any regulations and performing any preparatory administrative tasks that are necessary to carry out the provisions of the Act and on January 1, 2024 for all other purposes.

    Licensing State Issues State Legislation Nevada Student Loan Servicer Student Lending Consumer Finance NMLS


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