Does Oregon require a broker-dealer to file financial statements?
A:
No. Any financial information we need to review can be obtained from FINRA using the authority the firm gave the Division through the BD Consent Form.
Q:
How do I apply to be licensed in Oregon as a broker-dealer?
A:
Any broker-dealer which is a member of the Financial Industry Regulatory Authority (FINRA) must apply through the Central Registration Depository (CRD) system by filing an amended Form BD showing Oregon is being added as a licensed jurisdiction. Our licensing fee of $250 will be withdrawn from your CRD account. You must also provide at least one person who will be licensed to transact business in Oregon. Any broker-dealer which is not a member of FINRA must send all of the described documents, fees, and information directly to the Division.
Q:
How do I apply to be licensed in Oregon as an associated person of a broker-dealer?
A:
Individuals associated with an FINRA broker-dealer file a Form U-4 through the CRD system, showing Oregon is being added as a licensed jurisdiction. Our fee of $50 will be withdrawn from the broker-dealer's CRD account. Individuals associated with a non-FINRA broker-dealer must send a manually signed Form U-4 directly to the Division along with the fees of $50.
Q:
What examinations are required for associated persons of broker-dealers?
A:
Oregon requires proof of passing scores on two examinations. One exam must be a "blue sky" exam (Series 63 or 66) and one exam must be a product exam (Series 7 for a general securities license, or see other exams listed in Oregon Administrative Rule 441-175-0130(4) for a limited license). If exam scores are not shown on a CRD record for the individual, a copy of the document showing passing scores must be submitted to the Division.
What about "credit doctors" or lenders that can "help" me get the loan, even with credit problems or incorrect information?
A:
Submitting fraudulent information to get a home loan is a federal offense. When you apply for a mortgage loan, you are certifying that all the information you've submitted is correct.
There is no punishment for the person or the lender who "helps" you fix your credit report or get the loan. Even if you submit incorrect information with your lender's consent or knowledge, you are responsible. The repercussions can be devastating. You may be successful in closing your loan, but you could lose your home and be charged penalties if it is determined later that the information you submitted was false.
Q:
What should I do if I'm not sure about the loan that I've been offered? Can I back out of the deal?
A:
First, the law requires all lending institutions without exception to be licensed to engage in business. Find out if your lender is licensed to do business. Start by contacting the Division of Finance and Corporate Securities (DFCS) in Salem (please see page 11). Some major banks are federally licensed, while others should be licensed with DFCS, which is part of the Department of Consumer and Business Services of the State of Oregon.
Second, consult with a housing non-profit or consumer-protection program. You may also want to get a second opinion from a family member or friend who has experience with finances.
To answer the second part of the question, should you decide to back out of a home loan, you must do so before you sign the prepared loan documents during escrow. Ask the title company handling your transaction to forward you a copy of settlement document known as a HUD-1 as soon as possible, so that you will have an opportunity to verify the charges that you are expected to pay at closing.
If you are refinancing, you have three business days after signing the loan documents during which you can change your mind; however, you must notify the lender in writing that you do not want the loan.
Q:
Who regulates my financial institution?
A:
As noted earlier, the first thing you need to know is whether your lender is licensed to make loans. You also need to know if the institution is regulated at the federal or state level. Here are resources to use to obtain additional information about your institution or to file a complaint:
State-chartered institutions If your institution is regulated at the state level, contact the Division of Finance and Corporate Securities (DFCS) at 1 (503) 378-4140, or toll-free at 1 (866) 814-9710. To file a complaint, fill out our online complaint form or call and ask us to send you a complaint form. You may write to: DCBS/Division of Finance and Corporate Securities, 350 Winter St. NE, Room 410, Salem, Oregon 97301-3881.
Commercial banks If the name of your bank includes the word "National" or has the initials "N.A.," it is regulated by the Office of the Comptroller of the Currency (OCC). The telephone number for the OCC is 1 (800) 613-6743 or 1 (415) 545-5976.
Savings and loan associations or savings banks If your institution has the word "Federal" or the initials "F.S.B." or "F.A." included in its name, it is regulated by the Office of Thrift Supervision (OTS). The number for the OTS is 1 (800) 842-6929.
Credit unions If your credit union has the words "federal credit union" in its name or the initials "FCU," you can contact the National Credit Union Administration (NCUA) at 1 (703) 518-6330.
Preguntas y respuestas
Q:
Quienes regulan o controlan a mi institución financiera o a mi prestamista?
A:
Lo primero que usted debe averiguar es si su prestamista tiene licencia para hacer préstamos en Oregon. También es importante saber si su institución tiene licencia a nivel estatal o federal. Antes de elevar una queja con las entidades reguladoras, es aconsejable que trate de llegar a un acuerdo directamente con la institución o el supervisor de la compañía que le está dando el préstamo.
A continuación le ofrecemos una lista de las entidades reguladoras del gobierno, donde usted puede averiguar acerca de la licencia o para presentar una queja:
Entidades con licencia estatal Si su institución tiene licencia a nivel estatal, usted puede contactar a la División de Finanzas y Valores Corporativos del Estado (Division of Finance & Corporate Securities) llamando al (503) 378-4140, si llama fuera de Salem 1 (866) 814-9710 y pida hablar con alguien que hable español.
Si tiene acceso a la red del internet, usted puede obtener información y presentar su queja en la siguiente dirección www.cbs.state.or.us.
Q:
Si descubro que el préstamo que me están dando no es el que me prometieron, puedo rechazarlo?
A:
Si está comprando su casa y descubre que el préstamo no es el que esperaba, usted puede rechazarlo, pero debe hacerlo antes de firmar los documentos en la compañía de título o Title Company*. Una vez firmados los documentos, será demasiado tarde para rechazarlo. Hay la probabilidad de que pierda su depósito de la aplicación y el depósito que hizo al hacer su oferta al vendedor dela casa. Lo aconsejable es que usted pida a la compañía de título encargada de cerrar la transacción, una copia del documento conocido como "HUD-1"* o "Declaración de costos de cierre" antes de ir a firmar la documentación el dia del cierre. Pida a su agente de bienes raíces o a su prestamista que le ayude a obtener una copia de este documento cuanto antes.
Si está refinanciando su préstamo existente, usted tiene hasta tres días hábiles para rechazarlo después de haber firmado los documentos de cierre, usualmente en la compañía de título. Es muy importante que usted lo haga dentro de esos tres días y por escrito.
Q:
Si tengo muchos problemas de crédito, es verdad que alguien puede "arreglar" mi crédito a corto plazo o puedo llenar una aplicación con información incorrecta?
A:
La única forma de arreglar o mejorar una historia de crédito es con el tiempo y tomando las decisiones correctas. Por ejemplo, una bancarrota aparecerá en su historia de crédito hasta por diez años. Un cobro o colección, un juicio o fallo jurídico de una deuda o "judgment"* aparecerá en su historia de crédito hasta por siete años. Cuanto más antiguo el problema de crédito, menos impacto tendrá en su calificación de crédito o "credit score"* que el banco utiliza para darle el préstamo.
Por otra parte el poner información fraudulenta en una aplicación es una ofensa federal que puede tener consecuencias graves como perder la casa, multas y/o encarcelamiento, dependiendo de la gravedad del caso. Por ejemplo, aunque en muchos casos no todos los compradores que usaron un número de seguro social inválido fueron afectados o perdieron su casa, el riesgo persiste aun después de haber tomado posesión de la casa. Algunas personas afectadas con la pérdida de sus casas, mencionaron que se les aseguró que no hay ningún problema al usar información fraudulenta. Recuerde que al firmar la aplicación o cualquier otro documento, usted está certificando que la información que está dando es correcta. Y que entendió su contenido.
Q:
También puede escribirnos a:
A:
DCBS/Division of Finance & Corporate Securities 350 Winter St. NE, Room 410 Salem Oregon 97301-3881
Bancos comerciales Si el nombre de su banco incluye las palabras "national" o "national association" o las letras "N.A" o "NT&SA", esta institución debe tener licencia con "Office of Comptroller of the Currency" (OCC). El teléfono es 1 (800) 613-6743 (asistencia disponible en español.)
Asociaciones de ahorros y préstamos (savings & loan associations, savings banks) Si el nombre de su institución incluye las palabras "Federal" o tiene las iniciales "F.S.B." o "F.A," la entidad reguladora es "Office of Thrift Supervision" (OTS). El número de teléfono es 1 (800) 842-6929, opción #1. (no disponible en español). Usted puede enviar su correspondencia o queja a: Office of Thrift Supervision, Consumer Affairs Division, 1700 G St., NW., Washington D.C. 20552.
Uniones de crédito (credit unions) Si el nombre de su institución incluye las palabras "Federal Credit Union o las iniciales "FCU" usted puede contactarse con la oficina regional al teléfono 925-363-6200, opción # 3 (no disponible en español.)
Credit Service Organizations
Q:
How do I file a complaint?
A:
The Division of Finance and Corporate Securities (DFCS) investigates complaints involving credit services organizations. To file a complaint online or download a Microsoft Word Version of the form, click here. Submit written complaints to the division.
Written complaints should contain a brief but accurate explanation of the problem and advise us of your desired result. Any documentation to support the complaint will help the division to more quickly resolve the complaint. Do not send original documents, send copies.
Q:
What is provided by a credit services organization?
A:
Services and/or products which:
Improves, saves, or preserves a consumer's credit record, history, or rating;
Assists in obtaining an extension of credit;
Provides advice, assistance, instruction, or instructional materials with regard to either of the above.
Q:
Where can I find a list of persons or companies registered as credit services organizations in Oregon?
A:
Visit the list of credit services organizations registered to provide credit services and/or products to Oregon consumers.
The Division of Finance and Corporate Securities has been designated as the regulator of all registered credit services organizations operating in Oregon. You can get more information by calling (503) 378-4140.
Q:
Who is authorized to provide credit improvement services or educational materials to Oregon consumers?
A:
Only those persons who are registered with the Department of Consumer and Business Services, Division of Finance and Corporate Securities, and their authorized agents. A list of registered organizations can be found at credit services organizations.
A credit union can be chartered by the state Division of Finance and Corporate Securities (DFCS), Salem, Oregon, or by the federal chartering agency, the National Credit Union Administration (NCUA) in Tempe, Arizona. Individuals can also contact the Credit Union Association of Oregon for assistance in chartering a credit union.
Division of Finance and Corporate Securities: (503) 378-4140
Credit Union Association of Oregon: (503) 641-8420 or (800) 688-6098
National Credit Union Administration: (602) 302-6000
Q:
What if I find an error in my credit union call report after submitting it to DFCS?
A:
Send the corrected report electronically in the same manner as originally done. Contact the Division's credit union program support staff or manager with page and line numbers of all corrections.
Q:
What is the difference between a federal-chartered credit union and a state-chartered credit union?
A:
A federal-chartered credit union is chartered by the federal government under the Federal Credit Union Act. A state-chartered credit union is chartered by the State of Oregon under the Oregon Credit Union Act.
Q:
What is the process for amending my state-chartered credit union bylaws?
A:
Amendments to the bylaws are covered in Article XVIII or thereabout. Generally, the amendment is approved by the Board of Directors and then forwarded to the Division of Finance and Corporate Securities for approval. The bylaw amendment transmittal form (2780.pdf) can be found in the forms section of our Web site. The amendment will become effective after it has been approved by the state.
Q:
Who insures the deposits in a credit union?
A:
All credit unions in state-chartered and federal-chartered credit unions are insured up to $100,000 per account by the National Credit Union Share Insurance Fund (NCUSIF) and backed by the full faith and credit of the U.S. government.
Debt Consolidating Agencies
Q:
How do I file a complaint?
A:
The Division of Finance and Corporate Securities (DFCS) investigates complaints involving these organizations. To file a complaint online or download a Microsoft Word Version of the form, click here. Submit written complaints to the division.
Written complaints should contain a brief but accurate explanation of the problem and advise us of your desired result. Any documentation to support the complaint will help the division to more quickly resolve the complaint. Do not send original documents, send copies. Complaints usually take 2 - 4 weeks to resolve.
Q:
Visit the list of debt consolidating agencies registered to provide services and/or products to Oregon consumers.
A:
Visit the list of debt consolidating agencies registered to provide services and/or products to Oregon consumers.
Q:
What services are provided by a debt consolidating agency?
A:
Payments to any creditor by the agency on behalf of a client:
Which are provided from funding sources agreed to in writing by the debtor and within the debtors ability to pay.
Which are from sources that may include assignment of wages, salaries, income, credits or the sale of any thing of value.
For the purpose of reducing client debts and/or dealing with clients creditors.
The agency and the client will agree to a plan for debt reduction or financial accounting prior to implementation.
The agency provides complete accounting records of the financial activity provided for the client.
Q:
Where can I get a registration package?
A:
Contact the Debt Consolidating Agencies program at the Division of Finance and Corporate Securities by calling (503) 378-4140 or faxing to (503) 947-7862. Refer to Debt Consolidating Agencies Web site for the current Oregon Revised Statutes and Administrative Rules.
The Division of Finance and Corporate Securities has been designated as the regulator of these organizations operating in Oregon. You can get more information by calling (503) 378-4140.
Q:
Where is a list of banks for opening an Oregon Client Trust Account?
A:
Our Web site of www.oregondfcs.org has a link entitled "Banking & Trusts." On the banking page, there is a link to the Oregon Bankers Association which has a list of banks who will provide approved Oregon client trust accounts.
Q:
Who is authorized to provide debt consolidating and credit services to Oregon consumers?
A:
Only those persons who are registered or exempt under ORS 697.672 with the Department of Consumer and Business Services, Division of Finance and Corporate Securities, and their authorized agents. A list of registered organizations can be found at Debt Consolidating Agencies.
Q:
Who is exempt from registration?
A:
See ORS 697.622 for listing of exempted persons or organizations.
Franchises
Q:
I am starting a company and I want to offer franchises for sale. How do I go about that?
A:
Oregon law prohibits a franchisor from offering or selling franchises in Oregon unless the franchisor delivers to prospective franchisees one of two disclosure statements allowed by law:
The Uniform Franchise Offering Circular (UFOC) adopted by the North American Securities Administrators Association, Inc.; or
The disclosure statement required by the Federal Trade Commission Trade Regulation Rule set forth in 16 CFR 436.
The franchisor “must deliver the disclosure statement and all proposed agreements relating to the sale of the franchise to the prospective franchisee at least ten business days before the prospective franchisee executes any agreement relating to the sale of the franchise or at least ten business days before the prospective franchisee pays or is required to pay to the franchisor any consideration for the franchise including refundable deposits, whichever occurs first.”
Oregon Administrative Rule 441-325-0020 (2).
Q:
I want a list of all the XYZ Company franchises, where they are located, and who owns each XYZ Company franchise. Can you fax that to me?
A:
Businesses operating in Oregon are required to register corporations and assumed business names with the Business Registry section of the Corporation Division, Oregon Secretary of State. Those records also include the name of the registered agent. You can contact the Business Registry office at (503) 986-2200. Records can also be checked online at http://www.filinginoregon.com.
Q:
I'm a lawyer from another state, and I've been reviewing your statutes governing franchises in Oregon. Does Oregon have any administrative rules regulating franchises in Oregon?
If a franchisor doesn't have to register in Oregon, what does a franchisor have to do to sell franchises in Oregon?
A:
In addition to providing full disclosure to prospective franchisees, Oregon law also requires the franchisor to maintain a complete set of books, records and accounts of the sale and disposition of proceeds of sales of franchises. See ORS 650.010.
Q:
In reviewing my company’s files, I've found copies of Uniform Franchise Offering Circulars (UFOC) filed with other states, but I can't find the one we filed with the State of Oregon. Where can I get a copy of the last UFOC our company filed with your agency?
A:
Oregon law does not require the filing of any disclosure statement, including a UFOC, with the state regulator. Therefore, the Oregon Division of Finance and Corporate Securities does not accept and does not maintain franchise records pertaining to specific businesses. Oregon law requires the franchisor to maintain a complete set of books, records and accounts of the sale and disposition of proceeds of sales of franchises. See ORS 650.010.
You might wish to contact a state that does register franchises to learn whether that state has information relevant to your inquiry. Both the states of California and Washington register franchises and may have information about a specific franchise.
California Department of Corporations 1515 K Street, Suite 200 Sacramento, CA 95814-4052 (916) 445-7205 (866) 275-2677 or 866 ASK CORP www.corp.ca.gov/srd/franchise.htm
Washington Department of Financial Institutions Securities Division PO Box 41200 Olympia WA 98504-1200 (360) 902-8700 FAX (360) 902-0524 www.dfi.wa.gov/sd/franchise.htm
Q:
Is the XYZ Company store located in my town a franchise?
A:
Oregon law does not require the filing of franchise information with the State's Department of Consumer and Business Services. Therefore, the Oregon Division of Finance and Corporate Securities does not maintain records with information about specific franchises.
Q:
The franchisor is making demands that are not part of the deal or hasn't held up his end of the deal. What can I do about it?
A:
Because Oregon law regulates the disclosure of information from a franchisor to a franchisee prior to a sale, the Division of Finance and Corporate Securities will investigate allegations that a particular franchisor made a materially untruthful statement and/or failed to disclose a material fact in the disclosure document. Other complaints regarding the franchise agreement are considered matters of contractual interpretation and are not within the jurisdiction of this agency.
If you have purchased a franchise and believe that the franchisor has breached the agreement, you should consult an attorney familiar with franchises and business contracts. If you need assistance in locating an attorney, contact the Oregon State Bar Lawyer Referral Service at (503) 684-3763 (Portland area) or toll-free (800) 452-7636.
Oregon Law does provide a private right of action or civil remedy for franchisees who have a claim against a franchisor. See ORS 650.020.
Q:
What is the difference between franchise regulation and franchise registration?
A:
Oregon regulates the sale of franchises by requiring franchisors to provide certain disclosures to prospective franchisees before any sale. Other states regulate franchises by requiring franchisors to file franchise documents with the state regulator that must be approved prior to the sale of the franchise in that state.
Q:
Where can I find a sample UFOC that has been filed with your agency?
A:
Oregon law does not require nor accept the filing of any disclosure statement, including a UFOC, with the Department of Consumer and Business Services.
Q:
Who is the authorized agent of the XYZ Company franchise?
A:
For authorized agent information for businesses registered in the state of Oregon, contact the Business Registry office at (503) 986-2200 or go to http://www.filinginoregon.com.
Investment Advisor
Q:
Do I need to notify Oregon if information provided on my application changes after I have become licensed?
A:
Yes. The requirement to report material changes applies to broker dealers, state and federal covered investment advisers, and the individuals associated with any of these firms. The nonexclusive list of what is a material change can be found in Oregon Administrative Rule 441-175-0105. To report the change, file an amended application form (BD, ADV, or U-4, as appropriate) within 30 days of the occurrence of the material change. Submit the amended filing through CRD or IARD if the original application went through either of those systems, or in paper format directly to the Division. Note: when filing an amendment in paper format for Form ADV, you should submit the first page with manual signature, and any page on which there is a change. Highlight or circle the changes. There is no fee for the amended filing.
Information about the federal securities law requirements may be obtained by contacting:
For information on the range of capital funding options available to businesses, contact the Business Development Division of the Oregon Economic Development Department at:
Does Oregon have a de minimis licensing exemption?
A:
There is currently a de minimis exemption for any investment adviser firm with an office and license in another state, no place of business in Oregon, and fewer than six Oregon clients. Accredited investors and institutional clients are omitted when counting the Oregon clients. There is no de minimis exemption for broker-dealers, meaning that the broker-dealer and its associated person would be subject to penalties for doing business prior to becoming licensed or exempted from licensing in Oregon.
Q:
Does Oregon require a broker-dealer to file financial statements?
A:
No. Any financial information we need to review can be obtained from FINRA using the authority the firm gave the division through the BD Consent Form.
Q:
How do I apply to be licensed in Oregon as a broker-dealer?
A:
Any broker-dealer which is a member of the Financial Industry Regulatory Authority (FINRA) must apply through the Central Registration Depository (CRD) system by filing an amended Form BD showing Oregon is being added as a licensed jurisdiction. Our licensing fee of $250 will be withdrawn from your CRD account. You must also provide to us with at least one person who will be licensed to transact business in Oregon. Any broker-dealer which is not a member of FINRA must send all of the described documents, fees, and information directly to the Division.
Q:
How do I apply to be licensed in Oregon as an associated person of a broker-dealer?
A:
Individuals associated with a FINRA broker-dealer file a Form U-4 through the CRD system, showing Oregon is being added as a licensed jurisdiction. Our fee of $50 will be withdrawn from the broker-dealer's CRD account. Individuals associated with a non-FINRA broker-dealer must send a manually signed Form U-4 directly to the Division along with the fees of $50.
Q:
How do I apply to be licensed in Oregon as an investment advisor representative (IAR)?
A:
Through your employing investment adviser firm, submit a manually signed U-4, proof of passing appropriate exam(s) or exemption from the exam requirement (see OAR 441-175-120(4)(6), and a fee of $50. All individuals must be connected to an investment adviser firm (which may be a firm that they own and control).
Q:
How do I apply to be licensed or notice filed in Oregon as an investment adviser firm?
A:
This licensing or notice filing process depends on whether the firm has an office location in Oregon, and whether the SEC or a state agency is the regulator of the firm. Under a federal law passed in 1996, the SEC was given jurisdiction over all investment advisers with more than $25 million under management. The state securities agency in the state where the investment adviser has its home office is the regulator of any firm with $25 million or less under management.
A firm with less than $25 million under management and located in Oregon will be regulated by the Division. An application consists of a complete Form ADV, a fee of $200, a surety bond in the amount of $10,000, a copy of any proposed contract with clients, and financial statements required by Oregon Administrative Rule 441-175-0100. The firm must also have at least one investment adviser representative (IAR) who is licensed under the Oregon securities laws, starting at Oregon Revised Statutes 59.165.
State regulated firms with a home office outside of Oregon must submit a completed Form ADV and a fee of $200 to the Division. In addition, the firm must state in letter form whether it is licensed in its home state and whether it complies with its regulator's net capital or bonding regulations. The firm must also have at least one investment adviser representative (IAR).
Generally, federal-covered investment advisers (investment adviser registered representatives or IARR) with an office location in Oregon, or with more than five non-institutional clients in Oregon, are required to notice file in Oregon.
The SEC requires all federal covered investment advisers to notice file through the Investment Adviser Registration Depository (IARD) system. The firm should file an amended Form ADV on IARD adding Oregon as a notice filing jurisdiction. The IARD will withdraw our notice filing fee of $200 from the firm's account.
Q:
What examinations are required for associated persons of broker-dealers?
A:
Oregon requires proof of passing scores on two examinations. One exam must be a "blue sky" exam (Series 63 or 66) and one exam must be a product exam (Series 7 for a general securities license, or see other exams listed in Oregon Administrative Rule 441-175-0130(4) for a limited license). If exam scores are not shown on a CRD record for the individual, a copy of the document showing passing scores must be submitted to the Division.
Q:
What examinations are required for IARs, and what exemptions are available?
A:
Examinations specifically designed for IARs were created with an effective date of Jan. 1, 2000 by revising two existing exams previously offered through the exam testing centers. Unfortunately, the exam numbers were not changed, thus it is important for a regulator to know the date you took one of these exams. The two exams in question are Series 65 and Series 66. The Division currently accepts the following combinations of exams for IARs:
Series 65 prior to 1/1/00, and Series 7,
Series 66 after 1/1/00, and Series 7, or
Series 65 after 1/1/00
The Division exempts an individual from the exam requirement if the persons shows (1) proof of licensing as an IAR in any jurisdiction within the 2 years immediately prior to the filing of an application in Oregon, or (2) holding of a current professional designation of Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Chartered Investment Counselor (CIC), or Personal Financial Specialist (PFS).
Money Transmitters
Q:
How do I file a complaint?
A:
The Division of Finance and Corporate Securities (DFCS) investigates complaints involving these organizations. To file a complaint online or download a Microsoft Word Version of the form, click here. Submit written complaints to the division.
Written complaints should contain a brief but accurate explanation of the problem and advise us of your desired result. Any documentation to support the complaint will help the division to more quickly resolve the complaint. Do not send original documents, send copies. Complaints usually take 2 - 4 weeks to resolve.
Q:
I don't speak English, can I still get an application and help with translation?
A:
Yes, call (503) 378-4140. The receptionist will connect you with an examiner who will be able to assist you with completion of the application.
Q:
Where can I find a list of businesses licensed to do money transmission for Oregon consumers?
A:
Visit the licensed money transmitters search page. The page features searches by name, profession, or license number; by location; or offers a download function for obtaining the entire list of licensed money transmitters.
Q:
What does money transmission mean?
A:
The sale or issuance of payment instruments or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad by any and all means, including but not limited to payment instrument, wire, facsimile or electronic transfer.
Q:
Where can I find a license application?
A:
Visit the application form for money transmitters (MS Word or 3260.pdf) and everything you need to apply for a money transmitters license is available.
Q:
Where can I get more information?
A:
The Division of Finance and Corporate Securities has been designated as the regulator of these licensed organizations operating in Oregon. You can get more information by calling (503) 378-4140.
Q:
Who is authorized to transmit money for Oregon consumers and businesses?
A:
Only those persons who are licensed by the Department of Consumer and Business Services, Division of Finance and Corporate Securities, and their authorized agents. A list of licensed money transmitters can be found at money transmitters.
Mortgage Lending
Q:
How are "no cost" loan charges or rebated charges disclosed to the consumers/mortgage borrowers?
A:
If I am quoting a client a rate that would give a rebate back to cover some or all of their closing costs, do I need to quote those costs on the estimate disclosure that they sign? I have always quoted all of them and then have shown the credit as "broker paid closing costs." Does it matter which way that I disclose?
This was a great e-mail question I received that I am just sure other people are wondering about it too now that I'm seeing signs advertising "no cost" loans. The short answer is that you are required to quote all the costs, even if the consumer won't actually pay the cost out of their pocket at closing, and then mark them as POC or as broker paid closing costs. Here's why:
The good faith estimate must list all the charges that will be listed in section L of the HUD-1 or HUD-1A and that the borrower will normally pay or incur at or before settlement based upon common practice in the locality of the mortgaged property. So, what are the charges are required to be listed in Section L of the HUD-1 or HUD-1A?
Appendix A to Regulation X (the regulations of RESPA) states that the HUD-1 shall "itemize all charges imposed upon the Borrower and the Seller by the Lender and all sales commissions, whether to be paid at settlement or outside of settlement, and any other charges which either the Borrower or the Seller will pay for at settlement." As always, any charges that will be paid outside of settlement need to be listed but must be marked "POC" (paid outside of closing) and those POC charges aren't used in computing the total.
The appendix even talks about "no cost" or "no point" loans. According to the Appendix, the charge to be paid by the lender to an affiliated or independent service provider should be shown and then marked as POC. Those POC charges should not be used in computing totals. Just a reminder, this would also include indirect payments or back-funded payments to mortgage brokers that arise from the settlement transaction.
Recognizing that reading the regs to find the answer is about the best insomnia cure there is, my favorite section on HUD's Web site, their RESPA FAQs, comes through with a much faster answer.
Question 33 says: If the borrower is getting a "no cost" loan, must the lender list charges the lender is going to pay?
Yes. The charges to be shown on the GFE and the HUD-1 must include any payments by the lender to affiliated or independent settlement providers. These payments should be shown as POC (paid outside of closing).
So now you've seen the quick answer from me and HUD and the long answer from the regs, let me leave you with one other thing you ought to know. We frequently get calls from consumers wanting to know why one GFE is so much lower than the another company's estimate. If I have time, instead of the short answer of telling them to compare to see that each has the same types of charges, I'll ask about typical charges that are left off when low-balling a GFE to get the consumer in the door or have them fax me what they have. If all the usual fees aren't listed on the GFE, we'll probably be calling to find out why. So you can save yourself the call, by doing it right. Estimate the fee even if you are going to pay it and mark it POC.
Q:
I'm a loan originator and I heard that there were some recent changes in the statutes and rules. How do they affect me?
A:
The major changes of the new law and rules that affect loan originators are the education and testing requirements and the individual loan originator liability. The new laws and rules require that loan originators take an entry-level education course and pass an examination within six months from the date that the loan originator is first hired to originate loans or July 31, 2002, whichever date occurs later. Those loan originators who have been employed full-time as a loan originator for at least three years as of Jan. 1, 2002 are exempt from the entry-level course and testing requirements, however, all loan originators are required to obtain 20 hours of continuing education every two years. All loan originators must keep the original completion certificate for courses attended by the loan originator for five years and must provide a copy of the certificate to his or her employer.
The second change targeted at loan originators is the new individual loan originator liability for certain violations. In the past, the Division has been limited in its ability to address certain problems because the root cause of the problem was a specific loan originator. The loan originator would cause a problem, quit and go to work for another licensee. The loan originator would cause another problem and the cycle would continue. The Division would often be forced to fine the licensee employing the originator for the violation rather address the problem with the loan originator causing the problem because we had no specific authority to hold the loan originator directly responsible. This never resolved the underlying issue. Coupled with the authority provided to the Director to investigate and take action for violations in ORS 59.885 and 59.890, the Legislature granted the Division the authority to investigate complaints against specific loan originators and to hold loan originators individually responsible for certain violations in addition to or separate from the ability to hold the licensee responsible. The new law allows the Division to hold individual loan originators responsible for:
1) engaging in dishonest, fraudulent or illegal practices or conduct in any business or profession or engaging in unfair or unethical practices or conduct in connection with the mortgage business,
2) willfully or repeatedly violating or failing to comply with the Oregon Mortgage Lender Law or any rule or order of the Director,
3) failing to account to person interested for all money or property received in connection with a mortgage loan and
4) failing to comply with the education or testing requirements.
Loan originators should also know that their employers are required to notify the Division within 30 days of the date that the loan originator is hired or terminated. The Division will be tracking this information to make sure that loan originators are not originating loans for more than one company at a time. If a loan originator terminates his or her employment with the licensee, the loan originator may notify the Division that the loan originator has left the employment of the company so that the loan originator is clear in the Division records to work for another company. To notify the Division, the loan originator would need to provide written notification of the termination including the date of termination, the reason for termination and the current contact information for the loan originator.
Q:
I saw the proposed rules on your Web site and there looked like a lot of changes. What really has changed?
A:
This is an excellent question and I've been answering it several times a day now for a while. Instead of one really, really long response going through all the pieces, I'm going to explain the changes over several questions. First an overview, then in the next three installments, I'll go over the education requirements and specific changes from the licensee's perspective then the loan officer perspective.
The majority of the changes in the administrative rules were spawned by the passage of HB 2764 requiring loan originator education. The administrative rules are to clarify things that the legislature left up to the Division or to provide more detail on how the new law would be implemented.
For the most part, the rule changes can be placed in two categories. The first category is changes made as a result of the new legislation and includes all four of the new rule number and many of the minor additions to other rules. Those rule changes will be covered in a subsequent question.
The second category is comprised of rule changes that are exclusively technical fixes to existing rules. We used this rulemaking as an opportunity to clean up some grammar and spelling issues, to make sure that references to other rules and statutes were up to date, and generally just do some clean up. That is why there were so many rules that were affected by this rulemaking effort. If you look at most of the rules, you'll see that there is just one word or phrase change.
The only change that doesn't fit into the two categories listed above was the addition of OAR 441-870-0030 (11) and (12). The Division has had a number of consumer complaints within the past year about lenders who have the consumer sign final loan documents with significant conditions that still must be fulfilled before the loan can be approved, such as needing the appraisal, or before the lender has funds available to fund the loan. Many of these loans never funded or the funding was substantially delayed causing harm to the consumers involved. The Division had a policy, MB/B 98-02 dealing with loan signing, but OAR 441-870-0030(11) makes it clear that it is prohibited to require or permit consumers to sign promissory notes and trust deeds prior to the loan receiving final written loan approval, full disclosure to the consumer of repayment terms, and the lender having funds available to fund the loan. OAR 441-870-0030(12) prohibits delaying release of loan funds to the borrower, the borrower's approved representative or escrow for more than one business day following recording of the lien.
Q:
I'm a licensee and I saw that HB 2764 passed and then there were recent changes to the administrative rules, how do those affect me?
A:
In addition to providing a list of all loan originators to the Division by Jan. 31, 2002, each licensee must notify the Division within 30 days of hiring or terminating a loan originator and must certify that:
1. The loan originator is not working as a loan originator for any other company.
2. The loan originator has completed any required initial or continuing education and passed any required examination. When certifying that the loan originator has completed education and testing requirements, the licensee's response should be based upon whether the loan originator has completed requirements that were required to be fulfilled by the date the licensee is completing the certification. For those completing the initial notification due in Jan. 2002, the answer to this question would always be "no" the loan originator has not failed to complete any requirements since no one would be required to have completed any education or testing requirements as of the date the certification is completed. It is a violation of the Oregon Mortgage Lender Law to hire or continue to employ a loan originator who is working as loan originator for another company.
3. The loan originator has not violated any provision of the Oregon Mortgage Lender Law.
The Division has developed a form (MS Word or 2772.pdf) to make complying with these requirements easier. The form (MS Word or 2772.pdf), which includes the required certifications listed above, is posted on our Web site. If the answer to any of the questions is "yes," the licensee must provide a written explanation. Furthermore, the licensee must notify the Division of any changes in the information on that form within 30 days of the change. In addition, the licensee must maintain the information about the loan originator in the licensee's personnel files along with copies of the completion certificates for the initial and continuing education courses that the loan originator completes and the other personnel file requirements of OAR 441-865-0050.
Finally, Chapter 952, 2001 Oregon Laws made some changes to ORS 59.865 which is the statute that delineates under what circumstances the Division can revoke, suspend or deny a license. While the Division has always believed we had the authority to place conditions on a license, the Legislature saw fit to make this authority clear by specifically adding the authority to condition a license to ORS 59.865. At the same time, the Legislature expanded the statute by adding four new circumstances that trigger the authority to revoke, deny, suspend or condition a license. While all of the new triggers relate to the licensee's responsibilities relating to loan originators, three of the new circumstances are related to the new education and reporting requirements. Those three are:
1. Knowingly misrepresenting to the Director a loan originator's completion of initial or continuing education courses or completion of the examination.
2. Willfully or repeatedly employing loan originators who do not meet the training, education or continuing education requirements of loan originators or
3. Failing to notify the Director of the termination of a loan originator for failure to comply with state or federal laws, regulations or rules. While the Division has always maintained that licensees must diligently supervise the people working for the licensee, the fourth new trigger makes clear that Division can revoke, suspend, deny or condition a license if the licensee fails to diligently supervise and control the mortgage-related activities of its loan originators.
Q:
So what does the State do if my advertising is out of compliance?
A:
Any violation of any provision of the Oregon Mortgage Lender Law and the accompanying rules is punishable by civil penalty of not more than $5000 per violation, unless it is an continuing violation in which case the maximum per violation is $20,000. Furthermore, any violation of any provision of the Oregon Mortgage Lender Law could potentially carry a criminal penalty, a Class C Felony, except contempt of a subpoena issued by the Division which only a Class A Misdemeanor. Now truthfully even my fertile imagination struggles with thinking up some advertising violation that would rise to level that the Division would see fit for criminal penalties, but it seemed like an opportune time to remind people of the penalties that are possible for violations.
If it's an advertisement that I brought from home, I usually call or write the company to indicate that their advertisement seems out of compliance and suggest that they correct it. If the OAMB is sending us a third letter, the company has had plenty of warnings that their advertising is not compliant, so we're probably going to be pretty serious about stopping the non-compliant advertising and fining the company or making the appropriate referral to the FTC or other regulator if the Division does not have jurisdiction. For those violations that the Division has jurisdiction over, we are likely to send a consent order allowing the company to consent to a cease and desist and pay penalty for the violation as resolution.
There are three typical adverting issues the Division receives. First, we see a lot of advertisements where the rate is so low, it's questionable whether it's even available. When we receive that type of advertisement, I send a letter to the company requesting that they provide me with rate sheets or some other evidence that the advertised rate is actually available. When I receive the rate sheets, I review them to see if the rate is on them and whether a buy down was required to get the rate. So if you are advertising a really low rate, you should probably have a rate sheet or other form of commitment to back it up in case your advertisement catches our attention. If the rate sheet doesn't show that rate is available or requires a buy down that you didn't disclose, then there's a violation. Typically, at that time I would inform the licensee that their advertisement violated the rules and we generally resolve the issue with a consent order and fine.
Another common complaint comes from letters that imply associations with the consumer's current lender. Typically the ones I've seen are sort of a gray-issue and for the most part they have been forwarded to us by consumers who concerned others would be confused about the relationship or the current lender of consumers whose customers came in with the letter believing there was an affiliation or some other sort of relationship between the advertiser and the consumer's lender. The letters I've seen lately don't expressly imply an association but they don't disclaim one either and they use information such as the name of their lender, the amount of the loan, when the loan was made or other information that is readily available from public or purchasable records. Consumers believe that information in the advertisement must have been provided by their lender because they aren't aware the information is in public records. With these types of situations, I usually send a letter to company indicating that consumers are confused by the advertising and believe that there is an association when there is not. I request that the advertiser modify the advertisement to either remove what's creating the false impression for the consumer or, usually, to add a clear statement that there is no affiliation. So far, it's never taken more than a friendly word or letter to resolve those issues.
The last typical advertising problem is advertisements that do no have the company's licensed name or a licensed DBA on them. There is a reason why advertising must have a licensed name and it's not so that I get another reason to write a consent order when a licensee doesn't comply. It's so that consumers know what company is seeking the consumer's business. It allows the consumer to check out the company. If the company's name or DBA isn't licensed, we often can't verify the license for the consumer. Usually the phone number doesn't do much good because licensees aren't required to provide us every phone number they use so we often don't have the phone number that's advertised. If there's an address, we can track it down by a reverse search on the address (which had better be licensed location if you are a licensed lender) but not all advertising has an address and some have PO boxes that aren't required to be listed in connection with the license. So the consumer is left with us saying that we have no record of the company that sent the advertising which means that the company is either 1) violating our laws by advertising under a name that is not licensed, 2) violating our laws by soliciting loans without having a license when they are required to have one, or 3) are exempt from the licensing provisions for some reason, typically because they are a bank or subsidiary or affiliate of a bank. For the most part, I doubt that this response leaves the consumer with much confidence about the advertisement he or she received which sort of defeats the purpose of sending the advertisement in the first place, don't you think? So, the moral is put your name or a DBA on your advertisement. If you don't, you'll probably lose the customer anyway and you are likely to be fined if you don't.
From The OAMB Ethics Committee: The Ethics committee of the OAMB monitors advertising statewide. If you find an ad you feel may be out of compliance, please forward it to us at the OAMB main office. We send out over 100 letters a year to mortgage lenders with problem advertising in print, mailers, web, radio and more. We first send out a letter mentioning the ad and sources to review ad compliance issues and invite a call from the mortgage lender (Licensee of record). If this letter does not correct the next ad from that mortgage lender, we send out a second warning saying basically the same information and a warning that a third offense will result in us turning them in to the state for review of their advertising. We have only had to send one such "third notice" to a mortgage lender in over three years of monitoring advertising. Most appreciate our help (No fines with us when we notify you) and like the idea we are watching to make our industry better.
Q:
Is it necessary for the broker to disclose any rebate on the Good Faith when it will be disclosed on the Hud Settlement statement? At the time the good faith is typically done, the rate is not locked anyway, so showing a rebate that could go away before closing, if the market turns, could hurt the broker in the long run. What are your thoughts?
A:
Until Culpepper or some other decision changes how things work, right now it is still necessary for the broker to disclose any rebate on the Good Faith when it will be disclosed on the Hud Settlement Statement according to 24 CFR 3500.7(c). Because the FAQ published by HUD on their RESPA web page (see question 35) requires that the rebate be disclosed on the Hud statement, it must be disclosed on the Good Faith.
As for your concern about the customer relationship that may be hurt by disclosing something that may exist when you complete the Good Faith but doesn't exist at closing, I think there is a good way to be compliant but address your concerns. First estimate your yield spread or other lender payment as a range of payment, such as 0-3%. This is allowed under 24 CFR 3500.7(a) ("a good faith estimate of the amount of or range of charges") (emphasis added). This allows you to comply while anticipating changes that might occur, but make sure your range is actually a good estimate of what it might occur for this consumer. Something like 0-5% on every loan tells me that either you are even trying to estimate or you don't have a very good clue about what's going to happen in this loan. Neither situation is good.
Back up your reasonably estimated range with good communication with your borrower. Most borrowers don't see the fine print with which most yield spread premiums are disclosed. I can assure you it's caused more than one complaint. You can take steps to prevent that from occurring while you compliantly disclose the premium by pointing out the yield spread premium on the Good Faith when you review it with your borrower and explain what a yield spread premium is, why it is estimated in a range of numbers, and how it is calculated. You may have to spend some time on this issue if the consumer doesn't seem to understand but the extra time you spend educating the consumer may prevent you from spending much more time responding to a complaint filed by someone who simply did not understand. At this same time, you can address the fact that the Good Faith is an estimate and that you don't know exactly what the yield spread premium may be, if there even is one. That said, use your common sense. If you know there's going to be a yield spread premium, tell the consumer that up front and don't hide behind an estimate that includes zero as a possibility when zero isn't a possibility. If the consumer is surprised at closing that there's a yield spread or the size of it, it usually wont be good for you in the long run. Remember that long-used, but oh-so-true saying that a happy customer tells one person but an unhappy one tells 10 (and one of them may be your friendly regulator).
When explaining what a yield spread premium is, also explain that the fee goes to your company, not the consumer. Many consumer complaints have been based upon the consumer's lack of understanding of that fact. While you must disclose the premium on the Good Faith, most concerns and complaints about yield spread premiums can be prevented by clear communication with the consumer before you get to closing and the consumer sees some number on the Hud Settlement Statement that he or she never saw before sitting down to sign the final papers.
Q:
What advertising rules apply to mortgage lenders?
A:
Advertising by mortgage lenders is governed by both federal and state rules. The federal Truth in Lending Act dedicates an entire section to advertising consumer credit. The best place to read about all of the federal restrictions is in a document called "How to Advertise Consumer Credit & Lease Terms," on the Federal Trade Commission's Web site: http://www.ftc.gov/bcp/conline/pubs/buspubs/creditad.htm.
The two most common violations of the Truth in Lending Act are advertising a note rate without the APR and using a trigger term, such as the amount of the down payment, without the required disclosures.
The Oregon Association of Mortgage Professionals is another resource in this area. The OAMP's Ethics Committee monitors advertising statewide. You can contact the OAMP at http://www.oamponline.com/ or (800) 650-9076.
Q:
How does the state know when I don't follow the Truth in Lending Act and other advertising requirements?
A:
The Oregon Association of Mortgage Professionals and the Oregon Division for Finance and Corporate Securities work together to police advertising in the mortgage lending industry.
The OAMP's Ethics Committee looks at all kinds of advertising -- radio, billboards, newspapers, magazines, direct mail, television, and the Internet. If it finds an advertisement that seems to be in violation of the rules, it sends a letter to the advertiser. Most of the time, the advertiser cooperates and takes care of the problem after that first letter. But if the ad continues to run as is, the committee sends a second, more forceful letter. If the advertiser ignores the second letter, it gets a third letter that is copied to DFCS for review.
DFCS also checks advertising on its own. For example, as part of the licensing process, the division checks the advertising on the applicants' Web sites.
Q:
So what does the State do if my advertising is out of compliance?
A:
Companies that violate the Oregon Mortgage Lender Law and its rules can be fined up to $5,000 per violation or up to $20,000 for a continuing violation. And, while rare, an advertisement that breaks the law could carry a criminal penalty.
The Oregon Division of Finance and Corporate Securities tries to resolve the issue with the advertiser before issuing penalties. For example, if customers complain that an advertisement implies an association with their current lender, DFCS will contact the advertiser and request that it change the ad.
But if an advertiser has been warned and fails to change the ads or if DFCS find a clear violation of the law, it will issue a cease-and-desist order and penalty.
Q:
Can I complete my license application online?
A:
Mortgage lenders can apply for licenses, renewals, or branch locations online.
The system requires that you enter the same data as on the paper application forms, although some pieces of the application still need to be submitted in paper format, such as financial statements.
Contact your local insurance agent. He or she has access to the companies that are issuing Oregon Mortgage Lender Surety Bonds.
Have the surety bond company use the surety bond form located in the forms section of http://dfcs.oregon.gov/mortgage_lending.html. The form is labeled "Surety bond form - 440-2775."
Q:
What surety bond amount do I need?
A:
You need $25,000 for your principal location and $5,000 for each branch location, up to a maximum of $50,000.
Q:
Do I need to register with the Secretary of State?
A:
If you are a corporation formed in Oregon or have a physical location in Oregon, you must be registered with Oregon's Secretary of State. If you are a corporation formed in a state other than Oregon, you may be required to file with Oregon's Secretary of State as a foreign corporation. There are some exceptions -- call the Secretary of State at (503) 986-2200 to determine what filing is required.
Q:
What is an Oregon agent for service of process and do I need one?
A:
You must designate an Oregon agent for service of process. The Oregon agent for service of process is an individual or corporation physically located in Oregon who can receive legal documents on behalf of your company. For companies in Oregon, the agent is usually someone at the company. Out-of-state companies, though, must find an agent in Oregon. If you do not know an individual or company in Oregon to take on that role, here are some options:
CT Corporation System: (800) 227-4734
Corporation Service Co.: (800) 222-2122
Data Research Inc.: (800) 992-1983
Charles F. Mathias: (888) 375-6188
National Registered Agents Inc.: (800) 554-3113
Q:
What is a branch dba?
A:
A DBA (doing business as) is another name that your company uses besides the principal name of the company. A branch DBA, however, is used only with a specific branch or branches in your company. You should list a branch DBA only in Section 4 - Branch Office Information in the application, not in Section 1 - Firm Information.
Q:
Who do I include in the Section 5 - Affiliated person information?
A:
You must fill in information for each owner of more than 10 percent of the company and each officer, director, and experienced person. If you are a public company and are unsure of whom you should include, please contact the Mortgage Lender Section at (503) 378-4140.
Q:
What is an experienced person and do I need one?
A:
Every licensed mortgage lender must have an experienced person. An experienced person is an individual in your company who is responsible for ensuring compliance with the Oregon mortgage lending statutes, rules, and policies. Your experienced person must be an owner, officer, director, or full-time W-2 employee who does not work for any other licensed mortgage lender. He or she must have three years experience negotiating or originating residential real estate loans within the past five years.
An individual may be able to apply experience in other fields to the three-year requirement. For more information on equivalent and related experience, go to http://dfcs.oregon.gov/mortgage_lending.html#statrules and click on the rule for licensing.
If your experienced person changes, you must notify the Oregon Division of Finance and Corporate Securities within three working days as well as comply with other requirements. For specific requirements, go to http://dfcs.oregon.gov/mortgage_lending.html#statrules and click on the rule for licensing.
Q:
Do I need to send in the Notice of Clients' Trust Account and the Authorization to Examine Clients' Trust Account or the Affidavit and Undertaking or both?
A:
You will never need to send in both.
If you accept any money from borrowers other than at closing, you must maintain a clients' trust account with an Oregon financial institution. If that is the case, you must complete and send in the Notice of Clients' Trust Account and the Authorization to Examine Clients' Trust Account.
Any time you open a new client's trust account, you must send the Oregon Division of Finance and Corporate Securities a Notice of Clients' Trust Account and Authorization to Examine a Clients' Trust Account for that account within 30 days. If you close a client's trust account, you must notify DFCS in writing with 30 days.
If you do not receive money from borrowers prior to closing, you must complete the Affidavit and Undertaking.
Q:
What financial statements do I need to submit?
A:
You must submit a profit-and-loss statement and a balance sheet. Both must be less than six months old. They do not need to be audited but must be prepared in accordance with generally accepted accounting principles. If you are a new applicant and just began your mortgage lending business, you may submit a copy of the financial statements the surety company required for your surety bond.
Q:
How much does my license cost?
A:
The initial license, which expires after one year, costs $825 for your principal location and $165 for each branch location. Renewal licenses cost the same amount and expire after two years. If you add a branch after the initial license is issued, the cost is $247.50 per branch. The branch licenses will be set up to expire at the same time as the principal location license.
In addition, the licensee must pay $60 for every loan originator it employs. The licensee must pay that assessment with its initial application and at each renewal. For a new license, the company must estimate the number of loan originators it expects to employ during the first year and base the assessment on that number.
Q:
How long will it take for me to get my license?
A:
If your application is complete, it will take about three to four weeks. Please do not call to check the status of your application for at least 15 days.
If your application is not complete, there is no way to reliably estimate how long it will take to get your license. You will be sent a Notice of Incomplete Application, which will ask you to provide the items listed within a certain time frame. The faster you provide those items, the sooner the Oregon Division of Finance and Corporate Securities will issue your license.
Q:
If I hand deliver my application, can I get my license the same day?
A:
No. The application still must be reviewed, verified, and processed before a license can be issued.
Q:
What if information on my application changes after I submit it?
A:
You need to provide the Oregon Division of Finance and Corporate Securities written notice of any change in the information contained in your application. DFCS needs to know about most of the changes within 30 days of the change. There are some exceptions: You need to notify DFCS about a change in your experienced person within three working days; and if you are opening a new branch, you need to apply for a branch license 30 days before you open the branch.
Q:
When do I need to renew my license?
A:
Your renewal application must be submitted at least 30 days before your license expires. While the Oregon Division of Finance and Corporate Securities sends out renewal notices as a courtesy, it is your responsibility to renew your license timely.
Q:
What laws do I need to know and where can I find them?
A:
All licensees are required to comply with Oregon?s Mortgage Lender Law, located at ORS 59.840 through 59.996, and Oregon Administrative Rules (OAR) 441-850-0005 through 441-885-0010.
If a real estate agent wanted to complain about practices of a particular loan officer/mortgage broker, how would she or he go about doing that? Is there a formal procedure or a form to fill out?
A:
If the complaint is on behalf of a consumer, the consumer should make the complaint. For example, if the lender hasn't provided a good faith estimate or won't refund a client's trust account funds, the consumer should make the complaint.
To file a complaint, the consumer should send a letter to the Oregon Division of Finance and Corporate Securities outlining what happened. There also is a complaint form on the DFCS Web site, http://dfcs.oregon.gov/complaint.html, that a consumer can print, complete, and send in. If the issue is time sensitive or if there is a barrier to filing a written complaint (such as a literacy issue), the consumer should call DFCS at (503) 378-4140.
There are some instances, though, when it is more appropriate for the real estate agent to make the complaint. For example, if the real estate agent has noticed a pattern of a broker not providing good faith estimates promptly or not refunding clients' trust fund accounts, it might be appropriate for the agent to make the complaint. It also might make sense for an agent to let DFCS know about an unlicensed office or other things that wouldn't necessarily involve a consumer but would violate DFCS' statutes, rules, or policies.
Q:
If the borrower is getting a "no cost" loan or rebated charges, must the lender list charges the lender is going to pay?
A:
Yes. The lender is required to show all the costs, even costs the consumer won't actually pay out of pocket. The charges to be shown on the good faith estimate and the HUD-1 must include any payments by the lender to affiliated or independent settlement providers. These payments should be shown as POC (paid outside of closing).
Q:
Is it necessary for the broker to disclose any rebate on the good faith estimate when it will be disclosed on the HUD settlement statement? At the time the good faith is typically done, the rate is not locked. If the market turns, the rebate could go away before closing and hurt the broker in the long run.
A:
Yes. It still is necessary to disclose any rebate on the good faith estimate.
The concern about the customer is a valid one. A good way to make sure the customer isn't surprised at closing is to estimate your yield spread or other lender payment as a range, such as 0 percent to 3 percent. This allows you to comply with the rules, while letting the customer know that things might change. Just make sure your range is actually a good estimate.
In addition, make sure to communicate well with the borrower. Point out the yield spread premium on the good faith estimate when you review it with your borrower. Make sure he or she understands what it is, how it is calculated, and why it is an estimate.
Q:
What is the entry-level education requirement for loan originators?
A:
Loan originators are required to take a 20-hour entry-level course that has been approved by the Mortgage Lending Education Board and to pass the state mortgage lending examination before taking any loan applications. A person may take these courses and the test before being hired by a mortgage banker or mortgage broker.
Q:
What are the continuing education requirements for loan originators?
A:
During each 24-month period from the loan originators "continuing education date," loan originators are required to take 20 hours of continuing education courses that have been approved by the Mortgage Lending Education Board.
Q:
If the loan originator had taken 16 hours of continuing education courses, and then takes another eight-hour course, can the extra four hours be rolled over to the next 24-month period?
A:
No. Each 24-month period is a separate period of time. Every loan originator must take a minimum of 20 hours of continuing education classes during each 24-month period, but courses taken over this amount do not carry over to the next period.
Q:
What happens if a loan originator doesn't complete all 20 hours of continuing education by the end of each 24-month period?
A:
A loan originator who does not meet the ongoing continuing education requirement must immediately stop working as a loan originator. They must take an entry-level course and pass the entry-level exam before being qualified to work again as a loan originator.
Q:
When a new employer hires a loan originator, does the loan originator have 24 months from that hire date to complete continuing education?
A:
No. Once established, a loan originators "continuing education date," will not change. Changing employers would not extend the 24-month period. Therefore, every loan originator should know his or her start date and share it with their new employer. A loan originator should also track their continuing education class hours and be able to provide those records to a new employer.
Q:
How much notice does a licensee get before an examination? What do you look for? How long do they take? How much do they cost?
A:
The Oregon Division of Finance and Corporate Securities examines all licensees regularly -- more frequently when there is a problem.
For the routine exams, the division provides about a week's to 10 days' notice.
The examiner reviews the company's personnel, financial, and advertising records, clients' trust accounts, and loan files. For specifics on what the examiner looks for, see the current exam report (3368.pdf), which is posted in the mortgage lending section on the DFCS Web site: http://dfcs.oregon.gov/mortgage_lending.html. The current loan worksheet (3369.pdf) also is posted on the site and shows what the examiner looks for when reviewing a borrower's loan file. DFCS keeps these forms up-to-date.
It typically takes an examiners between three to five hours to review the records and check loan files. The exam costs $60 per hour.
After the on-site visit, the examiner mails the report to the licensee. The report includes a letter detailing any problems or potential problems the examiner found at the business; an invoice; and a survey about the examiner's performance.
Q:
If you discover that a licensee is unintentionally doing something incorrectly but it has not cost the borrower anything, how do you resolve that?
A:
If the examiner finds problems that are not serious and caused no harm to consumers, the licensee simply needs to respond to the letter explaining its plan for correcting the problems. If DFCS feels the response brings the licensee back into compliance, it will close the exam and not take any other action.
But if the examiner finds serious violations that have resulted or could result in damage to consumers, DFCS may take action. That action can vary, depending on the violation, but typically the licensee will have to pay a fine and agree to stop violating the rules.
Q:
Who is exempt from the mortgage lending licensing requirements?
A:
Mortgage bankers and brokers must be licensed. But not everyone who engages in mortgage banking and brokering has to be licensed. There are two main exceptions:
Those who are already regulated by a governmental or quasi-governmental agency. Typically these are banks or other depository institutions that are regulated by an agency such as the Office of Thrift Supervision or the Federal Deposit Insurance Corporation. It also could include a mortgage wholesaler that is a subsidiary of a bank or bank holding company.
Those who are performing mortgage banking or brokering incidental to something else. This means mortgage lending is not their primary professional activity. This could include a lawyer who occasionally engages in mortgage lending or an individual who sells his or her home and assists in the financing by taking a second mortgage.
For a complete list of the exceptions to the mortgage lending licensing requirements, go to http://dfcs.oregon.gov/mortgage_lending.html#statrules and click on the rule for Mortgage lending, mortgage bankers or brokers.
Q:
Can a mortgage broker with a license in Oregon do business in Vancouver, Washington without a license in Washington State?
A:
No. Your Oregon license only allows you to engage in residential mortgage transactions in Oregon. To handle a loan involving Washington property, you would have to check with Washington about its licensing provisions.
Q:
I don't have an approval with a particular lender but I know a company that does. Can I co-broker a loan with it to take advantage of its approval with the lender?
A:
Yes. Oregon doesn't have any statutes or rules that prohibit co-brokering, but there are some limitations and requirements:
The agreement must be made from company to company and not from an individual loan officer to another company. Otherwise, it would appear that the loan officer is working for two companies at the same time, which is unlicensed brokering activity.
The two companies would both need to have valid Oregon licenses or be exempt from licensing.
The compensation for loan origination activities must be reasonable, and it must travel from company to company. The companies then would pay their respective individual loan officers, processors, or whomever is owed for the deal.
The brokers should inform both the lender and the borrower about the arrangement.
No referral fee can be paid.
If you want to use a co-brokering arrangement for a FHA, VA, or other type of special loan, check with HUD first. Such arrangements may be prohibited for those kinds of loans.
Q:
Can I hire Realtors to act as loan originators?
A:
Yes. But to comply with the Oregon Mortgage Lender Law, you would have to license the office where the Realtor is originating loans as a branch location of your company. The license must be prominently displayed at the branch.
In addition to licensing the branch, there are a few other things to consider.
If you have a relationship with the Realtor other than as an employer, make sure the arrangement is compliant with the U.S. Department of Housing and Urban Development's RESPA (Real Estate Settlement Procedures Act) in regard to fee splitting.
If the Realtor is not an employee of your company, he or she must have a mortgage lender license or be exempt from the licensing requirements.
Because there are potential confidentiality and conflict of interest issues, it is best to address how you will handle those situations before they come up.
In addition, the Oregon Division of Finance and Corporate Securities advises you disclose the relationship to all those involved in the real estate transaction. Oregon does not require this, but some states do. The Texas Savings and Loan Department has a disclosure form available on its Web site: http://www.sml.state.tx.us/.
Although these types of arrangements are allowed under Oregon law, the Oregon Association of Mortgage Professionals' Ethics Committee warns against them. It says it sees no way to ethically perform the duties for one client as both loan officer and real estate agent.
Q:
Where can I get more information?
A:
The Division of Finance and Corporate Securities regulates all licensed mortgage lending organizations in Oregon. For more information, call (503) 378-4140.
Q:
Where can I get more information?
A:
The Division of Finance and Corporate Securities has been designated as the regulator of all licensed mortgage lending organizations operating in Oregon. You can get more information by calling (503) 378-4140.
Pawnbroker Program
Q:
Are "consignment" businesses also covered?
A:
A "consignment" business needs a pawnbroker license if they purchase personal property with an implicit or explicit agreement that they will hold the property for a period of time for redemption by the consumer.
Q:
How do I file a complaint?
A:
The Division of Finance and Corporate Securities (DFCS) investigates complaints involving these organizations. To file a complaint online or download a Microsoft Word Version of the form, click here. Submit written complaints to the division.
Written complaints should contain a brief but accurate explanation of the problem and advise us of your desired result. Any documentation to support the complaint will help the division to more quickly resolve the complaint. Do not send original documents, send copies. Complaints usually take 2 - 4 weeks to resolve.
Q:
Is any property not included in the ACT?
A:
Motor vehicles, securities, notes and judgments when used as pledged property are specifically excluded from the Pawnbroker Act.
Q:
What about "buy and sell" businesses?
A:
A "buy and sell" business needs a pawnbroker license if they purchase personal property with an implicit or explicit agreement that they will hold the property for a period of time for redemption by the consumer.
A pawn is a loan where personal property is pledged and the rate of interest is more that 10% per annum.
A pawn is also a purchase of personal property if the buyer agrees either verbally or in writing, to permit a seller to repurchase the property at a price, the difference is an amount which equals more than 10% per annum.
Q:
Where can I find a list of persons or companies licensed as pawnbrokers in Oregon?
A:
Visit the list of pawnbrokers licensed to serve Oregon consumers.
Q:
Where can I get a license application package?
A:
Call (503) 378-4140 or e-mail us and request a pawnbroker license application and the package will be mailed to you.
Q:
Where can I get more information?
A:
The Division of Finance and Corporate Securities has been designated as the regulator of these licensed organizations operating in Oregon. You can get more information by calling (503) 378-4140.
Securites Fees Change
Q:
Does the fee increase take effect for submissions received on or after November 26, 2003?
A:
The fee increase and new filing requirements will affect only those submissions received on or after November 26, 2003, regardless of the filings expiration date or the effective date with the Securities Exchange Commission.
Q:
For mutual funds and unit investment trusts that have classes of the same portfolio that are currently filed separately [due to being in a separate prospectus], will your state expect that the filing that expires earlier combine both classes?
A:
Yes. The filing is at the portfolio level, the classes of each are not important.
Q:
If a class is changing its name, what level does Oregon want to be notified, prospectus or portfolio, or a class is moving from one portfolio to another? Example: We have a prospectus expiring in March 2004, and a class is moving from this prospectus to another, do we have to submit a prospectus reconfiguration?
A:
Amendments concerning the moving of classes or class name changes are not required or necessary. An amendment is required only if a portfolio is changing its name. We are not requiring that you notify us of the class on any filings. This will greatly reduce the amount of time and paperwork involved in processing amendments that are no longer required.
Q:
If we decide not to offer a fund in Oregon and the fund is currently part of a prospectus notice [which also includes other funds], how should we notify you that we want to remove the fund from the notice?
A:
To reduce paperwork, the issuer can simply do nothing with that fund, until the current expiration date of the notice filing. At that time the filing will go to a status of “failure to renew.” If there are any portfolios in the filing that the issuer does want to renew, those portfolios can be renewed and the fund no longer being offered will simply go away.
