Earlier this year Nebraska made changes to its state laws relating to loan brokers. Typically, loan broker describes any person that in anticipation of compensation from a borrower arranges for a loan and assists with the loan application process. Loan brokers are employed as agents that solicit borrowers as clients, and hold themselves out to the community as loan brokers. Eliminating some of the confusion behind the wide range of loan servicing businesses and business entities, the amendments now specifically exclude banks, trust companies, savings and loan associations, and credit unions. Mortgage bankers, installment loan, credit card and insurance companies no longer qualify as loan brokers either, as well as, lenders approved by the Federal Housing Administration or Department of Veteran Affairs.

  

The Director of Banking has a duty to investigate applicants’-having filed an application under the Nebraska Installment Loan Act and paid the licensing fee-experience, character, and general fitness. With regard to an applicant’s overall quality and qualification, the Director will look to determine whether the applicant can and will operate honestly, fairly, and efficiently, while promoting the convenience and advantage of the community. Under the new provisions, accepted applicants will hold a valid license until the following December 31st, which will remain valid should the licensee renew his or her license annually. Licensees wishing to renew their Nebraska loan originator license must submit a renewal application and a $250 fee.

  

Should a licensee want to relocate his or her primary place of business, they must submit an application and provide such information the director may require to determine an approval. Once the director receives the application to relocate the licensee’s business, the director must then post a notice of the application in a local newspaper. The community will have 15 days to raise any substantive objections to the relocation, or it will proceed. However, if there are substantive objections, the Director will hold a hearing to assess the appropriateness of the proposed relocation.

  

  

On March 7, 2013 Nebraska’s governor approved amendments to Nebraska’s Residential Mortgage Licensing Act affecting certain licensee duties, notice, and Director of Banking powers. Any changes in a licensee’s employment history must now be updated through NMLS no later than 10 days from the notification of creation and/or termination of employment relationship. It is unlawful for any licensee to knowingly hide, destroy, or otherwise make unavailable any information pertinent to their mortgage loan origination business. Further, licensees must provide the Director with written notification within 30 days of any material developments, such as:

Also, any person licensed as a mortgage banker must provide the Director with written notification within 3 days if the licensee:

The new provisions indicate that the Director must notify any applicant in writing of an application denial, which must contain the reason for denial and carry the opportunity to appeal the decision. Applicants may no longer be denied solely because he or she fails to state required information. The Director is required to notify the applicant of any deficiencies and allow the applicant sufficient time to furnish the missing information. However, if the applicant does not respond to the notification or complete their deficient applicant before 120 days, the Director may consider the application abandoned. The Director has the discretion to adopt licensing and acceptance rules and procedures; however, the Director must deny a mortgage loan originator license if the applicant:

The Director may examine licensee’s records, investigate complaints and violations, or review any licensee as often as necessary, but not more than once a year at the licensee’s expense. With regards to the investigation, the Director has the authority to access and receive any documents deemed relevant regardless of records’ location or custodian. Licensees are required to produce any records relating to licensee’s business operations, and the Director may interview and compel the attendance of anyone deemed to have relevant information, including the licensee’s customers or any agents. Licensees have 21 calendar days to respond to the Director’s notice of inquiry with the required information. The Director may accept or provide any report regarding a licensee from or to the CFPB or a foreign state agency. Foreign state agency shall include any duly constituted regulatory or supervisory agency with authority over delayed deposit services or similar entities.

 

 

Louis Danastorg, J.D., M.B.A. is Associate Counsel and Compliance Specialist at Bankers Advisory, Inc. He is a graduate of Vanderbilt University and earned his Juris Doctor and Masters of Business Administration from Suffolk University. He can be reached at Louis@bankersadvisory.com