Vermont Amendments to Provisions Regarding Licensed Lenders and Loan Servicers
The state of Vermont modified multiple provisions through House Bill 182 that includes amendments regarding licensed lenders and loan servicers. Provisions in this bill range from effective immediately to effective on July 1, 2017; unless noted otherwise, the amendments discussed in this article are effective immediately.
Sec. 4. 8 V.S.A. § 2204a is amended with provisions regarding prelicensing education requirements. A person who completed 20 hours of prelicensing education under 12 U.S.C. § 5104(c) must retake such prelicensing education to be eligible to apply for a Vermont loan originator license if he or she:
- does not acquire a valid mortgage loan originator license in any state or does not become a federally registered mortgage loan originator within 3 years of completing the 20 hours; or
- does not maintain an approved mortgage loan originator license in any state or an approved federal registration for a period of three years or more within 3 years of completing the 20 hours.
A person who completed two hours of Vermont prelicense education as required by subdivision (a)(4) of this section must retake such prelicensing education to be eligible to apply for a Vermont loan originator license if he or she:
- does not acquire a valid Vermont mortgage loan originator license within three years of completing the prelicense education; or
- obtains a valid Vermont mortgage loan originator license and then subsequently does not maintain an approved Vermont mortgage loan originator license for a period of three years or more.
Sec. 7. 8 V.S.A. § 2508(a), Sec. 8. 8 V.S.A. § 2517(a), Sec. 9. 8 V.S.A. § 2756(a), and Sec. 10. 8 V.S.A. § 2904 are amended with provisions relating to the financial responsibility of money servicers, debt adjusters and loan servicers and how the Commissioner might evaluate such financial responsibility. The Commissioner may consider how the person has managed his or her own financial condition; a determination that a person has not shown financial responsibility may include the following:
- current outstanding judgments, except judgments solely as a result of medical expenses;
- current outstanding tax liens or other government liens and filings;
- foreclosures within the past three years; or
- a pattern of seriously delinquent accounts within the past three years.
Sec. 11. 8 V.S.A. § 2500(22) is added to define the term “virtual currency” as stored value that can be a medium of exchange, a unit of account, or a store of value and has value in money or is a substitute for money, it can be centralized or decentralized and can be exchanged for money or other virtual currency.
Sec. 13. 8 V.S.A. § 2511 regarding activities of money transmitters is added and has an effective date of July 1, 2017. Every money transmitter licensee and its authorized delegates must provide a receipt to the customer that clearly states:
- the name, address, and telephone number of the licensee;
- the amount of money presented for transmission; and
- the total of any fees charged by the licensee.
Sec. 17. 8 V.S.A. § 2545 adds amendments to provisions regarding suspension, revocation, and nonrenewal receivership. If the Commissioner believes that a person has violated subsection (a) of the section, the Commissioner can enjoin or prohibit such person from engaging in the financial services industry in this State, remove any officer, director, employee, or take any action necessary to carry out the purpose of the chapter.
Sec. 18. 8 V.S.A. § 2200 is amended with new definitions for “lead generation” and “loan solicitation.”
“Lead generation” means to initiate consumer interest or inquiry in a loan by online
marketing, direct response advertising, telemarketing, or other similar consumer contact; engage in the business of selling leads for loans a generate or augment leads for other persons for, or with the expectation of, compensation or gain; or refer Vermont borrowers to other persons for loans for, or with the expectation of, compensation or gain.
“Loan solicitation” means, for compensation or gain or with the expectation of compensation or gain, to: offer, solicit, broker, directly or indirectly arrange, place, or find a loan for a prospective Vermont borrower; engage in any activity intended to assist a prospective Vermont borrower in obtaining a loan, including lead generation; arrange, in whole or in part, a loan through a third party, regardless of whether approval, acceptance, or ratification by the third party is necessary to create a legal obligation for the third party, through any method, including mail, telephone, Internet, or any electronic means; or advertise or cause to be advertised in this State a loan or any of the services described. “Loan solicitation” does not apply to residential mortgage loans.
Effective July 1, 2017, Sec. 24. 8 V.S.A. § 2219 and Sec. 25. 8 V.S.A. § 2220a are added to require both a mortgage broker that engages solely in lead generation and does not employ or sponsor any mortgage loan originators and a loan solicitation licensee to include clearly and conspicuously in all advertisements of loans and solicitation of leads – the following disclosure:
THIS IS A LOAN SOLICITATION ONLY. [INSERT LICENSEE NAME] IS NOT THE LENDER. INFORMATION RECEIVED WILL BE SHARED WITH ONE OR MORE THIRD PARTIES IN CONNECTION WITH YOUR LOAN INQUIRY. THE LENDER MAY NOT BE SUBJECT TO ALL VERMONT LENDING LAWS. THE LENDER MAY BE SUBJECT TO FEDERAL LENDING LAWS.
Sec. 26. 8 V.S.A. § 2223 amends provisions relating to records required of licensee.
A licensee that engages in loan solicitation activity shall maintain the following records for not less than seven years:
- copies of all solicitation materials used in its business
- records of any contact or attempted contact with a consumer,
- the name, address, and, if applicable, unique identifier of any person who received, requested, or contracted for leads or referrals and any fees or consideration charged or received for such services.
Sec. 28. 8 V.S.A. § 2241 is amended for prohibited acts and practices to include:
- failure to clearly and conspicuously identify the licensee and the purpose of the contact in its written and oral communications with a consumer
- failure to provide the ability to opt out of any unsolicited advertisement communicated to a consumer via an e-mail address;
- to initiate an unsolicited advertisement via e-mail to a consumer more than 10 business days after the receipt of a request from such consumer to opt out of such unsolicited advertisements;
- to sell, lease, exchange or otherwise transfer or release the e-mail address or telephone number of a consumer who has requested to opt out of future solicitations.
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