CHAPTER 274
S.P. 222 - L.D. 686
An Act To Amend the Maine Consumer Credit Code - Credit Services Organizations
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 9-A MRSA §1-301, sub-§17, as amended by PL 1995, c. 326, §1, is further amended to read:
17. "Creditor" means a person who both:
A. Regularly extends credit in consumer credit transactions; and
B. Is the person to whom the debt arising from the consumer credit transactions is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. Notwithstanding the previous sentence, a person who regularly arranges for the extension of consumer credit from persons who are not creditors is a creditor and, in the case of an open-end credit plan involving a credit card, the card issuer and any person who honors the credit card and offers a discount that is a finance charge are creditors.
For the purposes of the requirements imposed under section 8-205, subsection 1, paragraphs E, F, G, and subsection 2, paragraphs A, B, C, D, I, K, and Article VIII 8, Parts 3 and 4, the term "creditor" also includes card issuers whether or not the amount due is payable by agreement in more than 4 installments or the payment of a finance charge is or may be required, and the administrator shall, by regulation, apply these requirements to those card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open-end credit plans.
A person regularly extends consumer credit only if that person extended credit more than 25 times, or more than 5 times for transactions secured by a dwelling, in the preceding calendar year. If a person did not meet these numerical standards in the preceding calendar year, the numerical standards must be applied to the current calendar year.
Notwithstanding the provisions of this section, any person who originates 2 or more high-rate, high-fee mortgages as defined in section 8-103, subsection F-1 in any 12-month period or any person who originates one or more such mortgages through a credit services organization loan broker as defined in Article X 10 of this Act in any 12-month period is considered a creditor.
Sec. 2. 9-A MRSA §2-302, sub-§7 is enacted to read:
7. The administrator may adopt rules requiring that applicants, applicants' partners, officers or directors and employees of applicants satisfy initial and continuing educational requirements. The reasonable costs of meeting such educational requirements must be assessed to applicants. Rules adopted pursuant to this subsection are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
Sec. 3. 9-A MRSA §10-101, as enacted by PL 1989, c. 70, §3, is amended to read:
This article shall may be known and may be cited as the "Maine Consumer Credit Code - Credit Services Organizations Loan Brokers."
Sec. 4. 9-A MRSA §10-102, sub-§1, as amended by PL 2001, c. 509, §§1 and 2, is further amended to read:
1. "Credit services organization Loan broker" is defined as follows.
A. "Credit services organization Loan broker" means any person who, with respect to the extension of consumer credit by others, provides or offers to provide, in return for the separate payment of money or other valuable consideration, any of the following services:
(1) Improving a consumer's credit record, history or rating;
(2) Arranging for or obtaining an extension of credit for a consumer; or
(3) Providing advice or assistance to a consumer with respect to subparagraph (1) or (2).
B. "Credit services organization Loan broker" does not include:
(1) A supervised financial organization;
(2) A supervised lender other than a supervised financial organization, except that, with respect to any transaction in which a supervised lender other than a supervised financial organization is acting solely as a credit services organization loan broker, section 10-302 applies;
(3) A person licensed by the Real Estate Commission to the extent that the person is engaged in activities regulated by that commission;
(4) A person currently admitted to the practice of law in this State;
(5) Any nonprofit organization exempt from taxation under the United States Internal Revenue Code, Section 501(c)(3) to the extent that the organization's activities are consistent with those set forth in its application for tax exemption to the Internal Revenue Service;
(6) A consumer reporting agency, as defined in the Fair Credit Reporting Act, Title 10, chapter 210;
(7) An affiliate of a supervised lender when the affiliate provides services described in paragraph A, subparagraph (1), (2) or (3) for or on behalf of that supervised lender and when the affiliate is not compensated by the consumer for those services;
(8) An employee of a supervised lender or an employee of an affiliate of a supervised lender when the employee provides services described in paragraph A, subparagraph (1), (2) or (3) for or on behalf of that supervised lender or affiliate and when the employee or the affiliate is not compensated by the consumer for those services;
(9) A person paid by a supervised lender or a consumer to document a loan, attend or conduct a loan closing, disburse loan proceeds or record or file loan documents;
(10) A person who performs marketing services for a creditor, such as a telemarketer, an advertising agency or a mailing house, when the person is not compensated by the consumer for those services;
(11) A seller of consumer goods or services that provides services described in paragraph A, subparagraph (1), (2) or (3) in connection with a sale or proposed sale of consumer goods or services by that seller when the seller is not compensated by a consumer for those services; or
(12) An employee of a seller of consumer goods or services that provides services described in paragraph A, subparagraph (1), (2) or (3) in connection with a sale or proposed sale of consumer goods or services by that seller when the employee or seller is not compensated by a consumer for those services.
For the purposes of this paragraph, "affiliate" has the same meaning as defined in Title 9-B, section 131, subsection 1-A.
Sec. 5. 9-A MRSA §10-201, as amended by PL 1993, c. 495, §2, is further amended to read:
§10-201. Licensing and biennial relicensing
A person desiring to engage or continue in business in this State as a credit services organization loan broker shall apply to the administrator for registration a license under this article on or before January 31st of each even-numbered year. The application must be in a form prescribed by the administrator. The administrator may refuse the application if it contains erroneous or incomplete information. A registration license may not be issued unless the administrator, upon investigation, finds that the financial responsibility, character and fitness of the applicant, and where applicable, its partners, officers or directors, warrant belief that the business will be operated honestly and fairly within the purposes of this Title. The administrator may adopt rules requiring that applicants, applicants' partners, officers or directors and employees of applicants satisfy initial and continuing educational requirements. The reasonable costs of meeting such educational requirements are assessed to applicants. Rules adopted pursuant to this section are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
The initial application shall must include an initial a fee of $200 $400. Annual reregistration shall The biennial relicensing application must include a fee of $100 $200.
A licensee may conduct business only at or from a place of business for which the licensee holds a license and not under any other name than that on the license.
Sec. 6. 9-A MRSA §10-202, as amended by PL 1997, c. 727, Pt. B, §21, is further amended to read:
Each application must be accompanied by evidence of a surety bond, in a form approved by the administrator in the aggregate amount of $10,000 $25,000, to run to the State for use by the State and any person or persons who may have a cause of action against a credit services organization loan broker. The terms of the bond must run concurrent with the period of time during which the license will be is in effect.
Sec. 7. 9-A MRSA §10-301, as amended by PL 1993, c. 495, §3, is further amended to read:
Each credit services organization loan broker shall place fees from consumers, other than bona fide 3rd-party fees, in an escrow account separate from any operating accounts of the business, pending completion of services offered. With respect to credit services organizations loan brokers offering to arrange for or obtain extensions of credit for consumers, or provide advice or assistance therefor to arrange for or obtain extensions of credit, "completion of services offered" means procurement of credit under the terms agreed to by the parties.
Sec. 8. 9-A MRSA §10-302, first ¶, as enacted by PL 1989, c. 70, §3, is amended to read:
Each agreement between a consumer and a credit services organization shall loan broker must be in writing, dated, and signed by the consumer and shall must include the following:
Sec. 9. 9-A MRSA §10-302, sub-§2, as enacted by PL 1989, c. 70, §3, is amended to read:
2. The terms and conditions of payment, including the total of all payments to be made by the consumer for the service, whether to the credit services organization loan broker or to some other person; and
Sec. 10. 9-A MRSA §10-303, first ¶, as enacted by PL 1989, c. 70, §3, is amended to read:
Before any agreement is entered into, or before any money is paid by a consumer, whichever occurs first, the credit services organization loan broker shall provide the consumer with written disclosure of material consumer protections, including the following:
Sec. 11. 9-A MRSA §10-304, as enacted by PL 1989, c. 70, §3, is amended to read:
1. No credit services organization A loan broker may not engage in this State in false or misleading advertising concerning the terms and conditions of any services or assistance offered.
2. This section imposes no liability on the owner or personnel of any medium in which an advertisement appears or through which it is disseminated.
3. A loan broker shall include its license number in all print advertising in this State.
Sec. 12. 9-A MRSA §10-305, as enacted by PL 1989, c. 70, §3, is amended to read:
The administrator may adopt reasonable rules pursuant to the Maine Administrative Procedure Act, Title 5, chapter 375, and in accordance with this article governing credit services organizations loan brokers.
Sec. 13. 9-A MRSA §10-306, as enacted by PL 2001, c. 262, Pt. A, §3, is amended to read:
§10-306. Privacy of consumer financial information
A credit services organization loan broker shall comply with the provisions of the federal Gramm-Leach-Bliley Act, 15 United States Code, Section 6801 et seq. (1999) and the applicable implementing federal Privacy of Consumer Information regulations, as adopted by the Office of the Comptroller of the Currency, 12 Code of Federal Regulations, Part 40 (2001); the Board of Governors of the Federal Reserve System, 12 Code of Federal Regulations, Part 216 (2001); the Federal Deposit Insurance Corporation, 12 Code of Federal Regulations, Part 332 (2001); the Office of Thrift Supervision, 12 Code of Federal Regulations, Part 573 (2001); the National Credit Union Administration, 12 Code of Federal Regulations, Part 716 (2001); the Federal Trade Commission, 16 Code of Federal Regulations, Part 313 (2001); or the Securities and Exchange Commission, 17 Code of Federal Regulations, Part 248 (2001), if the credit services organization loan broker is a financial institution as defined in those regulations. This section is not intended to permit the release of health care information except as permitted by Title 22, section 1711-C or Title 24-A, chapter 24.
Sec. 14. 9-A MRSA §10-401, as amended by PL 1993, c. 495, §5, is further amended to read:
§10-401. Effects of violations on rights of parties
Any credit services organization loan broker that violates any provision of this Title or any rule issued by the administrator, or that through any unfair, unconscionable or deceptive practice causes actual damage to a consumer, is subject to the following:
1. After notice and hearing, a cease and desist order from the administrator;
2. After notice and hearing, forfeiture of such portion of the required bond as proportionately may make aggrieved parties whole;
3. A civil action, by the administrator through the Attorney General, after which a court may assess a civil penalty of not more than $5,000;
4. A civil action by an aggrieved consumer in which that consumer has the right to recover actual damages from the credit services organization loan broker in an amount determined by the court, plus costs of the action together with reasonable attorney's fees; and
5. Revocation, suspension or nonrenewal of its registration pursuant to section 2-303 license.
Effective September 17, 2005.
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