Nac: Chapter 675 - Installment Loans

Link to law: http://www.leg.state.nv.us/nac/NAC-675.html
Published: 2015

[Rev. 11/22/2013 10:21:43

AM--2013]



[NAC-675 Revised Date: 10-06]

CHAPTER 675 - INSTALLMENT LOANS

675.005            “Licensee” defined.

675.010            Advertising.

675.020            Credit life insurance and credit

health or disability insurance.

675.030            Requests for payment; ledger cards.

675.060            Conduct of loan business with sales

finance business.

675.065            Conduct of business with a licensed

mortgage banker.

675.070            Collection of loans made outside Nevada.

675.080            Fee for supervision and related

activities: Amount; collection; failure to pay.

675.090  Fees: Application for

license.

675.100  Fees: Renewal of license;

reinstatement of expired license.

675.110  Annual assessments to

cover costs related to performance of audits and examinations.

675.120  Prerequisites to

engaging in business.

675.130  Revocation or

suspension of license.

675.140  Inspection of

documents filed with Division of Financial Institutions.

675.150  Complaints: Failure

to respond in timely manner; confidentiality.

 

      NAC 675.005  “Licensee” defined. (NRS 675.170)  As used

in this chapter, unless the context otherwise requires, “licensee” means a

person to whom one or more licenses have been issued pursuant to this chapter

and chapter 675 of NRS.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.010  Advertising. (NRS 675.170, 675.280)

     1.  No licensee may advertise in any manner

that may tend to confuse the identity of the licensee with any other unrelated

licensee.

     2.  No licensee may advertise in any manner

that a loan of a prospective borrower with another licensee will be paid or

increased if the loan is transferred to the advertising licensee.

     3.  No unethical advertising by licensees will

be permitted and the Commissioner of Financial Institutions reserves the right

to require all licensees to submit proposed advertising for approval before its

dissemination through the press, by radio or television.

     [Banking Div., Installment Loan Reg. No. 1, eff. 5-22-72]—(NAC

A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 675.020  Credit life insurance and credit health or disability insurance. (NRS 675.170, 675.300)

     1.  As used in this section, “credit

insurance” means both credit life insurance and credit health or disability

insurance.

     2.  If a licensee provides, obtains or

arranges any credit insurance as security for a loan, the premium or cost of

such insurance to the borrower must not exceed the rate or rates established by

the Commissioner of Insurance pursuant to the insurance laws. The insurance is

subject to the laws and regulations of the Division of Insurance of the

Department of Business and Industry.

     3.  If a loan on which credit insurance has

been obtained, arranged or provided by the licensee is prepaid in full, a

refund of a portion of the insurance premium or cost must be made to the

borrower, unless such prepayment in full was by death claim. If the insurance

refund plus interest refund together amount to less than $1, no refund need be

made.

     4.  When a loan is prepaid in full by a death

claim payment, the unearned portion of credit health or disability insurance

premium must be refunded as of the date of death, but no refund may be made as

to premiums paid for credit life insurance.

     5.  Only one party obligated on the loan may

be covered by such credit insurance, and the premium or insurance cost may only

be collected with respect to that party.

     6.  No statement, direct or implied, may be

made to any borrower which would lead the borrower to believe that the granting

of a loan was contingent upon his obtaining credit insurance as security for

the loan.

     7.  Licensees shall post in each loan

interview position a sign with the following language clearly printed in

3/8-inch print: “The purchase of credit life or accident and health insurance

is not required as a condition for the granting of a loan.”

     8.  If an insured borrower dies during the

term of the loan contract, the credit life insurance must be sufficient at

least to pay an amount which will discharge the loan completely at the date of

death, without any exception, reservation or limitation.

     9.  If the premium or insurance cost is

computed on the principal amount of loan and not also on interest and service

fee contracted to be paid, the entire proceeds of any death claim to the extent

provided in subsection 8 must be payable to the licensee.

     10.  If the premium or insurance cost is

computed on the total original amount of the note (principal plus interest and

service fee), the proceeds of any death claim must not be less than the greater

of the following:

     (a) The unpaid balance of the face amount of the

note, principal plus the combined interest and service fee, which under the

contract is scheduled to be outstanding at the date of death (also referred to

as the scheduled balance); or

     (b) The actual unpaid amount of the loan, which is

the unpaid balance of the face amount of the note less the required refund of

interest and service fee, which refund must be computed as at the date of death

(referred to as the net balance).

     11.  Whenever the amount of any death claim

is in excess of the net balance due at the date of death, the excess must be

paid by the licensee to the estate of the borrower, the surviving spouse or the

next of kin and this must be an obligation of the licensee. Licensees also are

required to see that insurance policies arranged in connection with loans

provide for death claims to be paid in accordance with this section. The

licensee’s records must reflect accurately the amount of the death claim, the

amount, if any, in excess of the net balance and the person to whom the excess

was paid.

     [Banking Div., Installment Loan Reg. No. 4, eff. 5-22-72]—(NAC

A by Comm’r of Insurance, 5-27-92)

      NAC 675.030  Requests for payment; ledger cards. (NRS 675.170, 675.250)

     1.  Requests for payment must be made only to

those obligated on the loan contract.

     2.  Collection attempts through written or

printed communication, sent by mail, must be enclosed in a sealed envelope.

     3.  The ledger card must indicate when an

account has been placed for collection or legal action taken. It must also

indicate whether judgment was obtained, together with the date and the amount

of the judgment.

     4.  On prepaid accounts, the ledger card must

clearly indicate the amount rebated, both for interest and for insurance.

     5.  Adequate records which will enable the

Commissioner of Financial Institutions to reconcile outstanding balances must

be maintained in each licensed office.

     6.  If there no longer is an outstanding

indebtedness from the borrower to the licensee, there must be delivered to the

borrower by the licensee a termination statement as required by the Uniform

Commercial Code (chapter 104 of NRS).

Such delivery is necessary even though the Uniform Commercial Code under such

circumstances does not require delivery of a termination statement unless the

borrower makes a written demand upon the secured party for a termination

statement.

     7.  If ledger cards or similar records for

loan accounts and installment sale contract accounts are commingled in a

licensee’s files, there must be a system by which such cards may be readily

identified one from the other, such as being of different colors or having

corners of different colors. All of such cards must bear the date of the

contract and must identify the type of transaction reflected on them.

     [Banking Div., Installment Loan Reg. No. 2, eff. 5-22-72]—(NAC

A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 675.060  Conduct of loan business with sales finance business. (NRS 675.170, 675.230)  Licensees

may conduct the business of making loans in the same office or place of

business where the licensee, an affiliate or associate also conducts a sales

finance business (the purchase of time paper representing the sale of goods or

services) if in the conduct of such other business in the office of the

licensee, the following is observed:

     1.  The sales finance business which is

subject to chapter 97 of NRS must be

carried on in compliance with that chapter.

     2.  Charges in connection with a retail

installment contract subject to chapter 97

of NRS must be made only as expressly authorized by chapter 97 of NRS. No charge may be

collected from the debtor on such a contract on the basis of or by reason of

the assignment of the contract to the licensee.

     3.  The validity of any such contract must be

determined by the law of the state where it actually is made.

     4.  Retail installment contracts created

pursuant to chapter 97 of NRS are not

subject to any maximum term or period of contract, and all such contracts may

be purchased by licensees.

     5.  Default charges, attorney fees,

collection costs and similar items which may be collected on such contracts are

limited to those expressly provided for in chapter

97 of NRS.

     [Banking Div., Installment Loan Reg. No. 3 § 3, eff. 5-22-72]—(NAC

A by Comm’r of Financial Institutions, 5-19-88)

      NAC 675.065  Conduct of business with a licensed mortgage banker. (NRS 675.170, 675.230)

     1.  A licensee may conduct business in the

same office or place of business with a licensed mortgage banker if:

     (a) The licensee and the mortgage banker maintain

separate licenses;

     (b) Each company is operated as a separate legal

entity;

     (c) The books, records and accounts of each company

are kept and maintained separately;

     (d) The licensee and the mortgage banker are

subsidiaries of the same parent corporation or otherwise have the same

ownership; and

     (e) The mortgage banker does not maintain trust

accounts as those described in NRS

645B.175.

     2.  Each application for approval to conduct

business pursuant to subsection 1 must be written and on a form prescribed by

the Commissioner of Financial Institutions.

     (Added to NAC by Admstr. of Financial Institutions,

eff. 5-1-86; A by Comm’r of Financial Institutions, eff. 3-30-94)

      NAC 675.070  Collection of loans made outside Nevada. (NRS 675.170, 675.310)  Any loan

made in another state and purchased by a licensee in this State, regardless of

the original amount of the loan or the unpaid balance, may be collected or

otherwise enforced at the rate shown in the contract and in accordance with its

terms, if the loan was lawfully made in accordance with the laws of the state

where it was made.

     [Banking Div., Installment Loan Reg. No. 7, eff. 5-22-72]

      NAC 675.080  Fee for supervision and related activities: Amount; collection;

failure to pay. (NRS 658.101, 675.170, 675.400)

     1.  The Commissioner of Financial Institutions

will charge and collect a fee of $30 per hour from each installment loan

company for any supervision, examination, audit, investigation or hearing

conducted pursuant to chapter 675 of

NRS.

     2.  The Commissioner will bill each

installment loan company upon the completion of the activity for the fee

established in subsection 1. The fee must be paid within 30 days after the date

the bill is received. Except as otherwise provided in this subsection, any

payment received after that date must include a penalty of 10 percent of the

fee plus an additional 1 percent of the fee for each month, or portion of a

month, that the fee is not paid. The Commissioner may waive the penalty for

good cause.

     3.  Failure of an installment loan company to

pay the fee required by subsection 1 as provided in this section constitutes

grounds for revocation of its license.

     (Added to NAC by Comm’r of Financial Institutions, eff.

4-20-88; A 11-27-89, eff. 7-1-89)

      NAC 675.090  Fees: Application for license. (NRS 675.100, 675.170)  An

application submitted pursuant to NRS

675.095 must be accompanied by:

     1.  A nonrefundable fee of $750; and

     2.  A fee of $800, prorated by the

Commissioner of Financial Institutions.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.100  Fees: Renewal of license; reinstatement of expired license. (NRS 675.140, 675.170)

     1.  A licensee shall pay annually to the

Division of Financial Institutions of the Department of Business and Industry a

fee of $750 for the renewal of a license.

     2.  If the Commissioner of Financial

Institutions reinstates an expired license, the licensee shall pay a reinstatement

fee of $400 in addition to the renewal fee prescribed in subsection 1.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

 

      NAC 675.110  Annual assessments to cover costs related to performance of

audits and examinations. (NRS 658.055, 675.170, 675.380)

     1.  Except as otherwise provided in NAC 658.030, each licensee shall pay to

the Division of Financial Institutions of the Department of Business and

Industry an annual assessment of $300 to cover the costs related to the

employment of a certified public accountant and the performance of audits and

examinations conducted by the Division.

     2.  The Division of Financial Institutions of

the Department of Business and Industry will bill each licensee for the assessment.

The assessment must be paid within 30 days after the date the bill is received.

     3.  A charge of 10 percent of the assessment

will be imposed on any licensee whose assessment is received by the Division of

Financial Institutions of the Department of Business and Industry after the

date on which the assessment is due.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.120  Prerequisites to engaging in business. (NRS 675.170)  A person

shall not engage in the business of lending in this State unless:

     1.  He possesses each license, certificate

and permit required by this chapter, chapter

675 of NRS and a local governmental entity; and

     2.  The location of the business complies

with any applicable planning and zoning ordinances.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.130  Revocation or suspension of license. (NRS 675.170, 675.440)  The

Commissioner of Financial Institutions may revoke or suspend a license in

accordance with NRS 675.370 to 675.450, inclusive, if a licensee

violates any provision of this chapter or chapter

675 of NRS, including, without limitation, a provision that imposes a fee

or assessment on a licensee.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.140  Inspection of documents filed with Division of Financial

Institutions. (NRS

675.170)  Except

as otherwise provided in NAC 675.150 or by specific

statute, all papers, documents, reports and other written instruments filed

with the Division of Financial Institutions of the Department of Business and

Industry pursuant to this chapter and chapter

675 of NRS are open to public inspection unless the Commissioner of

Financial Institutions determines that the information is required to be

withheld to protect the public welfare or the welfare of a licensee.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)

      NAC 675.150  Complaints: Failure to respond in timely manner; confidentiality. (NRS 675.170)

     1.  If a licensee, or an authorized

representative of that licensee, fails to respond to the Commissioner of

Financial Institutions within 20 business days after receipt of a written

notice that a complaint has been filed against the licensee, the licensee is

deemed to have admitted to the allegations contained in the complaint.

     2.  Subject to the discretion of the

Commissioner of Financial Institutions and except as otherwise provided by

specific statute, a complaint filed with the Division of Financial Institutions

of the Department of Business and Industry, any documents filed with the

complaint, and any report or information resulting from an investigation of the

complaint are confidential.

     (Added to NAC by Comm’r of Financial Institutions by

R109-06, eff. 6-28-2006)
Read Entire Law on www.leg.state.nv.us