[Rev. 11/22/2013 10:21:55 AM--2013]

[NAC-677 Revised Date: 10-06]

CHAPTER 677 - THRIFT COMPANIES

GENERAL PROVISIONS

677.010            Definitions.

677.020            “Acquiescence” defined.

677.030            “Borrowings” defined.

677.040            “Capital and surplus” defined.

677.050            “Capital and surplus not available for dividends” defined.

677.060            “Capital stock” defined.

677.070            “Capital surplus” defined.

677.074            “Commissioner” defined.

677.076            “Deposit” defined.

677.080            “Impaired capital” defined.

677.085            “Licensee” defined.

677.090            “Paid-in capital” defined.

677.100            “Paid-up capital and surplus” defined.

677.110            “Paid-up and unimpaired capital and unimpaired surplus” defined.

LICENSING

677.121            Prerequisites to engaging in business.

677.125            Notice of intent to license.

677.131            Fees: Application for authority to engage in business; issuance of license.

677.135            Fees: Renewal of license; reinstatement of expired license.

REQUIRED ACQUIESCENCE AND APPROVAL OF COMMISSIONER

677.150            Approval required to pledge assets.

677.160            Articles of incorporation and amendments.

677.170            Bylaws and amendments.

677.180            Voting trusts, pooling agreements and proxy agreements.

CAPITAL STRUCTURE

677.190            Requirements for acquiescence.

677.200            Capital accounts required.

677.220            Capital sources and requirements.

677.230            Capital surplus accounts.

677.240            Capital surplus account: Dividends and transfers.

677.250            Dividends.

677.260            Remedies if capital impaired, excess certificates issued or limitation of borrowing exceeded.

677.270            Limitations on lending.

SHARES

677.275            Consideration for sale.

677.280            Expenses and commissions of sale.

677.290            Sales or transfer.

AUDITS, EXAMINATIONS AND APPRAISALS

677.310            Fee for supervision and examination: Collection; determination of amount; failure to pay; additional costs.

677.315            Assessment for costs related to audits and examinations.

677.320            Appraisers.

677.330            Market value of security.

677.340            Adequate appraisal; reappraisal.

REPORTS

677.370            Monthly financial reports.

677.380            Semiannual financial reports.

677.390            Annual financial reports.

677.400            Waiver; confidentiality of reports; method for ascertaining amount of hypothecated certificates.

RECEIVABLES

677.410            Chargeoffs.

677.420            Chargeoffs of real property.

677.430            Review and chargeoffs.

LOANS

677.450            Disclosure of fees and charges.

CONTRACT FOR INSURANCE OF DEPOSITS ISSUED BY PRIVATE INSURER

677.500            Requirements of licensee for approval of contract; withdrawal of approval; hearing.

677.510            Requirements of private insurer for approval of contract.

677.520            Considerations in determination of acceptability of private insurer to issue contract; additional reserve.

677.530            Disclosure required before licensee accepts deposit.

677.540            Examination by Commissioner of Insurance.

677.550            Notification of change; approval or disapproval by Commissioner; hearing.

REMEDIAL ACTIONS

677.610            Complaints: Failure to respond in timely manner; confidentiality.

677.620            Suspension or revocation of license.

 

 

 

GENERAL PROVISIONS

      NAC 677.010  Definitions. (NRS 677.380)  As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 677.020 to 677.110, inclusive, have the meanings ascribed to them in those sections.

     (Supplied in codification; A by Comm’r of Financial Institutions, eff. 12-17-87; R101-01, 11-15-2001)

      NAC 677.020  “Acquiescence” defined. (NRS 677.380)  “Acquiescence” means the procedure of reviewing forms, documents, plans of business and other submissions, and the notice given by the Commissioner to thrift companies in writing that he does not object to their use.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.1, eff. 1-4-76; A 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.030  “Borrowings” defined. (NRS 677.380)  “Borrowings” under subsection 4 of NRS 677.620 includes all debt securities, no matter to whom they are issued.

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsec. 4.9, eff. 1-4-76; A and renumbered as subsec. 4.7, 1-4-78; A and renumbered as subsec. 4.9, 12-14-78]

      NAC 677.040  “Capital and surplus” defined. (NRS 677.380)  “Capital and surplus,” as used in NRS 677.540, subsection 3 of NRS 677.620 and NRS 677.770 means the sum of capital stock, capital surplus and undivided profits.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsecs. 1.6, 1.7 & 1.9, eff. 1-4-76; A and renumbered as subsecs. 1.2-1.4, 1-4-78; A and renumbered as subsecs. 1.2-1.4, 12-14-78]

      NAC 677.050  “Capital and surplus not available for dividends” defined. (NRS 677.380)  “Capital and surplus not available for dividends” as used in NRS 677.760 means the sum of capital stock, capital surplus and undivided profits to the extent of 10 percent of the capital stock.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.5, eff. 1-4-78]

      NAC 677.060  “Capital stock” defined. (NRS 677.380)  “Capital stock” means the aggregate par value of all issued and outstanding shares.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.2, eff. 1-4-76; A 12-14-78]

      NAC 677.070  “Capital surplus” defined. (NRS 677.380)  “Capital surplus” means that amount paid or contributed by the shareholders in accordance with the requirements of this chapter and chapter 677 of NRS.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.3, eff. 1-4-76; A and renumbered as subsec. 1.7, 1-4-78; A 12-14-78]

      NAC 677.074  “Commissioner” defined. (NRS 677.380)  “Commissioner” has the meaning ascribed to it in NRS 677.065.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.076  “Deposit” defined. (NRS 677.380)  “Deposit” has the meaning ascribed to it in NRS 677.075.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.080  “Impaired capital” defined. (NRS 677.380)  “Impaired capital” means that the minimum amount of capital, required by NRS 677.210 to be maintained in the capital stock and capital surplus accounts, is reduced by a deficit balance in the company’s undivided profit account. After the undivided profits have reached 10 percent of capital stock, capital will be considered to be impaired if the undivided profits fall below this level.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.11, eff. 1-4-76; A and renumbered as subsec. 1.9, 1-4-78]

      NAC 677.085  “Licensee” defined. (NRS 677.380)  “Licensee” has the meaning ascribed to it in NRS 677.110.

     (Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87)

      NAC 677.090  “Paid-in capital” defined. (NRS 677.380)  “Paid-in capital” for the purposes of NRS 677.210 means capital stock.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.4, eff. 1-4-76; A and renumbered as subsec. 1.10, 1-4-78]

      NAC 677.100  “Paid-up capital and surplus” defined. (NRS 677.380)  “Paid-up capital and surplus” as used in subsection 3 of NRS 677.630 means the sum of capital stock, capital surplus and undivided profits.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.10, eff. 1-4-76; A and renumbered as subsec. 1.11, 1-4-78]

      NAC 677.110  “Paid-up and unimpaired capital and unimpaired surplus” defined. (NRS 677.380)  “Paid-up and unimpaired capital and unimpaired surplus” as used in subsection 1 of NRS 677.620 means the sum of capital stock, capital surplus and undivided profits, so long as this total does not fall below that required by NRS 677.210.

     [Dep’t of Commerce, Thrift Companies Reg. § 1 subsec. 1.8, eff. 1-4-76; A and renumbered as subsec. 1.12, 1-4-78; A 12-14-78]

LICENSING

      NAC 677.121  Prerequisites to engaging in business. (NRS 677.380)  A person shall not engage in business in this State pursuant to the provisions of this chapter and chapter 677 of NRS unless:

     1.  He possesses each license, certificate and permit required by this chapter, chapter 677 of NRS and a local governmental entity; and

     2.  The location of the thrift company 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 677.125  Notice of intent to license. (NRS 677.380)

     1.  The Commissioner will send to each licensee a written notice of intent to license any new thrift company or new branch of an existing thrift company.

     2.  The notice will be sent at least 30 days before the intended action. The notice will include:

     (a) In the case of an applicant for a new thrift company, the names, addresses and occupations or previous occupations of the principals, president and manager and the company’s proposed location.

     (b) In the case of an applicant for a new branch of an existing thrift company, the proposed location of the new branch.

     [Dep’t of Commerce, Thrift Companies Reg. § 10, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)—(Substituted in revision for NAC 677.300)

      NAC 677.131  Fees: Application for authority to engage in business; issuance of license. (NRS 677.160, 677.380)

     1.  An original application submitted pursuant to NRS 677.160 must be accompanied by:

     (a) A fee of $1,500 for the principal office; and

     (b) A fee of $225 for each branch office.

     2.  Upon approval of the license and before issuance, the applicant shall pay:

     (a) A fee of $750 for the principal office; and

     (b) A fee of $150 for each branch office.

     (Added to NAC by Comm’r of Financial Institutions by R109-06, eff. 6-28-2006)

      NAC 677.135  Fees: Renewal of license; reinstatement of expired license. (NRS 677.360, 677.380)

     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 his license.

     2.  If the Commissioner of Financial Institutions reinstates an expired license, the licensee shall pay a reinstatement fee of $300 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)

REQUIRED ACQUIESCENCE AND APPROVAL OF COMMISSIONER

      NAC 677.150  Approval required to pledge assets. (NRS 677.380)  No assets of the thrift company may be pledged to secure payment of the bond or letter of credit without the express written permission of the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 2 subsec. 2.3, eff. 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.160  Articles of incorporation and amendments. (NRS 677.380)

     1.  Before the articles of incorporation of a thrift company are filed with the Secretary of State, a draft of the articles must be submitted to the Commissioner for acquiescence.

     2.  Any proposed amendments to the articles must also be submitted to the Commissioner for acquiescence before they are filed with the Secretary of State.

     3.  Within 10 days after the articles of incorporation or amendments to the articles have been filed with the Secretary of State, a copy of the articles or amendments showing the date of filing must be filed with the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 3 subsecs. 3.1-3.3, eff. 1-4-76; A 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.170  Bylaws and amendments. (NRS 677.380)

     1.  A draft of the bylaws must be submitted to the Commissioner for acquiescence before adoption. Any proposed amendments to the bylaws must also be submitted to the Commissioner for acquiescence before adoption.

     2.  Within 10 days after the bylaws or amendments thereto have been adopted, a copy of the bylaws or amendments showing the date of adoption must be filed with the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 3 subsecs. 3.4 & 3.5, eff. 1-4-76; A 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.180  Voting trusts, pooling agreements and proxy agreements. (NRS 677.380)

     1.  Any voting trusts or pooling agreements by and between shareholders must be in writing and submitted to the Commissioner for acquiescence before they become effective. A copy of the voting trust or pooling agreement will be retained by the Commissioner.

     2.  All proxy agreements must be in writing and submitted to the Commissioner for acquiescence before they become effective. A copy of all proxy agreements will be retained by the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 3 subsecs. 3.6 & 3.7, eff. 1-4-76; A 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

CAPITAL STRUCTURE

      NAC 677.190  Requirements for acquiescence. (NRS 677.380)  The Commissioner will not acquiesce in the capital structure of a thrift company unless the structure:

     1.  Is based on par value stock;

     2.  Provides that the holders of all issued and outstanding common voting stock are assessable in accordance with the provisions of this chapter, or in accordance with any order, directive or demand of the Commissioner; and

     3.  Provides that all borrowings, exclusive of thrift certificates, are subordinate to the claims of the thrift certificate holders.

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsecs. 4.1-4.3, eff. 1-4-76; A and renumbered as subsec. 4.1, 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.200  Capital accounts required. (NRS 677.380)  All thrift companies must maintain three capital accounts, which must be respectively entitled “Capital Stock,” “Capital Surplus” and “Undivided Profits.”

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsec. 4.4, eff. 1-4-76; A and renumbered as subsec. 4.2, 1-4-78]

      NAC 677.220  Capital sources and requirements. (NRS 677.380)

     1.  Appropriate proof that the minimum capital requirements of NRS 677.210 have been paid to the corporation in cash must be presented to the Commissioner before a thrift company license is issued.

     2.  No money obtained from the sale of debt securities may be used for meeting the initial minimum capital requirements of NRS 677.210.

     3.  For purposes of subsection 1 of NRS 677.540 and NRS 677.620, any money obtained from the sale of debt securities may not be considered part of the company’s capital structure without the express written permission of the Commissioner, and no repayment of debt securities that are considered part of the company’s capital structure may be made without the express written permission of the Commissioner.

     4.  The Commissioner will not give his permission to consider money obtained from the sale of debt securities as part of the company’s capital structure unless the rights of the holders of the debt securities are subordinated to the rights of the holders of the thrift certificates.

     5.  The Commissioner may refuse to give his permission to consider money obtained from the sale of debt securities as part of the company’s capital structure if he reasonably believes that a refusal is in the best interests of the company or the holders of the thrift certificates or that a refusal is needed to accomplish the purposes of chapter 677 of NRS.

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsecs. 4.6-4.8, eff. 1-4-76; A and renumbered as subsecs. 4.4-4.6, 1-4-78; A and renumbered as subsecs. 4.4-4.8, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.230  Capital surplus accounts. (NRS 677.380)

     1.  The capital surplus account may consist of money contributed to the company, money transferred to it from the company’s undivided profits account or money obtained through the sale of shares.

     2.  Money contributed must be earmarked “contributions,” money transferred from the company’s undivided profit account must be earmarked “transferred from undivided profits,” and money obtained through the sale of shares must be earmarked “sales.”

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsec. 4.10, eff. 1-4-76; A and renumbered as subsec. 4.8, 1-4-78; Renumbered as subsec. 4.10, 12-14-78]

      NAC 677.240  Capital surplus account: Dividends and transfers. (NRS 677.380)

     1.  Dividends may not be paid from the capital surplus account.

     2.  No funds may be transferred from the capital surplus account once they have been credited to it unless:

     (a) The transfer represents payment for the redemption of shares; and

     (b) The Commissioner has acquiesced to the transfer in writing.

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsec. 4.11, eff. 1-4-76; Renumbered as subsec. 4.9, 1-4-78; A and renumbered as subsec. 4.11, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.250  Dividends. (NRS 677.380)

     1.  Dividends may be paid only from the undivided profits account.

     2.  No dividends may be declared or paid if the declaration or payment would reduce the undivided profits account below 10 percent of the balance in the capital stock account.

     3.  No thrift company may declare any dividend to its shareholders except on April 30, July 31, October 31, or January 31.

     4.  No dividend may be paid to the company’s shareholders unless all interest due for the previous quarter has been paid to the company’s certificate holders, and unless all interest due has been paid to the holders of the company’s debt securities.

     5.  No dividend may be paid to the company’s shareholders unless all lawful claims and demands for withdrawal by certificate holders for the previous quarter have been paid.

     [Dep’t of Commerce, Thrift Companies Reg. § 5, eff. 1-4-76; A 1-4-78]

      NAC 677.260  Remedies if capital impaired, excess certificates issued or limitation of borrowing exceeded. (NRS 677.380)

     1.  If the capital of the company is impaired, or if the company has issued thrift certificates in excess of the limitation of subsection 1 of NRS 677.620 or if the company has exceeded the borrowings as limited by subsection 4 of NRS 677.620, the Commissioner may require that:

     (a) Money sufficient to cure the impairment or violation be transferred from the company’s undivided profit account to the capital or capital surplus account within 30 days after receipt of the order of the Commissioner to do so;

     (b) The company cease issuing thrift certificates until such time as the impairment or violation is cured; or

     (c) The holders of all common voting stock pay to the corporation on a pro rata basis enough money to cure the impairment or violation within 30 days after receipt of the order of the Commissioner to do so. The company must notify each common voting stockholder of the amount and terms of the assessment.

     2.  If, within 30 days after the thrift company has received notice of the requirements of the Commissioner, the impairment or violation is not cured, the Commissioner may forthwith take possession of the property and business of the company until its affairs are finally liquidated as provided by law.

     3.  This section does not limit any other remedies the Commissioner may have to cure impairments or violations.

     [Dep’t of Commerce, Thrift Companies Reg. § 6, eff. 1-4-76; A 1-4-78; 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.270  Limitations on lending. (NRS 677.380)  No thrift company may have outstanding total amounts of cash advanced as defined in NRS 677.030 plus the net amount owed to the thrift company on any item listed in subsection 1 of NRS 677.790 which in the aggregate exceeds 11 times its unimpaired capital.

     [Dep’t of Commerce, Thrift Companies Reg. § 7, eff. 2-7-76; A 1-4-78; 12-14-78]

SHARES

      NAC 677.275  Consideration for sale. (NRS 677.380)  No shares may be sold for any consideration other than cash without the express written permission of the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 4 subsec. 4.5, eff. 1-4-76; Renumbered as subsec. 4.3, 1-4-78; A 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)—(Substituted in revision for NAC 677.210)

      NAC 677.280  Expenses and commissions of sale. (NRS 677.380)

     1.  A thrift company may not incur a selling expense in connection with the sale of its shares in an amount in excess of 10 percent of the amount of cash paid by the purchaser on the selling price thereof.

     2.  A thrift company may not pay commissions for the sale of its shares to an officer or director of the company nor to anyone directly or indirectly who is not a broker or an agent licensed under chapter 90 of NRS.

     [Dep’t of Commerce, Thrift Companies Reg. § 8, eff. 1-4-76; A 1-4-78]

      NAC 677.290  Sales or transfer. (NRS 677.380)

     1.  Every sale, transfer, encumbrance or pledge of shares as a security interest, or other hypothecation, of a company’s voting stock and every sale, transfer, encumbrance or pledge of shares, or other hypothecation, of more than 10 percent of a company’s issued nonvoting stock must be acquiesced in by the Commissioner before such sale, transfer, encumbrance or pledge, or other hypothecation, becomes effective.

     2.  A sale, transfer, encumbrance or pledge of a share as a security interest, or other hypothecation of a company’s nonvoting stock that results in any natural person, company or other entities owning more than 10 percent of a thrift company’s issued nonvoting stock must be acquiesced in by the Commissioner before such sale, transfer, encumbrance or pledge, or other hypothecation, becomes effective.

     [Dep’t of Commerce, Thrift Companies Reg. § 9, eff. 1-4-76; A 2-7-76; 1-4-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

AUDITS, EXAMINATIONS AND APPRAISALS

      NAC 677.310  Fee for supervision and examination: Collection; determination of amount; failure to pay; additional costs. (NRS 658.101, 677.380, 677.430)

     1.  On or before June 30 of each year, the Commissioner of Financial Institutions will collect a fee from each thrift company for the supervision and examination of the thrift company pursuant to chapter 677 of NRS.

     2.  The fee is based on the portion of the annual appropriation from the State General Fund to the Division of Financial Institutions that is attributable to the supervision and examination of thrift companies. Each thrift company shall pay a share of that amount as determined by the following schedule:

 

     Total Assets

Base Fee

+ Fee Exceeding Base

 

 

 

Less than $5,000,000

                    $5,000

             N/A

 

 

 

$5,000,000 or more, but

                      5,000

$.25 per thousand of

less than $10,000,000

 

assets exceeding

 

 

$5,000,000

 

 

 

$10,000,000 or more, but

                      6,250

$.19 per thousand of

less than $50,000,000

 

assets exceeding

 

 

$10,000,000

 

 

 

$50,000,000 or more, but

                    13,850

$.12 per thousand of

less than $100,000,000

 

assets exceeding

 

 

$50,000,000

 

 

 

$100,000,000 or more, but

                    19,850

$.10 per thousand of

less than $500,000,000

 

assets exceeding

 

 

$100,000,000

 

 

 

$500,000,000 or more, but

                    59,850

$.07 per thousand of

less than $1,000,000,000

 

assets exceeding

 

 

$500,000,000

 

 

 

$1,000,000,000 or more, but

                    94,850

$.05 per thousand of

less than $3,000,000,000

 

assets exceeding

 

 

$1,000,000,000

 

 

 

$3,000,000,000 or more,

                  194,850

$.03 per thousand of

but less than

 

assets exceeding

$10,000,000,000

 

$3,000,000,000

 

 

 

$10,000,000,000 or more,

                  404,850

$.02 per thousand of

but less than

 

assets exceeding

$20,000,000,000

 

$10,000,000,000

 

Any adjustment to the fee required to account for the distribution of unused portions of or increases in the annual appropriation from the State General Fund must be made in a proportionate amount that is based on the relationship that the fee determined for each thrift company pursuant to paragraph (a) bears to the total fee imposed on all thrift companies licensed pursuant to chapter 677 of NRS.

     3.  If the fee is not paid on or before June 30, the Commissioner will assess a penalty of 10 percent of the amount of the fee and 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.

     4.  The fee does not include the cost of any extraordinary examination, audit, investigation or hearing conducted by the Division. The cost of any such examination, audit, investigation or hearing is $60 per hour.

     [Dep’t of Commerce, Thrift Companies Reg. § 11, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions, 4-20-88; 6-17-91)

      NAC 677.315  Assessment for costs related to audits and examinations. (NRS 658.055, 677.380, 677.435)

     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 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 after the date on which the assessment is due.

     (Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87; A 5-27-92)

      NAC 677.320  Appraisers. (NRS 677.380)

     1.  Only those employees of a thrift company and independent appraisers who have received prior letters of acquiescence from the Commissioner may appraise collateral taken by the company as security for a loan.

     2.  Before the Commissioner will acquiesce in the making of such appraisals by an employee of a thrift company or an independent appraiser, the employee or independent appraiser must submit an application to the Commissioner for his acquiescence. The application must be on a form provided by the Commissioner.

     3.  Before the Commissioner will acquiesce in the making of such appraisals by an employee of a thrift company, the employee must submit adequate proof to the Commissioner that he has completed a qualified course in appraisals or that he has substantial prior experience or that he has completed at least 20 appraisals under the direction of a company employee who has received a letter of acquiescence from the Commissioner to make appraisals.

     4.  A copy of the Commissioner’s letter of acquiescence for each appraiser must be kept on file by the thrift company in each office in which his appraisals are being used.

     [Dep’t of Commerce, Thrift Companies Reg. § 12, eff. 1-4-76; A 1-4-78; A and renumbered as subsecs. 12.1-12.4, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.330  Market value of security. (NRS 677.380)  The market value of any collateral taken as security for a loan, or of any item listed in subsection 1 of NRS 677.790, which is purchased, sold or discounted by the company must be determined by:

     1.  Reference to a standard publication in general use by the trade;

     2.  A copy of the bill of sale or purchase invoice;

     3.  In the case of household goods, the value of which is not relied upon by the licensee to secure the net amount of the loan, a statement of value represented as true and correct by the borrower and signed by him; or

     4.  An adequate written appraisal.

     [Dep’t of Commerce, Thrift Companies Reg. § 13 subsec. 13.1, eff. 1-4-76; A 1-4-78; 12-14-78]

      NAC 677.340  Adequate appraisal; reappraisal. (NRS 677.380)

     1.  A written appraisal is adequate if it:

     (a) Is prepared by a company employee or an independent appraiser who has been acquiesced in by the Commissioner to make appraisals;

     (b) Is in writing and signed by the appraiser;

     (c) States the fair market value of the property and the basis for arriving at the valuation of the property;

     (d) Sufficiently identifies the collateral and the transaction to which it pertains; and

     (e) Describes the work done by the appraiser.

     2.  The Commissioner may require a reappraisal of any property taken as security for a loan or any item listed in subsection 1 of NRS 677.790 which is purchased, sold or discounted by the company. Such a reappraisal must be performed by whomever the Commissioner designates and in accordance with whatever standards the Commissioner sets. All costs incurred by such a reappraisal must be borne by the licensee.

     [Dep’t of Commerce, Thrift Companies Reg. § 13 subsecs. 13.2 & 13.3, eff. 1-4-76; A 1-4-78; 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

REPORTS

      NAC 677.370  Monthly financial reports. (NRS 677.380)

     1.  Each licensee shall file with the Commissioner a monthly financial report for its entire operation.

     2.  The monthly financial report shall include:

     (a) The amount of loans outstanding at the beginning of the month;

     (b) The payments received on loans during the month;

     (c) The amount of new loans made during the month;

     (d) The balance of loans outstanding at the end of each month; and

     (e) The number of loans outstanding at the beginning and end of each month.

     3.  Each licensee shall also file with the Commissioner a monthly financial report for its entire operation showing the amount of thrift certificates outstanding at the beginning and end of each month.

     4.  Monthly financial reports are due by the 20th day of the month following the month to which they apply.

     [Dep’t of Commerce, Thrift Companies Reg. § 15 subsecs. 15.1-15.3, eff. 5-20-76; A 1-4-78; A and renumbered as § 14 subsecs. 14.1-14.3, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.380  Semiannual financial reports. (NRS 677.380)

     1.  Each licensee shall file with the Commissioner a semiannual financial report for its entire operation.

     2.  The semiannual report must include:

     (a) A statement of income and expenses for the period;

     (b) A balance sheet;

     (c) The monthly average number, size and amount of loans outstanding;

     (d) An analysis of delinquent accounts;

     (e) An identification of any court actions undertaken to effect collection; and

     (f) The detail of the total borrowings outstanding, exclusive of thrift certificates.

     3.  The semiannual financial report is due by the 30th day of the month following the close of the period.

     [Dep’t of Commerce, Thrift Companies Reg. § 15 subsecs. 15.4 & 15.5, eff. 5-20-76; A 1-4-78; A and renumbered as § 14 subsecs. 14.4-14.5, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

      NAC 677.390  Annual financial reports. (NRS 677.380)  The annual report required by NRS 677.400 must include, in addition to the information required by subsection 2 of NRS 677.400, a statement of changes in the company’s capital accounts and the detail of the total borrowings outstanding, exclusive of thrift certificates.

     [Dep’t of Commerce, Thrift Companies Reg. § 15 subsec. 15.6, eff. 5-20-76; A 1-4-78; A and renumbered as § 14 subsec. 14.6, 12-14-78]

      NAC 677.400  Waiver; confidentiality of reports; method for ascertaining amount of hypothecated certificates. (NRS 677.380)

     1.  The Commissioner may waive filing any of the reports required by this chapter upon specific application of the licensee.

     2.  All of the reports required by this chapter will be held in confidence between the Commissioner and the licensee.

     3.  Each licensee shall establish and maintain a method for readily ascertaining the amount of its thrift certificates which have been hypothecated to it for loans to the owners of the certificates.

     [Dep’t of Commerce, Thrift Companies Reg. § 15 subsecs. 15.7-15.8, eff. 5-20-76; A 1-4-78; A and renumbered as § 14 subsecs. 14.7-14.9, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

RECEIVABLES

      NAC 677.410  Chargeoffs. (NRS 677.380, 677.460)  Receivables must be charged to the allowance for losses when the receivables fall within any one of the following classifications:

     1.  Accounts on which no full contractual payment has been made within the past 90 days or 90 days from the due date of the first installment that is past due and unpaid. Before an account is charged to the allowance for losses pursuant to this subsection, the balance may be reduced by:

     (a) The amount of any applicable insurance claim which is pending if the claim is verified in writing by the insurance company.

     (b) The recoverable value of any collateral, other than real property, which has been repossessed by the licensee if he disposes of the collateral within 90 days after it is repossessed.

     2.  Accounts on which six contractual payments, due within the preceding 12 months, are past due and unpaid.

     3.  The debtor is deceased, his estate is without known assets and his obligation is not covered by credit life insurance.

     4.  The debtor has filed for a discharge in bankruptcy, but the account may be considered renewed or revised if at least three contractual payments have been received after the debtor has reaffirmed his obligation or if one or more contractual payments have been received after he has filed under Chapter XIII of the Bankruptcy Act.

     5.  The location of the debtor is unknown after a conscientious effort has been made to locate the debtor.

     6.  Accounts on which any balance is due after sale of repossessed collateral unless one or more contractual payments have been received after such sale.

     7.  Any balance due is uncollectible for any other reason.

     [Dep’t of Commerce, Thrift Companies Reg. § 16 subsec. 16.1, eff. 5-20-76; A 1-4-78; Renumbered as § 15 subsec. 15.1, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 7-2-84)

      NAC 677.420  Chargeoffs of real property. (NRS 677.380, 677.460)

     1.  When an account is secured by real property and its status places it in a chargeoff classification, the amount charged to the allowance for credit losses may be reduced by the value of the real property, if any.

     2.  The value of such real property must be its estimated sales price on a “forced-sale” basis, less estimated costs of sale and any senior encumbrances.

     [Dep’t of Commerce, Thrift Companies Reg. § 16 subsec. 16.2, eff. 5-20-76; Renumbered as § 15 subsec. 15.2, 12-14-78]

      NAC 677.430  Review and chargeoffs. (NRS 677.380, 677.460)

     1.  Receivables must be reviewed at least once each month, and accounts subject to chargeoff must be charged to the allowance for credit losses not later than the 15th day of the succeeding month.

     2.  When a licensee is able to satisfy the Commissioner that facts exist concerning an account which justify a smaller chargeoff than is provided for in this chapter, the chargeoff may be reduced or eliminated as determined by the Commissioner.

     [Dep’t of Commerce, Thrift Companies Reg. § 16 subsecs. 16.3 & 16.4, eff. 5-20-76; Renumbered as § 15 subsecs. 15.3 & 15.4, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)

LOANS

      NAC 677.450  Disclosure of fees and charges. (NRS 677.380)  The terms and conditions of all potential charges to a borrower, including any charge for a default on an installment due, a deferment, a prepayment of the loan, and a returned check, must be disclosed to the borrower in writing prior to closing any loan.

     [Dep’t of Commerce, Thrift Companies Reg. § 17, eff. 12-14-78]

CONTRACT FOR INSURANCE OF DEPOSITS ISSUED BY PRIVATE INSURER

      NAC 677.500  Requirements of licensee for approval of contract; withdrawal of approval; hearing. (NRS 677.247, 677.380)

     1.  Before the Commissioner will approve a contract for the insurance of deposits that is issued by a private insurer pursuant to subsection 2 of NRS 677.247, the licensee must, in addition to satisfying the requirements of subsection 2 of NRS 677.247:

     (a) Create and maintain reserves of not less than 5 percent of deposits in a form set forth in subsection 1 of NRS 677.230;

     (b) File with the Commissioner a fidelity bond pursuant to NRS 677.170 that provides fidelity coverage on each officer, director and employee of at least $300,000;

     (c) Maintain stockholders’ equity of not less than $500,000 plus an additional $50,000 for each branch office of the thrift company of the licensee;

     (d) Agree to forego entering into a contract for the insurance of deposits with a private insurer that is an affiliated business organization unless the contract has been approved by the Commissioner and the Commissioner of Insurance; and

     (e) Comply with any applicable provisions of federal law.

     2.  If the Commissioner withdraws his approval from a contract for the insurance of deposits pursuant to subsection 2 of NRS 677.247 because a licensee or private insurer who is a party to the contract violates a provision of this chapter or chapter 677 of NRS, the licensee or private insurer may request a hearing before the Commissioner. The Commissioner will schedule and hold such a hearing pursuant to chapter 233B of NRS.

     3.  If the Commissioner of Insurance withdraws his approval from a contract for the insurance of deposits pursuant to subsection 2 of NRS 677.247 because a licensee or private insurer who is a party to the contract violates a provision of title 57 of NRS or the regulations adopted pursuant thereto, the licensee or private insurer may request a hearing before the Commissioner of Insurance pursuant to NRS 679B.310.

     4.  As used in this section:

     (a) “Affiliated business organization” means a business organization, including, without limitation, a corporation or partnership that controls, is controlled by or is under common control with the business organization of a licensee.

     (b) “Stockholders’ equity” has the meaning ascribed to it in NRS 677.125.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.510  Requirements of private insurer for approval of contract. (NRS 677.247, 677.380)

     1.  Before the Commissioner will approve a contract for the insurance of deposits that is issued by a private insurer pursuant to subsection 2 of NRS 677.247, a private insurer must:

     (a) Be licensed in this State by the Commissioner of Insurance;

     (b) Be rated within one of the five highest rating categories by a national rating service or hold a certificate of authority as an acceptable surety on federal bonds issued by the Secretary of the Treasury pursuant to 31 C.F.R. § 223.3; and

     (c) Agree to:

          (1) Submit quarterly and annual financial statements to the Commissioner and the Commissioner of Insurance;

          (2) Maintain an investment portfolio that includes assets of sufficient liquidity to reimburse depositors fully and promptly for any losses which the depositors may incur, including, without limitation, cash, reinsurance and lines of credit; and

          (3) Create and maintain reserves of not less than 15 percent of the amount of the insured deposits in the form of:

               (I) Cash;

               (II) United States treasury bills or notes;

               (III) Short-term certificates of deposit;

               (IV) Money market accounts;

               (V) Lines of credit; or

               (VI) The investments set forth in NRS 355.140.

     2.  As used in this section, “short-term” means having a maturity of 2 years or less.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.520  Considerations in determination of acceptability of private insurer to issue contract; additional reserve. (NRS 677.247, 677.380)

     1.  In determining whether a private insurer is acceptable to issue a contract for the insurance of deposits, the Commissioner will consider:

     (a) The value of the insurer’s capital;

     (b) The qualifications of the directors, officers and managers of the insurance company;

     (c) The insurer’s articles of incorporation and its bylaws and all amendments thereto;

     (d) The insurer’s policies for investments; and

     (e) The form of all insurance contracts entered into by the insurer, including contracts for reinsurance.

     2.  After a private insurer obtains the approval of the Commissioner and the Commissioner of Insurance to issue a contract for the insurance of deposits, the Commissioner, after consultation with the Commissioner of Insurance, may, for cause, require the insurer to establish and maintain, for such a time as the Commissioner may require, an additional reserve, in cash or United States treasury bills or notes, in an amount fixed by the Commissioner. If required, the reserve must be kept in an account approved by the Commissioner in a federally insured financial institution located in this State.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.530  Disclosure required before licensee accepts deposit. (NRS 677.247, 677.380)

     1.  A licensee who has obtained a contract for the insurance of deposits that is issued by a private insurer pursuant to subsection 2 of NRS 677.247 shall, before accepting a deposit from a person, require that person to sign and date a form which contains a disclosure written in substantially the following form:

 

Your deposit is not insured by the Federal Deposit Insurance Corporation or any other federal or state entity. The deposits with this thrift company are insured only by a private insurer. The name of the private insurer that is insuring your deposit is......(insert name of private insurer). You are advised to fully consider this issue before depositing money with this company.

 

     2.  The disclosure set forth in subsection 1 must be printed in at least 8-point bold type. The licensee may place the disclosure on a form that contains other information if the block for the signature and date are in close proximity to the text of the disclosure.

     3.  The licensee shall:

     (a) Provide a copy of the form with the signed disclosure to each person who deposits money with the thrift company of the licensee;

     (b) Retain the original form with the signed disclosure for at least 6 years after the form is signed;

     (c) Present the original or a copy of the disclosure upon request by the Commissioner or an employee of the Division of Financial Institutions designated by the Commissioner;

     (d) Post a placard with the disclosure printed on it in at least 14-point bold type:

          (1) At the main entrance to the principal office and each branch office of the thrift company of the licensee; and

          (2) In a conspicuous place at each teller’s window located at the principal office and each branch office of the thrift company of the licensee; and

     (e) Comply with any other applicable disclosure requirements set forth in federal law.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.540  Examination by Commissioner of Insurance. (NRS 677.247, 677.380)  The Commissioner may request that the Commissioner of Insurance:

     1.  Conduct an examination, in the manner set forth in chapter 679B of NRS, of a private insurer that issues a contract for the insurance of deposits pursuant to subsection 2 of NRS 677.247; and

     2.  Report the results of the examination to the Commissioner within 60 days of receipt of such a request.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

      NAC 677.550  Notification of change; approval or disapproval by Commissioner; hearing. (NRS 677.247, 677.380)

     1.  A private insurer that issues a contract for the insurance of deposits pursuant to subsection 2 of NRS 677.247 shall notify the Commissioner within 3 business days after the private insurer has knowledge of any change:

     (a) In the ownership of 10 percent or more of the outstanding voting stock of the private insurer if the private insurer is a corporation; or

     (b) Of the partners of the private insurer if the private insurer is a partnership.

     2.  Within 60 days after receipt of a notice of change pursuant to subsection 1, the Commissioner will approve or disapprove the continuance of the insurance of deposits by the private insurer.

     3.  If the Commissioner disapproves the continuance of the insurance of deposits by the private insurer, the private insurer may request a hearing before the Commissioner. The Commissioner will schedule and hold such a hearing pursuant to chapter 233B of NRS.

     (Added to NAC by Comm’r of Financial Institutions by R101-01, eff. 11-15-2001)

REMEDIAL ACTIONS

      NAC 677.610  Complaints: Failure to respond in timely manner; confidentiality. (NRS 677.380)

     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)

      NAC 677.620  Suspension or revocation of license. (NRS 677.380, 677.510)  The Commissioner of Financial Institutions may suspend or revoke a license in accordance with NRS 677.480 to 677.570, inclusive, if the licensee violates any provision of this chapter or chapter 677 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)