requires two-thirds majority vote (§ 14)                                                                                                               

                                                                                                  

 

Assembly Bill No. 492–Committee on
Commerce and Labor

 

(On Behalf of the Department of Business and
Industry, Financial Institutions Division)

 

March 24, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Provides for regulation of mortgage bankers. (BDR 54‑470)

 

FISCAL NOTE:    Effect on Local Government: Yes.

                             Effect on the State: Yes.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to mortgage bankers; providing for the regulation of mortgage bankers; requiring a person to obtain a license to engage in mortgage banking; prescribing the requirements for licensure; requiring the Commissioner of Financial Institutions to adopt regulations relating to the licensure of mortgage bankers; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Title 54 of NRS is hereby amended by adding

1-2  thereto a new chapter to consist of the provisions set forth as

1-3  sections 2 to 28, inclusive, of this act.

1-4  Sec. 2.  As used in this chapter, unless the context otherwise

1-5  requires, the words and terms defined in sections 3 to 7, inclusive,

1-6  of this act, have the meanings ascribed to them in those sections.

1-7  Sec. 3.  “Capital” means money used by a mortgage banker

1-8  in the operation of its business, including money used to fund

1-9  loans secured by real property made by the mortgage banker. The

1-10  term does not include money invested by a third party in a loan

1-11  secured by real property.

2-1  Sec. 4.  “Commissioner” means the Commissioner of

2-2  Financial Institutions.

2-3  Sec. 5.  “Division” means the Division of Financial

2-4  Institutions of the Department of Business and Industry.

2-5  Sec. 6.  “Licensee” means a person who is licensed as a

2-6  mortgage banker pursuant to this chapter.

2-7  Sec. 7.  “Mortgage banker” means any person who is

2-8  approved by the Federal National Mortgage Association or the

2-9  Federal Home Loan Mortgage Corporation as a seller and

2-10  servicer, the Department of Housing and Urban Development as a

2-11  mortgagee and the Department of Veterans Affairs as a lender

2-12  and, directly or indirectly:

2-13      1.  Holds himself out as being able to buy or sell notes, or

2-14  make loans, secured by liens on real property funded by capital,

2-15  another mortgage banker or any person described in subsection 1

2-16  of section 8 of this act;

2-17      2.  Negotiates, originates or makes, or makes an offer to

2-18  negotiate, originate or make loans secured by liens on real

2-19  property on behalf of another mortgage banker or any person

2-20  described in subsection 1 of section 8 of this act; or

2-21      3.  Offers for sale in this state any security which is exempt

2-22  from registration pursuant to state or federal law and purports to

2-23  make investments in promissory notes secured by liens on real

2-24  property.

2-25      Sec. 8.  Except as otherwise provided in section 9 of this act,

2-26  the provisions of this act do not apply to:

2-27      1.  Any person doing business under the laws of this state, any

2-28  other state or the United States relating to banks, savings

2-29  banks, trust companies, savings and loan associations, consumer

2-30  finance companies, industrial loan companies, credit unions, thrift

2-31  companies, mortgage companies, mortgage brokers or insurance

2-32  companies, unless the business conducted in this state is not

2-33  subject to supervision by the regulatory authority of the other

2-34  jurisdiction, in which case licensing pursuant to this act is

2-35  required.

2-36      2.  A real estate investment trust, as defined in 26 U.S.C. §

2-37  856, unless the business conducted in this state is not subject to

2-38  supervision by the regulatory authority of the other jurisdiction, in

2-39  which case licensing pursuant to this act is required.

2-40      3.  An employee benefit plan, as defined in 29 U.S.C. §

2-41  1002(3), if the loan is made directly from money in the plan by the

2-42  plan’s trustee.

2-43      4.  An attorney rendering services in the performance of his

2-44  duties as an attorney.

3-1  5.  A real estate broker rendering services in the performance

3-2  of his duties as a real estate broker.

3-3  6.  Any person doing any act under an order of any court.

3-4  7.  Any natural person, or a husband and wife, who provides

3-5  money for investment in loans secured by a lien on real property,

3-6  on his own account.

3-7  8.  Agencies of the United States and the State of Nevada and

3-8  its political subdivisions, including the Public Employees’

3-9  Retirement System.

3-10      9.  A seller of real property who offers credit secured by a

3-11  mortgage of the property sold.

3-12      Sec. 9. 1.  A person who claims an exemption from the

3-13  provisions of this chapter pursuant to subsection 1 of section 8 of

3-14  this act must:

3-15      (a) File a written application for a certificate of exemption

3-16  with the Commissioner;

3-17      (b) Pay the fee required pursuant to section 14 of this act; and

3-18      (c) Include with the written application proof satisfactory to

3-19  the Commissioner that the person meets the requirements of

3-20  subsection 1 of section 8 of this act.

3-21      2.  The Commissioner may require a person who claims an

3-22  exemption from the provisions of this chapter pursuant to

3-23  subsections 2 to 9, inclusive, of section 8 of this act to:

3-24      (a) File a written application for a certificate of exemption

3-25  with the Commissioner;

3-26      (b) Pay the fee required pursuant to section 14 of this act; and

3-27      (c) Include with the written application proof satisfactory to

3-28  the Commissioner that the person meets the requirements of at

3-29  least one of those exemptions.

3-30      3.  A certificate of exemption expires automatically if, at any

3-31  time, the person who claims the exemption no longer meets the

3-32  requirements of at least one exemption set forth in section 8 of this

3-33  act.

3-34      4.  If a certificate of exemption expires automatically

3-35  pursuant to this section, the person shall not provide any of the

3-36  services of a mortgage banker or otherwise engage in, carry on or

3-37  hold himself out as engaging in or carrying on the business of a

3-38  mortgage banker, unless the person applies for and is issued:

3-39      (a) A license as a mortgage banker pursuant to this chapter; or

3-40      (b) Another certificate of exemption pursuant to this chapter.

3-41      5.  The Commissioner may impose upon a person who is

3-42  required to apply for a certificate of exemption or who holds a

3-43  certificate of exemption an administrative fine of not more than

3-44  $10,000 for each violation he commits, if the person has:

4-1  (a) Knowingly made or caused to be made to the

4-2  Commissioner any false representation of material fact;

4-3  (b) Suppressed or withheld from the Commissioner any

4-4  information which the person possesses and which, if submitted by

4-5  him, would have rendered the person ineligible to hold a

4-6  certificate of exemption; or

4-7  (c) Violated any provision of this chapter, a regulation adopted

4-8  pursuant to this chapter or an order of the Commissioner that

4-9  applies to a person who is required to apply for a certificate of

4-10  exemption or who holds a certificate of exemption.

4-11      Sec. 10.  1.  A person who wishes to apply for a license as a

4-12  mortgage banker must file a written application with the

4-13  Commissioner and pay the fee required pursuant to section 14 of

4-14  this act.

4-15      2.  An application for a license as a mortgage banker must:

4-16      (a) Be verified.

4-17      (b) Include the location and telephone number of the principal

4-18  office of the applicant and the name, location and telephone

4-19  number of the person who will be responsible for the operation of

4-20  the applicant’s business as a mortgage banker in this state, and

4-21  the location and telephone number of each office maintained in

4-22  this state. If the applicant does not intend to maintain an office

4-23  in this state, he must include the name and address of the person

4-24  in this state whom he designates as his resident agent for the

4-25  service of process for any action or proceeding filed against him in

4-26  this state.

4-27      (c) State the name under which the applicant will conduct

4-28  business as a mortgage banker.

4-29      (d) If the applicant is not a natural person, list the name,

4-30  residence address and business address of each person who will

4-31  have an interest in the business of mortgage banking as a

4-32  principal, partner, officer, director or trustee, specifying the

4-33  capacity and title of each such person.

4-34      (e) Indicate the general plan and character of the business.

4-35      (f) State the length of time the applicant has been engaged in

4-36  the business of a mortgage banker.

4-37      (g) Include a financial statement of the applicant.

4-38      (h) Include proof of:

4-39          (1) The seller and servicer number issued to the applicant

4-40  by the Federal National Mortgage Association or Federal Home

4-41  Loan Mortgage Corporation;

4-42          (2) The mortgagee number issued to the applicant by the

4-43  Department of Housing and Urban Development; and

4-44          (3) The lender identification number issued to the applicant

4-45  by the Department of Veterans Affairs.

5-1  (i) Include any other information required by the regulations

5-2  adopted by the Commissioner or an order of the Commissioner.

5-3  3.  Except as otherwise provided in this chapter, the

5-4  Commissioner shall issue a license to an applicant as a mortgage

5-5  banker if:

5-6  (a) The application complies with the requirements of this

5-7  chapter; and

5-8  (b) The applicant and each general partner, officer or director

5-9  of the applicant, if the applicant is a partnership, corporation or

5-10  unincorporated association:

5-11          (1) Has a good reputation for honesty, trustworthiness and

5-12  integrity and displays competence to transact the business of a

5-13  mortgage banker in a manner which protects the interests of the

5-14  general public. The applicant must submit to the Commissioner

5-15  satisfactory proof of those qualifications.

5-16          (2) Has not been convicted of, or entered a plea of nolo

5-17  contendere to, a felony or any crime involving fraud,

5-18  misrepresentation or moral turpitude.

5-19          (3) Has not made a false statement of material fact on his

5-20  application.

5-21          (4) Has not had a license that was issued pursuant to the

5-22  provisions of this chapter or chapter 645B or 645E of NRS

5-23  suspended or revoked within the 10 years immediately preceding

5-24  the date of his application.

5-25          (5) Has not had a license issued in any other state, district

5-26  or territory of the United States or any foreign country suspended

5-27  or revoked within the 10 years immediately preceding the date of

5-28  his application.

5-29          (6) Has not violated any provision of this chapter, a

5-30  regulation adopted pursuant thereto or an order of the

5-31  Commissioner.

5-32      4.  If an applicant is a partnership, corporation or

5-33  unincorporated association, the Commissioner may refuse to issue

5-34  a license to the applicant if any member of the partnership or any

5-35  officer or director of the corporation or unincorporated

5-36  association has committed any act or omission that would be cause

5-37  for refusing to issue a license to a natural person.

5-38      Sec. 11. 1.  In addition to any other requirements for the

5-39  issuance or renewal of a license set forth in this chapter, a natural

5-40  person who applies for the issuance or renewal of a license as a

5-41  mortgage banker must submit to the Commissioner:

5-42      (a) The social security number of the applicant; and

5-43      (b) The statement prescribed by the Welfare Division of the

5-44  Department of Human Resources pursuant to NRS 425.520. The

5-45  statement must be completed and signed by the applicant.

6-1  2.  The Commissioner shall include the statement required

6-2  pursuant to subsection 1 in:

6-3  (a) The application or any other forms that must be submitted

6-4  for the issuance or renewal of the license; or

6-5  (b) A separate form prescribed by the Commissioner.

6-6  3.  The Commissioner shall not issue or renew a license as a

6-7  mortgage banker if the applicant is a natural person who:

6-8  (a) Fails to submit the statement required pursuant to

6-9  subsection 1; or

6-10      (b) Indicates on the statement submitted pursuant to

6-11  subsection 1 that he is subject to a court order for the support of a

6-12  child and is not in compliance with the order or a plan approved

6-13  by the district attorney or other public agency enforcing the order

6-14  for the repayment of the amount owed pursuant to the order.

6-15      4.  If an applicant indicates on the statement submitted

6-16  pursuant to subsection 1 that he is subject to a court order for the

6-17  support of a child and is not in compliance with the order or a

6-18  plan approved by the district attorney or other public agency

6-19  enforcing the order for the repayment of the amount owed

6-20  pursuant to the order, the Commissioner shall advise the applicant

6-21  to contact the district attorney or other public agency enforcing

6-22  the order to determine the actions that the applicant may take to

6-23  satisfy the arrearage.

6-24      Sec. 12.  1.  A mortgage banker shall not operate under a

6-25  fictitious name unless:

6-26      (a) He complies with the provisions of chapter 602 of NRS;

6-27      (b) Files with the Division a certified copy of the certificate

6-28  issued by the county clerk; and (c) The Division has issued a

6-29  license that indicates the use of the fictitious name.

6-30      2.  The Division shall not issue more than one license under

6-31  the same or a confusingly similar name.

6-32      3.  A mortgage banker shall not use more than one name,

6-33  fictitious or otherwise, for each license issued by the Division.

6-34      4.  If a mortgage banker changes or assumes a fictitious name

6-35  under which the business is conducted, the mortgage banker shall:

6-36      (a) File with the Division a certified copy of the certificate

6-37  issued by the county clerk within 10 days after the certificate is

6-38  issued; and

6-39      (b) Return the license and request that a new license be issued

6-40  that indicates the name under which the business is proposed to be

6-41  conducted.

6-42      5.  The mortgage banker may not use the fictitious name until

6-43  he has received the new license indicating the fictitious name.

6-44      Sec. 13.  1.  A license entitles a licensee to engage only in

6-45  the activities authorized by this chapter.

7-1  2.  A license may not be transferred or assigned without the

7-2  written approval of the Commissioner.

7-3  3.  The provisions of this section do not prohibit a licensee

7-4  from:

7-5  (a) Holding a license issued pursuant to chapter 645B or 645E

7-6  of NRS; or

7-7  (b) Conducting the business of a mortgage broker and the

7-8  business of a mortgage banker in the same office.

7-9  Sec. 14.  1.  A license issued to a mortgage banker pursuant

7-10  to this chapter expires each year on December 31, unless it is

7-11  renewed. To renew a license, the licensee must submit to the

7-12  Commissioner on or before December 31 of each year:

7-13      (a) An application for the renewal of a license; and

7-14      (b) The fee for the renewal of a license pursuant to this

7-15  section.

7-16      2.  If the licensee fails to submit the application or payment on

7-17  or before December 31, the license is cancelled. The

7-18  Commissioner may reinstate a cancelled license if the licensee

7-19  submits to the Commissioner:

7-20      (a) An application for the renewal of a license;

7-21      (b) The fee required for the renewal of a license pursuant to

7-22  this section; and

7-23      (c) A reinstatement fee of $100.

7-24      3.  The Commissioner shall charge and collect the following

7-25  fees:

7-26      (a) For filing an original application for a license, $200.

7-27      (b) For issuing an original license, $200.

7-28      (c) For filing an application for renewal of a license, $200.

7-29      (d) For filing an application for a duplicate copy of a license,

7-30  upon proof of its loss, $10.

7-31      (e) For filing an application for a certificate of exemption,

7-32  $200.

7-33      4.  Except as otherwise provided in this subsection, the fees

7-34  collected pursuant to this section must be deposited in the State

7-35  Treasury for credit to the State General Fund. The fees collected

7-36  pursuant to paragraph (a) of subsection 3 must be deposited in the

7-37  Investigative Account for Financial Institutions created by

7-38  NRS 232.545.

7-39      Sec. 15.  1.  Subject to the administrative control of the

7-40  Director of the Department of Business and Industry, the

7-41  Commissioner shall exercise general supervision and control over

7-42  mortgage bankers doing business in this state.

7-43      2.  In addition to any other duties imposed upon him by law,

7-44  the Commissioner shall:

8-1  (a) Adopt regulations necessary to carry out the provisions of

8-2  this chapter, except regulations relating to loan fees; and

8-3  (b) Conduct such investigations as may be necessary to

8-4  determine whether a person has violated any provision of this

8-5  chapter, a regulation adopted pursuant to this chapter or an order

8-6  of the Commissioner.

8-7  Sec. 16.  1.  In conducting any investigation or hearing, the

8-8  Commissioner may:

8-9  (a) Compel the attendance of any person by subpoena.

8-10      (b) Administer oaths.

8-11      (c) Examine any person under oath concerning the business

8-12  and conduct of affairs of any person subject to the provisions of

8-13  this chapter, and in connection therewith, require the production

8-14  of any books, records or papers relevant to the inquiry.

8-15      2.  Any person subpoenaed pursuant to the provisions of this

8-16  section who willfully refuses or willfully neglects to appear at the

8-17  time and place named in the subpoena or produce books, records

8-18  or papers required by the Commissioner, or who refuses to be

8-19  sworn or answer as a witness, is guilty of a misdemeanor.

8-20      3.  The Commissioner may assess and collect from a mortgage

8-21  banker who is the subject of the investigation or hearing a fee

8-22  based on the rate established pursuant to NRS 658.101.

8-23      Sec. 17.  1.  Each licensee shall give written notice to the

8-24  Commissioner of the revocation of the licensee’s approval as a

8-25  seller or servicer from the Federal National Mortgage Association

8-26  or Federal Home Loan Mortgage Corporation, as a mortgagee

8-27  from the Department of Housing and Urban Development or as a

8-28  lender from the Department of Veterans Affairs not later than 10

8-29  days after the licensee receives notice of the revocation from the

8-30  appropriate federal entity.

8-31      2.  The Commissioner may suspend the license of a licensee

8-32  upon the revocation of an approval from any of the entities set

8-33  forth in subsection 1. If the suspension of the license is based

8-34  solely upon the revocation of an approval and the licensee applies

8-35  for a license as a mortgage broker pursuant to chapter 645B of

8-36  NRS or as a mortgage company pursuant to chapter 645E of NRS,

8-37  the Commissioner shall not suspend the license until a

8-38  determination concerning the application is made.

8-39      Sec. 18.  Each licensee shall keep and maintain at all times

8-40  complete and suitable records of all mortgage transactions made,

8-41  together with all original books, papers and data, or copies

8-42  thereof, clearly reflecting the financial condition of the business of

8-43  the mortgage banker. The records, or copies thereof, must be

8-44  made available to the Commissioner upon his request.

9-1  Sec. 19.  1.  Except as otherwise provided in this section or

9-2  by specific statute, all papers, documents, reports and other written

9-3  instruments filed with the Commissioner pursuant to this chapter

9-4  are open to public inspection.

9-5  2.  Except as otherwise provided in subsection 3, the

9-6  Commissioner may withhold from public inspection or refuse to

9-7  disclose to a person, for such time as the Commissioner considers

9-8  necessary, any information that, in his judgment, would:

9-9  (a) Impede or otherwise interfere with an investigation that is

9-10  pending against a mortgage banker;

9-11      (b) Have an undesirable effect on the welfare of the public or

9-12  the welfare of any mortgage banker; or

9-13      (c) Give any mortgage banker a competitive advantage over

9-14  any other mortgage banker.

9-15      3.  The Commissioner shall, upon request, disclose the

9-16  following information concerning a mortgage banker:

9-17      (a) The findings and results of any investigation which has

9-18  been completed during the immediately preceding 5 years against

9-19  the mortgage banker pursuant to the provisions of this chapter

9-20  and which has resulted in a finding by the Commissioner that the

9-21  mortgage banker committed a violation of a provision of this

9-22  chapter, a regulation adopted pursuant to this chapter or an order

9-23  of the Commissioner; and

9-24      (b) The nature of any disciplinary action that has been taken

9-25  during the immediately preceding 5 years against the mortgage

9-26  banker pursuant to the provisions of this chapter.

9-27      Sec. 20.  1.  For each violation committed by an applicant,

9-28  whether or not he is issued a license, the Commissioner may

9-29  impose upon the applicant an administrative fine of not more than

9-30  $10,000, if the applicant has:

9-31      (a) Knowingly made or caused to be made to the

9-32  Commissioner any false representation of material fact;

9-33      (b) Suppressed or withheld from the Commissioner any

9-34  information which the applicant possesses and which, if submitted

9-35  by him, would have rendered the applicant ineligible to be licensed

9-36  pursuant to the provisions of this chapter; or

9-37      (c) Violated any provision of this chapter, a regulation adopted

9-38  pursuant to this chapter or an order of the Commissioner in

9-39  completing and filing his application for a license or during the

9-40  investigation of his application for a license.

9-41      2.  For each violation committed by a licensee, the

9-42  Commissioner may impose upon the licensee an administrative

9-43  fine of not more than $10,000, may suspend, revoke or place

9-44  conditions upon his license, or may do both, if the licensee,

9-45  whether or not acting as such:

10-1      (a) Is insolvent;

10-2      (b) Is grossly negligent or incompetent in performing any act

10-3  for which he is required to be licensed pursuant to the provisions

10-4  of this chapter;

10-5      (c) Does not conduct his business in accordance with law or

10-6  has violated any provision of this chapter, a regulation adopted

10-7  pursuant to this chapter or an order of the Commissioner;

10-8      (d) Is in such financial condition that he cannot continue in

10-9  business with safety to his clients;

10-10     (e) Has made a material misrepresentation in connection with

10-11  any transaction governed by the provisions of this chapter;

10-12     (f) Has suppressed or withheld from a client any material

10-13  facts, data or other information relating to any transaction

10-14  governed by the provisions of this chapter which the licensee knew

10-15  or, by the exercise of reasonable diligence, should have known;

10-16     (g) Has knowingly made or caused to be made to the

10-17  Commissioner any false representation of material fact or has

10-18  suppressed or withheld from the Commissioner any information

10-19  which the licensee possesses and which, if submitted by him,

10-20  would have rendered the licensee ineligible to be licensed

10-21  pursuant to the provisions of this chapter;

10-22     (h) Has failed to account to persons interested for all money

10-23  received for a trust account;

10-24     (i) Has refused to allow an examination by the Commissioner

10-25  of his books and affairs or has refused or failed, within a

10-26  reasonable time, to provide any information or make any report

10-27  that may be required by the Commissioner pursuant to the

10-28  provisions of this chapter or a regulation adopted pursuant to this

10-29  chapter;

10-30     (j) Has been convicted of, or entered a plea of nolo contendere

10-31  to, a felony or any crime involving fraud, misrepresentation or

10-32  moral turpitude;

10-33     (k) Has refused or failed to pay, within a reasonable time, any

10-34  fees, assessments, costs or expenses that the licensee is required to

10-35  pay pursuant to this chapter or a regulation adopted pursuant to

10-36  this chapter;

10-37     (l) Has failed to satisfy a claim made by a client which has

10-38  been reduced to judgment;

10-39     (m) Has failed to account for or to remit any money of a client

10-40  within a reasonable time after a request for an accounting or

10-41  remittal;

10-42     (n) Has commingled the money or other property of a client

10-43  with his own or has converted the money or property of other

10-44  persons to his own use; or

11-1      (o) Has engaged in any other conduct constituting a deceitful,

11-2  fraudulent or dishonest business practice.

11-3      Sec. 21. 1.  If the Commissioner receives a copy of a court

11-4  order issued pursuant to NRS 425.540 that provides for the

11-5  suspension of all professional, occupational and recreational

11-6  licenses, certificates and permits issued to a person who is the

11-7  holder of a license as a mortgage banker, the Commissioner shall

11-8  deem the license issued to that person to be suspended at the end

11-9  of the 30th day after the date on which the court order was issued

11-10  unless the Commissioner receives a letter issued to the holder of

11-11  the license by the district attorney or other public agency pursuant

11-12  to NRS 425.550 stating that the holder of the license has complied

11-13  with the subpoena or warrant or has satisfied the arrearage

11-14  pursuant to NRS 425.560.

11-15     2.  The Commissioner shall reinstate a license as a mortgage

11-16  banker that has been suspended by a district court pursuant to

11-17  NRS 425.540 if the Commissioner receives a letter issued by the

11-18  district attorney or other public agency pursuant to NRS 425.550

11-19  to the person whose license was suspended stating that the person

11-20  whose license was suspended has complied with the subpoena or

11-21  warrant or has satisfied the arrearage pursuant to NRS 425.560.

11-22     Sec. 22.  1.  If the Commissioner enters an order imposing

11-23  disciplinary action against a person or denying a license to any

11-24  person, the Commissioner shall cause written notice of the order

11-25  to be served personally or sent by certified mail or telegraph to the

11-26  person.

11-27     2.  Unless a hearing has been conducted concerning the

11-28  matter, the person, upon application, is entitled to a hearing. If

11-29  the person does not make such an application within 45 days after

11-30  the entry of the initial order, the Commissioner shall enter a final

11-31  order concerning the matter.

11-32     3.  A person may appeal a final order of the Commissioner in

11-33  accordance with the provisions of chapter 233B of NRS.

11-34     Sec. 23.  1.  The Commissioner may investigate upon

11-35  complaint or otherwise when it appears that a licensee is

11-36  conducting business in violation of any provision of this chapter

11-37  or the regulations adopted pursuant thereto or when it appears

11-38  that any person is engaging in the business of a mortgage banker

11-39  without being licensed pursuant to the provisions of this chapter.

11-40     2.  If, upon investigation, it appears that the licensee is so

11-41  conducting his business or an unlicensed person is engaged in the

11-42  business of a mortgage banker, the Commissioner may:

11-43     (a) Advise the district attorney of the county in which the

11-44  business is conducted, and the district attorney shall cause the

12-1  appropriate legal action to be taken to enjoin the operation of the

12-2  business or prosecute the violations of this chapter; and

12-3      (b) Bring suit in the name and on behalf of the State of

12-4  Nevada against such person and any other person concerned in or

12-5  in any way participating in or about to participate in any action in

12-6  violation of this chapter or regulations adopted pursuant thereto to

12-7  enjoin any such person from continuing those practices or

12-8  engaging therein or doing any such act.

12-9      3.  If the Commissioner brings suit, the district court of any

12-10  county of this state is hereby vested with the jurisdiction in equity

12-11  to restrain illegal practices or transactions and may grant

12-12  injunctions to prevent and restrain those practices or transactions.

12-13  During the pendency of the proceedings before the district court:

12-14     (a) The court may issue such temporary restraining orders as

12-15  may appear to be just and proper;

12-16     (b) The findings of the Commissioner shall be deemed to be

12-17  prima facie evidence and sufficient grounds, in the discretion of

12-18  the court, for the ex parte issuance of a temporary restraining

12-19  order; and

12-20     (c) The Commissioner may apply for and on proper showing is

12-21  entitled to have issued the court’s subpoena requiring forthwith

12-22  the appearance of any person to:

12-23         (1) Produce any documents, books and records as may

12-24  appear necessary for the hearing of the petition; and

12-25         (2) Testify and give evidence concerning the conduct

12-26  complained of in the petition.

12-27     Sec. 24.  It is unlawful for any person to provide any of the

12-28  services of a mortgage banker, unless he is exempted pursuant to

12-29  section 9 of this act, to engage in or carry on, or hold himself out

12-30  as engaging in or carrying on, the business of a mortgage banker

12-31  without first obtaining a license as a mortgage banker.

12-32     Sec. 25. A person, or any director, officer, agent or employee

12-33  of a person, who violates any provision of this chapter or a

12-34  regulation adopted pursuant to this chapter or an order of the

12-35  Commissioner is guilty of a misdemeanor.

12-36     Sec. 26.  1.  The Division shall not issue a license pursuant

12-37  to this chapter to an applicant who does not maintain an office in

12-38  this state unless he has executed a written statement that appoints

12-39  a person in this state, the Commissioner or the Secretary of State

12-40  as his resident agent for the service of process for any action or

12-41  proceeding filed against him in this state.

12-42     2.  The statement of appointment must include a provision

12-43  which provides:

13-1      (a) That any process which is served on the resident agent

13-2  shall be deemed to have the same legal validity as if it had been

13-3  served on the applicant;

13-4      (b) That the appointment of the resident agent as his agent for

13-5  the service of process continues as long as any liability remains

13-6  outstanding against him in this state; and

13-7      (c) For venue in any judicial or administrative district in this

13-8  state without regard to the residence or principal place of business

13-9  of the holder of a license.

13-10     3.  The statement of appointment must be signed by the

13-11  applicant and notarized. The applicant shall file a copy of

13-12  the statement of appointment with the Commissioner. A copy of

13-13  the statement which is certified by the Commissioner shall be

13-14  deemed sufficient evidence of the appointment.

13-15     4.  If any process is served upon the resident agent pursuant

13-16  to this section, the resident agent shall mail the process by certified

13-17  mail to the last known address of the licensee. Service of process

13-18  shall be deemed complete upon service upon the resident agent.

13-19  The manner of the service of process described in this subsection

13-20  does not affect the validity of any other service of process

13-21  authorized by law.

13-22     Sec. 27. It is unlawful for any foreign corporation,

13-23  association or business trust to conduct any business as a

13-24  mortgage banker in this state, unless it:

13-25     1.  Qualifies under chapter 80 of NRS; and

13-26     2.  Complies with the provisions of this chapter or, if it claims

13-27  an exemption from the provisions of this chapter, complies with

13-28  the requirements for that exemption.

13-29     Sec. 28.  The provisions of this chapter do not limit any

13-30  statutory or common law right of any person to bring an action in

13-31  any court for any act involved in the transaction of the business of

13-32  mortgage banking or the right of the State of Nevada to punish

13-33  any person for any violation of any law.

13-34     Sec. 29.  NRS 40.750 is hereby amended to read as follows:

13-35     40.750  1.  As used in this section, “financial institution”

13-36  means a bank, mortgage banker, mortgage broker, mortgage

13-37  company, credit union, thrift company or savings and loan

13-38  association, or any subsidiary or affiliate of a bank, mortgage

13-39  banker, mortgage broker, mortgage company, credit union, thrift

13-40  company or savings and loan association, which is authorized to

13-41  transact business in this state and which makes or acquires, in whole

13-42  or in part, any loan of the kind described in subsection 2.

13-43     2.  Except as otherwise provided in subsection 5, a person who,

13-44  for the purpose of obtaining a loan secured by a lien on real

13-45  property, knowingly conceals a material fact, or makes a false

14-1  statement concerning a material fact knowing that the statement is

14-2  false, is liable to any financial institution which relied upon the

14-3  absence of that concealed fact or on that false statement for any

14-4  damages it sustains because of the fraud.

14-5      3.  In addition to its actual damages, a financial institution may

14-6  recover exemplary or punitive damages in an amount not to exceed

14-7  50 percent of the actual damages awarded.

14-8      4.  The cause of action provided by this section:

14-9      (a) Is not, for the purposes of NRS 40.430, an action for the

14-10  recovery of any debt or an action for the enforcement of any right

14-11  secured by mortgage or lien upon real estate.

14-12     (b) Is in addition to and not in substitution for any right of

14-13  foreclosure existing in favor of the financial institution. Any

14-14  recovery pursuant to this section does not limit the amount of a

14-15  judgment awarded pursuant to NRS 40.459, but the financial

14-16  institution is not entitled to recover actual damages more than once

14-17  for the same loss.

14-18     5.  The provisions of this section do not apply to any loan

14-19  which is secured by a lien on real property used for residential

14-20  purposes if:

14-21     (a) The residence is a single-family dwelling occupied by the

14-22  person obtaining the loan, as represented by him in connection with

14-23  his application for the loan; and

14-24     (b) The loan is for the principal amount of $150,000 or less.

14-25     Sec. 30.  NRS 80.015 is hereby amended to read as follows:

14-26     80.015  1.  For the purposes of this chapter, the following

14-27  activities do not constitute doing business in this state:

14-28     (a) Maintaining, defending or settling any proceeding;

14-29     (b) Holding meetings of the board of directors or stockholders or

14-30  carrying on other activities concerning internal corporate affairs;

14-31     (c) Maintaining accounts in banks or credit unions;

14-32     (d) Maintaining offices or agencies for the transfer, exchange

14-33  and registration of the corporation’s own securities or maintaining

14-34  trustees or depositaries with respect to those securities;

14-35     (e) Making sales through independent contractors;

14-36     (f) Soliciting or receiving orders outside of this state through or

14-37  in response to letters, circulars, catalogs or other forms of

14-38  advertising, accepting those orders outside of this state and filling

14-39  them by shipping goods into this state;

14-40     (g) Creating or acquiring indebtedness, mortgages and security

14-41  interests in real or personal property;

14-42     (h) Securing or collecting debts or enforcing mortgages and

14-43  security interests in property securing the debts;

14-44     (i) Owning, without more, real or personal property;

15-1      (j) Isolated transactions completed within 30 days and not a part

15-2  of a series of similar transactions;

15-3      (k) The production of motion pictures as defined in

15-4  NRS 231.020;

15-5      (l) Transacting business as an out‑of‑state depository institution

15-6  pursuant to the provisions of title 55 of NRS; and

15-7      (m) Transacting business in interstate commerce.

15-8      2.  The list of activities in subsection 1 is not exhaustive.

15-9      3.  A person who is not doing business in this state within the

15-10  meaning of this section need not qualify or comply with any

15-11  provision of this chapter, chapter 645A, 645B or 645E of NRS or

15-12  title 55 or 56 of NRS or sections 2 to 28, inclusive, of this act,

15-13  unless he:

15-14     (a) Maintains an office in this state for the transaction of

15-15  business; [or]

15-16     (b) Solicits or accepts deposits in the state, except pursuant to

15-17  the provisions of chapter 666 or 666A of NRS[.] ; or

15-18     (c) Funds or acts as an agent on behalf of a borrower or

15-19  lender with respect to more than three loans secured by liens on

15-20  real property within 1 calendar year to persons not related within

15-21  the third degree of consanguinity.

15-22     4.  As used in this section and for the purposes of NRS 80.016,

15-23  “deposits” means demand deposits, savings deposits and time

15-24  deposits, as those terms are defined in chapter 657 of NRS.

15-25     Sec. 31.  NRS 90.530 is hereby amended to read as follows:

15-26     90.530  The following transactions are exempt from NRS

15-27  90.460 and 90.560:

15-28     1.  An isolated nonissuer transaction, whether or not effected

15-29  through a broker-dealer.

15-30     2.  A nonissuer transaction in an outstanding security if the

15-31  issuer of the security has a class of securities subject to registration

15-32  under section 12 of the Securities Exchange Act of 1934, 15 U.S.C.

15-33  § 78l, and has been subject to the reporting requirements of section

15-34  13 or 15(c) of the Securities Exchange Act of 1934, 15 U.S.C. §§

15-35  78m and 78o(d), for not less than 90 days next preceding the

15-36  transaction, or has filed and maintained with the Administrator for

15-37  not less than 90 days preceding the transaction information, in such

15-38  form as the Administrator, by regulation, specifies, substantially

15-39  comparable to the information the issuer would be required to file

15-40  under section 12(b) or 12(g) of the Securities Exchange Act of 1934,

15-41  15 U.S.C. §§ 78l(b) and 78l(g), were the issuer to have a class of its

15-42  securities registered under section 12 of the Securities Exchange Act

15-43  of 1934, 15 U.S.C. § 78l, and paid a fee with the filing of $150.

15-44     3.  A nonissuer transaction by a sales representative licensed in

15-45  this state, in an outstanding security if:

16-1      (a) The security is sold at a price reasonably related to the

16-2  current market price of the security at the time of the transaction;

16-3      (b) The security does not constitute all or part of an unsold

16-4  allotment to, or subscription or participation by, a broker-dealer as

16-5  an underwriter of the security;

16-6      (c) At the time of the transaction, a recognized securities manual

16-7  designated by the Administrator by regulation or order contains the

16-8  names of the issuer’s officers and directors, a statement of the

16-9  financial condition of the issuer as of a date within the preceding 18

16-10  months, and a statement of income or operations for each of the last

16-11  2 years next preceding the date of the statement of financial

16-12  condition, or for the period as of the date of the statement of

16-13  financial condition if the period of existence is less than 2 years;

16-14     (d) The issuer of the security has not undergone a major

16-15  reorganization, merger or acquisition within the preceding 30 days

16-16  which is not reflected in the information contained in the manual;

16-17  and

16-18     (e) At the time of the transaction, the issuer of the security has a

16-19  class of equity security listed on the New York Stock Exchange,

16-20  American Stock Exchange or other exchange designated by the

16-21  Administrator, or on the National Market System of the National

16-22  Association of Securities Dealers Automated Quotation System. The

16-23  requirements of this paragraph do not apply if:

16-24         (1) The security has been outstanding for at least 180 days;

16-25         (2) The issuer of the security is actually engaged in business

16-26  and is not developing his business, in bankruptcy or in receivership;

16-27  and

16-28         (3) The issuer of the security has been in continuous

16-29  operation for at least 5 years.

16-30     4.  A nonissuer transaction in a security that has a fixed

16-31  maturity or a fixed interest or dividend provision if there has been

16-32  no default during the current fiscal year or within the 3 preceding

16-33  years, or during the existence of the issuer, and any predecessors if

16-34  less than 3 years, in the payment of principal, interest or dividends

16-35  on the security.

16-36     5.  A nonissuer transaction effected by or through a registered

16-37  broker-dealer pursuant to an unsolicited order or offer to purchase.

16-38     6.  A transaction between the issuer or other person on whose

16-39  behalf the offering of a security is made and an underwriter, or a

16-40  transaction among underwriters.

16-41     7.  A transaction in a bond or other evidence of indebtedness

16-42  secured by a real estate mortgage, deed of trust, personal property

16-43  security agreement, or by an agreement for the sale of real estate or

16-44  personal property, if the entire mortgage, deed of trust or agreement,

17-1  together with all the bonds or other evidences of indebtedness

17-2  secured thereby, is offered and sold as a unit.

17-3      8.  A transaction by an executor, administrator, sheriff, marshal,

17-4  receiver, trustee in bankruptcy, guardian or conservator.

17-5      9.  A transaction executed by a bona fide secured party without

17-6  the purpose of evading this chapter.

17-7      10.  An offer to sell or sale of a security to a financial or

17-8  institutional investor or to a broker-dealer.

17-9      11.  Except as otherwise provided in this subsection, a

17-10  transaction pursuant to an offer to sell securities of an issuer if:

17-11     (a) The transaction is part of an issue in which there are not

17-12  more than 25 purchasers in this state, other than those designated in

17-13  subsection 10, during any 12 consecutive months;

17-14     (b) No general solicitation or general advertising is used in

17-15  connection with the offer to sell or sale of the securities;

17-16     (c) No commission or other similar compensation is paid or

17-17  given, directly or indirectly, to a person, other than a broker-dealer

17-18  licensed or not required to be licensed under this chapter, for

17-19  soliciting a prospective purchaser in this state; and

17-20     (d) One of the following conditions is satisfied:

17-21         (1) The seller reasonably believes that all the purchasers in

17-22  this state, other than those designated in subsection 10, are

17-23  purchasing for investment; or

17-24         (2) Immediately before and immediately after the

17-25  transaction, the issuer reasonably believes that the securities of the

17-26  issuer are held by 50 or fewer beneficial owners, other than those

17-27  designated in subsection 10, and the transaction is part of an

17-28  aggregate offering that does not exceed $500,000 during any 12

17-29  consecutive months.

17-30  The Administrator by rule or order as to a security or transaction or

17-31  a type of security or transaction, may withdraw or further condition

17-32  the exemption set forth in this subsection or waive one or more of

17-33  the conditions of the exemption.

17-34     12.  An offer to sell or sale of a preorganization certificate or

17-35  subscription if:

17-36     (a) No commission or other similar compensation is paid or

17-37  given, directly or indirectly, for soliciting a prospective subscriber;

17-38     (b) No public advertising or general solicitation is used in

17-39  connection with the offer to sell or sale;

17-40     (c) The number of offers does not exceed 50;

17-41     (d) The number of subscribers does not exceed 10; and

17-42     (e) No payment is made by a subscriber.

17-43     13.  An offer to sell or sale of a preorganization certificate or

17-44  subscription issued in connection with the organization of a

17-45  depository institution if that organization is under the supervision of

18-1  an official or agency of a state or of the United States which has and

18-2  exercises the authority to regulate and supervise the organization of

18-3  the depository institution. For the purpose of this subsection, “under

18-4  the supervision of an official or agency” means that the official or

18-5  agency by law has authority to require disclosures to prospective

18-6  investors similar to those required under NRS 90.490, impound

18-7  proceeds from the sale of a preorganization certificate or

18-8  subscription until organization of the depository institution is

18-9  completed, and require refund to investors if the depository

18-10  institution does not obtain a grant of authority from the appropriate

18-11  official or agency.

18-12     14.  A transaction pursuant to an offer to sell to existing

18-13  security holders of the issuer, including persons who at the time of

18-14  the transaction are holders of transferable warrants exercisable

18-15  within not more than 90 days after their issuance, convertible

18-16  securities or nontransferable warrants, if:

18-17     (a) No commission or other similar compensation other than a

18-18  standby commission, is paid or given, directly or indirectly, for

18-19  soliciting a security holder in this state; or

18-20     (b) The issuer first files a notice specifying the terms of the offer

18-21  to sell, together with a nonrefundable fee of $150, and the

18-22  Administrator does not by order disallow the exemption within the

18-23  next 5 full business days.

18-24     15.  A transaction involving an offer to sell, but not a sale, of a

18-25  security not exempt from registration under the Securities Act of

18-26  1933, 15 U.S.C. §§ 77a et seq., if:

18-27     (a) A registration or offering statement or similar document as

18-28  required under the Securities Act of 1933, 15 U.S.C. §§ 77a et seq.,

18-29  has been filed, but is not effective;

18-30     (b) A registration statement, if required, has been filed under

18-31  this chapter, but is not effective; and

18-32     (c) No order denying, suspending or revoking the effectiveness

18-33  of registration, of which the offeror is aware, has been entered by

18-34  the Administrator or the Securities and Exchange Commission, and

18-35  no examination or public proceeding that may culminate in that kind

18-36  of order is known by the offeror to be pending.

18-37     16.  A transaction involving an offer to sell, but not a sale, of a

18-38  security exempt from registration under the Securities Act of 1933,

18-39  15 U.S.C. §§ 77a et seq., if:

18-40     (a) A registration statement has been filed under this chapter, but

18-41  is not effective; and

18-42     (b) No order denying, suspending or revoking the effectiveness

18-43  of registration, of which the offeror is aware, has been entered by

18-44  the Administrator and no examination or public proceeding that may

19-1  culminate in that kind of order is known by the offeror to be

19-2  pending.

19-3      17.  A transaction involving the distribution of the securities of

19-4  an issuer to the security holders of another person in connection

19-5  with a merger, consolidation, exchange of securities, sale of assets

19-6  or other reorganization to which the issuer, or its parent or

19-7  subsidiary, and the other person, or its parent or subsidiary, are

19-8  parties, if:

19-9      (a) The securities to be distributed are registered under the

19-10  Securities Act of 1933, 15 U.S.C. §§ 77a et seq., before the

19-11  consummation of the transaction; or

19-12     (b) The securities to be distributed are not required to be

19-13  registered under the Securities Act of 1933, 15 U.S.C. §§ 77a et

19-14  seq., written notice of the transaction and a copy of the materials, if

19-15  any, by which approval of the transaction will be solicited, together

19-16  with a nonrefundable fee of $150, are given to the Administrator at

19-17  least 10 days before the consummation of the transaction and the

19-18  Administrator does not, by order, disallow the exemption within the

19-19  next 10 days.

19-20     18.  A transaction involving the offer to sell or sale of one or

19-21  more promissory notes each of which is directly secured by a first

19-22  lien on a single parcel of real estate, or a transaction involving the

19-23  offer to sell or sale of participation interests in the notes if the notes

19-24  and participation interests are originated by a depository institution

19-25  and are offered and sold subject to the following conditions:

19-26     (a) The minimum aggregate sales price paid by each purchaser

19-27  may not be less than $250,000;

19-28     (b) Each purchaser must pay cash either at the time of the sale or

19-29  within 60 days after the sale; and

19-30     (c) Each purchaser may buy for his own account only.

19-31     19.  A transaction involving the offer to sell or sale of one or

19-32  more promissory notes directly secured by a first lien on a single

19-33  parcel of real estate or participating interests in the notes, if the

19-34  notes and interests are originated by a mortgagee approved by the

19-35  Secretary of Housing and Urban Development under sections 203

19-36  and 211 of the National Housing Act, 12 U.S.C. §§ 1709 and 1715b,

19-37  and are offered or sold, subject to the conditions specified in

19-38  subsection 18, to a depository institution or insurance company, the

19-39  Federal Home Loan Mortgage Corporation, the Federal National

19-40  Mortgage Association or the Government National Mortgage

19-41  Association.

19-42     20.  A transaction between any of the persons described in

19-43  subsection 19 involving a nonassignable contract to buy or sell the

19-44  securities described in subsection 18 if the contract is to be

19-45  completed within 2 years and if:

20-1      (a) The seller of the securities pursuant to the contract is one of

20-2  the parties described in subsection 18 or 19 who may originate

20-3  securities;

20-4      (b) The purchaser of securities pursuant to a contract is any

20-5  other person described in subsection 19; and

20-6      (c) The conditions described in subsection 18 are fulfilled.

20-7      21.  A transaction involving one or more promissory notes

20-8  secured by a lien on real estate, or participating interests in those

20-9  notes, by:

20-10     (a) A mortgage company licensed pursuant to chapter 645E of

20-11  NRS to engage in those transactions; [or]

20-12     (b) A mortgage broker licensed pursuant to chapter 645B of

20-13  NRS to engage in those transactions[.] ; or

20-14     (c) A mortgage banker licensed pursuant to sections 2 to 28,

20-15  inclusive, of this act to engage in those transactions.

20-16     Sec. 32.  NRS 232.545 is hereby amended to read as follows:

20-17     232.545  1.  An Investigative Account for Financial

20-18  Institutions is hereby created in the State General Fund. The

20-19  Account consists of money which is:

20-20     (a) Received by the Department of Business and Industry in

20-21  connection with the licensing of financial institutions and the

20-22  investigation of persons associated with those institutions; and

20-23     (b) Required by law to be placed therein.

20-24     2.  The Director of the Department of Business and Industry or

20-25  his designee may authorize expenditures from the Investigative

20-26  Account to pay the expenses incurred:

20-27     (a) In investigating applications for licensing of financial

20-28  institutions and in investigating persons associated with those

20-29  institutions;

20-30     (b) In conducting special investigations relating to financial

20-31  institutions and persons associated with those institutions; and

20-32     (c) In connection with mergers, consolidations, conversions,

20-33  receiverships and liquidations of financial institutions.

20-34     3.  As used in this section, “financial institution” means an

20-35  institution for which licensing or registration is required by the

20-36  provisions of titles 55 and 56 and chapters 604, 645B, 645E and 649

20-37  of NRS[.] and sections 2 to 28, inclusive, of this act.

20-38     Sec. 33.  NRS 604.090 is hereby amended to read as follows:

20-39     604.090  1.  Except as otherwise provided in subsection 2, it is

20-40  unlawful to operate a check-cashing or deferred deposit service

20-41  without being registered with the Commissioner.

20-42     2.  The provisions of this chapter do not apply to:

20-43     (a) A person doing business pursuant to the authority of any law

20-44  of this state or of the United States relating to banks, savings banks,

20-45  trust companies, savings and loan associations, credit unions,

21-1  development corporations, mortgage bankers, mortgage brokers,

21-2  mortgage companies, thrift companies, pawnbrokers or insurance

21-3  companies.

21-4      (b) A person licensed to make installment loans pursuant to

21-5  chapter 675 of NRS.

21-6      (c) A person who is primarily engaged in the retail sale of goods

21-7  or services who:

21-8          (1) As an incident to or independently of a retail sale or

21-9  service from time to time cashes checks for a fee or other

21-10  consideration of not more than $2; and

21-11         (2) Does not hold himself out as a check-cashing service.

21-12     (d) A person while performing any act authorized by a license

21-13  issued pursuant to chapter 671 of NRS.

21-14     (e) A person who holds a nonrestricted gaming license issued

21-15  pursuant to chapter 463 of NRS while performing any act in the

21-16  course of that licensed operation.

21-17     (f) A person who is exclusively engaged in a check-cashing

21-18  service relating to out-of-state checks.

21-19     (g) A corporation organized pursuant to the laws of this state

21-20  that has been continuously and exclusively engaged in a check-

21-21  cashing service in this state since July 1, 1973.

21-22     Sec. 34.  NRS 657.120 is hereby amended to read as follows:

21-23     657.120  1.  A financial institution may impose and collect a

21-24  fee or charge, not to exceed an amount specified in or limited by

21-25  specific statute, for any service it provides to a customer, if the fee

21-26  or charge is clearly and conspicuously disclosed in writing to the

21-27  customer before the customer receives the service. A financial

21-28  institution must provide a customer with written notice of any

21-29  increase in the fee or charge at least 10 days before the increase

21-30  becomes effective.

21-31     2.  A fee or charge for the presentation for payment, on a single

21-32  business day, of multiple checks drawn by a customer on an account

21-33  for which there is an insufficient balance to pay all the checks, must

21-34  be determined as if the checks drawn in a single series or class were

21-35  presented:

21-36     (a) In the order the checks were written;

21-37     (b) From the lowest check number to the highest check number;

21-38  or

21-39     (c) In order of ascending amounts, the check for the smallest

21-40  sum being presented first.

21-41     3.  As used in this section, “financial institution” means an

21-42  institution licensed pursuant to the provisions of this title or title 56

21-43  or chapter 645B, 645E or 649 of NRS[,] or sections 2 to 28,

21-44  inclusive, of this act, or a similar institution chartered or licensed

21-45  pursuant to federal law.

22-1      Sec. 35.  NRS 657.130 is hereby amended to read as follows:

22-2      657.130  1.  As used in this section, unless the context

22-3  otherwise requires:

22-4      (a) “Committee to review compliance” means one or more

22-5  persons assigned or engaged by a financial institution to test, review

22-6  or evaluate its conduct, transactions or potential transactions,

22-7  policies or procedures for the purpose of monitoring and improving

22-8  or enforcing compliance with state and federal statutes and

22-9  regulations requiring safe, sound and fair lending practices,

22-10  including, without limitation, acts concerning equal credit

22-11  opportunity, fair housing, fair lending, flood zone protection,

22-12  housing and financial discrimination, truth in lending and financial

22-13  reporting to federal or state regulatory agencies.

22-14     (b) “Financial institution” means an institution licensed pursuant

22-15  to the provisions of this title or title 56 or chapter 645B or 645E of

22-16  NRS, or sections 2 to 28, inclusive, of this act, or a similar

22-17  institution chartered or licensed pursuant to federal law. The term

22-18  includes, without limitation, a holding company, affiliate or

22-19  subsidiary of such an institution.

22-20     2.  Except as otherwise voluntarily authorized by the financial

22-21  institution:

22-22     (a) A document prepared for or created by a committee to

22-23  review compliance is confidential and privileged, and is not subject

22-24  to discovery or admissible in evidence in a civil action of this state,

22-25  even if it has been submitted to a governmental or regulatory agency

22-26  of this state, the United States or a foreign government.

22-27     (b) A member of a committee to review compliance or a person

22-28  who acted under the direction of the committee cannot be required

22-29  to testify in a civil action concerning the contents of a document

22-30  described in paragraph (a) or concerning the discussions or

22-31  conclusions of, or the actions taken by, the committee.

22-32     Sec. 36.  NRS 675.040 is hereby amended to read as follows:

22-33     675.040  This chapter does not apply to:

22-34     1.  A person doing business under the authority of any law of

22-35  this state or of the United States relating to banks, savings banks,

22-36  trust companies, savings and loan associations, credit unions,

22-37  development corporations, mortgage bankers, mortgage brokers,

22-38  mortgage companies, thrift companies, pawnbrokers or insurance

22-39  companies.

22-40     2.  A real estate investment trust, as defined in 26 U.S.C. § 856.

22-41     3.  An employee benefit plan, as defined in 29 U.S.C. §

22-42  1002(3), if the loan is made directly from money in the plan by the

22-43  plan’s trustee.

23-1      4.  An attorney at law rendering services in the performance of

23-2  his duties as an attorney at law if the loan is secured by real

23-3  property.

23-4      5.  A real estate broker rendering services in the performance of

23-5  his duties as a real estate broker if the loan is secured by real

23-6  property.

23-7      6.  Except as otherwise provided in this subsection, any firm or

23-8  corporation:

23-9      (a) Whose principal purpose or activity is lending money on real

23-10  property which is secured by a mortgage;

23-11     (b) Approved by the Federal National Mortgage Association as

23-12  a seller or servicer; and

23-13     (c) Approved by the Department of Housing and Urban

23-14  Development and the Department of Veterans Affairs.

23-15     7.  A person who provides money for investment in loans

23-16  secured by a lien on real property, on his own account.

23-17     8.  A seller of real property who offers credit secured by a

23-18  mortgage of the property sold.

23-19     9.  A person holding a nonrestricted state gaming license issued

23-20  pursuant to the provisions of chapter 463 of NRS.

23-21     Sec. 37.  NRS 675.230 is hereby amended to read as follows:

23-22     675.230  1.  Except as otherwise provided in subsection 2, a

23-23  licensee may not conduct the business of making loans under this

23-24  chapter within any office, suite, room or place of business in which

23-25  any other business is solicited or engaged in, except an insurance

23-26  agency or notary public, or in association or conjunction with any

23-27  other business, unless authority to do so is given by the

23-28  Commissioner.

23-29     2.  A licensee may conduct the business of making loans

23-30  pursuant to this chapter in the same office or place of business as:

23-31     (a) A mortgage broker if:

23-32         (1) The licensee and the mortgage broker:

23-33             (I) Operate as separate legal entities;

23-34             (II) Maintain separate accounts, books and records;

23-35             (III) Are subsidiaries of the same parent corporation; and

23-36             (IV) Maintain separate licenses; and

23-37         (2) The mortgage broker is licensed by this state pursuant to

23-38  chapter 645B of NRS and does not receive money to acquire or

23-39  repay loans or maintain trust accounts as provided by

23-40  NRS 645B.175.

23-41     (b) A mortgage company if:

23-42         (1) The licensee and the mortgage company:

23-43             (I) Operate as separate legal entities;

23-44             (II) Maintain separate accounts, books and records;

23-45             (III) Are subsidiaries of the same parent corporation; and

24-1              (IV) Maintain separate licenses; and

24-2          (2) The mortgage company is licensed by this state pursuant

24-3  to chapter 645E of NRS and, if the mortgage company is also

24-4  licensed as a mortgage broker pursuant to chapter 645B of NRS,

24-5  does not receive money to acquire or repay loans or maintain trust

24-6  accounts as provided by NRS 645B.175.

24-7      (c) A mortgage banker if:

24-8          (1) The licensee and the mortgage banker:

24-9              (I) Operate as separate legal entities;

24-10             (II) Maintain separate accounts, books and records;

24-11             (III) Are subsidiaries of the same parent corporation;

24-12  and

24-13             (IV) Maintain separate licenses; and

24-14         (2) The mortgage banker is licensed by this state pursuant

24-15  to sections 2 to 28, inclusive, of this act.

24-16     Sec. 38.  1.  This section and sections 1 to 37, inclusive, of

24-17  this act become effective upon passage and approval for the purpose

24-18  of adopting any regulations necessary to carry out the provisions of

24-19  this act, and on January 1, 2004, for all other purposes.

24-20     2.  Sections 11 and 21 of this act expire by limitation on the

24-21  date on which the provisions of 42 U.S.C. § 666 requiring each state

24-22  to establish procedures under which the state has authority to

24-23  withhold or suspend, or to restrict the use of professional,

24-24  occupational and recreational licenses of persons who:

24-25     (a) Have failed to comply with a subpoena or warrant relating to

24-26  a procedure to determine the paternity of a child or to establish or

24-27  enforce an obligation for the support of a child; or

24-28     (b) Are in arrears in the payment for the support of one or more

24-29  children,

24-30  are repealed by the Congress of the United States.

 

24-31  H