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The Oregon Administrative Rules contain OARs filed through October 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 730

CONSUMER FINANCE

441-730-0000

Statutory Authority; Purpose

(1) OAR 441-730-0000 to 441-730-0320 is adopted pursuant to the rulemaking authority granted the director by ORS 725.320, and 725.505.

(2) The rules are considered necessary to assure the proper conduct of the business regulated, to enforce the Consumer Finance Act and to protect the public.

Stat. Auth.: ORS 725.320, 725.505
Stats. Implemented: ORS 725
Hist.: BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0005; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0010

Definitions

(1) "Annual percentage rate” or “APR” means the annual percentage rate that every licensee is required by Regulation Z of the Federal Truth in Lending Act (Title I of the Consumer Credit Protection Act) to disclose to each of its credit customers.

(2) "Borrower" means a natural person.

(3) “Branch” means a physical location at which business is conducted and which is required to post a license under 725.160.

(4) "Charges" means any one or more of the fees, premiums or other charges described by ORS 725.340(2)(a), (3) and (4), and other items charged to a borrower's account; but the term does not include interest or deferral charges.

(5) "Deferral charges" means the additional charge assessed by a licensee made for deferring all unpaid installments as provided by ORS 725.340(2)(b). Deferral charges do not apply to loans with a single payment payback feature.

(6) "Director" means the Director of the Department of Consumer and Business Services.

(7) “Finance charge” means the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.

(8) "Formalized grading system" means a formula or computer program that determines the creditworthiness of individual borrowers based on information regarding the borrower's financial condition, such as the borrower's income, assets, debts and financial obligations, and the nature and value of any collateral used to secure the loan.

(9) "Fully amortized" means characterized by periodic payments, that if made as scheduled, result in full repayment of the principal and interest owed on a loan by the end of the loan term.

(10) "License" means a consumer finance license required to make consumer finance loans as described in ORS 725.045.

(11) “Legally qualified in this state” means a business is qualified to conduct business in this state, having made the appropriate filings with the Secretary of State.

(12) "Licensee" means a person in the business of making loans for periods of more than 60 days that have periodic payments.

(13) "Loan" means a loan that is subject to the Oregon Consumer Finance Act.

(14) "Loan underwriting" means a written or otherwise documented evaluation of the assumption of risk preceding the granting of a loan to a specific borrower, and may be fulfilled through use of a formalized grading system. Loan underwriting may be based on one or more of the following:

(a) Credit information furnished by the borrower, such as employment history, income, and outstanding obligations;

(b) A financial statement that includes income, assets and debts;

(c) Publicly available information concerning the borrower, that may include the borrower's credit report;

(d) The borrower's credit needs and willingness and ability to pay, including the nature and value of any collateral used to secure the loan.

(15) “Nationwide Mortgage Licensing System and Registry” or “NMLS” means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and successors develop and maintain for participating state agencies to use to register and license mortgage loan originators and non-depository companies and made available at www.nationwidelicensingsystem.org.

(16) "Periodic payments" means loan repayments scheduled for monthly or more frequent periods of time.

(17) "Person" means a natural person or an organization, including a corporation, partnership, proprietorship, association, limited liability company, or cooperative.

(18) “Register” means entering the general information into the NMLS that is required to utilize the system for licensing and renewal.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.110, 725.140, 725.340, & 725.360
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0007; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14; Administrative correction, 7-24-14; FCS 3-2014, f. & cert. ef. 8-25-14

441-730-0015

Licensee Lending Characteristics and Practices

(1) A licensee, making loans under that license, must make a determination of the creditworthiness of a borrower based on the information about the borrower’s financial condition, such as his or her income, assets, debts, and financial obligations, and the nature and value of any collateral used to secure the loan for the majority of loans made under a consumer finance license.

(2) A licensee must ensure that the majority of secured or unsecured loans made under a license have:

(a) Periodic payments;

(b) Terms longer than 60 days;

(c) Loan underwriting; and

(d) Full amortization.

(3) A licensee must not:

(a) Disguise any loan as an open-ended loan authorized under ORS 725.345 or 725.347 as a device or subterfuge to evade the requirements and prohibitions of this rule;

(b) Retain the title to the vehicle used as security on a loan for more than thirty business days before submitting the application to be recorded as a lien-holder on the title or taking other commercially reasonable steps to be added as a security interest holder of the vehicle;

(c) Unreasonably withhold documents on a loan secured by a borrower’s vehicle for more than three business days if the loan is paid by certified or guaranteed funds; or

(d) Require a borrower, as a condition of making a loan under its license, to provide a postdated check or debit authorization for one or more future payments. However, if permitted by the licensee and at the discretion of the borrower, one or more postdated checks or debit authorizations may be delivered to a licensee to facilitate timely future payments.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.110, 725.140(1) & 725.330
Hist.: FCS 2-2000, f. & cert. ef. 2-15-00; Renumbered from 441-730-0005, FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2007(Temp), f. & cert. ef. 8-10-07 thru 12-27-07; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0025

License Applications

(1) For purposes of ORS 725.120, an applicant for a license must submit an application attested to by an authorized owner or officer of the applicant through the Nationwide Mortgage Licensing System and Registry (NMLS).

(2) Applicants and licensees must comply with the registration, application, licensing, and renewal processes set forth in the NMLS.

(3)(a) An applicant, including a current licensee, must provide the employment history for a proposed manager of the licensed location for the five years immediately preceding the date of the application. A licensee employing a new manager may be required to submit a resume to meet the requirements of this section.

(b) The employment history for a license applicant’s proposed manager must demonstrate verifiable recent experience in traditional lending, including but not limited to, experience obtained in banking, consumer finance, or mortgage lending. For purposes of this rule, “recent” means no less than three years out of the five years immediately preceding the date of application. Short-term lending experience alone is not a sufficient substitute for the required experience.

(c) At the request of the applicant and in the sole discretion of the director, education, extensive training, or other business experience may be substituted for the three out of five years of traditional lending experience. Factors that the director may consider include relevance of the education, or the number, complexity and types of transactions handled in the substituted business experience. Short-term lending experience alone is not a sufficient substitute for the required experience.

(4) A person not currently licensed with the director to make loans must submit:

(a) The employment history for all executive officers, owners, directors, or managing partners. A resume may be required to meet this requirement. At least one-half of the executive officers, owners, directors, or managing partners must have verifiable recent lending experience in banking, consumer finance, or mortgage lending;

(b) A business plan, including but not limited to:

(A) Financial and operational history of the applicant, if any;

(B) Copies of any loan documents that are proposed to be used;

(C) A description of the types of loans and the percentage of the different types of loans the applicant proposes to make, the length of the loans the applicant proposes to make, the interest rates or range of rates the applicant proposes to charge, and any other business activities the licensee will engage in at the location;

(D) The process by which the applicant will determine that loans to be made comply with requirements in OAR 441-730-0015(1); and

(E) Funding sources for the loans, including third-party financial institutions.

(5) For purposes of ORS 725.140 and this rule, the filing date of an application is the date the application is complete. An application must be deemed complete on the date:

(a) All required fees have been paid; and

(b) All fully completed documents that are part of an NMLS registration, NMLS application or that are required to be submitted by this rule have been received.

(6) An initial application for licensing is deemed abandoned if:

(a) The director has had one or more incomplete documents as part of an application for a minimum of 60 days; and

(b) The applicant has not responded within 30 days following a written notice from the director requesting submission of all fees, documents, or information necessary to make the application complete.

(7) An applicant whose initial application has been abandoned may reapply by submitting a new application including new fees.

(8) A consumer finance lending license shall expire on December 31 of each calendar year. At least 30 days prior to the expiration of the license, the licensee shall submit a complete renewal request, including renewing NMLS registration if applicable, and all prescribed renewal fees at OAR 441-730-0030 through NMLS. A renewal is not deemed effective until approved by the Director.

(9) In the event a licensee does not receive renewal approval from the Director by December 31, the license is deemed to have lapsed in NMLS.

(a) Reinstatement is available through NMLS through the last day of February of the renewal year. In order to reinstate the license, the licensee must apply for reinstatement using NMLS.

(b) If a licensee fails to reinstate by the last day in February of the renewal year they must reapply for a license.

(10) Conducting consumer finance activity in the state after an annual license expires and before the license approved for renewal constitutes unlicensed consumer finance activity in violation of ORS 725.045.

(11) The Director may refuse to renew a license if a reason exists to suspend or revoke under ORS 725.230.

(12) NMLS shall collect any fees required to be paid by applicants and licensees as authorized by ORS 725.185(1) on behalf of the Director. NMLS is required to forward these fees to the Department of Consumer and Business Services, pursuant to the terms of the written agreement between the Department of Consumer and Business Services and the Conference of State Bank Supervisors and its subsidiaries.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.120 & 725.140
Hist.: FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14; Administrative correction, 7-24-14; FCS 4-2014, f. & cert. ef. 8-27-14

441-730-0026

Corporate Surety Bond for Consumer Finance Licensees Employing a Mortgage Loan Originator

(1) This rule applies to a consumer finance company licensed under ORS 725.010 to 725.270 and OAR chapter 441, division 730 that employs one or more mortgage loan originators. The corporate surety bond must be in a form and on terms approved by the director.

(2) A corporate surety bond under this rule must be renewed or replaced each calendar year, concurrently with the license renewal of any mortgage loan originators employed by the consumer finance company. The corporate surety bond shall be delivered to the director by December 1 of each calendar year but may be made effective as of December 31 of each calendar year. In no case shall any applicant, mortgage banker or mortgage broker subject to this rule reduce the amount of a corporate surety bond before October 1 of each calendar year.

(3) A consumer finance company must maintain a corporate surety bond during the period the company employs a mortgage loan originator. The corporate surety bond must remain in effect for at least five years after the person ceases to employ one or more mortgage loan originators. A person must file a claim against the corporate surety bond before the bond expires as described in this section.

(4) At least five years after a consumer finance company ceases to originate residential mortgage loans, the person or the writer of the corporate surety bond may apply to the director for release of the corporate surety bond. Unless the director determines that claims are pending against the person for violation of ORS 86A.095 through 86A.198, the director will release the corporate surety bond.

(5) The sum of the corporate surety bond for a consumer finance company that employs one or more mortgage loan originators must be calculated based on the last required annual report submitted under OAR 441-730-0320. The sum of each consumer finance company’s corporate surety bond must be determined as follows:

(a) For a consumer finance company that has not previously conducted business involving the origination of residential mortgage loans, the corporate surety bond must be in the amount of $50,000.

(b) For a consumer finance company making or negotiating less than $10,000,000 in residential mortgage loans in the previous calendar year, the corporate surety bond must be in the amount of $50,000.

(c) For a consumer finance company making or negotiating $10,000,000 or more but less than $25,000,000 in residential mortgage loans in the previous calendar year, the corporate surety bond must be in the amount of $75,000.

(d) For a consumer finance company making or negotiating $25,000,000 or more but less than $50,000,000 in residential mortgage loans in the previous calendar year, the corporate surety bond must be in the amount of $100,000.

(e) For a consumer finance company making or negotiating $50,000,000 or more but less than $100,000,000 in residential mortgage loans in the previous calendar year, the corporate surety bond must be in the amount of $150,000.

(f) For a consumer finance company making or negotiating more than $100,000,000 in residential mortgage loans in the previous calendar year, the corporate surety bond must be in the amount of $200,000.

(6) Notwithstanding section (5) of this rule, a person that obtains and maintains one or more consumer finance licenses in this state may provide a corporate surety bond in an amount to cover the entire surety amounts required for one or more of the person’s consumer finance companies in an amount meeting the minimum bond amounts of sections (5)(a) through (f) of this rule.

Stat. Auth.: ORS 86A.242
Stats. Implemented: ORS 86A.227
Hist.: FCS 3-2010, f. 3-18-10, cert. ef. 3-22-10; FCS 4-2012, f. & cert. ef 8-1-12

441-730-0027

State Criminal Records Check

(1) A consumer finance company that makes or offers to make residential mortgage loans must conduct a state criminal records check of an employee prior to the person originating residential mortgage loans.

(a) The consumer finance company must search state records of all states where the individual has resided in the past 10 years using the person's full legal name, date of birth, place of birth, and Social Security number.

(b) The consumer finance company must use the services of law enforcement agencies or an independent private company that complies with the federal Fair Credit Reporting Act to conduct the state criminal records check.

(2) If the state criminal records check discloses a disqualifying conviction under ORS 86A.212, an applicant for a mortgage loan originator license may not be employed and a currently employed mortgage loan originator must cease making residential mortgage loans immediately.

(3) The consumer finance company must maintain state criminal records check documents in a secure location and must make these available to the director for examination at any reasonable time or times and may require, without subpoena, the production of such records at the office of the director as often as is reasonably necessary. The consumer finance company must preserve these records for three years after they terminate the employment of the mortgage loan originator. After the retention period, the consumer finance company must destroy these files in a secure manner.

(4) This rule applies to employees of consumer finance companies hired or employed on or after August 1, 2010.

Stat. Auth.: ORS 59.972, 86A.242
Stats. Implemented: ORS 59.972
Hist.: FCS 3-2010, f. 3-18-10, cert. ef. 3-22-10

Notes, Mortgages, and Collateral

441-730-0030

Fees, Charges Licensees Pay the Director

(1) In addition to any fees required to register with and participate in NMLS, an applicant or licensee shall pay:

(a) $600 for an initial application for each location to be licensed; and

(b) $600 for renewal for each licensed location, due and payable at the time that the request to renew is submitted through the NMLS.

(2) The rate of charge payable by a licensee is $75 an hour per person payable by the licensee for the director and each examiner and other division employee used in an examination conducted under ORS 725.312 and for extra services provided a licensee under 725.185(2).

(3) Notwithstanding the rate of charge fixed by section (2) of this rule:

(a) If an examiner from the division or the director is required to travel out of state to conduct the examination or provide extra services, the rate of charge payable by the licensee is $75 an hour per person, plus actual cost of travel. Actual travel costs include air fare, lodging, food, car usage out of state, mileage to the Oregon airport and return, and travel time beginning from the departure time and ending at the departure time at the destination city;

(b) If the extra services or examination is performed by a consultant hired by contract for the particular service or examination, the charge payable by the licensee is the actual cost to the division of the contract consultant.

(4) As used in this rule, "extra services" means any attention other than an examination given under ORS 725.310.

(5) In addition to the charges fixed by sections (2) and (3) of this rule, the director will collect from a licensee any additional costs directly attributable to extra services given the licensee under ORS 725.185 or a special examination given the licensee under ORS 725.310.

(6) The director may by order reduce the fees assessed for any specific year.

Stat. Auth.: ORS 725.185
Stats. Implemented: ORS 725.185
Hist.: FID 8-1985, f. & ef. 12-31-85; FCS 2-1988, f. 1-29-88, cert. ef. 2-1-88; Renumbered from 805-075-0015; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 1-1989, f. 1-18-89, cert. ef. 2-1-89; FCS 1-2001, f. 1-22-01, cert. ef. 2-1-01; FCS 4-2003, f. 12-30-03 cert. ef. 1-1-04; FCS 4-2004, f. 11-1-04, cert. ef. 1-1-05; FCS 3-2005, f. & cert. ef. 9-6-05; FCS 1-2008, f.& cert. ef. 1-28-08; FCS 2-2009, f. & cert. ef. 2-3-09; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 7-2013(Temp), f. 12-31-13, cert. ef. 1-1-14 thru 6-30-14; Administrative correction, 7-24-14; FCS 3-2014, f. & cert. ef. 8-25-14

441-730-0050

Notes and Agreements

(1) All forms of notes and agreements pertaining to loans and security for loans used by a licensee must be so worded that they comply with all provisions of ORS Chapter 725 and these rules.

(2) Any forms or agreements required or authorized by federal statute or regulations and in compliance with those statutes or regulations are considered in compliance with and authorized by ORS Chapter 725.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.120 & 725.320
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0030; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0060

Loans Not to Be Payable on Demand; Exception

(1) Except as provided by section (2) of this rule, a loan shall not be made payable on demand.

(2) A loan may provide that, if there is a default under the note or collateral security agreement, the loan may become due and payable immediately or on demand.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.050
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; Renumbered from 805-075-0040

441-730-0070

Advertising Regulations

(1) A licensee or other person must not, in any advertisement printed, displayed, published, distributed, or broadcasted, including on the Internet, by the licensee or on the licensee's behalf include any reference to the supervision of the business of the licensee by this state or any department or official of this state, except the phrase "licensed under the Oregon Consumer Finance Act" or "subject to state regulation" or both.

(2) A licensee or other person must not, in any advertisement printed, displayed, published, distributed, broadcast, including on the Internet, by the licensee or on the licensee's behalf, use any name other than the name under which the license is issued.

(3) A licensee must retain a copy of all advertising for the period beginning with the date of the last examination in a designated licensed office, or with the prior approval of the director, at another location until an examiner has reviewed the material.

(4) Notwithstanding the provisions of sections (1) and (2) of this rule:

(a) A licensee that makes and closes the majority of loans in a licensed location must prominently post their license in a manner conspicuous to the public; or

(b) If a licensee makes and closes the majority of loans electronically, they must prominently post their license on their website and at their licensed location in a manner conspicuous to the public.

(5) The posted license shall state that the business is licensed and regulated by the Department of Consumer and Business Services, and will include the Department’s toll-free telephone number for public inquiries or complaints.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.060
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renum?bered from 805-075-0045; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 3-2010, f. 3-18-10, cert. ef. 3-22-10; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0080

Qualifications of Person in Charge of Licensed Office

(1) A loan licensee must not place any person in charge of a licensed office unless the person has a thorough understanding of ORS chapter 725 and these rules.

(2) A licensee must place the experienced person as described in OAR 441-730-0025(2) in its licensed office.

(3) Notwithstanding section (2) of this rule, if the licensee holds a license for more than one location or if the experienced person described in OAR 441-730-0025(2) is employed outside of Oregon, the licensee may place a qualified person with no less than one year's traditional lending experience in charge of each licensed office provided the experienced person described in OAR 441-730-0025(2) supervises the lending operations of each location.

(4) At the request of the applicant and in the sole discretion of the director, education, extensive training or other business experience may be substituted for the one year of relevant lending experience required in section (3) of this rule.

(5) Unless a licensee requires all loan underwriting decisions be forwarded to an experienced person at another location or uses a formalized grading system, a licensee must employ or place a qualified person as described in this rule at each licensed office to be in charge of and oversee the lending operations of the office. A licensee must provide the director with a current resume for any new manager employed or placed at a licensed office within 30 days of the date of their employment.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.140, 725.310 & 725.330
Hist.: BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0050; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0100

Licensee Officers and Directors

(1)(a) A licensee may add a new executive officer, owner, director, or managing partner at any time after the licensee has been granted a license if after the addition at least one-half of the executive officers, owners, directors, or managing partners can demonstrate verifiable recent lending experience in banking, consumer finance, or mortgage lending as required by OAR 441-730-0025.

(b) If a licensee adds a new executive officer, director, partial owner, or managing partner under this section, the licensee must provide a current resume for such new persons demonstrating verifiable recent lending experience in banking, consumer finance, or mortgage lending to the director within 30 days of their appointment or selection.

(2) If an existing or new executive officer, director, partial owner, or managing partner of the licensee gains a controlling interest in the company after the license has been granted, the licensee must notify the director within 30 days.

(3) An officer or director of a licensee addressed in an order issued by the director under ORS 725.315 or 725.317 may, within 30 days after the date the order is issued and served, request a hearing on the order as provided for contested cases by 183.310 to 183.500, and the rules of the director adopted pursuant thereto.

(4) A person who is suspended or removed under ORS 725.315 or 725.317 must not conduct any of the business of the licensee or have access to the books, records, or assets of the licensee either as an officer, director, partner, stockholder, or employee without receiving permission from the director:

(a) During the period of the suspension; or

(b) After the effective date of the removal.

(5) A licensee subject to an order of suspension under the provisions of ORS 725.230(2) may, within 90 days after the date the order is issued or served, request a hearing on the order as provided for contested cases by 183.310 to 183.500 and the rules of the director adopted pursuant thereto.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.315 & 725.317
Hist.: BB 3-1978, f. 5-16-78, ef. 7-1-78; Renumbered from 805-075-0057; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0110

Accounting Records of Licensee

(1) The accounting records of a licensee must reflect a complete segregation of the loan transactions from any other business in which the licensee may be engaged.

(2) The licensee must maintain separate control accounts or other acceptable records to reflect such segregation for:

(a) Loans receivable;

(b) Charges; and

(c) Repossessed property and sales of repossessed property.

(3) The receipt and disbursement of all charges charged or collected must be fully accounted for.

(4) Each licensee must maintain a log of:

(a) Loans made, listing each loan in sequence by number or date of loan and showing:

(A) The amount of the loan;

(B) The type of security taken;

(C) The rate of interest charged; and

(D) The types of insurance for which premium charges have been made in connection with the loan and which are payable by the borrower.

(b) Loans prepaid in full by credit life insurance showing for each loan so paid;

(A) The borrower's name and account number;

(B) The date of death of the borrower;

(C) The date proof of death was received by the licensee; and

(D) The disposition of the insurance proceeds with substantiating documents.

(c) Any litigation initiated by the licensee showing for each proceeding:

(A) The borrower's name and account number;

(B) The court where the proceeding is filed;

(C) The date of filing; and

(D) When applicable, the date, and terms of any disposition of the matter.

(d) Information on files sent to a collection agency showing, for each file:

(A) The borrower's name, the account number;

(B) The original date of the loan, the due date of the loan, or last renewal or extension;

(C) The date the loan was sent to the collection agency;

(D) The name of the collection agency; and

(E) The date and amount of monies received from the collection agency.

(F) A separate log of files sent to a collection agency need not be maintained provided the information is available in existing records at the time of examination.

(5) Any public or private sale of repossessed property by a licensee must be made in good faith and in a commercially reasonable manner. If there is no recognized market for the property, such as a motor vehicle auction house or similar sales process that is commonly used to sell property of the kind repossessed by the licensee, prior to a private sale of repossessed property, the licensee must obtain, from persons who are not directly or indirectly related to the licensee, sufficient written bids to establish market value. The written bid must contain sufficient information to identify the property being bid on.

(6) When a judgment is entered in a court proceeding initiated by a licensee on a loan, the licensee forthwith must place in the related loan file either:

(a) A copy of the judgment entered in the proceeding; or

(b) A statement verified by a representative of the licensee, detailing the essential provisions of the judgment.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0060; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0120

Account Record to Be Maintained for Each Loan

(1) The licensee must maintain a separate individual account record for each loan made to any borrower showing:

(a) The loan number;

(b) The date of the loan;

(c) The name and address of the borrower;

(d) A brief description of the security, if any;

(e) The agreed interest rate or rates and the amount of each charge, if any;

(f) The terms of repayment, including the expiration date of the loan, and any modifications of the terms.

(g) The amount of each payment made on the loan and in accordance with sections (2) and (3) of this rule, how the payment is allotted to principal, interest and charges;

(h) The date of the final entry when the loan is paid in full or otherwise finally settled or closed; and

(i) A clear, brief explanation of any other entries that result in the reduction or addition to the principal balance or interest.

(2) The account record for a daily interest loan must show, for each loan payment received:

(a) The amount, if any, applied to interest;

(b) The date to which the interest is paid;

(c) If payment is insufficient to pay interest to date, the dollar amount short;

(d) The amount applied to principal, if any; and

(e) The unpaid principal balance of the loan, if any.

(3) The account record for a precomputed-interest loan may comply with section (2) of this rule or it must show, for each loan payment received:

(a) The amount of the payment applied to installments, identifying which installments;

(b) The amount applied to any default charges; and

(c) The unpaid balance of the loan and charges, if any.

(4) When a licensee makes advances to perform covenants, the account record must specify:

(a) The amount of the advance which is added to the principal of the loan.

(b) A brief description of what the advance is paying; and

(c) When the advance is to purchase insurance coverage, the type and extent of coverage.

(5) All entries to the account record made by the licensee must be accurate and posted by close of business on the day the transaction occurred. If the licensee is unable to post a transaction as required by this section, the posting when made must reflect the actual date of the transaction.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renum?bered from 805-075-0065; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0125

Residential Borrower Files for Mortgage Loans

(1) In addition to any records required to be kept under OAR 441-730-0110 and 441-730-0120, a consumer finance company that makes or offers to make a residential mortgage loan must ensure that the following are prepared and maintained in the loan file:

(a) A summary of the key terms of the approval of the loan;

(b) A copy of each residential mortgage loan application with the signature and the unique identifier of the mortgage loan originator who took or received the application, who offered to negotiate or negotiated the loan, or who closed the loan;

(c) A copy of all documentation relied upon in making the loan decision;

(d) A copy of the borrower executed note and executed trust deed;

(e) A copy of all correspondence with the borrower in writing or in a format easily converted to writing;

(f) A copy of the good faith estimate prepared under Regulation X, 24 C.F.R. Part 3500 and translated as applicable to comply with ORS 86A.198;

(g) If required to be prepared for the residential mortgage transaction, a copy of the final credit report, or the report relied upon for the loan decision, if other than the final credit report, received on the borrower including documentation of borrower payment history;

(h) If required to be prepared for the Oregon residential mortgage transaction, a copy of any disclosure required by Regulation Z, 12 C.F.R. Part 226 and translated as applicable to comply with ORS 86A.198, including, but not limited to, the Truth in Lending disclosure statement;

(i) A copy of the final HUD-1 settlement statement required by 24 C.F.R. Part 3500; and

(j) A copy of the statement that notifies the borrower that loan documents associated with the transaction will be in English and that advises the borrower to obtain appropriate assistance, with any necessary translations as required by ORS 86A.195.

(2) Records retained under this rule may be kept in a written format or in a format easily converted to writing.

Stat. Auth.: ORS 86A.242
Stats. Implemented: ORS 725.230
Hist.: FCS 3-2010, f. 3-18-10, cert. ef. 3-22-10

441-730-0130

Maintaining Index of Obligors

A licensee must maintain in each of its licensed offices an alphabetical index or other index system approved by the director, of every person obligated, directly or contingently, on a loan serviced at that office.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0070; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0140

Records and Files Required to Be Kept at Servicing Office; Copies of Loans Transferred; Centralized Accounting Office Exception

(1) A licensee must maintain the accounting records and loan files for active loans at the licensed office where the loans are serviced.

(2) Whenever an active loan is for any reason transferred to another licensed office in this state, the licensee must retain in the transferring office an exact copy of the individual account record and supporting legal documents.

(3) Whenever an active loan is for any reason transferred to another licensed office, the licensee must retain in the transferring office an exact copy of the account record to which has been added the date of transfer and the name and address of the new location of the account. However, if a bulk sale or similar transfer of loans not in the ordinary course of business is made to another licensed office, the licensee may, with the prior approval of the director, make other provisions for the retention of copies of records and files and for the examination of accounts in the receiving office.

(4) Whenever a licensee sends an active loan to another licensed location, the licensee must retain the original record or an exact copy of the account record in the originating office.

(5) Notwithstanding sections (1) through (4) of this rule, a licensee may, with the prior approval of the director, maintain the accounting records and loan files for active loans at a location other than the servicing office if:

(a) The other location is established by the licensee to provide centralized accounting for one or more licensed offices;

(b) Off-site maintenance of the records and files will not hinder prompt servicing of the loans by the servicing offices;

(c) The director, and any duly appointed examiners or agents of the director, have the right of free access to the records and files of the licensee at the other location; and

(d) The other location provides adequate security for the licensee's records and files.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; BB 1-1983, f. 3-29-83, ef. 4-1-83; Renumbered from 805-075-0075; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 6-2010, f. & cert. ef. 6-4-10

Computation of Interest and Charges

441-730-0150

Consolidating Sales Financing into Direct Loans

(1) A licensee shall not make a direct loan to pay off a retail installment contract owned by or assigned to the licensee if the loan bears a higher APR than that borne by the contract unless the loan is of substantial benefit to the borrower. A substantial benefit would exist in circumstances including, but not limited to one or more of the following:

(a) The retail installment contract is in default two installments or more;

(b) The amount of the individual installments payable on the direct loan will be lower than the amount of the individual installment being paid on the contract;

(c) The direct loan pays off one or more obligations in addition to the retail installment contract;

(d) The principal amount of the direct loan exceeds the sum of the unpaid installments on the retail installment contract by not less than 20 percent of the sum of the unpaid installments, or by $200, whichever is less.

(2) As used in this rule, "retail installment contract" has the meaning given the term by ORS 83.010 and 83.510.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.320
Hist.: BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0103; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09

441-730-0160

Daily-Interest Computation

(1) When interest on a loan is computed on a daily basis using a 360-day factor, the maximum charge for each day must be 1/30 of the monthly rate. In determining the elapsed time to compute interest on any such loan, each calendar month shall be treated as containing 30 days. However, when the period for which interest is computed includes the last day of the month:

(a) If the month has 31 days, the 31st day must be ignored:

(b) If the month is February, two days must be added to the period, except in leap year when only one day may be added.

(2) Interest on a loan may be computed on a daily basis using a 365-day factor or, in a leap year, a 366-day factor. In determining the elapsed time to compute interest or a refund of interest, on such a loan, the maximum charge for each day must be 1/365th of the annual rate, except in a leap year when the maximum charge for each day must be 1/366th of the annual rate.

Stat. Auth. ORS 725.320 & 725.505
Stats. Implemented ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0105; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0170

Precomputed Interest

(1) When a loan contract is repayable in substantially equal and consecutive monthly installments of principal and interest combined, interest may be precomputed and added to the principal. Interest may be precomputed even though the first installment period is more or less than one month.

(2) If the first installment period exceeds one month, the amount of the agreed monthly interest charge must be reduced for the first period by 1/30th of the amount for each extra day in the first period. If the first installment period is less than one month the amount of the agreed monthly interest charge must be reduced for the first period by 1/30th of the amount for each day that the first installment period is less than one month.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0110; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0180

Deferred Payment on Precomputed Loan

(1) When unpaid installments are deferred as provided by ORS 725.340(2)(b), the licensee must give the borrower written evidence of the agreed deferral showing:

(a) The amount of the deferral charge;

(b) The new due date of the first deferred installment; and

(c) The new due date of the final deferred installment of the loan.

(2) The licensee must also note the due date of the final deferred installment and the amount of the deferral charge on the borrower's account record.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.340(2)
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0120; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0200

Action on Precomputed Loan; Rebate Required

(1) When a licensee brings an action against a borrower on a precomputed loan, if the action comes to judgment prior to the due date of the final installment, the licensee must tender a rebate to the borrower of interest unearned as of the date of the judgment. The rebate must be computed in accordance with ORS 725.340(2)(c) as if the loan were prepaid in full on the date of the judgment.

(2) Rebate of any deferral charge must be determined on the US Actuarial Rule.

(3) Licensees may collect prejudgment interest awarded by the court, but may not estimate interest based upon an estimate of the judgment date.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0130; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0205

Limitation on Charging a Prepayment Penalty by Consumer Finance Licensees

A licensee may not charge a penalty for prepayment of all or part of the unpaid balance of a loan where:

(1) A licensee refinances a loan they own.

(2) The licensee has repossessed any collateral offered for the loan, sold the collateral and applied the proceeds of the sale towards the unpaid balance of the loan.

(3) The licensee forecloses on property and applies any proceeds realized from the foreclosure toward the unpaid balance of the loan.

(4) The licensee exercises an option contained in the loan agreement to require immediate repayment of all or part of the unpaid balance of the loan.

(5) All or part of the loan balance is repaid with insurance benefits resulting from the death of the borrower.

(6) The licensee demands repayment of all or part of the unpaid balance of the loan.

(7) The loan is a home equity line of credit or an unsecured line of credit.

Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.360
Hist.: FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0210

Recomputation of Interest on Delinquent Precomputed Loan

If two or more installments of a precomputed loan are delinquent, the licensee may elect to recompute interest and other charges. A recomputation shall be made at the agreed interest rate, or at the APR, from the date the loan was made, on actual unpaid balances, until the date the loan is paid in full. When such an election is made, the licensee shall recompute the interest charges from the date of the loan to the date of the election by applying every payment received prior to the election first to interest and then to the unpaid principal as of the date the payment was received. Recomputed interest so received is in lieu of the precomputed interest, including any deferral charges, and default charges which accrued prior to the date of the election.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0135; FCS 3-2009, f. & cert. ef. 6-2-09

441-730-0220

Insurance Premium Charges; Refunds

If a loan contract is prepaid in full by cash, renewal, refinancing, or a new loan, one month or more before the final installment due date, the licensee shall refund to the borrower that proportion of the credit life and credit health insurance premium collected which the sum of the monthly balances scheduled to follow the installment date nearest the date of prepayment in full bears to the sum of all scheduled monthly balances, as computed in accordance with the rule commonly know as the "rule of seventy-eights." However, a licensee is not required to make a refund if the unearned insurance premium is less than $2 and the loan is prepaid in full by cash.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0145

441-730-0230

Insurance Benefits Paid to Licensee

(1) When a death claim settlement is made on a borrower's account and the credit life insurance premium charged was based on the total of installments contracted, including both principal and anticipated interest, the licensee shall credit the borrower's account or estate in an amount not less than the total of all installments including both principal and unearned interest which were insured and scheduled to follow the date of the borrower's death. The licensee is entitled to accrue interest for not to exceed 30 days after proof of death is received by the licensee or until the date the insurance check is received, whichever is first to occur. A copy of the insurance check shall be retained in the file for auditing purposes.

(2) If premium charges for other types of credit life and credit health insurance have been charged to the account of the deceased borrower, the unearned charges shall also be credited to the borrower's account or estate from date of death.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0150

Licensee's Duties to Borrower

441-730-0240

Statement of Loan

(1) In addition to the statement required by ORS 725.360(1), the licensee shall, at the time each loan is made, deliver to the borrower:

(a) A written statement that payment in any amount may be made in advance at any time and, if the loan contains a prepayment penalty, the statement shall comply with the notice required by ORS 82.160(1).

(b) A detailed schedule showing the manner in which the proceeds of the loan have been disbursed or are to be disbursed on behalf of the borrower, including:

(A) Amounts applied to payment of the balance of an existing loan with the licensee;

(B) Amounts paid to others as authorized and designated by the borrower;

(C) Amounts paid for insurance premiums, itemizing the types of insurance that the borrower has approved in writing and, if the coverage of any policy is less than the principal balance or the full term of the loan, state the balance and term covered.

(D) Amounts paid for other identifiable charges the borrower has approved in writing;

(E) Amounts retained for filing, releasing, recording, satisfaction, reconveyance, license, title transfer, and similar fees, itemizing the purpose of each fee; and

(F) Amounts remaining that will be paid to the borrower.

(c) When requested by the borrower, a copy of the security agreement, trust deed, or mortgage signed by the borrower, together with any attached schedule of property pledged by the borrower.

(2) When copies are requested by any other person obligated directly or contingently on the loan, the licensee shall also deliver a copy of the statements and other documents required by ORS 725.360(1) and section (1) of this rule to such other person whether the person is obligated as a maker, co-maker guarantor, accommodation maker, endorser or otherwise.

(3) The statement required by section (1) of this rule may include disclosures under applicable federal law that a licensee is required to make to the borrower at the time the loan is made.

(4) The licensee shall retain a copy of the statement of loan delivered to the borrower for at least two years after final entry has been made on the loan records.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.330, ORS 725.340 & ORS 725.360
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0170; FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01

441-730-0246

Contents of Foreclosure Notices

The sender of a notice form required by ORS 86.737 must enter in the form and format adopted by this rule:

(1) The statewide telephone contact number for handling consumer queries as 855-480-1950;

(2) The telephone number of the Oregon State Bar’s Lawyer Referral Service as 503-684-3763;

(3) The Oregon State Bar’s Lawyer Referral Service toll-free number as 800-452-7636;

(4) The website address of the Oregon State Bar as: http://www.osbar.org;

(5) The website address for the organization providing more information and a directory of legal aid programs as http://www.oregonlawhelp.org

(6) The toll-free consumer mortgage foreclosure information number as 855-480-1950; and

(7) Information on federal loan modification programs as http://www.makinghomeaffordable.gov/.

Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08, cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f. 12-2-09, cert. ef. 12-7-09; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 13-2011(Temp), f. & cert. ef. 12-15-11 thru 6-12-12; Administrative correction, 6-27-12

441-730-0250

Receipt to Be Furnished to Borrower Upon Request

(1) When the borrower requests a receipt for a payment on a loan for which interest is to be computed on a daily basis, the receipt shall specify:

(a) The amount applied to interest, if any;

(b) The date to which the interest is paid, or the dollar amount short, if payment is insufficient to pay interest to date;

(c) The amount applied to principal, if any; and

(d) The unpaid principal of such loan, if any.

(2) When a borrower requests a receipt for a payment on a loan that is contracted for interest to be precomputed, the receipt shall specify:

(a) The amount of the payment applied to the loan and any default charges; and

(b) The amount of the unpaid balance of the loan and charges, if any.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.360
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0175; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09

441-730-0255

Payoff Information to be Furnished to Borrower Upon Request

(1) When a borrower requests the payoff information on a loan and specifies a payoff date, the licensee must promptly, but in no case later than three business days, provide the requested information.

(2) When a borrower does not specify a payoff date, the licensee must calculate the payoff amount for a date no later than 10 days after the date of the request, and the amount must be provided within three business days of the borrower’s request. When a licensee provides a payoff amount, it must also advise the borrower, verbally or in writing, that interest will continue to accrue past the payoff date if the loan is not paid in full.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.360
Hist.: FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0260

Advances to Perform Covenants

(1) Within a reasonable time after advancing any sum pursuant to ORS 725.340(3), the licensee must furnish the borrower a written statement showing:

(a) The amount of the sums advanced and, any charges with respect to such sums advanced;

(b) Any revised payment schedule; and, if the duties of the borrower performed by the licensee pertain to insurance.

(c) A brief description of the types of insurance paid for the by licensee.

(2) The amount advanced by the licensee may be added to the unpaid balance of the loan and may bear interest not to exceed the rate permitted by ORS 725.340(3). However, a licensee may not advance any sums under ORS 725.340(3) or add any such advances to the unpaid balance of a loan unless the borrower's loan contract provides for such advances and additions.

Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340(3)
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from 805-075-0180; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0280

Prohibited Provisions in Loan Contract Provisions

A licensee may not use a contract evidencing a loan that contains any of the following provisions:

(1) A hold harmless clause;

(2) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in the event of suit or process;

(3) A provision in which the consumer agrees not to assert any claim or defense arising out of the contract against the licensee or any holder in due course.

(4) An executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held, owned by, or due to the consumer, unless the waiver applies solely to property subject to a security interest executed in connection with the loan.

Stat. Auth.: ORS 725.505
Stats. Implemented: ORS 725.360
Hist.: FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 4-2001, f. & cert. ef. 3-27-01; FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 6-2010, f. & cert. ef. 6-4-10

441-730-0320

Licensee Reporting

(1) Licensees are required to file their annual report by March 31 of each year. Licensees must also provide known information on any felony conviction, or any conviction involving theft or fraud, of any executive officer, director, managing partner, or the manager of any office location that occurred during the reporting period that had not already been reported to the director. This applies to:

(a) A new qualified person or office manager;

(b) A new experienced person;

(c) Material changes in business plan; or

(d) Any criminal conviction entered against any person named in the application.

(2)(4) In addition, a consumer finance licensee employing one or more mortgage loan originators shall file a report of condition with the National Mortgage Licensing System and Registry of the consumer finance licensee’s business and operations in Oregon related to residential mortgage transactions. The report shall be filed within 45 days following the end of each calendar quarter.

Stat. Auth.: ORS 725.505, 86A.242
Stats. Implemented: ORS 725.190, 86A.239
Hist.: FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09; FCS 3-2010, f. 3-18-10, cert. ef. 3-22-10; FCS 6-2010, f. & cert. ef. 6-4-10; FCS 4-2012, f. & cert. ef. 8-1-12

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