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REAL ESTATE AGENCY

 

DIVISION 49

Escrow Agent Licensing

 

863-049-0000

Applicability and Purpose

This division applies to escrow agents and those who wish to become escrow agents. Its purpose is to set forth the requirements and processes for initial licensing, changes in ownership and individuals in charge of escrow operations, notice to the Agency of other changes, and license renewal.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0005

Definitions

As used in this division, unless the context requires otherwise:

(1) “Agency” means the Oregon Real Estate Agency.

(2) “Bank” is defined in ORS 706.008.

(3) “Commissioner” means Oregon Real Estate Commissioner.

(4) “Escrow” is defined in ORS 696.505.

(5) “Escrow agent” is defined in ORS 696.505.

(6) “Escrow operations” means any activity that is subject to regulation under ORS 696.505 to 696.590.

(7) “Escrow trust account” is defined in section 1, chapter 174, Oregon Laws 2009.

(8) “Trust funds” is defined in section 1, chapter 174, Oregon Laws 2009.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.505 & 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0010

Initial License Application Form and Content

(1) An applicant for an escrow agent’s license may be either a legal entity or an individual, but the requirements for each are slightly different. All applicants must submit:

(a) An initial license application on an Agency-approved form;

(b) Additional information required by OAR 863-049-0015 for legal entities or OAR 863-049-0020 for individuals;

(c) The information required by OAR 863-049-0025 concerning criminal records checks and fingerprint cards; and

(d) The fees authorized by ORS 696.530 and OAR 863-005-0090.

(2) The application form for all applicants must contain the following information:

(a) The applicant’s legal name;

(b) The assumed business name, if any, as registered with Oregon Secretary of State;

(c) The applicant’s Federal Tax ID Number;

(d) The applicant’s fiscal year end;

(e) The applicant’s main office address, phone number, FAX number, and if applicable, Web site address;

(f) If the applicant has any branch offices, the address, phone number, and FAX number of such offices;

(g) The authorized contact for the applicant, including the individual’s name, title, address, phone number and, if applicable, e-mail address and FAX number;

(h) The name, title, date, and signature of the individual authorized to submit the application and a certification that this individual is so authorized; and

(i) For a legal entity, the application form must also contain the names of the following:

(A) Any individual or legal entity holding an ownership interest in the escrow agent of more than five percent,

(B) All corporate officers in charge of escrow operations, and

(C) All individuals in charge of escrow operations.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0015

Additional Information for Legal Entities

(1) In addition to the license application form, an applicant that is a legal entity must submit the following:

(a) A corporate surety bond in the amount required by ORS 696.525 or one of the following:

(A) Evidence of a deposit in an amount equal to the surety bond as provided in ORS 696.527, or

(B) A written request to the commissioner for a waiver of the surety bond or deposit, as provided in ORS 696.527(4);

(b) A document signed and dated by the individual authorized to submit the application containing the following:

(A) A general plan and description of the character of the business;

(B) A history of the formation of the escrow business, including when the business was established; and

(C) Except as provided in section (2) of this rule, a description of:

(i) The experience or training of the applicant’s employees in the escrow business,

(ii) Information showing that the entity has at least three years of collective experience among its personnel in administering escrows in Oregon or in a state with comparable escrow laws,

(iii) The applicant’s escrow business in another state, or

(iv) A testimonial of an escrow agent licensed in this state concerning the applicant’s training and escrow experience.

(c) Information about the applicant’s financial resources prepared by a certified public accountant in accordance with Generally Accepted Accounting Principles;

(d) Resumes of the individuals submitting the fingerprint cards and criminal records check clearance applications required by this division;

(e) A resolution of the entity authorizing the individual to sign and submit documents;

(f) A certificate of existence shown by current documentation from the Oregon Secretary of State or other appropriate state agency that the applicant is active and in good standing; and

(g) Current documentation from the Oregon Secretary of State that any assumed business name the escrow agent intends to use in its escrow operations is active and in good standing.

(2) If the applicant does not meet the three-year experience requirement contained in this rule, the applicant may seek a waiver from the commissioner by submitting information showing that the applicant has other qualifications sufficient to ensure the protection of the public.

(3) The Agency may require the applicant to submit any additional information that the Agency considers necessary to demonstrate the applicant’s qualifications to transact escrow business.

(4) Every license application must be accompanied by the license fee authorized by ORS 696.530. The fee applies to all periods of the year. The Agency does not pro-rate license fees.

(5) Every license application must be accompanied by criminal records check clearance applications and fingerprint cards as specified in OAR 863-049-0025 (Criminal Records Check Clearance Application and Fingerprint Card) and an additional fee as specified in 863-005-0090 sufficient to recover the costs of processing any required fingerprint information and securing any criminal offender information for the following:

(a) Any individual holding an ownership interest in the escrow agent of more than five percent,

(b) All corporate officers in charge of escrow operations, and

(c) All individuals in charge of escrow operations.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0020

Additional Information for Individual Applicants

(1) In addition to the license application form, an individual applicant must submit the following documents:

(a) A corporate surety bond in the amount required by ORS 696.525 or one of the following:

(A) Evidence of a deposit in an amount equal to the surety bond as provided in ORS 696.527, or

(B) A written request to the commissioner for a waiver of the surety bond or deposit, as provided in ORS 696.527(4);

(b) A document signed and dated by the individual submitting the application containing the following information:

(A) A general plan and description of the character of the business;

(B) A history of the formation of the escrow business, including when the business was established; and

(C) Except as provided in section (2) of this rule, a description of:

(i) The experience or training of the applicant’s employees in the escrow business,

(ii) Information showing that the individual has at least three years of experience administering escrows in Oregon or in a state with comparable escrow laws,

(iii) The applicant’s escrow business in another state, or

(iv) A testimonial of an escrow agent licensed in this state concerning the applicant’s training and escrow experience.

(c) Information about the applicant’s financial resources prepared by a certified public accountant in accordance with Generally Accepted Accounting Principles;

(d) Evidence that the individual is 18 years or older; and

(e) Resumes of the individuals submitting the fingerprint cards and criminal records check clearance applications required by this division;

(2) If the individual applicant does not meet the three-year experience requirement contained in this rule, the applicant may seek a waiver from the commissioner by submitting information showing that the applicant has other qualifications sufficient to ensure the protection of the public.

(3) The Agency may require the applicant to submit any additional information that the Agency considers necessary to demonstrate the applicant’s qualifications to transact escrow business.

(4) The license application must be accompanied by the license fee authorized by ORS 696.530. The fee applies to all periods of the year. The Agency does not pro-rate license fees.

(5) Every license application must be accompanied by criminal records check clearance applications and fingerprint cards as specified in OAR 863-049-0025 (Criminal Records Check Clearance Application and Fingerprint Card) and an additional fee as specified in 863-005-0090 sufficient to recover the costs of processing any required fingerprint information and securing any criminal offender information pertaining to the applicant for the following:

(a) The license applicant and

(b) All individuals in charge of the escrow operations.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0025

Criminal Records Check Clearance Application and Fingerprint Card

(1) The Agency conducts a criminal records check, makes a criminal background fitness determination, and either approves or denies a criminal background check clearance application under the provisions of OAR chapter 863, division 5. The Agency conducts this process on certain individuals, owners, or employees of an escrow agent license applicant as part of the initial application review and approval process. The Agency conducts this criminal records check process on certain individuals, owners, or employees of an escrow agent licensee as part of the application for changes in ownership or individuals who are in charge of escrow operations under OAR 863-049-045.

(2) As used in this rule, “applicant” means the individual applying for a criminal records check clearance under OAR chapter 863, division 5.

(3) The applicant must apply for a criminal records check clearance in writing on an Agency-approved form with all information provided and verified by the applicant.

(4) The criminal records check clearance application must include, but is not limited to, the following information:

(a) The applicant’s legal name, residence address, and telephone number;

(b) The applicant’s date and place of birth;

(c) The applicant’s Social Security Number; and

(d) Whether the applicant has ever been convicted of or is under arrest, investigation, or indictment for a felony or misdemeanor.

(5) The commissioner may require additional information from the applicant that the commissioner considers necessary for protecting the public.

(6) As provided in OAR 863-005-0090, all fingerprint cards, photographs, records, reports, and criminal offender information obtained or compiled by the Agency are confidential and exempt from public inspection. The Agency will keep such information segregated from other information on the escrow agent applicant or licensee and maintain such information in a secure place.

(7) If the Agency determines that additional information is necessary to process the application, the Agency may request such information in writing, and the applicant must provide the requested information in order to complete the application. If the applicant fails to provide the requested information, the Agency may determine that the application is incomplete and deny the application.

(8) An escrow agent license applicant who has otherwise qualified for the escrow agent’s license may not be considered for such license until each criminal records check clearance application has been approved or denied.

(9) If the Agency denies an individual’s criminal records check clearance application, the Agency will not approve the escrow license application.

(10) For the purposes of the Agency’s final approval of an initial application pursuant to OAR 863-049-0010 or a change of ownership pursuant to 863-049-0045, an approved criminal background check clearance for an individual is valid for 12 months.

Stat. Auth.: ORS 696.541 & 696.790
Stats. Implemented: ORS 696.511
Hist.: REA 2-1997, f. 6-18-97, cert. ef. 7-1-97; REA 4-1997, f. 11-24-97, cert. ef. 12-1-97; REA 10-2008, f. 12-15-08, cert. ef. 1-1-09; Renumbered from 863-050-0240 by REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0030

License Issue, Term, and Form

(1) The Agency will issue an escrow agent’s license to an applicant after determining that the applicant meets the license requirements contained in ORS 696.505 to 696.590 and this division and receiving:

(a) The license application form and documents required under this division, and

(b) The fees authorized by ORS 696.530 and OAR 863-005-0090.

(2) A licensee may engage in escrow operations from the date the license is issued until the license expires or is revoked, surrendered, or suspended.

(3) All escrow agents’ licenses expire on June 30 of each year. A license may be renewed by filing a license renewal application as provided in OAR 863-049-0035 and paying the required fee.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511, 696.530
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0035

License Renewal

(1) An escrow agent’s license expires on June 30 of each year. A licensee may not engage in escrow operations after a license expires.

(2) The Agency will renew an escrow agent’s license when the Agency has received the following:

(a) The renewal fee authorized by ORS 696.530, and

(b) An Agency-approved renewal application form that includes the training certification and contact information required by ORS 696.511(6).

(3) A licensee has a 30-day grace period after June 30 in which to renew the expired license. The licensee may not engage in escrow operations during that time. No late fee is required for late renewal.

(4) If the Agency renews an expired license during the 30-day grace period, the renewed license is effective as of the renewal date and is not retroactive. The renewed license does not authorize any escrow operations that occurred between July 1and the license renewal date.

(5) If the licensee fails to renew a license by the end of the 30-day grace period but wishes to engage in escrow operations, the licensee must submit a new initial license application pursuant to OAR 863-049-0010 and pay all required fees.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511, 696.530
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0040

Notice to Agency of Changes

(1) An escrow agent must notify the Agency within five calendar days on an Agency-approved form of the following changes in the information contained in an escrow agent license application: main or branch office location changes, branch office establishment, and branch office closure.

(2) An escrow agent must notify the Agency on an Agency-approved form ten business days before ceasing business operations.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0045

Application for Approval of Changes to Ownership or Individuals in Charge of Escrow Operations

(1) An escrow agent must apply to the Agency for approval of changes in ownership or changes to individuals in charge of escrow operations. The application must be submitted on an Agency-approved form and include resumes, criminal records check clearance applications, fingerprint cards, and fees required under OAR 863-005-0090.

(2) The following changes are subject to this rule:

(a) Any individual who will hold an ownership interest in the escrow agent of more than five percent;

(b) Corporate officers who will be in charge of escrow operations for an escrow agent; and

(c) Other individuals who will be in charge of escrow operations for an escrow agent.

(3) The licensee may not allow the proposed change in ownership interest in (2)(a) of this rule to occur until the Agency approves the criminal records check clearance and notifies the licensee in writing.

(4) A licensee must submit an application for a change to corporate officers or individuals in charge of escrow operations under (2)(b) or (c) of this rule no later than five business days after the change.

(5) If the Agency denies a criminal records check clearance application submitted under (4) of this rule, the Agency will submit written notice to the individual and to the licensee, and the licensee must immediately remove the individual who was denied clearance from any duties as a corporate officer of individual in charge of the licensee’s escrow operations.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.511
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0050

Letters of Credit

(1) For a certified, annually renewable letter of credit to be satisfactory to the commissioner under ORS 696.527 in lieu of a surety bond or deposit, the letter of credit must:

(a) Be executed by a bank;

(b) Name the State of Oregon Real Estate Agency as beneficiary;

(c) Make no reference to any other conditional agreement, document, or entity;

(d) Be annually renewable, without amendment, for successive one-year periods from the stated expiration or any future expiration date until such time as notice is given in accordance with this section;

(e) Provide for no less than sixty (60) calendar days notice to the Agency as beneficiary of any election not to renew the letter of credit; and

(f) Be payable by sight draft or upon presentation at an office of the bank by an authorized representative of the beneficiary accompanied by a signed statement certifying that “The attached order from the Commissioner of the Oregon Real Estate Agency represents that the escrow agent is in violation of ORS 696.505–696.590.”

(2) The commissioner may require that a Letter of Credit include additional terms and conditions.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.527
Hist.: REA 2-2004(Temp), f. & cert. ef. 1-15-04 thru 6-25-04; REA 4-2004, f. 4-28-04 cert. ef. 5-3-04; REA 10-2008, f. 12-15-08, cert. ef. 1-1-09; Renumbered from 863-050-0035 by REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

863-049-0055

Annual Report and Financial Statements

(1) An escrow agent must submit to the Agency by March 31 of each year an Annual Report for the previous calendar year consisting of the following:

(a) A schedule of the amount of trust funds received and disbursed each month on collection escrows and the amount of trust funds received and disbursed each month on closing escrows. The schedule must include the beginning balance and the ending balance of each such account and be prepared based upon the individual escrow ledgers for such accounts;

(b) A list of closing escrows that have been open for more than twelve months as of December 31 of the previous year, showing the escrow number, date opened, names of principals, the escrow ledger balance, and a statement of the reason the escrow has remained open for more than one year;

(c) The amount of clients' trust funds received and disbursed each month by the escrow agent while acting as a trustee under a trust deed pursuant to ORS 86.705 to 86.795. The schedule must include the beginning balance and the ending balance for each account. The schedule must be prepared from the outstanding individual escrow ledgers for such accounts;

(d) An executed general authorization to inspect all clients' trust accounts set up as required by ORS 696.578(1) on an Agency-approved form;

(e) A list of outstanding checks as of December 31 of the previous year, listed by check number, issue date, payee, and amount, for all escrow trust accounts; and

(f) Any other information the Agency deems necessary to administer the provisions of ORS 696.505 to 696.590.

(2) An escrow agent must submit to the Agency, not later than 150 days after the end of the agent’s tax or accounting year, a set of the agent’s financial statements as follows:

(a) The financial statements must be prepared in accordance with generally accepted accounting principals by a certified public accountant or other qualified person approved by the Agency.

(b) The person preparing the financial statements must provide a statement of the type of the presentation made and include all appropriate notes to the financial statement.

(c) The financial statements must include the following:

(A) A balance sheet as of the agent’s year end;

(B) Statement of profit and loss;

(C) Statement of cash flows;

(D) Statement of retained earnings; and

(E) Any other changes in capital accounts for the year then ended.

(d) As part of the report submitted under this rule, the escrow agent must authorize the commissioner or the commissioner's authorized representative to examine and verify any asset or liability shown on the balance sheet. The authorization must be in writing and submitted to the Agency with the report.

(3) The commissioner may grant an extension of time, to be determined by the commissioner, for filing reports submitted under sections (2) or (3) of this rule if the agent so requests in writing and provides sufficient reason why the agent cannot file the reports by the specified date.

(4) The reports required by this rule must be signed by the escrow agent or appropriate corporate officer of the escrow agent attesting to the accuracy of the information contained in the report.

Stat. Auth.: ORS 696.541
Stats. Implemented: ORS 696.534
Hist.: REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

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