An Act To Register Nonbank Loan Officers
Maine Legislature, Session 122, LD 1303
Committee: Insurance and Financial Services
Sponsors: GLYNN
Amends: 9-A MRSA §2, 9-A MRSA §10

Legislative Document 
No. 1303 
H.P.900 
House of Representatives, March 15,2005 
An Act To Register Nonbank Loan Officers 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative GLYNN of South Portland. 
Printed on recycled paper 
'!rl~ /h.11lQ£:~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 9-A MRS A §1-301, sub-§22-A is enacted to read: 
A. 
"Loan officer" means an individual who is employed or 
retained and supervised by a licensed supervised lender that is 
not 
a 
supervised financial organization, 
or by 
a 
registered 
credit services organization, whose primary job responsibilities 
include direct contact with mortgage applicants and who accepts 
applications for and originates, negotiates, sO.Hcits, arranges 
for Or obtains mortgage loans. 
"Loan officer" does not include 
employees who conduct purely administrative or clerical tasks. 
"Loan officer" not include a sole proprietor licensed as and 
acting solely as a supervised lender pursuant to section 2 302, 
subsection 1 Or registered as and acting solely as a credit 
services organization pursuant to section 10-201. 
Sec. 2. 9·A MRSA §2·302, sub-§l-A is enacted to read: 
I-A. 
At the time of application for a 
license to make 
supervised loans and on an ongoing basis during the term of any 
such license, the applicant shall apply to the administrator for 
registration of all loan officers employed or retained by the 
applicant. 
Applications must be filed in a manner prescribed by 
the administrator, must include the names, 
addresses and work 
locations of the loan officers and such additional information as 
is 
reasonably 
reguested 
by 
the 
administrator 
and 
must 
be 
accompanied by an application fee of $20 for each loan officer, 
UP to a maximum of $200. 
Sec. 3. 9-A MRSA §2-302, sub-§2, as amended by PL 1999, c. 
184, §2, is further amended to read: 
2. 
Ne A license to make supervised loans or a registration 
certificate as 
a 
loan officer may 
llQk be issued unless the 
administrator, 
upon 
investigation, 
finds 
that 
the 
financial 
responsibility, character and fitness of the applicant, and of 
the members thereof, if the applicant is a 
copartnership or 
association, and of the officers and directors thereof, if the 
applicant is a corporation, and of the loan officers thereof, are 
such as to warrant belief that the business will be operated 
honestly 
and 
fairly within 
the 
purposes 
of 
this 
Act. 
In 
determining 
the 
financial 
responsibility 
of 
an 
applicant 
proposing to 
engage 
in making 
insurance 
premium 
loans, 
the 
administrator shall consider the liabilities the lender may incur 
for erroneous cancellation of insurance. 
A. 
Every applicant shall also, 
application, 
file 
with 
the 
administrator 
so 
requires, 
a 
at the time of filing such 
administrator, 
if 
the 
bond 
satisfactory 
to 
the 
Page l-LR0679(l) 
administrator in an amount not to exceed $50,000. 
The terms 
of the bond must run concurrent with the period of time 
during which the license will be in effect. 
The bond must 
run to the State for the use of the State and of any person 
or persons who 
may have 
a 
cause of action against the 
licensee under this Act. The bond must be conditional that 
the licensee will faithfully conform to and abide by the 
provisions of this Act and to all rules lawfully made by the 
administrator under this Act and will pay to the State and 
to any such person or persons any and all amounts of money 
that may become due or owing to the State or to such person 
or persons from the licensee under and by virtue of this Act 
during the period for which the bond is giventi 
B. 
As 
used 
in 
this 
section, 
the 
term 
"financial 
responsibility" means that the applicant has available for 
the operation of the licensed business net assets of at 
least $25,000 and upon issuance of a license, each licensee 
shall maintain net assets of at least $25,000 whieh thgt are 
either used or readily available for use in the conduct of 
the 
business 
of 
each office of 
the 
licensee 
in which 
supervised loans are made. 
D. 
In 
determining 
the 
financial 
responsibility 
of 
a 
nonprofit organization engaged in the financing of housing 
for low-income people under a program specifically designed 
for 
that 
purpose, 
the 
administrator 
may 
waive 
the 
requirement of a bond and availability of $25,000 of net 
assets, 
if the 
applicant 
submits 
appropriate 
additional 
evidence of financial responsibility. 
Sec. 4. 9-A MRSA §2-302, sub-§3, as enacted by PL 1973, c. 
762, §l, is amended to read: 
3. 
Upon written request, the applicant is entitled to a 
hearing on the question of his the applicant's qualifications for 
a license or registration if (a) the administrator has notified 
the 
ap~licant in writing that Ris ~ application has 
been 
denied, or (b) the administrator has not issued a license Q!: 
registration within 60 days after the application for the license 
or registration was filed. A request for a hearing may not be 
made more than 15 days after the administrator has mailed a 
wr i ting to the applicant notifying Rim the applicant that the 
application 
has 
been 
denied 
and 
stating 
in 
substance 
the 
administrator's findings supporting denial of the application. 
Sec. 5. 9-A MRSA §2-302, sub-§5-A is enacted to read: 
5-A. 
A 
licensee 
may 
conduct 
the 
business 
of 
making 
supervised loans only through a 
loan officer who possesses a 
current. valid registration certificate. 
A loan officer may not 
be 
employed 
or 
retained 
simultaneously 
by 
more 
than 
one 
licensee. 
A 
loan officer 
must 
be 
registered at 
the 
loan 
officer's principal licensed worx location and may then work from 
any licensed location of the supervised lender. 
The registration 
of " lo"n officer is v"lid only when th"t person is employed or 
ret"ined Sind supervised by " licensed supervised lender. 
When a 
lo"n officer ce"ses to be employed by " 
licensed supervised 
lender. the lo"n officer and the supervised lender shall promptly 
notify the "dministr"tor in writing. 
Sec. 6. 9·A MRSA §2·303, as amended by PL 1985, c. 763, Pt. 
A, §26 and PL 1999, c. 547, Pt. B, §78 and affected by §80, is 
further amended to read: 
§2-303. Revocation or suspension of license or registration 
1. 
The administrator may file a complaint with the District 
Court to suspend or revoke a license to make supervised loans ~ 
"registr"tion "S " 10"n officer if the administrator finds 
reason to believe, after investigation or hearing, or both, that: 
A. 
The licensee or registrant has violated this Act or any 
rule or order made pursuant to this Act; or 
B. 
Facts or conditions exist WR~Qa ~ 
would clearly have 
justified the administrator in refusing to grant a license 
or rlgistrAtioo had these facts or conditions been known to 
exist at the 
time 
the 
application for 
the 
license 
~ 
registr"tion was made. 
An affirmative 
saall--ee II 
finding by 
sufficient to 
the District 
suspend or 
Court 
revoke 
of either cause 
the license or 
registration. 
I-A. 
The administrator may refuse to renew a license or 
registration, after notice and opportunity for a hearing has been 
provided to the licensee or registrant, for any of the reasons 
set forth in subsection 1. 
2. 
No revocation or suspension of a 
r~gistr"tion impoirs or 
a"ee~ affects 
preexisting lawful contract between the 
and any debtor. 
license sRa~~-iffipai~ or 
the obligation of any 
licensee or registrant 
3. 
The administrator may reinstate a license, terminate a 
suspension or grant a new license or registration to a person 
whose license or registration has been revoked if no fact or 
condition then exists wRieh ~ 
clearly would have justified the 
administrator in refusing to grant a license or registration. 
4. 
No revocation, suspension, annulment or withdrawal of a 
license 
or 
registration 
is 
lawful 
unless, 
prior 
to 
the 
institution 
of 
proceedings 
by 
the 
administrator, 
se 
the 
administrator gave notice by mail to the licensee or registrant 
of facts or conduct whieh .t.h.a.t. warrant the intended actionT and 
the licensee or registrant was given an opportunity to show 
compliance with all lawful requirements for the retention of the 
license or registration. 
Sec. 7. 9-A MRSA §2-303-A, as enacted by PL 2001, c. 371, §4, 
is amended to read: 
S2-303-A. Temporary suspension of license or reqistration 
Notwithstanding Title 5, sections 10003 and 10004 and Title 
10, section 8003, if the public interest or the protection of 
borrowers so requires, the administrator may, by order, suspend a 
license to 
make 
supervised loans or registration as 
a 
loan 
officer or postpone the effective date of such a license 
.Q.I. 
registration. 
Upon entry of the order, the administrator shall 
promptly notify the applicant 9~L licensee or registrant that an 
order has been entered, of the reasons for the order and that, 
within 15 days after the receipt of a written request by the 
applicant 
9~L licensee 
or 
registrant, 
the 
matter 
must 
be 
scheduled for hearing. 
Section 2-303 applies to all subsequent 
proceedings. 
Sec. 8. 9-A MRSA §lO·l02, sub-§3 is enacted to read: 
3. 
"Loan officer" has the same meaning as in section 1-301, 
subsection 22-A. 
Sec. 9. 9-A MRSA §lO-201, as amended by PL 1993, c. 495, §2, 
is further amended to read: 
§lO-20l. Reqistration and annual rereqistration 
A person desiring to engage or continue in business in this 
State as 
a 
credit services organization shall apply to 
the 
administrator for registration under this article on or before 
January 31st of each year. 
The application must be in a form 
prescribed by the administrator. 
The administrator may refuse 
the 
application 
if 
it 
contains 
erroneous 
or 
incomplete 
information. 
At the time of application and on an ongoing basis 
during the term of any such registration, the applicant shall 
apply to the administrator for registration of all loan officers 
employed 
or 
retained 
by 
the 
applicant. 
An 
application 
for 
registration 
as 
a 
loan officer 
must 
be 
filed 
in 
a 
manner 
~ribed by the administrator and include the name, address and 
work location of the loan officer and such additional information 
as is reasonably requested by the administrator. 
A registration 
may not be issued unless the administrator, upon investigation, 
finds that the financial responsibility, character and fitness of 
the applicant, and where applicable, its partners, officers 9f'..L 
directors or loan officers, warrant belief that the business will 
be operated honestly and fairly within the purposes of this Title. 
The application sRall ~ 
include an initial fee of $200. 
Annual 
reregistration 
sRall 
!J1lA.5..t, 
include 
a 
fee 
of 
$100. 
ApplicSlnts and registrants must pay an additional $20 for each 
loan officer. up to a maximum of $200. 
A 
registered 
credit 
services 
organization 
may 
conduct 
business only through a loan officer who possesses a current, 
valid registration certificate. 
A 
lOSln 
officer 
may 
not 
be 
employed or retained simultaneously by more than one registrant. 
A loan officer must register at the loan officer's principal 
registered work locAtion and may then work from any registered 
location of the credit services organization. 
The registration 
of a lQan officer is valid only when that person is emplQyed or 
retained 
and 
supervised 
by 
a 
registered 
credit 
services 
organization. 
When a lOAn officer ceases tQ be employed by a 
registered credit services organizatiQn. the loan Qfficer and the 
credit 
services 
organizatiQn 
shall 
promptly 
notify 
the 
administrator in writing. 
Sec. 10. 9-A MRSA §10-401, first 1[, as amended by PL 1993, c. 
495, §5, is further amended to read: 
Any credit services organization or loan officers of any 
credit services organization that v~ela~es violate any provision 
of this Title or any rule issued by the administrator, or that 
through any unfair, unconscionable or deceptive practice eal:lses 
~ 
actual 
damage 
to 
a 
consumer, 
~s ~ SUbject 
to 
the 
following: 
Sec. 11. 9-A MRSA §10-401, sub-§4, as amended by PL 1993, c. 
495, §5, is further amended to read: 
4. 
A civil action by an aggrieved consumer in which that 
consumer has the right to r€:cover actual damages from the credit 
services 
organization 
or 
its 
loan 
officers 
in 
an 
amount 
determined by the court, plus costs of the action together with 
reasonable attorney's fees; and 
SUMMARY 
This bill requires the registration of loan officers both 
for supervised lenders and for credit services organizations. 
1. 
The bill defines "loan officer" in a way that exempts 
clerical staff and loan processors. 
The definition also exempts 
sole proprietors and employees of banks and credit unions. 
2. 
The bill requires that at the time a supervised lender 
applies for its license to make supervised loans the company 
request registration of its loan officers. 
In addition, those 
loan officer registrations would have to be updated during the 
licensing period. 
3. 
The bill authorizes the Department of Professional and 
Financial Regulation, Office of Consumer Credit Regulation to 
suspend 
or 
revoke 
the 
registration 
of 
a 
loan 
officer 
independently of any action against the license or registration 
of 
a 
supervised lender or credit services organization. 
In 
effect, 
this 
would 
permit 
the 
State 
to 
track 
a 
specific 
individual loan officer.