Vermont

TITLE 8: BANKING AND INSURANCE

CHAPTER 72: GENERAL PROVISIONS

2100. Application of chapter

(a) Except as otherwise provided in this part, this chapter applies to a person doing or soliciting business in this State as described in this part.

(b) This chapter does not apply to:

(1) development credit corporations subject to chapter 65 of this title; or

(2) independent trust companies subject to chapter 77 of this title. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 1.)

2101. Definitions

Except as otherwise provided in this part:

(1) “Commercial loan” means a loan or extension of credit that is described in 9 V.S.A. § 46(1), (2), or (4). The term does not include a loan or extension of credit secured in whole or in part by an owner occupied one- to four-unit dwelling.

(2) “Commissioner” means the Commissioner of Financial Regulation.

(3) “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities or other interest of any other person.

(4) “Depository institution” has the same meaning as in 12 U.S.C. § 1813 and includes any bank and any savings association as defined in 12 U.S.C. § 1813. The term also includes a credit union organized and regulated as such under the laws of the United States or any state.

(5) “Dwelling” has the same meaning as in 15 U.S.C. § 1602.

(6) “Federal banking agencies” means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the National Credit Union Administration, and the Federal Deposit Insurance Corporation or any successor of any of these.

(7) “Holder” means:

(A) the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession;

(B) the person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to the order of the person in possession; or

(8) “Immediate family member” means a spouse, child, sibling, parent, grandparent, or grandchild, aunt, uncle, nephew, niece, including stepparents, stepchildren, stepsiblings, step grandparents, step grandchildren, and adoptive relationships. The term also includes former spouses dividing property in connection with a divorce or separation.

(9) “Individual” means a natural person.

(10) “Insurance company” means an institution organized and regulated as such under the laws of any state.

(11) “Licensee” means a person required to be licensed or registered under this part.

(12) “Material litigation” means a litigation that according to generally accepted accounting principles is deemed significant to an applicant’s or a licensee’s financial health and is required to be disclosed in the applicant’s or licensee’s annual audited financial statements, report to shareholders, or similar records.

(13) “Mortgage loan” means a loan secured primarily by a lien against real estate.

(14) “Nationwide Multistate Licensing System and Registry” or “Nationwide Mortgage Licensing System and Registry” or “NMLS” means a multistate licensing system developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and operated by the State Regulatory Registry LLC for the licensing and registration of non-depository financial service entities in participating state agencies, or any successor to the Nationwide Multistate Licensing System and Registry.

(15) “Person” has the same meaning as in 1 V.S.A. § 128.

(16) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(17) “Residential mortgage loan” means a loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on either a dwelling or residential real estate, upon which is constructed or intended to be constructed a dwelling.

(18) “Residential real estate” means real property located in this State, upon which is constructed or intended to be constructed a dwelling.

(19) “Responsible individual” means an individual who is employed by a licensee and has principal, active managerial authority over the provision of services in this State.

(20) “State” means a state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States, except that when capitalized the term means the State of Vermont.

(21) “Unique identifier” means a number or other identifier assigned by protocols established by the Nationwide Multistate Licensing System and Registry.

(22) “Unsafe or unsound practice” means a practice or conduct by a person licensed to do business in this State that creates the likelihood of material loss, insolvency, or dissipation of the licensee’s assets, or otherwise materially prejudices the interests of its customers. (Added 2019, No. 20, § 2.)

2102. Application for license

(a) Application for a license or registration shall be in writing, under oath, and in the form prescribed by the Commissioner, and shall contain the legal name, any fictitious name or trade name, and the address of the residence and place of business of the applicant, and if the applicant is a partnership or an association, of every member thereof, and if a corporation, of each officer and director thereof; also the county and municipality with street and number, if any, where the business is to be conducted and such further information as the Commissioner may require.

(b) At the time of making an application, the applicant shall pay to the Commissioner a fee for investigating the application and a license or registration fee for a period terminating on the last day of the current calendar year. The following fees are imposed on applicants:

(1) For an application for a lender license under chapter 73 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee for the initial license. For each additional lender license from the same applicant, $500.00 as a license fee and $500.00 as an application and investigation fee.

(2) For an application for a lender license under chapter 73 of this title for a lender only making commercial loans, $500.00 as a license fee and $500.00 as an application and investigation fee.

(3) For an application for a mortgage broker license under chapter 73 of this title, other than a mortgage broker that meets each of the requirements of subdivisions (b)(4)(A)-(B) of this section, $500.00 as a license fee and $500.00 as an application and investigation fee.

(4) For an application for a mortgage broker license under chapter 73 of this title that meets each of the following requirements, $250.00 as a license fee and $250.00 as an application and investigation fee:

(A) the applicant is an individual sole proprietor; and

(B) no person, other than the applicant, shall be authorized to act as a mortgage broker under the applicant’s license.

(5) For an application for a mortgage loan originator license under chapter 73 of this title, $50.00 as a license fee and $50.00 as an application and investigation fee.

(6) For an application for a sales finance company license under chapter 73 of this title, $350.00 as a license fee and $350.00 as an application and investigation fee.

(7) For an application for a loan solicitation license under chapter 73 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(8) [Repealed.]

(9) For an application for a consumer litigation funding company registration under chapter 74 of this title, $200.00 as a registration fee and $300.00 as an application and investigation fee.

(10) For an application for a money transmission license under chapter 79 of this title, $1,000.00 as a license fee, $1,000.00 as an application and investigation fee, and $25.00 as a license fee for each authorized delegate location.

(11) For an application for a check cashing and currency exchange license under chapter 79 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(12) For an application for a debt adjuster license under chapter 83 of this title, $250.00 as a license fee and $500.00 as an application and investigation fee.

(13) For an application for a loan servicer license under chapter 85 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee.

(14) For an application for a personal information protection company license under chapter 78 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(c) In connection with an application for a license, the applicant, each officer, director, and responsible individual of the applicant, each person in control of the applicant, and any other person the Commissioner requires in accordance with NMLS guidelines or other multistate agreements, shall furnish to the Nationwide Multistate Licensing System and Registry information concerning each person’s identity, including:

(1) fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, and international criminal history background check;

(2) personal history and experience in a form prescribed by the Nationwide Multistate Licensing System and Registry, including the submission of authorization for the Nationwide Multistate Licensing System and Registry and the Commissioner to obtain:

(A) an independent credit report and credit score obtained from a consumer reporting agency described in 15 U.S.C. § 1681a for the purpose of evaluating the applicant’s financial responsibility at the time of application; and the Commissioner may obtain additional credit reports and credit scores to confirm the licensee’s continued compliance with the financial responsibility requirements of this part;

(B) information related to any administrative, civil, or criminal findings by any governmental jurisdiction; and

(3) any other information required by the Nationwide Multistate Licensing System and Registry or the Commissioner.

(d) The applicant shall provide a list of any material litigation in which the applicant has been involved in the 10-year period preceding the submission of the application.

(e) If an applicant is a corporation, limited liability company, partnership, or other entity, the applicant shall also provide:

(1) the date of the applicant’s incorporation or formation and state or country of incorporation or formation;

(2) if applicable, a certificate of good standing from the state or country in which the applicant is incorporated or formed;

(3) a brief description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded;

(4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the 10-year period preceding the submission of the application, of each executive officer, manager, responsible individual, director of, or person in control of, the applicant;

(5) a list of any criminal convictions, material litigation, or disciplinary actions in which any executive officer, manager, responsible individual, director of, or individual in control of, the applicant has been involved in the 10-year period preceding the submission of the application;

(6) a copy of the applicant’s audited financial statements for the most recent fiscal year and, if available, for the two-year period preceding the submission of the application;

(7) a copy of the applicant’s unconsolidated financial statements for the current year, whether audited or not, and, if available, for the two-year period preceding the submission of the application;

(8) if the applicant is publicly traded, a copy of the most recent 10-K report filed with the U.S. Securities and Exchange Commission; and

(9) if the applicant is a wholly owned subsidiary:

(A) a copy of audited financial statements for the parent company for the most recent fiscal year; and

(B) of a corporation publicly traded in the United States, a copy of the parent corporation’s most recent 10-K report filed with the U.S. Securities and Exchange Commission, or if the applicant is a wholly owned subsidiary of a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation’s domicile outside the United States.

(f) If the applicant is not an individual, the name and address of the applicant’s registered agent in this State.

(g) Upon the filing of an application, the Commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant and any person named in the application. The Commissioner may conduct an on-site investigation of the applicant, the cost of which the applicant shall bear pursuant to section 18 of this title.

(h) This section does not apply to a person applying for a commercial lender license under section 2202a of this title. (Added 2019, No. 20, § 2; 2019, No. 70, § 1; amended 2019, No. 103 (Adj. Sess.), § 2; 2021, No. 25, § 2, eff. May 12, 2021.)

2103. Approval of application and issuance of license

(a) Upon the filing of an application, payment of the required fees, and satisfaction of any applicable bond and liquid asset requirements, the Commissioner shall issue a license to the applicant if the Commissioner finds:

(1)(A) The financial responsibility, experience, character, and general fitness of the applicant command the confidence of the community and warrant belief that the business will be operated honestly, fairly, and efficiently pursuant to the applicable chapter of this title.

(i) If the applicant is a partnership or association, such findings are required with respect to each partner, member, and responsible individual of, and each person in control of, the applicant.

(ii) If the applicant is a corporation, such findings are required with respect to each officer, director, and responsible individual of, and each person in control of, the applicant.

(B) For purposes of assessing whether a person is financially responsible, the Commissioner may consider how the person has managed his or her own financial condition, which may include factors such as whether the person has:

(i) current outstanding judgments, except judgments solely as a result of medical expenses;

(ii) current outstanding tax liens or other government liens and filings;

(iii) foreclosures within the past three years; or

(iv) a pattern of seriously delinquent accounts within the past three years.

(2) Allowing the applicant to engage in business will promote the convenience and advantage of the community in which the applicant will conduct its business.

(3) The applicant, each officer, director, and responsible individual of, and each person in control of, the applicant, has never had a financial services license or similar license revoked in any governmental jurisdiction, except that a subsequent formal vacation of such revocation shall not be deemed a revocation.

(4) The applicant, each officer, director, and responsible individual of, and each person in control of, the applicant has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court:

(A)(i) during the seven-year period preceding the date of the application for licensing and registration; or

(ii) at any time preceding such date of application, if such felony involved an act of fraud or dishonesty, a breach of trust, or money laundering; and

(B) provided that any pardon or expungement of a conviction shall not be a conviction for purposes of this subsection.

(5) The applicant has satisfied the applicable surety bond and liquid asset requirement as follows:

(A) for an application for a lender license, mortgage broker license, mortgage loan originator license, or loan solicitation license, the applicable bond and liquid asset requirements of sections 2203 and 2203a of this title;

(B) for an application for a litigation funding company registration, the financial stability requirement of section 2252 of this title;

(C) for an application for a money transmitter license, the bond and net worth requirements of sections 2507 and 2510 of this title;

(D) for an application for a debt adjuster license, the bond requirement of section 2755 of this title; and

(E) for an application for a loan servicer license, the bond requirement of sections 2903 and 2907 of this title.

(6) For an application for a mortgage loan originator license, the applicant has satisfied the prelicense education requirement of section 2204a of this title and the prelicensing testing requirement of section 2204b of this title.

(b)(1) If the Commissioner finds the applicant does not meet the requirements of subsection (a) of this section, the Commissioner shall not issue a license.

(2) Not later than 60 days after an applicant files a complete application, the Commissioner shall notify the applicant of the denial, stating the reason or reasons therefor.

(3) If the applicant does not file a timely request for reconsideration pursuant to section 2104 of this title, the Commissioner shall:

(A) return to the applicant any amounts paid for the applicable bond requirement and license fee; and

(B) retain the investigation fee to cover the costs of investigating the application.

(c)(1) If the Commissioner finds that an applicant meets the requirements of subsection (a) of this section, he or she shall issue the license not later than 60 days after an applicant submits a complete application.

(2) Except as otherwise provided in this title, a license is valid until the licensee surrenders the license or the Commissioner revokes, suspends, terminates, or refuses to renew the license.

(d) For good cause shown and consistent with the purposes of this section, the Commissioner may waive or modify the requirements of subdivision (a)(3) of this section; provided, however, that the Commissioner may not waive the requirement of subdivision (a)(3) of this section for applicants for a mortgage loan originator license.

(e) If an application remains incomplete for 120 days, the Commissioner may deem the application abandoned or withdrawn.

(f) This section does not apply to a person applying for a commercial lender license under section 2202a of this title. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 7.)

2104. Request for reconsideration; review of denial of application

(a)(1) If the Commissioner denies an application, not later than 15 days after the date of denial the applicant may request that the Commissioner reconsider the application.

(2) The applicant shall submit his or her request in writing and shall respond specifically to the Commissioner’s stated reason or reasons for denial.

(b)(1) The Commissioner shall reconsider the application in light of the applicant’s request and response and issue a decision not later than 60 days after the date of the request.

(2) If the Commissioner finds that the applicant meets the requirements of subsection 2103(a) of this title, he or she shall issue a license.

(3) If the Commissioner finds that the applicant does not meet the requirements of subsection 2103(a) of this title, the Commissioner shall not issue a license and shall:

(A) return to the applicant the bond, if any, and any amounts paid for the applicable license fee; and

(B) retain the investigation fee to cover the costs of investigating the application.

(c) The applicant may appeal the Commissioner’s decision by filing an action in the civil division of the Washington County Superior Court not later than 15 days after the date the Commissioner denied the request for reconsideration. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 8.)

2105. Contents of license; nontransferable

(a) A license shall state the address at which a licensee will conduct its business, shall state fully the name of the licensee, and, if the licensee is not an individual, shall state the date and place of its organization or incorporation.

(b) A mortgage loan originator license shall state fully the name of the individual, his or her sponsoring company, and the licensed location to which he or she is assigned.

(d) The Commissioner, in his or her discretion, may issue a license through the NMLS. (Added 2019, No. 20, § 2; amended 2021, No. 25, § 6, eff. May 12, 2021.)

2106. Additional place of business; change of place of business

(a)(1) A license is required for each place of business.

(2) Except as otherwise provided in this title, the Commissioner may issue more than one license to the same licensee for additional places of business if the licensee meets the requirements for each place of business.

(b)(1) A licensee shall provide written notice to the Commissioner and fee of $100.00 not less than 30 days before changing or closing a place of business.

(2) Upon receiving the notice and fee, the Commissioner shall record the change of location and the date, and the licensee may operate at the new location. (Added 2019, No. 20, § 2.)

2107. Change of control

(a) A licensee shall give the Commissioner notice of a proposed change of control within 30 days of the proposed change and request approval of the acquisition. A money transmitter licensee shall also submit with the notice a nonrefundable fee of $500.00.

(b) After review of a request for approval under subsection (a) of this section, the Commissioner may require the licensee to provide additional information concerning the proposed persons in control of the licensee. The additional information shall be limited to the same categories of information required of the licensee or persons in control of the licensee as part of its original license or renewal application.

(c) The Commissioner shall approve a request for change of control under subsection (a) of this section if, after investigation, the Commissioner determines that the person or group of persons requesting approval has the competence, experience, character, and general fitness to operate the licensee or person in control of the licensee in a lawful and proper manner, and that the interests of the public will not be jeopardized by the change of control.

(d) The Commissioner shall approve or deny a request for change of control not later than 60 days after a complete request is filed and notify the licensee of the decision in a record. The Commissioner for good cause may extend the review period.

(e) The following persons are exempt from the prefiling requirements of subsection (a) of this section, but the licensee shall notify the Commissioner of the change of control and request the Commissioner’s approval using the standards in subsection (b) of this section for a change of control:

(1) a person that acts as a proxy for the sole purpose of voting at a designated meeting of the security holders or holders of voting interests of a licensee or person in control of a licensee;

(2) a person that acquires control of a licensee by devise or descent;

(3) a person that acquires control as a personal representative, custodian, guardian, conservator, or trustee, or as an officer appointed by a court of competent jurisdiction or by operation of law; and

(4) a person that the Commissioner, by rule or order, exempts in the public interest.

(f) Subsection (a) of this section does not apply to public offerings of securities.

(g) Before filing a request for approval to acquire control, a person may request in a record a determination from the Commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the Commissioner determines that the person would not be a person in control of a licensee, the Commissioner shall enter an order to that effect, and the proposed person and transaction is not subject to the requirements of subsections (a) through (c) of this section. (Added 2019, No. 20, § 2.)

2108. Notification of material change

(a) A licensee shall notify the Commissioner in writing within 30 days of any material change in the information provided in a licensee’s application.

(b) A licensee shall notify the Commissioner in writing within 30 days of any change in the list of executive officers, managers, directors, or responsible individuals.

(c) A licensee shall file a report with the Commissioner within 15 business days after the licensee has reason to know of the occurrence of any of the following events involving the licensee, or any executive officer, manager, director, person in control, responsible individual, or equivalent of the licensee:

(1) the filing of a petition by or against the licensee or such person under the U.S. Bankruptcy Code for bankruptcy or reorganization;

(2) the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

(3) the commencement of a disciplinary proceeding or a license denial against the licensee or such person in a state or country in which the licensee engages in business or is licensed, including any action by the Attorney General of any state;

(4) the cancellation or other impairment of the licensee’s bond or other security;

(5) a charge or conviction against the licensee or such person for a felony;

(6) a charge against or conviction of an authorized delegate for a felony;

(7) receiving notification of the initiation of a class action lawsuit against the licensee; or

(8) any change in the organizational structure of the licensee or any parent company of the licensee. (Added 2019, No. 20, § 2.)

2109. Annual renewal of license

(a) On or before December 1 of each year, every licensee shall renew its license or registration for the next succeeding calendar year and shall pay to the Commissioner the applicable renewal of license or registration fee. At a minimum, the licensee or registree shall continue to meet the applicable standards for licensure or registration. At the same time, the licensee or registree shall maintain with the Commissioner any required bond in the amount and of the character as required by the applicable chapter. The annual license or registration renewal fee shall be:

(1) For a lender license under chapter 73 of this title, $1,200.00.

(2) For a lender license under chapter 73 of this title for a lender only making commercial loans, $500.00.

(3) For a mortgage broker license under chapter 73 of this title, other than a mortgage broker that meets each of the requirements of subdivisions (4)(A)-(C) of this section, $500.00.

(4) For a mortgage broker license under chapter 73 of this title that meets each of the following requirements, $250.00:

(A) the mortgage broker license is held by an individual sole proprietor;

(B) no person, other than the individual sole proprietor, shall be authorized to act as a mortgage broker under this license; and

(5) For a mortgage loan originator license under chapter 73 of this title, $100.00.

(6) For a sales finance company license under chapter 73 of this title, $350.00.

(7) For a loan solicitation license under chapter 73 of this title, $500.00.

(8) [Repealed.]

(9) For a consumer litigation funding company registration under chapter 74 of this title, $200.00.

(10) For a money transmission license under chapter 79 of this title, $1,000.00, plus an annual renewal fee of $25.00 for each authorized delegate, provided that the total renewal fee of all authorized delegate locations shall not exceed $3,500.00.

(11) For a check cashing and currency exchange license under chapter 79 of this title, $500.00.

(12) For a debt adjuster license under chapter 83 of this title, $250.00.

(13) For a loan servicer license under chapter 85 of this title, $1.000.00.

(14) For a personal information protection company license under chapter 78 of this title, $500.00.

(b) A license originally issued on or after November 1 of the current year is valid for the next succeeding year.

(c) In addition to the annual renewal fee, on or before April 1 of each year a money transmission licensee shall pay the Department an annual assessment equal to $0.0001 per dollar volume of money services activity performed for, or sold or issued to, Vermont customers for the most recent year ending December 31, which assessment shall not be less than $100.00 and shall not be greater than $15,000.00.

(d) An individual holding a mortgage loan originator license shall also satisfy the annual continuing education requirement of section 2204c of this title.

(e) Notwithstanding any other provision of this title, the license of a mortgage loan originator who fails to pay the annual renewal fee or fails to satisfy all of the minimum license renewal standards by December 1 shall automatically expire on December 31.

(f) Notwithstanding any other provision of this title, the registration of a litigation funding company that fails to pay the annual renewal fee or fails to satisfy all of the minimum registration renewal requirements by December 1 shall automatically expire on December 31. (Added 2019, No. 20, § 2; 2019, No. 70, § 1a; amended 2019, No. 103 (Adj. Sess.), § 3; 2021, No. 25, § 3, eff. May 12, 2021.)

2110. Revocation, suspension, termination, or nonrenewal of license; cease and desist orders

(a) The Commissioner may deny, suspend, terminate, revoke, condition, or refuse to renew a license or order that any person or licensee cease and desist in any specified conduct if the Commissioner finds:

(1) the licensee failed to pay the renewal of license fee or an examination fee as provided in this part, or to maintain in effect the required liquid assets or the bond or bonds required under the provisions of this part, or to file any annual report or other report, or to comply with any lawful demand, ruling, or requirement of the Commissioner;

(2) the licensee violated any applicable provision of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any rule, order, or directive, adopted pursuant to those provisions;

(3) the licensee engages in fraud, intentional misrepresentation, or gross negligence;

(4) the licensee engages in an unsafe or unsound practice;

(5) the licensee is convicted of a violation of a state or federal anti-money-laundering statute;

(6) the competence, experience, character, or general fitness of the licensee, person in control of a licensee, or responsible individual of the licensee indicates that it is not in the public interest to permit the person to provide services in this State;

(7) the licensee fails to continue to meet the initial licensing requirements of this title, or withholds information, or fails to cooperate with an examination or investigation, or makes a material misstatement in a license application, license renewal, or any document submitted to the Commissioner or to the Nationwide Multistate Licensing System and Registry;

(8) any cause for which issuance of the license could have been refused had it then existed and been known to the Commissioner at the time of issuance, including unconscionable conduct that takes advantage of a borrower’s lack of bargaining power or lack of understanding of the terms or consequences of the transaction.

(9) the licensee has demonstrated a pattern of failure or refusal to promptly pay obligations on payment instruments or transmissions of money, is insolvent, suspends payment of its obligations, or makes an assignment for the benefit of its creditors; or

(10) a money transmission licensee does not remove an authorized delegate after the Commissioner issues and serves upon the licensee a final order including a finding that the authorized delegate has violated this part.

(b) The Commissioner may issue orders or directives to any person:

(1) to cease and desist from conducting business;

(2) to cease any harmful activities or violations of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any order, directive, or rule adopted pursuant to those provisions;

(3) to cease business under a license or any conditional license if the Commissioner determines that such license was erroneously granted or the licensee is currently in violation of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any order, directive, or rule, adopted pursuant to those provisions;

(4) enjoining or prohibiting any person from engaging in the financial services industry in this State;

(5) to remove any officer, director, employee, responsible individual, or control person; or

(6) regarding any other action or remedy as the Commissioner deems necessary to carry out the purposes of this part.

(c) The Commissioner shall provide not less than 15 days’ notice and an opportunity to be heard before he or she issues an order or directive pursuant to subsection (b) of this section. Mailing notice to the licensee’s current address as stated on the license shall be presumptive evidence of its receipt by the licensee. However, if the Commissioner finds that the public safety or welfare imperatively requires emergency action, action with no prior notice or prior opportunity to be heard may be taken, pending proceedings for revocation or other action. (Added 2019, No. 20, § 2.)

2111. Revocation, suspension, termination, or nonrenewal where more than one place of business

The Commissioner may revoke, suspend, terminate, or refuse to renew only the license for a particular place of business at which grounds for revocation, suspension, termination, or refusal to renew may occur or exist, or if the Commissioner finds that such grounds for revocation, suspension, termination, or refusal to renew are of general application to all licensed places of business, or to more than one licensed place of business, operated by such licensee, the Commissioner shall revoke, suspend, terminate, or refuse to renew all of the licenses issued to the licensee or such licenses as such grounds apply to, as the case may be. (Added 2019, No. 20, § 2.)

2112. Surrender of license; no effect on liability; reinstatement

(a) A licensee may surrender a license by delivering to the Commissioner notice that the licensee surrenders the license.

(b) Surrender shall not affect the licensee’s administrative, civil, or criminal liability for acts committed prior to surrender. A revocation, suspension, termination, refusal to renew, or surrender of a license does not impair or affect the obligation of a preexisting lawful contract.

(c) The Commissioner may reinstate a revoked, suspended, terminated, expired, inactive, or nonrenewed license or issue a new license to a licensee whose license was revoked, suspended, terminated, expired, inactive, or nonrenewed if no fact or condition then exists that would have warranted the Commissioner to refuse to issue the license under this part; provided, however, that the Commissioner shall not issue a new license or reinstate a license to a mortgage loan originator whose license was revoked unless the revocation order is vacated. (Added 2019, No. 20, § 2.)

2113. Appeal of final order

(a) The Commissioner shall serve his or her findings and order of suspension, termination, revocation, or to cease and desist in specified conduct on the licensee by mail at the licensee’s current address as stated on the license, which shall be presumptive evidence of its receipt by the licensee.

(b) The licensee may appeal the Commissioner’s decision by filing an action in the civil division of the Washington County Superior Court not later than 15 days after the date of service. (Added 2019, No. 20, § 2.)

2114. Rules

The Commissioner may adopt rules and issue orders, rulings, demands, and findings as is necessary to perform his or her duties under this part. (Added 2019, No. 20, § 2.)

2115. Penalties

(a) The Commissioner may:

(1) impose an administrative penalty of not more than $10,000.00, plus the State’s cost and expenses of investigating and prosecution of the matter, including attorney’s fees, for each violation upon any person who violates or participates in the violation of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any lawful rule adopted, or directive or order issued, pursuant to those sections; and

(2) order any person to make restitution to another person for a violation of this part, chapter 200 of this title, or 9 V.S.A. chapter 4, 59, or 61.

(b) Each violation, or failure to comply with any directive or order of the Commissioner, is a separate and distinct violation.

(c) It shall be a criminal offense, punishable by a fine of not more than $100,000.00, or not more than a year in prison, or both, for any person, after receiving an order that directs the person to cease exercising the duties and powers of a licensee and imposes an administrative penalty under this part, to perform the duties or exercise the powers of a licensee until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the order is vacated by the Commissioner or by a court of competent jurisdiction.

(d)(1) A loan contract made in knowing and willful violation of subdivision 2201(a)(1) of this title is void, and the lender shall not collect or receive any principal, interest, or charges; provided, however, in the case of a loan made in violation of subdivision 2201(a)(1) of this title, where the Commissioner does not find a knowing and willful violation, the lender shall not collect or receive any interest or charges, but may collect and receive principal.

(2) If a person who receives an order that directs the person to cease exercising the duties and powers of a licensee and imposes an administrative penalty under this part continues to perform the duties or exercise the powers of a licensee without satisfying the penalty, or otherwise reaching a satisfactory resolution between the parties, or securing a decision vacating the order by the Commissioner or by a court of competent jurisdiction, a loan contract made by the person after receipt of such order is void and the lender shall not collect or receive any principal, interest, or charges.

(e) The powers vested in the Commissioner in this part are in addition to any other powers to enforce penalties, fines, or forfeitures authorized by law. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 9.)

2116. Administrative procedure

All administrative proceedings under this part shall be conducted in accordance with 3 V.S.A. chapter 25 and any rules adopted by the Commissioner on hearing procedure. (Added 2019, No. 20, § 2.)

2117. Examinations and investigations; examination fees

(a) In addition to any authority allowed under this part or other law, and for the purpose of examination, or discovering or investigating violations or complaints of or arising under this part; chapter 200, subchapter 2 of this title; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or a rule adopted, or an order or directive issued pursuant to those sections, or securing information required or useful thereunder, and for purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation, the Commissioner or his or her representative may:

(1) conduct investigations and examinations;

(2) access, receive, and use any books, accounts, records, files, documents, information, or evidence including:

(A) criminal, civil, and administrative history information, including nonconviction data;

(B) personal history and experience information, including independent credit reports obtained from a consumer reporting agency described in 15 U.S.C. § 1681a; and

(C) any other documents, information, or evidence the Commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of such documents, information, or evidence.

(b)(1) The Commissioner may review, investigate, or examine any person, regardless of whether the person has obtained a license under this part, as often as necessary in order to carry out the purposes of this part.

(2) The Commissioner may direct, subpoena, or order the attendance of, and examine under oath, a person whose testimony is required about the loans or the business or subject matter of an examination or investigation, and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other documents the Commissioner deems relevant to the inquiry.

(c)(1) A person subject to this part shall make available to the Commissioner upon request the books and records relating to the operations of the person.

(2) The Commissioner shall have access to the books and records and to interview the officers, principals, responsible individuals, control persons, mortgage loan originators, employees, independent contractors, agents, and customers of the person concerning its business.

(d) A person subject to this part shall make or compile reports or prepare other information as directed by the Commissioner in order to carry out the purposes of this section, including:

(1) accounting compilations;

(2) information lists and data concerning transactions in a format prescribed by the Commissioner; and

(3) any other information as the Commissioner deems necessary to carry out the purposes of this part.

(e)(1) In making any examination or investigation authorized by this part, the Commissioner may control access to the documents and records of the person under examination or investigation.

(2) The Commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept.

(3) During the period of control, a person shall not remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the Commissioner.

(4) Unless the Commissioner has reasonable grounds to believe the documents or records of the person have been or are at risk of being altered or destroyed for purposes of concealing a violation of this part, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.

(f) In order to carry out the purposes of this part, the Commissioner may:

(1) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;

(2) enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information, or evidence obtained under this section;

(3) use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate a person subject to this part;

(4) accept and rely on examination or investigation reports made by other government officials within or outside this State; or

(5) accept audit reports made by an independent certified public accountant for the person subject to this part in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of the examination, report of investigation, or other writing of the Commissioner.

(g) The authority of this section shall remain in effect, whether a person subject to this part acts or claims to act under any licensing or registration law of this State, acts without such authority, or surrenders his or her license.

(h) No person subject to investigation or examination under this section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information.

(i) The Commissioner may, in the case of any person subject to this part who does not maintain a Vermont office, accept reports of examinations prepared by another state or federal regulatory agency as substitutes if such reports are available to the Commissioner and are determined to be adequate in exercising his or her powers and discharging his or her responsibilities under this part.

(j)(1) A person subject to this part shall pay to the Department all fees, costs, and expenses of any examination, review, and investigation as prescribed by section 18 of this title, which fees, costs, and expenses shall be billed when they are incurred.

(2) In addition to the powers set forth in section 2110 of this title, the Commissioner may maintain an action for the recovery of examination, review, and investigation fees, costs, and expenses as prescribed in section 18 of this title in any court of competent jurisdiction.

(k) Information obtained during an examination or investigation under this part shall be confidential and privileged and shall be treated as provided in section 23 of this title. (Added 2019, No. 20, § 2.)

2118. Joint examinations

(a)(1) The Commissioner may conduct an on-site examination in conjunction with representatives of other state agencies or agencies of another state or of the federal government.

(2) Instead of an examination, the Commissioner may accept the examination report of an agency of this State or of another state or of the federal government or a report prepared by an independent certified public accountant.

(b)(1) A joint examination or an acceptance of an examination report does not preclude the Commissioner from conducting an examination as provided by law.

(2) A joint report or a report accepted under this subsection is an official report of the Commissioner for all purposes. (Added 2019, No. 20, § 2.)

2119. Records required of licensee

(a)(1) A licensee shall keep, use in the licensee’s business, and make available to the Commissioner upon request, the books, accounts, records, and data compilations as will enable the Commissioner to determine whether the licensee is complying with the provisions of this part and with the rules adopted by the Commissioner.

(2) A licensee shall preserve the books, accounts, records, and data compilations in a secure manner for not less than seven years after making the final entry on any loan recorded therein.

(3) After the seven-year retention period, the licensee shall dispose of the books, accounts, records, and data compilations in accordance with 9 V.S.A. § 2445.

(b) A licensee may maintain records in any form permitted in subsection 11301(c) of this title. (Added 2019, No. 20, § 2.)

2120. Annual report; call reports

(a)(1) In addition to any specific information required by the applicable chapter, annually, on or before April 1, a licensee shall file a report with the Commissioner to provide the information the Commissioner reasonably requires concerning the business and operations conducted in this State during the preceding calendar year.

(2) The licensee shall submit the report under oath and in the form the Commissioner requires.

(3) For good cause, the Commissioner may extend the due date for the annual report required by this subsection.

(4) If a licensee does not file its annual report on or before April 1, or within any extension of time granted by the Commissioner, the licensee shall pay to the Department $1,000.00 for each month or part of a month that the report is past due, beginning on the date that is five business days after April 1 or the last date of such extension, as applicable.

(b)(1) Annually, not later than 90 days after the end of its fiscal year, a licensee shall file financial statements with the Commissioner in a form and substance acceptable to the Commissioner, which financial statements shall include a balance sheet and income statement.

(2) This subsection does not apply to a lender making only commercial loans.

(c) A licensee shall submit to the Nationwide Multistate Licensing System and Registry reports of condition in a form and including the information the Nationwide Multistate Licensing System and Registry requires, if applicable.

(d) The Commissioner may require more frequent reports from any licensee. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 10; 2021, No. 25, § 4, eff. May 12, 2021.)

2121. Deceptive advertising

(a) A person subject to this part shall not advertise, print, display, publish, distribute, or broadcast or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, a statement or representation that is false, misleading, or deceptive.

(b) The Commissioner may order a person to cease conduct that violates this section. (Added 2019, No. 20, § 2.)

2122. Use of other names or business places

(a) A licensee shall not conduct business or make a loan subject to regulation under this part under any other name or at any other place of business than as specified in its license.

(b) Mortgage loan originators and employees of licensees may work remotely through a licensed location without being physically present at such location, provided the mortgage loan originator or employee is assigned to a licensed location, is adequately supervised by the licensee, and the licensee and the mortgage loan originator or employee meet such additional conditions as the Commissioner may require.

(c) This section does not apply to a commercial loan made to a borrower located outside Vermont for use outside Vermont. (Added 2019, No. 20, § 2; amended 2021, No. 25, § 7, eff. May 12, 2021.)

2123. Licenses modified, amended, or repealed by amendment to this part

The State of Vermont may amend or repeal this chapter so as to effect a cancellation or alteration of a license or right of a licensee, provided that such an amendment or repeal shall not impair or affect an obligation under a preexisting lawful contract. (Added 2019, No. 20, § 2.)

2124. Nationwide Multistate Licensing System and Registry

(a) In furtherance of the Commissioner’s duties under this part, the Commissioner may participate in the Nationwide Multistate Licensing System and Registry and may take such action regarding participation in the licensing system as the Commissioner deems necessary to carry out the purposes of this part, including:

(1) issue rules or orders, and establish procedures, to further participation in the Nationwide Multistate Licensing System and Registry;

(2) facilitate and participate in the establishment and implementation of the Nationwide Multistate Licensing System and Registry;

(3) establish relationships or contracts with the Nationwide Multistate Licensing System and Registry or other entities designated by the Nationwide Multistate Licensing System and Registry;

(4) authorize the Nationwide Multistate Licensing System and Registry to collect and maintain records and to collect and process any fees associated with licensure on behalf of the Commissioner;

(5) require persons engaged in activities that require a license under this part to utilize the Nationwide Multistate Licensing System and Registry for license applications, renewals, amendments, surrenders, and such other activities as the Commissioner may require and to pay through the System all fees provided for under this part;

(6) authorize the Nationwide Multistate Licensing System and Registry to collect fingerprints on behalf of the Commissioner in order to receive or conduct criminal history background checks;

(7) in order to reduce the points of contact which the Federal Bureau of Investigation may have to maintain for purposes of this part, use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting information from and distributing information to the Department of Justice or any governmental agency; and

(8) in order to reduce the points of contact that the Commissioner may have to maintain for purposes of subsection 2102(c) of this chapter, use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting and distributing information to and from any source so directed by the Commissioner.

(b)(1) The Commissioner may require persons engaged in activities that require a license under this part to submit fingerprints, and the Commissioner may utilize the services of the Nationwide Multistate Licensing System and Registry to process the fingerprints and to submit the fingerprints to the Federal Bureau of Investigation, the Vermont State Police, or any equivalent state or federal law enforcement agency for the purpose of conducting a criminal history background check.

(2) The licensee or applicant shall pay the cost of such criminal history background check, including any charges imposed by the Nationwide Multistate Licensing System and Registry.

(c) A person engaged in an activity that requires a license under this part shall pay all applicable charges to utilize the Nationwide Multistate Licensing System and Registry, including the processing charges the administrator of the Nationwide Multistate Licensing System and Registry establishes, in addition to the fees required under this part.

(d) The Nationwide Multistate Licensing System and Registry is not intended to and does not replace or affect the Commissioner’s authority to grant, deny, suspend, terminate, revoke, or refuse to renew licenses. (Added 2019, No. 20, § 2.)

2125. Report to Nationwide Multistate Licensing System and Registry

(a) Subject to State privacy and confidentiality laws, and subject to section 2126 of this title, the Commissioner shall report regularly violations of this part, enforcement actions, and other relevant information to the Nationwide Multistate Licensing System and Registry.

(b) A licensee may challenge information the Commissioner reports to the Nationwide Multistate Licensing System and Registry in accordance with 3 V.S.A. chapter 25 and any rules adopted by the Commissioner on hearing procedures. (Added 2019, No. 20, § 2.)

2126. Confidentiality

In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing:

(1)(A) The privacy or confidentiality of any information or material provided to the Nationwide Multistate Licensing System and Registry, and any privilege arising under federal or state law with respect to such information or material, including the rules of any federal or state court, shall continue to apply to the information or material after the information or material is disclosed to the Nationwide Multistate Licensing System and Registry.

(B) The Commissioner may share the information and material with state and federal regulatory officials who have oversight authority without affecting the privilege or confidentiality protections provided by federal law or state law.

(2) The Commissioner may enter agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, State Regulatory Registry LLC, or other associations representing governmental agencies.

(3) Information or material that is subject to privilege or confidentiality under subdivision (1) of this section is not subject to:

(A) disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or

(B) subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to a privilege held by the Nationwide Multistate Licensing System and Registry, the person to whom such information or material pertains waives the privilege.

(4) This section does not apply to information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators that are included in the Nationwide Multistate Licensing System and Registry for access by the public. (Added 2019, No. 20, § 2.)

CHAPTER 73: LICENSED LENDERS, MORTGAGE BROKERS, MORTGAGE LOAN ORIGINATORS, SALES FINANCE COMPANIES, AND LOAN SOLICITATION COMPANIES

2200. Definitions

As used in this chapter:

(1)(A) “Employee” means, subject to subdivision (B) of this subdivision (1), an individual whose manner and means of work are subject to the right of control of, or are controlled by a person and whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by:

(i) the controlling person;

(ii) an entity that directly or indirectly owns 100 percent of the controlling person; or

(iii) an entity that is directly or indirectly 100 percent owned by the same parent company as the controlling person.

(B) For purposes of a registered mortgage loan originator, the term “employee” has such binding definition as may be issued by the federal banking agencies in connection with their responsibilities under the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

(2) “Engage in the business of a mortgage loan originator” means to act as, or to hold oneself out as acting as, or to represent to the public that one can provide the services of, a mortgage loan originator, in a commercial context, and with some degree of habitualness or repetition. Habitualness or repetition is met if either the individual who acts as a mortgage loan originator does so with a degree of habitualness or repetition or the source of the prospective financing provides such financing or performs other phases of origination of residential mortgage loans with a degree of habitualness or repetition. Acting in a commercial context is met if either the individual or an entity for which the individual acts does so for the purpose of obtaining profit rather than exclusively for governmental or family purposes.

(3) “Housing finance agency” means any authority:

(A) that is chartered by a state to help meet the affordable housing needs of the residents of the state;

(B) that is supervised directly or indirectly by the state government;

(D) whose activities make it eligible to be a member of the National Council of State Housing Agencies.

(4) “Lead” means any information identifying a potential consumer of a loan.

(5) “Lead generation” means to:

(A) initiate consumer interest or inquiry in a loan by online marketing, direct response advertising, telemarketing, or other similar consumer contact;

(B) engage in the business of selling leads for loans;

(D) refer Vermont borrowers to other persons for loans for, or with the expectation of, compensation or gain.

(6) “Loan processor or underwriter” means an individual who performs clerical or support duties as an employee at the direction and subject to the supervision and instruction of a person licensed, or exempt from licensing, under this chapter.

(A) For purposes of this subdivision (6), the term “clerical or support duties” may include, subsequent to the receipt of a residential mortgage loan application:

(i) the receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan; and

(ii) communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms.

(B) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that such individual can or will perform any of the activities of a mortgage loan originator.

(7)(A) “Loan solicitation” means, for compensation or gain or with the expectation of compensation or gain, to:

(i) offer, solicit, broker, directly or indirectly arrange, place, or find a loan for a prospective Vermont borrower;

(ii) engage in any activity intended to assist a prospective Vermont borrower in obtaining a loan, including lead generation;

(iii) arrange, in whole or in part, a loan through a third party, regardless of whether approval, acceptance, or ratification by the third party is necessary to create a legal obligation for the third party, through any method, including mail, telephone, Internet, or any electronic means; or

(iv) represent to the public through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that a person can or will provide a loan or any of the services described in subdivisions (i)-(iii) of this subdivision (7)(A).

(B) As used in this subdivision (7), “loan solicitation” does not:

(i) apply to residential mortgage loans;

(ii) include a broker-dealer registered or exempt from registration under 9 V.S.A. § 5401 when the broker-dealer provides the services described in subdivision (A) of this subdivision (7) and the broker-dealer is not compensated by the consumer for those services;

(iii) include an agent registered or exempt from registration under 9 V.S.A. § 5402 when the agent provides the services described in subdivision (A) of this subdivision (7) and the individual agent is not compensated by the consumer for those services;

(iv) include an insurance producer licensed under 8 V.S.A. § 4800 when the insurance producer provides the services described in subdivision (A) of this subdivision (7) and the individual insurance producer is not compensated by the consumer for those services;

(v) include a seller of goods or services that provides the services described in subdivision (A) of this subdivision (7) in connection with financing the sale or proposed sale of the seller’s goods or services and the seller is not compensated by the consumer for the services described in subdivision (A) of this subdivision (7); or

(vi) include other categories of loans or service providers as determined by the Commissioner by rule or order.

(8) “Mortgage broker” means any person who for compensation or gain, or in the expectation of compensation or gain, directly or indirectly negotiates, places, assists in placement, or finds, or offers to negotiate, place, assist in placement, or find mortgage loans, other than commercial loans, on real property for others. The term shall not include real estate brokers or salespersons, as defined in 26 V.S.A. § 2211, who in connection with services performed in a prospective real estate transaction, provide mortgage information or assistance to a buyer, if such real estate broker or real estate salesperson is not compensated for providing such mortgage information or assistance in addition to the compensation received from the seller or buyer for such real estate brokerage activity. The term shall not include attorneys licensed to practice law in this State acting in their professional capacity. The term shall not include persons engaged in the foregoing activities solely in connection with the sale, assignment, or other transfer of one or more previously originated loans.

(9) “Mortgage loan originator”:

(A) Means an individual who for compensation or gain or in the expectation of compensation or gain:

(i) takes a residential mortgage loan application;

(ii) offers or negotiates terms of a residential mortgage loan;

(iii) represents to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that such individual can or will perform the services described in subdivision (i) or (ii) of this subdivision (9)(A).

(B) An individual “takes a residential mortgage loan application” if the individual receives a residential mortgage loan application for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower or prospective borrower, or to accept the terms offered by a borrower or prospective borrower in response to a solicitation, whether the application is received directly or indirectly from the borrower or prospective borrower.

(C) An individual “offers or negotiates terms of a residential mortgage loan for compensation or gain” if the individual:

(i)(I) presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms;

(II) communicates directly or indirectly with a borrower or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms; or

(III) recommends, refers, or steers a borrower or prospective borrower to a particular lender or set of residential mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower; and

(ii) receives or expects to receive payment of money or anything of value in connection with the activities described in subdivision (i) of this subdivision (9)(C) or as a result of any residential mortgage loan terms entered into as a result of such activities.

(D) Does not include:

(i) an individual engaged solely as a loan processor or underwriter, except as otherwise provided in subsection 2201(g) of this chapter;

(ii) a person or entity that only performs real estate brokerage activities and is licensed or registered in accordance with Vermont law, unless the person or entity is compensated by a buyer or a seller in addition to the compensation received for such real estate brokerage activity or is compensated by a lender, mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator; or

(iii) a person or entity solely involved in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. § 101(53D).

(10) “Nontraditional mortgage product” means any mortgage product other than a 30-year fixed rate mortgage.

(11) “Real estate brokerage activity” means any activity that involves offering or providing real estate brokerage services to the public, including:

(A) acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;

(B) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

(C) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property, other than in connection with providing financing with respect to any such transaction;

(D) engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and

(E) offering to engage in any activity or act in any capacity described in subdivision (A), (B), (C), or (D) of this subdivision (11).

(12) “Registered mortgage loan originator” means any individual who:

(A) meets the definition of mortgage loan originator and is an employee of:

(i) a depository institution;

(ii) a subsidiary that is:

(I) owned and controlled by a depository institution, as determined by a federal banking agency; and

(II) regulated by a federal banking agency; or

(iii) an institution regulated by the Farm Credit Administration; and

(B) is registered with, and maintains a unique identifier through, the Nationwide Multistate Licensing System and Registry.

(13) “Residential mortgage loan application” means a request, in any form, for an offer, or a response to a solicitation of an offer, of residential mortgage loan terms, and information about the borrower or prospective borrower that is customary or necessary in a decision on whether to make such an offer.

(14) “Sales finance company” means any person who has purchased one or more retail installment contracts, as defined in 9 V.S.A. §§ 2351(5) and 2401(7), from one or more retail sellers located in this State. Taking one or more retail installment contracts as security for a loan or loans shall not be construed as purchasing for purposes of this definition. (Added 1995, No. 162 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 1995, No. 180 (Adj. Sess.), § 38(a); 1997, No. 98 (Adj. Sess.), § 2, eff. April 16, 1998; 1999, No. 153 (Adj. Sess.), § 11, eff. Jan. 1, 2001; 2009, No. 29, § 1; 2009, No. 134 (Adj. Sess.), § 24a; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2011, No. 85 (Adj. Sess.), § 1, eff. April 20, 2012; 2013, No. 34, § 3; 2015, No. 128 (Adj. Sess.), § F.3, eff. May 24, 2016; 2017, No. 22, § 18, eff. May 4, 2017; 2019, No. 20, § 3.)

2201. Licenses required

(a) Without first obtaining a license under this chapter from the Commissioner, a person shall not:

(1) Engage in the business of making loans of money, credit, goods, or things in action and charge, contract for, or receive on any such loan interest, a finance charge, discount, or consideration therefor.

(2) Act as a mortgage broker.

(3) Engage in the business of a mortgage loan originator.

(4) Act as a sales finance company.

(5) Engage in the business of loan solicitation. A person licensed as a lender, sales finance company, or mortgage broker is not required to obtain a separate loan solicitation license when acting on the person’s own behalf.

(b) A licensed mortgage loan originator shall register and maintain a valid unique identifier with the Nationwide Multistate Licensing System and Registry and shall be either:

(1) An employee actively employed at or assigned to a licensed location of, and supervised and sponsored by, only one licensed lender or licensed mortgage broker operating in this State.

(2) An individual sole proprietor who is also a licensed lender or licensed mortgage broker.

(3) An employee engaged in loan modifications employed at or assigned to a licensed location of, and supervised and sponsored by, only one third-party loan servicer licensed to operate in this State pursuant to chapter 85 of this title. As used in this subsection, “loan modification” means an adjustment or compromise of an existing residential mortgage loan. The term “loan modification” does not include a refinancing transaction.

(c) A person licensed pursuant to subdivision (a)(1) of this section may engage in mortgage brokerage and sales finance if such person informs the Commissioner in advance that he or she intends to engage in sales finance and mortgage brokerage. Such person shall inform the Commissioner of his or her intention on the original license application under section 2102 of this title, any renewal application under section 2109 of this title, or pursuant to section 2106 of this title, and shall pay the applicable fees required by subsection 2102(b) of this title for a mortgage broker license or sales finance company license.

(d) A lender license, mortgage broker license, sales finance company license, or loan solicitation license shall not be required of:

(1) A state agency, political subdivision, or other public instrumentality of a state.

(2) A federal agency or other public instrumentality of the United States.

(3) A gas or electric utility subject to the jurisdiction of the Public Utility Commission engaging in energy conservation or safety loans.

(4) A depository institution or a financial institution as defined in subdivision 11101(32) of this title.

(5) A pawnbroker.

(6) An insurance company.

(7) A seller of goods or services that finances the sale of such goods or services, other than a residential mortgage loan.

(8) Any individual who offers or negotiates the terms of a residential mortgage loan secured by a dwelling that served as the individual’s residence, including a vacation home, or inherited property that served as the deceased’s dwelling, provided that the individual does not act as a mortgage loan originator or provide financing for such sales so frequently and under such circumstances that it constitutes a habitual activity and acting in a commercial context.

(9) Lenders that conduct their lending activities, other than residential mortgage loan activities, through revolving loan funds, that are nonprofit organizations exempt from taxation under 26 U.S.C. § 501(c) and that register with the Commissioner of Economic Development under 10 V.S.A. § 690a.

(10) Persons who lend, other than residential mortgage loans, an aggregate of less than $250,000.00 in any one year at rates of interest of no more than 12 percent per annum.

(11) A seller who, pursuant to 9 V.S.A. § 2355(f)(1)(D), includes the amount paid or to be paid by the seller to discharge a security interest, lien interest, or lease interest on the traded-in motor vehicle in a motor vehicle retail installment sales contract, provided that the contract is purchased, assigned, or otherwise acquired by a sales finance company licensed pursuant to this title to purchase motor vehicle retail installment sales contracts or a depository institution.

(12)(A) A person making an unsecured commercial loan, which loan is expressly subordinate to the prior payment of all senior indebtedness of the commercial borrower regardless of whether such senior indebtedness exists at the time of the loan or arises thereafter. The loan may or may not include the right to convert all or a portion of the amount due on the loan to an equity interest in the commercial borrower.

(B) As used in this subdivision (12), “senior indebtedness” means:

(i) all indebtedness of the commercial borrower for money borrowed from depository institutions, trust companies, insurance companies, and licensed lenders, and any guarantee thereof; and

(ii) any other indebtedness of the commercial borrower that the lender and the commercial borrower agree shall constitute senior indebtedness.

(13) Nonprofit organizations established under testamentary instruments, exempt from taxation under 26 U.S.C. § 501(c)(3), and that make loans for postsecondary educational costs to students and their parents, provided that the organizations provide annual accountings to the Probate Division of the Superior Court.

(14) Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual.

(15) A housing finance agency.

(16) A person who makes no more than three mortgage loans in any consecutive three-year period beginning on or after July 1, 2011.

(e) A mortgage loan originator license shall not be required of:

(1) Registered mortgage loan originators, when employed by and acting for an entity described in subdivision 2200(12) of this chapter.

(2) Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual.

(3) Any individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that served as the individual’s residence, including a vacation home, or inherited property that served as the deceased’s dwelling, provided that the individual does not act as a mortgage loan originator or provide financing for such sales so frequently and under such circumstances that it constitutes a habitual activity and acting in a commercial context.

(4) An individual who is an employee of a federal, state, or local government agency, or an employee of a housing finance agency, who acts as a mortgage loan originator only pursuant to his or her official duties as an employee of the federal, state, or local government agency or housing finance agency.

(5) A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client, unless the attorney is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator. To the extent an attorney licensed in this State undertakes activities that are covered by the definition of a mortgage loan originator, such activities do not constitute engaging in the business of a mortgage loan originator, provided that:

(A) such activities are considered by the State governing body responsible for regulating the practice of law to be part of the authorized practice of law within this State;

(B) such activities are carried out within an attorney-client relationship; and

(6) A person who makes no more than three mortgage loans in any consecutive three-year period beginning on or after July 1, 2011.

(f) If a person who offers or negotiates the terms of a mortgage loan is exempt from licensure pursuant to subdivision (d)(16) or (e)(6) of this section, there is a rebuttable presumption that he or she is not engaged in the business of making loans or being a mortgage loan originator.

(g) Independent contractor loan processors or underwriters. A loan processor or underwriter who is an independent contractor may not engage in the activities of a loan processor or underwriter unless such independent contractor loan processor or underwriter obtains and maintains a mortgage loan originator license. Each independent contractor loan processor or underwriter licensed as a mortgage loan originator must have and maintain a valid unique identifier issued by the Nationwide Multistate Licensing System and Registry.

(h) This chapter shall not apply to commercial loans of $1,000,000.00 or more. (Amended 1969, No. 243 (Adj. Sess.), § 1; 1979, No. 173 (Adj. Sess.), § 2, eff. April 30, 1980; 1985, No. 38, § 2; 1991, No. 1, § 1, eff. Feb. 27, 1991; 1995, No. 162 (Adj. Sess.), § 2, eff. Jan. 1, 1997; 1999, No. 153 (Adj. Sess.), § 12, eff. Jan. 1, 2001; 2001, No. 55, § 4, eff. June 12, 2001; 2005, No. 143 (Adj. Sess.), § 2; 2007, No. 159 (Adj. Sess.), § 1, eff. May 20, 2008; 2007, No. 178 (Adj. Sess.), § 1; 2009, No. 29, § 1; 2009, No. 137 (Adj. Sess.), § 1a; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2011, No. 21, § 1, eff. May 11, 2011; 2011, No. 85 (Adj. Sess.), § 2, eff. April 20, 2012; 2013, No. 29, § 3; 2013, No. 34, § 4; 2013, No. 199 (Adj. Sess.), § 21; 2015, No. 51, § E.4; 2017, No. 22, § 19, eff. May 4, 2017; 2019, No. 20, § 4; 2019, No. 103 (Adj. Sess.), § 6; 2021, No. 25, § 8, eff. May 12, 2021.)

2201a. Repealed. 1995, No. 162 (Adj. Sess.), § 39(a), eff. Jan. 1, 1997.

2202. Repealed. 2019, No. 20, § 5.

2202a. Application for commercial lender license

(a) Application for a license for a lender making solely commercial loans shall be in writing, under oath, and in the form prescribed by the Commissioner, and shall contain the name and address of the residence and the place of business of the applicant and, if the applicant is a partnership or association, of every member thereof, and, if a corporation, of each officer, director, and control person thereof; the county and municipality with street and number, if any, where the business is to be conducted; and such further information as the Commissioner may require.

(b) At the time of making application, the applicant shall pay to the Commissioner an initial licensing fee and an application and investigation fee pursuant to subdivision 2102(b)(2) of this title.

(c) In connection with an application for a commercial lender license, the applicant and each officer, director, and control person of the applicant shall furnish to the Nationwide Multistate Licensing System and Registry information concerning the applicant’s identity and the identity of each of the applicant’s officers, directors, and control persons, including:

(1) fingerprints for submission to the Federal Bureau of Investigation and for any other governmental agency or entity authorized to receive such information for a state, national, and international criminal history background check;

(2) personal history and experience in a form prescribed by the NMLS, including the submission of authorization for the NMLS and the Commissioner to obtain information related to any administrative, civil, or criminal findings by any governmental jurisdiction; and

(3) any other information required by the NMLS or the Commissioner. (Added 2009, No. 134 (Adj. Sess.), § 24c; amended 2019, No. 20, § 6.)

2202b. Approval of application; issuance of commercial lender license

(a) Upon the filing of an application and payment of the required fees, the Commissioner shall issue a commercial lender license to the applicant if the Commissioner finds:

(1) The experience, character, and general fitness of the applicant command the confidence of the community and warrant belief that the business will be operated honestly, fairly, and efficiently within the purposes of this chapter.

(A) If the applicant is a partnership or association, such findings are required with respect to each partner, member, and person in control of the applicant.

(B) If the applicant is a corporation, such findings are required with respect to each officer, director, and person in control of the applicant.

(2) The applicant and each officer, director, and person in control of the applicant has never had a lender license, mortgage broker license, mortgage loan originator license, or similar license revoked in any governmental jurisdiction, except that a subsequent formal vacation of such revocation shall not be deemed a revocation.

(3) The applicant and each officer, director, and person in control of the applicant has not been convicted of or pled guilty or nolo contendere to a felony in a domestic, foreign, or military court:

(A) during the seven-year period preceding the date of the application for licensing, except a conviction for driving under the influence or a similarly titled offense in this State or in any other jurisdiction; or

(B) at any time preceding the date of application, if the felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering; and

(b)(1) If the Commissioner finds that the applicant does not meet the requirements of subsection (a) of this section, the Commissioner shall not issue a license.

(2) Not later than 60 days after an applicant files a complete application, the Commissioner shall notify the applicant of the denial, stating the reason or reasons therefor.

(3) If the applicant does not file a timely request for reconsideration pursuant to section 2104 of this title, the Commissioner shall:

(A) return to the applicant the sum paid by the applicant as a license fee; and

(B) retain the investigation fee to cover the costs of investigating the application.

(c)(1) If the Commissioner finds that an applicant meets the requirements of subsection (a) of this section, he or she shall issue the license not later than 60 days after the applicant submits a complete application.

(2) Provided that the licensee annually renews the license, the license shall be valid until the licensee surrenders the license or until the Commissioner revokes, suspends, terminates, or refuses to renew the license.

(d) For good cause shown and consistent with the purposes of this section, the Commissioner may waive or modify the requirements of subdivision (a)(2) of this section. (Added 2009, No. 134 (Adj. Sess.), § 24f; amended 2017, No. 22, § 5, eff. May 4, 2017; 2019, No. 20, § 7.)

2203. Bond; liquid assets required

(a) Prior to issuance of a license, the applicant shall file with the Commissioner, and shall keep in force thereafter for as long as the license remains in effect, a bond in a form and substance to be approved by the Commissioner in which the applicant shall be the obligor, in such sum as the Commissioner may require. The aggregate liability for any and all claims on any bond shall in no event exceed the sum thereof. No surety obligation on a bond shall be terminated unless at least 60 days’ prior written notice is given by the surety to the obligor and the Commissioner. When one person is issued licenses to conduct the licensed activity at more than one office, the Commissioner may accept a single bond covering all such offices. The bond shall run to the State for the use of the State and of any person or persons who may have cause of action against the obligor of such bond under the provisions of this chapter. Such bond shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this chapter and of all rules and regulations lawfully made by the Commissioner hereunder, and will pay to the State and to any such person or persons any and all monies that may become due or owing to the State or to such person or persons from such obligor under and by virtue of the provisions of this chapter. The Commissioner shall require that the amount of the bonds shall be based upon the dollar amount of loans originated in Vermont and, at a minimum:

(1) For licensed lenders:

(A) who annually originate $0.00 to $1,000,000.00 in loans, a surety bond not less than $50,000.00;

(B) who annually originate $1,000,000.01 to $15,000,000.00 in loans, a surety bond not less than $100,000.00;

(2) For mortgage brokers:

(A) who annually originate $0.00 to $2,000,000.00 in mortgage loans, a surety bond not less than $25,000.00;

(B) who annually originate $2,000,000.01 to $5,000,000.00 in mortgage loans, a surety bond not less than $50,000.00;

(D) who annually originate $15,000,000.01 or more in mortgage loans, a surety bond not less than $100,000.00.

(3) The Commissioner may adopt regulations modifying the minimum bond requirements set forth in this subsection.

(b) Each mortgage loan originator shall be covered by a surety bond in accordance with this section. In the event that the mortgage loan originator is an employee of a person subject to this chapter, the surety bond of such licensed lender or licensed mortgage broker can be used in lieu of the mortgage loan originator’s surety bond requirement, provided that the surety bond shall provide coverage for each mortgage loan originator in an amount as prescribed in this section.

(c) A loan solicitation licensee shall maintain a surety bond in an amount not less than $25,000.00 or in such other amount as the Commissioner may require.

(d) When an action is commenced on a licensee’s bond, the Commissioner may require the filing of a new bond. Immediately upon recovery upon any action on the bond, the licensee shall file a new bond.

(e) Every applicant for a lender’s license shall also prove, in form satisfactory to the Commissioner, that the applicant has liquid assets of $25,000.00, or such greater amount as the Commissioner may require, available for the operation of such business at the location specified in the application. Every applicant wishing to make commercial loans shall prove liquid assets in an amount of $50,000.00 or such greater amount as the Commissioner may require.

(f) Notwithstanding subsections (a) and (e) of this section, the Commissioner may waive or modify the requirement for or amount of a bond or liquid asset set forth in this section, or accept other appropriate means of assuring the financial responsibility of a licensee.

(g) This section does not apply to a lender making only commercial loans. (Amended 1983, No. 35, § 2; 1995, No. 162 (Adj. Sess.), § 4, eff. Jan. 1, 1997; 2005, No. 36, § 3; 2009, No. 29, § 1; 2009, No. 134 (Adj. Sess.), § 24d; 2017, No. 22, § 21, eff. May 4, 2017.)

2203a. Additional bond; liquid assets to be maintained

(a) If the Commissioner finds at any time that a licensee’s bond is insecure, exhausted, insufficient, or otherwise doubtful, the Commissioner shall require one or more additional bonds meeting the standards set forth in section 2203 of this title. The licensee shall file the bond within 10 days of the Commissioner’s written demand to do so.

(b) Every licensee, except as set forth in subsection (c) of this section, shall maintain at all times assets in amounts as set forth in section 2203 of this title, or in such greater amount deemed necessary by the Commissioner. Assets must be either in liquid form available for the operation of or actually used in the conduct of such business at the location specified in the license.

(c) Every licensee making commercial loans shall maintain liquid assets in an amount deemed necessary by the Commissioner, but in no event less than $50,000.00. (Amended 1983, No. 35, § 3; 1989, No. 244 (Adj. Sess.), § 3; 1995, No. 162 (Adj. Sess.), § 8, eff. Jan. 1, 1997; 2009, No. 29, § 1; 2019, No. 20, § 8.)

2204. Repealed. 2019, No. 20, § 9.

2204a. Mortgage loan originator prelicensing and relicensing education requirement

(a) In order to meet the prelicensing education requirement for a mortgage loan originator, a person shall complete at least 20 hours of education approved in accordance with subsection (b) of this section, which shall include at least:

(1) three hours of federal law and regulations;

(2) three hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues;

(3) two hours of training related to lending standards for the nontraditional mortgage product marketplace; and

(4) two hours of Vermont law and regulations.

(b) For purposes of subsection (a) of this section, prelicensing education courses shall be reviewed and approved by the Nationwide Multistate Licensing System and Registry based upon reasonable standards. Review and approval of a prelicensing education course shall include review and approval of the course provider.

(c) Nothing in this section shall preclude any prelicensing education course, as approved by the Nationwide Multistate Licensing System and Registry, that is provided by the employer of the applicant or an entity which is affiliated with the applicant by an agency contract, or any subsidiary or affiliate of such employer or entity.

(d) Prelicensing education may be offered either in a classroom, online, or by any other means approved by the Nationwide Multistate Licensing System and Registry.

(e) The prelicensing education requirements approved by the Nationwide Multistate Licensing System and Registry in subdivisions (a)(1), (2), and (3) of this section for any state shall be accepted as credit toward completion of prelicensing education requirements in Vermont.

(f) A person previously licensed as a mortgage loan originator under this chapter applying to be licensed again must prove that he or she has completed all of the continuing education requirements for the year in which the license was last held. This subsection does not apply to an individual who is required to retake 20 hours of prelicensing education pursuant to subsection (g) of this section.

(g) A person who has completed 20 hours of prelicensing education under 12 U.S.C. § 5104(c) must retake such prelicensing education to be eligible to apply for a Vermont loan originator license if he or she:

(1) within three years of completing the prelicensing education, does not acquire a valid mortgage loan originator license in any state or does not become a federally registered mortgage loan originator; or

(2) within three years of completing the prelicensing education, obtains a valid mortgage loan originator license in any state or becomes a federally registered mortgage loan originator and subsequently does not maintain an approved mortgage loan originator license in any state or an approved federal registration for a period of three years or more.

(h) A person who has completed two hours of Vermont prelicense education as required by subdivision (a)(4) of this section must retake such prelicensing education to be eligible to apply for a Vermont mortgage loan originator license if he or she:

(1) does not acquire a valid Vermont mortgage loan originator license within three years of completing the prelicense education; or

(2) obtains a valid Vermont mortgage loan originator license and then subsequently does not maintain an approved Vermont mortgage loan originator license for a period of three years or more. (Added 2009, No. 29, § 1; amended 2013, No. 29, § 4, eff. May 13, 2013; 2017, No. 22, § 4, eff. May 4, 2017; 2019, No. 20, § 10.)

2204b. Testing of mortgage loan originators

(a) An individual applying for a mortgage loan originator license shall pass, in accordance with the standards established under this section, a qualified written test developed by the Nationwide Multistate Licensing System and Registry and administered by a test provider approved by the Nationwide Multistate Licensing System and Registry based upon reasonable standards.

(b) A written test shall not be treated as a qualified written test for purposes of subsection (a) of this section unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including:

(1) ethics;

(2) federal law and regulation pertaining to mortgage origination;

(3) State law and regulation pertaining to mortgage origination; and

(4) federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues.

(c) Nothing in this section shall prohibit a test provider approved by the Nationwide Multistate Licensing System and Registry from providing a test at the location of the employer of the applicant or the location of any subsidiary or affiliate of the employer of the applicant.

(d) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than 75 percent correct answers to questions.

(e) An individual may take a test three consecutive times, with each consecutive test occurring at least 30 days after the preceding test. After failing three consecutive tests, an individual shall wait at least six months before taking the test again.

(f) A licensed mortgage loan originator who fails to maintain a valid license for a period of five years or longer shall retake the test, not taking into account any time during which such individual is a registered mortgage loan originator. (Added 2009, No. 29, § 1; amended 2011, No. 85 (Adj. Sess.), § 4, eff. April 20, 2012; 2019, No. 20, § 11.)

2204c. Continuing education for mortgage loan originators

(a) In order to meet the annual continuing education requirements, a licensed mortgage loan originator shall complete at least eight hours of education approved in accordance with subsection (b) of this section, which shall include at least:

(1) three hours of federal law and regulations;

(2) two hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues; and

(3) two hours of training related to lending standards for the nontraditional mortgage product marketplace.

(b) For purposes of subsection (a) of this section, continuing education courses shall be reviewed and approved by the Nationwide Multistate Licensing System and Registry based upon reasonable standards. Review and approval of a continuing education course shall include review and approval of the course provider.

(c) Nothing in this section shall preclude any education course, as approved by the Nationwide Multistate Licensing System and Registry, that is provided by the employer of the mortgage loan originator or an entity that is affiliated with the mortgage loan originator, or any subsidiary or affiliate of the employer.

(d) Continuing education may be offered either in a classroom, online, or by any other means approved by the Nationwide Multistate Licensing System and Registry.

(e) A licensed mortgage loan originator:

(1) except for subsection (i) of this section, may only receive credit for a continuing education course in the year in which the course is taken; and

(2) may not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

(f) A licensed mortgage loan originator who is an approved instructor of an approved continuing education course may receive credit for the licensed mortgage loan originator’s own annual continuing education requirement at the rate of two hours of credit for every one hour taught.

(g) A person having successfully completed the education requirements approved by the Nationwide Multistate Licensing System and Registry in subdivisions (a)(1), (2), and (3) of this section for any state shall be accepted as credit toward completion of continuing education requirements in Vermont.

(h) A licensed mortgage loan originator who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of a new or renewed license. This subsection does not apply to an individual who is required to retake 20 hours of prelicensing education pursuant to subsection 2204a(g) of this title.

(i) A person who otherwise meets the requirements for renewal of a license may make up any deficiency in continuing education as established by order or rule of the Commissioner. (Added 2009, No. 134 (Adj. Sess.), § 24f; amended 2017, No. 22, § 5, eff. May 4, 2017; 2019, No. 20, § 12.)

2204d. Mortgage loan originator license inactive status

The license of a mortgage loan originator that has satisfied all of the requirements of licensure, other than being employed by a licensed lender or licensed mortgage broker, may be placed in an approved inactive status. (Amended 1995, No. 162 (Adj. Sess.), § 7, eff. Jan. 1, 1997; 2009, No. 29, § 1; 2013, No. 29, § 5, eff. May 13, 2013; 2019, No. 20, § 13.)

2205. Repealed. 2019, No. 20, § 14.

2206. Recodified. 2019, No. 20, § 13.

2207. Recodified. 2019, No. 20, § 8.

2208. Repealed. 2019, No. 20, § 15.

2208a. Mortgage loan originator change of employer or sponsor

(a) No mortgage loan originator may be employed, supervised, and sponsored by more than one licensed lender or licensed mortgage broker operating in this State. Alternatively, a mortgage loan originator may be an individual sole proprietor who is also licensed as a lender or mortgage broker in this State.

(b) A mortgage loan originator shall notify the Commissioner and update its status on the Nationwide Mortgage Licensing System and Registry within 15 days of any change in the employer and sponsor of the mortgage loan originator subsequent to the initial employer and sponsor. A fee of $50.00 payable to the Commissioner shall accompany notice of such change of employer and sponsor. (Added 2009, No. 134 (Adj. Sess.), § 19.)

2209. Repealed. 2019, No. 20, § 16.

2209a. Recodified. 2019, No. 20, § 12.

2210. Repealed. 2019, No. 20, § 17.

2211. Repealed. 2019, No. 20, § 18.

2212. Repealed. 2019, No. 20, § 19.

2213. Repealed. 2019, No. 20, § 20.

2214. Repealed. 2019, No. 20, § 21.

2215. Repealed. 2019, No. 20, § 22.

2216. Mortgage lending; specific requirements; exceptions

Every licensee engaging in the making of loans secured by a lien against real estate located in this State, whether conducting its affairs as an agent or principal and whether operating from facilities within the State or by mail, telephone, or by electronic means, shall comply with the general provisions of this chapter unless exempted herein. A licensee making such loans through a third person shall only make loans through a person licensed as a mortgage broker and as a mortgage loan originator under this chapter, unless such third person is exempt from such licensing provisions. Any lender who makes such loans through a third person required to be licensed and not so licensed, in addition to being subject to all applicable penalties under Vermont law, shall be responsible for the acts or omissions of the third person as a principal is responsible for the acts and omissions of its agent. Every licensee making loans secured by a lien against real estate shall comply with sections 10403 and 10404, and subchapter 2 of chapter 200 of this title, and shall also be subject to the following specific limitations:

(1) For loans secured by a first lien, the term shall not exceed 480 months, and the licensees may not exceed the interest rate permitted by 9 V.S.A. § 41a(b)(8). All such lien documents shall include a power of sale pursuant to 12 V.S.A § 4531a et seq. The limitations on permitted charges contained in sections 2231 and 2233 of this title and 9 V.S.A. §§ 42, 44, and 46 shall not apply to any loan within the scope of 12 U.S.C. § 1735f-7a. Permitted charges shall be as specified in 9 V.S.A. § 42, 44, and 46 for any loan secured by a first lien on real estate that is not included within the scope of 12 U.S.C. § 1735f-7a, instead of sections 2231 and 2233 of this title.

(2) For loans secured by a subordinate lien, the term shall not exceed 360 months, and the licensees may not exceed the interest rate permitted by 9 V.S.A. chapter 4. All such lien documents shall include a power of sale pursuant to 12 V.S.A. § 4531a et seq. Permitted charges for loans secured by a subordinate lien shall be as specified in 9 V.S.A. §§ 42, 44, and 46, instead of sections 2231 and 2233 of this title.

(3) No licensee shall take a lien upon real estate as security for any loan made under this chapter, except such lien as is created by law upon the recording of a judgment or such lien as secures a loan in principal amount in excess of $3,000.00 at the time of making.

(4) Interest shall be computed by the actuarial method in accordance with 9 V.S.A. 41a(d).

(5) Any loan secured by a lien on real estate, except a commercial loan, which does not contain a fixed rate or substantially equal payments for full amortization within the repayment period shall conform to federal regulations on alternative mortgages where applicable by reason of federal law or action of the Commissioner.

(6) This section shall not apply to commercial loans. (Added 1983, No. 35, § 1; amended 1989, No. 244 (Adj. Sess.), § 1; 1995, No. 162 (Adj. Sess.), § 17, eff. Jan. 1, 1997; 1997, No. 23, § 12, eff. Jan. 1, 1997; 1997, No. 98 (Adj. Sess.), § 3, eff. April 16, 1998; 1999, No. 153 (Adj. Sess.), § 15, eff. Jan. 1, 2001; 2009, No. 29, § 1.)

2217. Mortgage brokers

(a) No licensee or other person shall act as a mortgage broker in any transaction in which the licensee or such other person is acting as a mortgage lender.

(b) Each mortgage broker required to be licensed under this chapter shall retain for a minimum of six years after a contract is executed pursuant to section 2219 of this title, the original contract between the mortgage broker and the prospective borrower, a copy of the settlement statement, an account of fees received in connection with the loan, correspondence, papers, or records relating to the loan and such other documents as the Commissioner may require.

(c) A mortgage broker and a mortgage loan originator shall only negotiate, place, or assist in placement of Vermont mortgage loans with lenders licensed pursuant to this chapter, or with depository institutions authorized to do such business in Vermont. (Added 1995, No. 162 (Adj. Sess.), § 18, eff. Jan. 1, 1997; amended 2009, No. 29, § 1.)

2218. Segregated accounts

(a) All permitted charges paid by loan applicants or borrowers to a lender or a mortgage broker subject to this chapter shall be deposited in one or more accounts maintained at a bank approved by the Commissioner, and with respect to such funds the lender or mortgage broker shall act as a fiduciary. Such account or accounts shall be segregated from all other accounts of the lender or broker. No permitted charges shall be used in the conduct of a lender’s or a broker’s personal affairs, nor in a lender’s or a broker’s business affairs not specifically related to the applicant or borrower.

(b) Such lender or mortgage broker may withdraw funds from the segregated account for payment directly to third parties for authorized fees.

(c) Such lender or mortgage broker may withdraw funds from the segregated account for commissions to which it is entitled for services actually performed. Services are deemed to have been performed when a loan has closed, the loan applicant has withdrawn the loan application in writing, or such mortgage broker or lender has provided to the loan applicant or borrower written notice that the loan has been denied.

(d) Such lender or mortgage broker may return funds from the segregated account to the borrower if not prohibited by the application or contract.

(e) Such lender or mortgage broker shall maintain complete and accurate account records, including, at a minimum, the source of all deposits, the nature of all disbursements, the date and amount of each transaction, and the name of the loan applicant or borrower. All documents pertaining to account activity shall be produced upon request of the Commissioner. (Added 1995, No. 162 (Adj. Sess.), § 19, eff. Jan. 1, 1997; amended 2009, No. 29, § 1.)

2219. Contract required of mortgage broker

(a) In advance of taking any fee or collecting any charges or at the time the prospective borrower submits a signed application, a written agreement in a form approved by the Commissioner shall be prepared by the mortgage broker and shall be signed by both the mortgage broker and the prospective borrower. The agreement shall set forth the particulars of the service to be performed by the mortgage broker, including specifics as to what shall constitute reasonable efforts on the part of the mortgage broker to perform the agreed upon services, shall state clearly that the mortgage broker shall represent the interests of the prospective borrower rather than those of any lender, and shall state the fee for the services.

(b) A mortgage broker who acts as an independent contractor loan processor or an underwriter who performs loan processing or underwriting activities for a licensed or exempt mortgage broker or lender is not required to provide a mortgage broker agreement to the prospective borrower, provided:

(1) the mortgage broker is acting as an independent contractor loan processor or underwriter as described in subsection 2201(g) of this chapter;

(2) the mortgage broker’s activities are limited to loan processor or underwriting activities as described in subdivision 2200(6) of this chapter;

(3) the mortgage broker is paid a fee solely by the licensed or exempt mortgage broker or lender, is not paid by the prospective borrower, and is not paid a commission based upon the dollar amount of the loan; and

(4) if the mortgage broker is acting as an independent contractor loan processor or underwriter on behalf of a mortgage broker, such mortgage broker has already entered into a written mortgage broker agreement with the prospective borrower.

(c) A mortgage broker that engages solely in lead generation and does not employ or sponsor any mortgage loan originators is not required to provide a mortgage broker agreement but must include clearly and conspicuously in all advertisements of loans and solicitation of leads, the following disclosure: THIS IS A LOAN SOLICITATION ONLY. [INSERT LICENSEE NAME] IS NOT THE LENDER. INFORMATION RECEIVED WILL BE SHARED WITH ONE OR MORE THIRD PARTIES IN CONNECTION WITH YOUR LOAN INQUIRY. THE LENDER MAY NOT BE SUBJECT TO ALL VERMONT LENDING LAWS. THE LENDER MAY BE SUBJECT TO FEDERAL LENDING LAWS. (Added 1995, No. 162 (Adj. Sess.), § 20, eff. Jan. 1, 1997; amended 2009, No. 29, § 1; 2013, No. 29, § 6, eff. May 13, 2013; 2017, No. 22, § 24; 2019, No. 20, § 23.)

2220. Disclosure required by mortgage lender

In advance of taking any fee or collecting any charges for a mortgage loan, or at the time the prospective borrower submits a signed application, a written disclosure shall be provided by the lender to the prospective borrower setting forth all provisions relating to interest rates applicable to the loan, and specific disclosure regarding any possibility that the lender may change its role to that of a mortgage broker. This section shall not apply to commercial loans. (Added 1995, No. 162 (Adj. Sess.), § 21, eff. Jan. 1, 1997; amended 2009, No. 29, § 1.)

2220a. Disclosure required by loan solicitation licensee

Each loan solicitation licensee shall include clearly and conspicuously in all advertisements of loans and solicitations of leads, the following statement: THIS IS A LOAN SOLICITATION ONLY. [INSERT LICENSEE NAME] IS NOT THE LENDER. INFORMATION RECEIVED WILL BE SHARED WITH ONE OR MORE THIRD PARTIES IN CONNECTION WITH YOUR LOAN INQUIRY. THE LENDER MAY NOT BE SUBJECT TO ALL VERMONT LENDING LAWS. THE LENDER MAY BE SUBJECT TO FEDERAL LENDING LAWS. (Added 2017, No. 22, § 25.)

2221. Out-of-state mortgage loans

A mortgage loan made outside Vermont for use outside Vermont shall be deemed to be made outside the state of Vermont and shall not be subject to this chapter except upon written agreement of the borrower and the licensee. (Added 1995, No. 162 (Adj. Sess.), § 22, eff. Jan. 1, 1997; amended 2009, No. 29, § 1.)

2222. Examinations

The Commissioner shall examine the affairs, business, and records of each licensee under this chapter, other than a loan solicitation company, at least once every three years. The Commissioner shall examine the affairs, business, and records of each loan solicitation company as often as the Commissioner deems necessary to carry out the purposes of this part. (Amended 1979, No. 157 (Adj. Sess.), § 6; 1987, No. 119, § 6; 1995, No. 162 (Adj. Sess.), § 23, eff. Jan. 1, 1997; 1997, No. 23, § 6a; 1999, No. 153 (Adj. Sess.), § 16, eff. Jan. 1, 2001; 2009, No. 29, § 1; 2019, No. 20, § 24.)

2223. Additional records required of loan solicitation licensees

(a) In addition to any records required by section 2119 of this title, a licensee that engages in loan solicitation activity shall maintain the following records for not less than seven years:

(1) copies of all solicitation materials used in its business, regardless of medium, including business cards, telephone scripts, mailers, electronic mail, and radio, television, and Internet advertisements;

(2) records of any contact or attempted contact with a consumer, including the name, date, method, and nature of contact, and any information provided to or received from the consumer; and

(3) the name, address, and, if applicable, unique identifier of any person who received, requested, or contracted for leads or referrals and any fees or consideration charged or received for such services.

(b) Thereafter, the licensee shall dispose of such records in accordance with 9 V.S.A. § 2445. (Amended 1995, No. 162 (Adj. Sess.), § 24, eff. Jan. 1, 1997; 2009, No. 29, § 1; 2017, No. 22, § 26, eff. May 4, 2017; 2019, No. 20, § 25.)

2223a. Repealed. 1969, No. 243 (Adj. Sess.), § 8.

2224. Repealed. 2019, No. 20, § 26.

2225. Statement of rates of charge

Rates of charge shall be stated fully and clearly in such manner as necessary to prevent misunderstanding thereof by prospective borrowers. (Amended 1995, No. 162 (Adj. Sess.), § 26, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2226. Repealed. 2019, No. 20, § 27.

2227. Conduct of unrelated business

No licensee shall conduct the business of making noncommercial loans under this chapter within any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, except as may be authorized in writing by the Commissioner upon his or her finding that the character of such other business is such that the granting of such authority would not facilitate evasions of this chapter or of the rules and regulations lawfully made hereunder. (Amended 1995, No. 162 (Adj. Sess.), § 28, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2228. Repealed. 2019, No. 20, § 28.

2229. Confessions of judgment; powers of attorney; contents of notes

No licensee shall take any confession of judgment. No licensee shall take any power of attorney excepting such as may be incorporated in a form of note approved by the Commissioner for use in the financing of insurance premiums. No licensee shall take any note, promise to pay, or security that does not accurately disclose the actual amount of the loan, the time for which it is made, and the agreed rate of interest, nor any instrument in which blank spaces are left to be filled in after execution. Notwithstanding the foregoing provisions of this section, the Commissioner may by rule exempt from all or part of this section commercial loans. (Amended 1987, No. 142 (Adj. Sess.), § 1, eff. April 11, 1988; 1989, No. 244 (Adj. Sess.), § 7; 2009, No. 29, § 1.)

2230. Rate of interest

(a) Every licensee may charge, contract for, and receive thereon interest, calculated according to the actuarial method as set forth in 9 V.S.A. § 41a(d), not exceeding the rates permitted by 9 V.S.A. chapter 4, except that the rate of interest on loans secured by motor vehicles, mobile homes, travel trailers, aircraft, watercraft and farm equipment may not exceed the rate permitted by 9 V.S.A. § 41a(b)(4).

(b) Interest may be charged, contracted for, and received at the single annual percentage rate that would earn the same interest as the graduated rates when the loan is paid according to its agreed terms and the calculations are made according to the actuarial method. Interest shall not be paid, deducted, received, or added to principal in advance, except that the advance collection of interest for a period not to exceed 30 days shall be permitted upon the origination of a mortgage loan. Except for loans made pursuant to section 2216 of this title, the maximum interest permitted on loans made under this chapter shall be computed on the basis of the number of days actually elapsed. For the purpose of these computations, a year is any period of 365 consecutive days and 366 days during a leap year.

(c) No licensee shall induce or permit any person jointly or severally to become obligated, directly or contingently or both, under more than one contract of loan made under this section at the same time, for the purpose of obtaining a higher rate of interest than would otherwise be permitted by law.

(d) This section shall not apply to commercial loans. (Amended 1969, No. 243 (Adj. Sess.), § 3; 1979, No. 173 (Adj. Sess.), § 6, eff. April 30, 1980; 1981, No. 26, § 1; 1981, No. 89, § 5, eff. May 13, 1981; 1983, No. 35,§§ 5, 9; 1995, No. 162 (Adj. Sess.), § 30, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2231. Contracts to be repayable in monthly installments; maximum term; additional charges prohibited; invalidity of loan contract

(a) Except for loans made pursuant to section 2216 of this title and in compliance with applicable regulations of the Commissioner, all loan contracts made under the provisions of this chapter shall require repayment in substantially equal consecutive monthly installments of principal and interest combined.

(b) In addition to the interest and charges herein provided for no further or other charge or amount for any examination, service, brokerage, commission, expense, fee, bonus, or other thing or otherwise shall be directly or indirectly charged, contracted for, or received except filing, recording, releasing, or termination fees paid or to be paid to a public officer; the premium or identifiable charge for credit life or disability insurance obtained, provided, or sold by the licensee subject to the provisions of sections 4101-4115 or sections 3805 and 3806 of this title and any gain or advantage to the licensee from such shall not be deemed in violation of this chapter nor an additional charge in violation of this section or section 2230 of this title. For loans subject to this subsection, if any interest, consideration, or charges in excess of those permitted by this subsection, except as the result of an accidental or bona fide error are charged, contracted for, or received, the contract of loan shall be void and the licensee shall have no right to collect or receive any principal, interest, or charges whatsoever.

(d) The provisions of subsection (b) of this section shall not apply to mortgage loans. (Amended 1969, No. 243 (Adj. Sess.), § 4; 1979, No. 173 (Adj. Sess.), § 7, eff. April 30, 1980; 1981, No. 26, § 2; 1981, No. 89, § 6, eff. May 13, 1981; 1983, No. 35, §§ 6, 9; 1995, No. 162 (Adj. Sess.), § 31, eff. Jan. 1, 1997; 1997, No. 98 (Adj. Sess.), §§ 4, 5, eff. April 16, 1998; 2009, No. 29, § 1.)

2232. Repealed. 1995, No. 162 (Adj. Sess.), § 39(a), eff. Jan. 1, 1997.

2232a. Requirements regarding the borrower

(a) Each licensed lender shall deliver to the borrower at the time any loan is made a statement showing in clear and distinct terms the amount and date of the loan and of its maturity, the nature of the security, if any, for the loan, the name and address of the borrower and of the licensee, and the agreed rate of charge.

(b) Each licensed lender shall, in advance of any loan closing, deliver to each prospective borrower, based on the type of loan applied for, a full and accurate schedule of the charges to be made and the method of computing the same.

(c) Each licensed lender or holder shall give to the borrower a plain and complete statement of all payments made on account of any such loan specifying the amount applied to finance charges and the amount, if any, applied to principal, and stating the unpaid principal balance, if any, of such loan. When payment is made, a licensee shall provide the borrower with a statement therefor within 30 days after the payment is received, or shall provide, on an annual basis, statements setting forth the information required herein. Each licensed lender or holder shall provide a transaction history of the loan to the borrower upon request.

(d) Each licensed lender or holder shall permit payment to be made in advance without prepayment premium or penalty in any amount on any contract of loan at any time, but the licensee or holder may apply such payment first to all finance charges in full at the agreed rate up to the date of such payment.

(e) Each licensed lender or holder shall, upon repayment of the loan in full, promptly mark indelibly every obligation and security signed by the borrower with the word “Paid” or “Canceled,” and within 30 days release any mortgage, restore any pledge, cancel and return any note, record or file any necessary release or discharge, cancel and return any assignment given to the licensee by the borrower, and refund to the borrower, in accordance with rules adopted by the Commissioner any unearned portion of the premium for credit life or disability insurance if a premium for such insurance was disbursed on behalf of the borrower at the time the loan was originally made. The provisions of this subsection shall not affect the right of action created by 27 V.S.A. § 464.

(f) This section shall not apply to commercial loans. (Amended 1979, No. 173 (Adj. Sess.), § 8, eff. April 30, 1980; 1981, No. 26, § 3; 1981, No. 89, § 7, eff. May 13, 1981; 1983, No. 35, §§ 7-9; 1995, No. 162 (Adj. Sess.), § 32, eff. Jan. 1, 1997; 2009, No. 29, § 1; 2015, No. 97 (Adj. Sess.), § 9.)

2233. Charges; loan solicitation; specialized financing

(a) Other than a mortgage broker fee pursuant to section 2219 of this title, no person who is required to be licensed under this chapter, shall directly or indirectly charge, contract for, or receive any interest, discount, consideration, or charge greater than is authorized by 9 V.S.A. § 41a or 46. No such loan for which a greater rate of interest, finance charge, consideration, or charges than is authorized by 9 V.S.A. § 41a or 46 has been charged, contracted for, or received shall be enforced in this State, and every person in any way participating therein in this State shall be subject to the provisions of this chapter. However, any loan legally made in any state which then had in effect a regulatory loan law similar in principle to this chapter may be enforced in this State only to the extent of collecting the principal amount owed and interest thereon at a rate not greater than that authorized by 9 V.S.A. § 41a or 46.

(b) A loan solicited or made by mail, telephone, or electronic means to a Vermont resident shall be subject to the provisions of this chapter notwithstanding where the loan was legally made. No person shall engage in the business of soliciting or making loans by mail, telephone, or electronic means to residents of this State unless duly licensed. Such licensee shall be subject to the applicable provisions of this title and 9 V.S.A. chapters 4, 59, and 61, but shall not be required to have or maintain a place of business in the State.

(c) No person other than a depository institution, pawnbroker, insurance company, or seller of merchandise or services shall engage in specialized financing, including tuition plans or other such financing, but not including insurance premium financing, for residents of this State unless duly licensed. Such licensee shall be subject to the applicable provisions of this title and 9 V.S.A. chapters 4, 59, and 61, but shall not be required to maintain a place of business in this State. Such financing may include more than one loan per borrower. A license granted to such lenders shall be explicit in its authority with respect to the types of business permitted. (Amended 1969, No. 243 (Adj. Sess.), § 7; 1975, No. 76; 1979, No. 173 (Adj. Sess.), § 10, eff. April 30, 1980; 1983, No. 77, § 2; 1995, No. 162 (Adj. Sess.), § 33, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2234. Assignment of wages

The payment in money, credit, goods, or things in action, as consideration for any sale or assignment of, or order for, the payment of wages, salary, commissions, or other compensation for services, whether earned or to be earned, for the purpose of regulation under this chapter, shall be deemed a loan secured by such assignment. The amount by which such assigned compensation exceeds the amount of such consideration actually paid, for the purposes of regulation under this chapter, shall be deemed finance charges or charges upon such loan from the date of such payment to the date such compensation is payable. Such transactions shall be governed by and subject to applicable provisions of this title and 9 V.S.A. chapters 4, 59, and 61. (Amended 1969, No. 243 (Adj. Sess.), § 6; 1979, No. 173 (Adj. Sess.), § 9, eff. April 30, 1980; 1995, No. 162 (Adj. Sess.), § 34, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2235. Requirements for assignment of wages

No assignment of or order for payment of any salary, wages, commissions, or other compensation for services, earned or to be earned, given to secure any loan made by any licensee under this chapter, shall be valid unless the amount of such loan is paid to the borrower simultaneously with its execution. Such assignment or order, or any chattel mortgage or other lien on household furniture then in the possession and use of the borrower, shall not be valid unless it is in writing, signed in person by the borrower, nor shall it be valid if the borrower is married unless it is signed in person by both husband and wife. However, written assent of a spouse shall not be required if the borrower has title as a result of a court order. (Amended 1995, No. 162 (Adj. Sess.), § 35, eff. Jan. 1, 1997; 2009, No. 29, § 1.)

2236. Repealed. 1995, No. 162 (Adj. Sess.), § 39(a).

2236a. Extent of assignment; service upon employer

Under any such assignment or order for the payment of future salary, wages, commissions, or other compensation for services given as security for a loan made by any licensee under this chapter, a sum not to exceed 10 percent of the borrower’s salary, wages, commissions, or other compensation for services shall be collectible from the employer of the borrower by the licensee at the time of each payment to the borrower of such salary, wages, commissions, or other compensation for services, from the time that a copy of such assignment, verified by the oath of the licensee or the licensee’s agent, together with a similarly verified statement of the amount unpaid upon such loan, is served upon the employer. (Amended 2009, No. 29, § 1.)

2237. Repealed. 2019, No. 20, § 29.

2238. Out-of-state commercial loans

A commercial loan made to a borrower located outside Vermont for use outside Vermont shall be deemed to be made outside the State of Vermont and shall not be subject to this chapter except upon written agreement of the licensee and borrower. (Amended 2009, No. 29, § 1.)

2239. Commercial leases

This chapter shall not apply to commercial leases as defined in 9 V.S.A. chapters 59 and 61. (Amended 2009, No. 29, § 1.)

2240. Repealed. 2019, No. 20, § 30.

2241. Prohibited acts and practices

It is a violation of this chapter for a person or individual to:

(1) directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person;

(2) engage in any unfair or deceptive practice toward any person;

(3) obtain property by fraud or misrepresentation;

(4) solicit or enter into a contract with a borrower that provides in substance that the person or individual may earn a fee or commission through “best efforts” to obtain a loan even though no loan is actually obtained for the borrower;

(5) solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;

(6) conduct any business covered by this chapter without holding a valid license as required under this chapter, to assist or aid and abet any person in the conduct of business under this chapter without a valid license as required under this chapter, or to refer a person to, or receive a fee from, any person who must be licensed but was not licensed as of the time the licensee’s services were provided;

(7) fail to make disclosures as required by this chapter and any other applicable State or federal law, including regulations thereunder;

(8) fail to comply with this chapter or rules adopted under this chapter, or fail to comply with any orders or directives from the Commissioner, or fail to comply with any other State or federal law, including the rules thereunder, applicable to any business authorized or conducted under this chapter;

(9) make, in any manner, any false or deceptive statement or representation, including with regard to the rates, points, or other financing terms or conditions for a mortgage loan, to engage in bait and switch advertising, or to represent to the public that the licensee is able to perform an activity requiring licensure unless such licensee is duly licensed or is exempt from licensure;

(10) negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Mortgage Licensing System and Registry or in connection with any investigation conducted by the Commissioner or another governmental agency;

(11) make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property;

(12) collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this chapter;

(13) cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer;

(14) fail to account truthfully for monies belonging to a party to a mortgage loan transaction;

(15) fail to identify clearly and conspicuously the licensee and the purpose of the contract in its written and oral communications with a consumer; or

(16) fail to provide the ability to opt out of any unsolicited advertisement communicated to a consumer via an e-mail address; to initiate an unsolicited advertisement via e-mail to a consumer more than 10 business days after the receipt of a request from such consumer to opt out of such unsolicited advertisements; or to sell, lease, exchange, or otherwise transfer or release the e-mail address or telephone number of a consumer who has requested to opt out of future solicitations. (Added 2009, No. 29, § 1; amended 2017, No. 22, § 28, eff. May 4, 2017.)

2242. Repealed. 2019, No. 20, § 31.

2243. Repealed. 2019, No. 20, § 32.

2244. Unique identifier shown

(a) The unique identifier issued by the Nationwide Mortgage Licensing System and Registry of any person originating a residential mortgage loan shall be clearly shown on all residential mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule or order of the Commissioner.

(b) The unique identifier issued by the Nationwide Mortgage Licensing System and Registry of any person engaging in the business of lending or acting as a mortgage broker, sales finance company, or loan solicitation licensee shall be clearly shown on all loan application forms, solicitations, or advertisements, including business cards and websites, and any other documents as established by rule or order of the Commissioner. (Added 2009, No. 29, § 1; amended 2013, No. 29, § 7, eff. May 13, 2013; 2017, No. 22, § 29, eff. May 4, 2017.)

2245. Pension loans

Any person who engages in the business of offering consideration in exchange for a secured interest in all or part of pension proceeds in the possession of a participant, beneficiary, or member of a pension plan, program, or system shall be deemed to be engaged in the business of making loans pursuant to subdivision 2201(a)(1) of this chapter and shall be subject to 9 V.S.A. chapters 4 and 63. (Added 2013, No. 109 (Adj. Sess.), § 2.)

2246. Repealed. 2015, No. 55, § 5A.

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