As used in this chapter, unless the
context otherwise requires, the words and terms defined in NRS 676.015
to 676.080 , inclusive, have the meanings ascribed to them
in those sections.
(Added to NRS by 1973, 1490; A 1983, 1812)
“Commissioner” means the
Commissioner of Financial Institutions.
(Added to NRS by 1983, 1812; A 1987, 1992)
“Contract” means any agreement
entered into under this chapter by a licensee and a debtor for the stated
purpose of debt adjusting.
(Added to NRS by 1973, 1490)
“Creditor” means a person for
whose benefit moneys are being collected and disbursed by the licensee.
(Added to NRS by 1973, 1490)
“Debt adjustment” means
the making of a contract or the performance thereunder, under whatever
name, whereby a person, firm, company or corporation undertakes, for a
consideration, the scheduled receipt of a debtor’s moneys or evidences
thereof for the purpose of distribution among certain specified creditors
in payment or partial payment of the debtor’s obligations.
(Added to NRS by 1973, 1490)
“Debtor” means a person from whom
moneys are being accepted for disbursement to creditors.
(Added to NRS by 1973, 1490)
“License” means a license issued
under the provisions of this chapter.
(Added to NRS by 1973, 1490)
“Licensee” means any person,
firm, company or corporation who is licensed under this chapter.
(Added to NRS by 1973, 1490)
“Office” means each location by
street number, building number, city and state where the business of debt
adjusting is conducted.
(Added to NRS by 1973, 1490)
This chapter does not apply to any of
the following while they are engaged in the regular course of their
properly licensed business or profession:
1. Attorneys at law.
2. Banks, fiduciaries or financing and lending institutions.
3. Title insurance companies.
4. Employees of licensees under this chapter.
5. Judicial officers or others acting under court orders.
6. Nonprofit religious, fraternal or cooperative organizations
offering debt adjustment service for their members exclusively.
7. Nonprofit corporations organized to render financial planning
service to the public.
(Added to NRS by 1973, 1491)
LICENSES
No person, firm, company or
corporation may engage in the business of debt adjusting except as
provided in and authorized by this chapter, and without first having
obtained a license from the Commissioner.
(Added to NRS by 1973, 1491; A 1983, 1812; 1987, 1992)
1. An application for a license must be in writing, under oath and
in the form prescribed by the Commissioner.
2. The application must:
(a) Give the business name, location of the office, names and
addresses of all officers and directors, if a corporation or association,
and names and addresses of partners, if a copartnership.
(b) Be accompanied by a copy of the fictitious name certificate or
the articles of incorporation, where applicable.
(c) Contain such further relevant information as the Commissioner
may require.
3. The Commissioner shall consider an application to be withdrawn
if the Commissioner has not received all information and fees required to
complete the application within 6 months after the date the application
is first submitted to the Commissioner or within such later period as the
Commissioner determines in accordance with any existing policies of joint
regulatory partners. If an application is deemed to be withdrawn pursuant
to this subsection or if an applicant otherwise withdraws an application,
the Commissioner may not issue a license to the applicant unless the
applicant submits a new application and pays any required fees.
(Added to NRS by 1973, 1491; A 1983, 1812; 1987, 1993; 2005, 1885
)
1. In addition to any other requirements set forth in this
chapter, each applicant must submit:
(a) Proof satisfactory to the Commissioner that the applicant:
(1) Has a good reputation for honesty, trustworthiness and
integrity and is competent to transact the business for which the
applicant seeks to be licensed in a manner which protects the interests
of the general public.
(2) Has not made a false statement of material fact on the
application for the license.
(3) Has not committed any of the acts specified in
subsection 2.
(4) Has not had a license issued pursuant to this chapter
suspended or revoked within the 10 years immediately preceding the date
of the application.
(5) Has not been convicted of, or entered a plea of nolo
contendere to, a felony or any crime involving fraud, misrepresentation
or moral turpitude.
(6) If the applicant is a natural person:
(I) Is at least 21 years of age; and
(II) Is a citizen of the United States or lawfully
entitled to remain and work in the United States.
(b) A complete set of his fingerprints and written permission
authorizing the Division of Financial Institutions of the Department of
Business and Industry to forward the fingerprints to the Central
Repository for Nevada Records of Criminal History for submission to the
Federal Bureau of Investigation for its report.
2. In addition to any other lawful reasons, the Commissioner may
refuse to issue a license to an applicant if the applicant:
(a) Has committed or participated in any act which, if committed or
done by a holder of a license, would be grounds for the suspension or
revocation of the license.
(b) Has previously been refused a license pursuant to this chapter
or has had such a license suspended or revoked.
(c) Has participated in any act which was a basis for the refusal
or revocation of a license pursuant to this chapter.
(d) Has falsified any of the information submitted to the
Commissioner in support of the application for the license.
(Added to NRS by 2005, 1883 )
1. At the time of making the application, the applicant shall:
(a) Pay to the Commissioner a nonrefundable fee of not more than
$500 for the application and survey. The applicant shall also pay such
additional expenses incurred in the process of investigation as the
Commissioner deems necessary. In addition, a fee of not less than $200 or
more than $400, prorated on the basis of the licensing year as provided
by the Commissioner, must be paid at the time of making the application.
The Commissioner shall adopt regulations establishing the amount of the
fees required pursuant to this paragraph. All money received by the
Commissioner pursuant to this subsection must be placed in the
Investigative Account created by NRS 232.545 .
(b) Furnish a satisfactory bond to the State of Nevada, executed by
an admitted surety company approved by the Commissioner, in the amount of
$10,000, or an appropriate substitute pursuant to NRS 676.135 , conditioned upon the faithful accounting of
all money collected upon accounts and entrusted to the licensee, or its
employees or agents.
(c) Provide a blank copy of the debt-adjustment contract which will
be used by the licensee in its business.
2. Not later than 3 months after the issuance of the license and
thereafter semiannually the Commissioner shall determine the appropriate
amount of bond or appropriate substitute which must be maintained by the
licensee in accordance with the licensee’s average monthly balance in the
trust account maintained pursuant to NRS 676.220 :
AMOUNT OF
AVERAGE MONTHLY BALANCE BOND
REQUIRED
Less than
$50,000....................................................................
.......................... $10,000
$50,000 or more but less than
$100,000............................................................
25,000
$100,000 or more but less than
$150,000.......................................................... 30,000
$150,000 or more but less than
$200,000.......................................................... 40,000
$200,000 or
more.......................................................................
........................... 50,000
(Added to NRS by 1973, 1491; A 1981, 1433; 1983, 1326, 1812; 1987,
1993; 1989, 936; 1991, 1815; 2005, 1885 )
1. An applicant for a license may deposit with any bank or trust
company authorized to do business in this state, with the permission of
the Commissioner, as a substitute for the surety bond required by NRS
676.130 :
(a) An obligation of a bank, savings and loan association, thrift
company or credit union licensed to do business in this state;
(b) Bills, bonds, notes, debentures or other obligations of the
United States or any agency or instrumentality thereof, or guaranteed by
the United States; or
(c) Any obligation of this state or any city, county, town,
township, school district or other instrumentality of this state or
guaranteed by this state, in an aggregate amount, based upon principal
amount or market value, whichever is lower.
Ę The deposit must be in a form approved by the Commissioner.
2. The obligations of a bank, savings and loan association, thrift
company or credit union must be held to secure the same obligation as
would the surety bond. With the approval of the Commissioner, the
depositor may substitute other suitable obligations for those deposited
which must be assigned to the State of Nevada and are negotiable only
upon approval by the Commissioner.
3. Any interest or dividends earned on the deposit accrue to the
account of the depositor.
4. The deposit must be an amount at least equal to the required
surety bond and must state that the amount may not be withdrawn except by
direct and sole order of the Commissioner.
(Added to NRS by 1981, 1432; A 1983, 1812; 1987, 1993)
Upon the filing of the
application and the payment of fees, the Commissioner shall investigate
the facts concerning the application and the requirements provided for in
NRS 676.150 .
(Added to NRS by 1973, 1491; A 1983, 1813; 1987, 1994)
If the Commissioner finds that:
1. The financial responsibility, experience, character and general
fitness of the applicant and of the associates, directors or officers
thereof are such as to command the confidence of the public and to
warrant belief that the business will be operated lawfully, honestly,
fairly and efficiently, within the purposes of this chapter; and
2. Allowing the applicant to engage in business will promote the
convenience and advantage of the community in which the licensed office
is to be located,
Ę he shall issue and deliver a license to the applicant.
(Added to NRS by 1973, 1491; A 1983, 1813; 1987, 1994)
1. A license expires on December 31 of each year. On or before
that date, each licensee may apply to the Commissioner for a renewal of
his license.
2. The application must be on the form prescribed by the
Commissioner and must be accompanied by a fee of not less than $400 and a
bond, as in the case of the original application.
3. If the application, fee for renewal or bond is filed after
December 31, the Commissioner may renew the expired license upon receipt
of the application, fee for renewal and bond, and a fee of not more than
$400 for reinstatement.
4. Each license, as renewed, remains in force until surrendered,
suspended or revoked as provided in this chapter.
5. The Commissioner shall adopt regulations establishing the
amount of the fees required pursuant to this section.
(Added to NRS by 1973, 1492; A 1983, 1813; 1987, 1994; 1989, 922;
2005, 1886 )
Except as otherwise
provided in NRS 676.130 , all fees and
charges collected under the provisions of this chapter must be deposited
in the State Treasury pursuant to the provisions of NRS 658.091 .
(Added to NRS by 1973, 1492; A 1983, 1327; 2003, 3234 )
Each license shall be
kept conspicuously posted in the licensed place of business.
(Added to NRS by 1973, 1492)
Licenses may not be
transferred or assigned.
(Added to NRS by 1973, 1492)
Not more than
one office may be maintained under the same license. The Commissioner may
issue additional licenses to the same licensee for other offices upon
compliance with the provisions of this chapter governing issuance of a
single license.
(Added to NRS by 1973, 1492; A 1983, 1813; 1987, 1994)
1. A licensee shall immediately notify the Commissioner of any
change in the ownership of 5 percent or more of the outstanding voting
stock of the licensee.
2. An application must be submitted to the Commissioner, pursuant
to NRS 676.120 , by a person who
acquires:
(a) At least 25 percent of a licensee’s outstanding voting stock; or
(b) Any outstanding voting stock of a licensee if the change will
result in a change in the control of the licensee.
Ę Except as otherwise provided in subsection 4, the Commissioner shall
conduct an investigation to determine whether the financial
responsibility, experience, character and general fitness of the
applicant are such as to command the confidence of the public and to
warrant belief that the business will be operated lawfully, honestly,
fairly and efficiently, within the purposes of this chapter. If the
Commissioner denies the application, he may forbid the applicant from
participating in the business of the licensee.
3. The licensee with which the applicant is affiliated shall pay
such a portion of the cost of the investigation as the Commissioner
requires. All money received by the Commissioner pursuant to this
subsection must be placed in the Investigative Account created by NRS
232.545 .
4. A licensee may submit a written request to the Commissioner to
waive an investigation pursuant to subsection 2. The Commissioner may
grant a waiver if the applicant has undergone a similar investigation by
a state or federal agency in connection with the licensing of or his
employment with a financial institution.
(Added to NRS by 1985, 1347; A 1987, 1994; 1991, 1815)
1. A licensee must obtain the approval of the Commissioner before
using or changing a business name.
2. A licensee shall not:
(a) Use any business name which is identical or similar to a
business name used by another licensee under this chapter or which may
mislead or confuse the public.
(b) Use any printed forms which may mislead or confuse the public.
(Added to NRS by 2005, 1884 )
Any licensee may surrender any license by
delivering it to the Commissioner with written notice of its surrender,
but a surrender does not affect any civil or criminal liability for acts
committed prior thereto.
(Added to NRS by 1973, 1492; A 1983, 1814; 1987, 1995)
CONDUCT OF BUSINESS
Each licensee shall:
1. Open and maintain a separate trust account in a state or
national bank or credit union doing business in this state. All money
received from debtors for the benefit of creditors must be deposited in,
and all payments to creditors must be disbursed from, this account.
2. Keep and use such books and accounting records as are in accord
with sound and accepted accounting practices.
3. Maintain a separate record or ledger card for the account of
each debtor, showing the amount of money received from and disbursed on
behalf of each debtor.
4. Maintain a separate record, in a form approved by the
Commissioner, or ledger card for each creditor, identifying the
particular debtor-source of money and showing the amount of money
disbursed in accordance with the appropriate debt-adjustment contract.
5. Preserve all books and accounting records for at least 7 years
after making the final entry therein.
(Added to NRS by 1973, 1493; A 1983, 1814; 1987, 1995; 1999, 1451
)
1. Annually, on or before April 15, each licensee shall file with
the Commissioner a report of operations of the licensed business for the
preceding calendar year.
2. A report must give information with respect to the financial
operations of the licensee.
3. A report must be made under oath and must be in the form
prescribed by the Commissioner.
(Added to NRS by 1973, 1493; A 1983, 1814; 1987, 1995)
Each licensee shall pay the assessment levied
pursuant to NRS 658.055 and cooperate
fully with the audits and examinations performed pursuant thereto.
(Added to NRS by 1987, 827)
1. Every debt-adjustment transaction shall be based upon a
debt-adjustment contract entered into by the licensee and debtor under
the provisions of this chapter. A blank form of such contract shall
accompany each application for a license or renewal thereof.
2. The contract, an executed copy of which shall be delivered to
the debtor, shall:
(a) List all the debtor’s obligations to be adjusted.
(b) Enumerate by name and address all the creditors holding such
obligations.
(c) State the total charges agreed upon as the fee for the services
of the licensee.
(d) Provide that upon the written consent of the debtor, additional
obligations to be adjusted may be added subsequent to the date of the
contract upon the same terms and conditions and at the same rate of
charge as in such contract.
(e) Indicate the beginning and expiration dates of the contract,
which, in no case, may encompass a period longer than 36 months.
(f) Provide that the debtor may terminate his obligations
thereunder without penalty upon the payment of the charges allowed under
NRS 676.250 and agreed upon by the
terms of this contract.
(Added to NRS by 1973, 1493)
1. Licensees are allowed such fees as are clearly stated in the
contract.
2. Such fees may include:
(a) An initial retainer fee of $50, which need not be amortized.
(b) A service fee, which must be amortized equally, each month,
over the length of the contract, but no more than one monthly
amortization may be applied to the debtor’s account as charges for any
particular month, unless prepayment is being made.
(c) A fee of $3 per check issued in payment of all nonterminal
indebtedness.
3. The total amount of fees received by a licensee under any
particular contract, exclusive of the retainer fee, may not exceed 15
percent of the listed terminal indebtedness. Terminal indebtedness does
not mean indebtedness on a residence or other expenses normally incurred
in maintaining a residence.
4. If the debtor chooses at any time to satisfy the total
indebtedness listed in the contract before the expiration of the
contract, the licensee may charge and is limited to a fee of not more
than 7 percent of the then remaining balance of indebtedness listed in
the contract.
5. No fee other than the initial retainer fee may be charged until
the licensee has secured the consent of creditors:
(a) Constituting more than 50 percent of the total number of
creditors enumerated in the contract; and
(b) Holding more than 50 percent of the total amount of
indebtedness listed in the contract.
Ę The acceptance by a creditor of three consecutive payments made by the
licensee in accordance with the terms of the contract constitutes the
consent of that creditor, if notice is included with each such payment
that acceptance of three consecutive payments constitutes consent for the
purposes of this subsection.
(Added to NRS by 1973, 1494; A 1985, 378; 1989, 1208)
Each licensee shall:
1. Make remittances to creditors within 10 days after receipt of
the monthly remittance from the debtor.
2. Furnish a written statement of account to the debtor at least
once every 90 days. If the licensee has been doing business for more than
1 year, the Commissioner may waive the requirement of this subsection as
he shall determine.
3. Provide account information to the debtor verbally when
requested during normal business hours.
(Added to NRS by 1973, 1494; A 1983, 1814; 1987, 1996)
DISCIPLINARY ACTION
1. For the purpose of discovering violations of this chapter or of
securing information lawfully required under this chapter, the
Commissioner or his authorized representative may at any time and shall,
at least once each year, investigate the business and examine the books,
accounts, papers and records of any licensee.
2. For the purpose of discovering violations of this chapter or of
securing information lawfully required under this chapter, the
Commissioner or his duly authorized representatives may at any time
investigate the business and examine the books, accounts, papers and
records used therein of:
(a) Any other person engaged in an activity for which a license is
required pursuant to the provisions of this chapter; and
(b) Any person whom the Commissioner has reasonable cause to
believe is violating or is about to violate any provision of this
chapter, whether or not the person claims to be within the authority or
beyond the scope of this chapter.
3. For the purpose of examination, the Commissioner or his
authorized representatives shall have and be given free access to the
offices and places of business, files, safes and vaults of such persons
described in this section.
4. The Commissioner may require the attendance of any person and
examine him under oath regarding:
(a) Any transaction or business regulated pursuant to the
provisions of this chapter; or
(b) The subject matter of any audit, examination, investigation or
hearing.
5. For each examination of a licensee, the Commissioner shall
charge and collect from the licensee a fee for conducting the examination
and in preparing and typing the report of the examination at the rate
established pursuant to NRS 658.101 .
(Added to NRS by 1973, 1492; A 1979, 956; 1983, 1327, 1814; 1987,
1996, 2227; 2005, 1884 )
1. The Commissioner may require the attendance of any person and
examine him under oath with regard to the debt adjustment business
regulated by this chapter or the subject matter of any examination,
investigation or hearing.
2. The Commissioner may require the production of books, accounts,
papers and records in aid of any examination, investigation or hearing.
(Added to NRS by 1973, 1492; A 1983, 1815; 1987, 1996)
1. The Commissioner may, pursuant to the procedure provided in
this chapter, deny, suspend or revoke any license for which application
has been made or which has been issued under the provisions of this
chapter if he finds, as to the licensee, its associates, directors or
officers, grounds for action.
2. Any one of the following grounds may provide the requisite
grounds for denial, suspension or revocation:
(a) Conviction of a felony relating to the practice of debt
adjusters or of a misdemeanor involving moral turpitude.
(b) Violation of any of the provisions of this chapter or
regulations of the Commissioner.
(c) Fraud or deceit in procuring the issuance of the license.
(d) Continuous course of unfair conduct.
(e) Insolvency, filing in bankruptcy, receivership or assigning for
the benefit of creditors by any licensee or applicant for a license under
this chapter.
(f) Failure to pay a tax as required pursuant to the provisions of
chapter 363A of NRS.
(g) Failure to pay the fee for renewal or reinstatement of a
license.
3. The Commissioner shall, after notice and hearing, impose upon
the licensee an administrative fine of not more than $10,000 for each
violation by the licensee of any of the provisions of this chapter or
regulations of the Commissioner. If a fine is imposed pursuant to this
section, the costs of the proceeding, including investigative costs and
attorney’s fees, may be recovered by the Commissioner.
(Added to NRS by 1973, 1492; A 1983, 1815; 1987, 1996; 1989, 923;
1993, 902; 2003, 2732 ; 2003, 20th Special Session, 227 ; 2005, 1886 )
In addition to any other lawful reasons, the Commissioner may
suspend or revoke a license if the licensee has engaged in any act that
would be grounds for denying a license pursuant this chapter.
(Added to NRS by 2005, 1884 )
If the Commissioner finds that any one of
the requisite grounds for denial, suspension or revocation of the license
exists and that the enforcement of this chapter requires the immediate
suspension of a license, he may, upon 5 days’ written notice and a
hearing, enter an order suspending a license for a period not exceeding
20 days, pending the holding of a hearing as prescribed in NRS 676.310
.
(Added to NRS by 1973, 1493; A 1983, 1815; 1987, 1997)
1. The Commissioner may, after notice and hearing, enter an order:
(a) Denying a license to any applicant who fails to establish, at
the hearing, its financial responsibility, experience, character and
general fitness to engage in debt adjusting; or
(b) Revoking the license of a licensee who fails to overcome, at
the hearing, the probable cause for the revocation found by the
Commissioner.
2. The denial, expiration, suspension or revocation of a license,
as provided in this chapter, does not impair nor affect the obligation
under any lawful contract for debt adjustment.
(Added to NRS by 1973, 1493; A 1977, 96; 1983, 1816; 1987, 1997;
1989, 923)
UNLAWFUL ACTS; PENALTIES
Any person and
the several members, officers, directors, agents and employees of any
firm, company or corporation who engage in the business of debt adjusting
without the license required by this chapter are guilty of a misdemeanor.
(Added to NRS by 1973, 1495)
It is unlawful for a licensee
to:
1. Purchase from a creditor any obligation of a debtor.
2. Operate as a collection agent and as a licensee as to any one
debtor who has incurred a debt primarily for personal, family or
household purposes.
3. Execute any contract or agreement to be signed by the debtor
unless the contract or agreement is fully and completely filled in and
finished.
4. Receive or charge any fee in the form of a promissory note or
other promise to pay, or receive or accept any mortgage or other security
for any fee, either as to real or personal property.
5. Pay any bonus or other consideration to any person for the
referral of a debtor to its business, nor shall it accept or receive any
bonus, commission or other consideration for referring any debtor to any
person for any reason.
6. Advertise its services, display, distribute, broadcast or
televise or permit to be displayed, advertised, distributed, broadcast or
televised its services in any manner whatsoever whereby any false,
misleading or deceptive statement or representation with regard to the
services to be performed by the licensee or the charges to be made
therefor is made.
(Added to NRS by 1973, 1495; A 1989, 1449)
In addition to any other remedy
or penalty, the Commissioner may impose an administrative fine of not
more than $10,000 upon a person who, without a license, conducts any
business or activity for which a license is required pursuant to the
provisions of this chapter.
(Added to NRS by 2005, 1884 )
Any person and the several
members, officers, directors and employees of any firm, company or
corporation who violate any provision of this chapter are guilty of a
misdemeanor.
(Added to NRS by 1973, 1495)
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