USA Statutes : arizona
Title : Banks and Financial Institutions
Chapter : ADVANCE FEE LOAN BROKERS
In this chapter, unless the context otherwise requires:
1. "Advance fee" means a fee, interest or other consideration directly or
indirectly received by a person prior to a loan of money or extension of credit or a
commitment to loan money or extend credit being made by the person. Advance fees do not
include the actual cost of charges paid to a third party which are incurred in making
real estate loans secured in whole or in part by a mortgage deed of trust or other
security instrument on real estate, including charges for a preliminary title search,
title examination and report, title insurance premiums, property survey and appraisal
2. "Advance fee loan broker" means a person who is not exempt under section 6-1302
and who for an advance fee or in the expectation of an advance fee either directly or
indirectly makes or procures, attempts to make or procure or offers to make or procure or
attempt to make or procure a loan of money or extension of credit.
6-1302 Scope of chapter; exemptions
A. Any person who acts as an advance fee loan broker shall register with the
superintendent as provided in this chapter. A person who is not exempt under subsection
B of this section and who advertises for, solicits or purports to be willing to make or
procure a loan or extension of credit for an advance fee is presumed to be engaged in the
business of an advance fee loan broker.
B. This chapter does not apply to:
1. Individuals not regularly engaged in the business of making or procuring loans
or extensions of credit for an advance fee.
2. A person doing business as permitted by any law of any state or of the United
States relating to banks, savings banks, trust companies, savings and loan associations,
credit unions, insurance companies, consumer lenders or profit sharing and pension
3. A person licensed as a mortgage broker, a mortgage banker or a commercial
mortgage banker pursuant to chapter 9 of this title.
4. A person who makes a loan with the person's own money or for the person's own
5. A person licensed as a real estate broker or salesperson pursuant to title 32,
chapter 20, article 2.
6. A person who is licensed to practice law in this state but who is not actively
and principally engaged in the business of making or procuring loans or extensions of
credit, if this person renders services in the course of the person's practice as an
7. An institutional investor as defined in section 6-971 unless the institutional
investor advertises for, solicits or holds himself out as willing to make or procure for
an advance fee a loan or extension of credit other than a commercial mortgage loan as
defined in section 6-971.
8. This state including any political subdivision of this state.
9. The United States or any department or agency of the United States.
6-1303 Application for registration
A. Application for registration as an advance fee loan broker may be made by any
person. An application for registration shall be signed by the applicant and duly
verified by oath. The application shall be filed with the superintendent and shall
contain such information as the superintendent prescribes by rule and deems necessary in
determining whether the applicant is entitled to engage in the advance fee loan broker
B. The superintendent shall rule on an application within sixty days following the
date the application is filed with the superintendent.
Each original application shall be accompanied by a nonrefundable fee of fifty
dollars. Each supplemental statement shall be accompanied by a nonrefundable fee of
6-1305 Registration; reporting requirements
A. The superintendent shall register the applicant as an advance fee loan broker
when an applicant has fully complied with the provisions of this chapter and the rules
prescribed by the superintendent.
B. The superintendent shall immediately notify the applicant by mail upon
registering the applicant as an advance fee loan broker.
C. Registration of an advance fee loan broker shall expire one year from the
effective date of registration.
D. An advance fee loan broker may annually renew his registration by filing a
supplemental statement showing any changes in the facts set forth in the original
application for registration or any previously filed supplemental statement made at the
time of annual renewal.
E. An advance fee loan broker shall file a supplemental statement showing any
changes in the facts set forth in the original application or in any supplemental
statement made at the time of annual renewal within thirty days of a change in any
6-1306 Register of advance fee loan brokers
The names and addresses of all persons who have been registered as advance fee loan
brokers shall be recorded in a register of advance fee loan brokers in the office of the
Advance fee loan brokers shall maintain books, records and accounts in connection
with transactions involving the receipt and disbursement of funds received by the advance
fee loan broker. The books, records and accounts shall be maintained in accordance with
generally accepted accounting practices and shall be subject to inspection at all times
by authorized representatives of the superintendent.
6-1308 Denial, revocation or suspension of registration
A. The superintendent may deny, revoke or suspend the registration of an advance
fee loan broker if the superintendent finds that:
1. The application for registration, any supplemental statement or any other
document filed with the superintendent is incomplete, inaccurate or misleading.
2. The advance fee loan broker is insolvent or is in an unsound financial
3. The advance fee loan broker has violated any provision of this chapter or any
rule or order of the superintendent.
4. The advance fee loan broker has refused to permit an examination of the books,
records and accounts in connection with transactions involving the receipt and
disbursement of funds received by the advance fee loan broker.
5. The advance fee loan broker has failed to pay the original application fee or
any supplemental statement fees as required by this chapter.
B. It is sufficient cause for denial, revocation or suspension of registration of
an advance fee loan broker as provided in this section, if the advance fee loan broker is
a partnership, corporation, unincorporated association or trust, that a member of the
partnership, an officer or a director of the corporation or unincorporated association or
the trustee or other fiduciary of the trust or a person controlling, controlled by or
under common control with the broker has been guilty of any act or omission which would
be sufficient grounds for denying, revoking or suspending the registration of an
6-1309 Prohibited acts
A. An advance fee loan broker shall not advertise, display, distribute, broadcast
or televise or cause or permit to be advertised, displayed, distributed, broadcast or
televised any false, misleading or deceptive statement or representation with regard to
the rates, terms or conditions for loans or the likelihood of the loan or extension of
credit being granted.
B. An advance fee loan broker shall not take any note, promise to pay or instrument
of security that does not disclose the amount of the loan, a schedule of payment or
description of the payment schedule and the agreed rate of charge or any instruments in
which blanks are left to be filled in after the loan is made.
C. An advance fee loan broker shall not make a false promise or misrepresentation
or conceal an essential or material fact in the course of the advance fee loan broker
D. An advance fee loan broker shall not engage in illegal business practices.
E. An advance fee loan broker may not pay any fees, commissions or bonuses or a
gift of anything of value to any merchant, dealer, borrower, or other person for the
purpose of attracting applications for loans or as consideration for referring loan
F. A person is not entitled to receive any advance fees in connection with
arranging for or negotiating a loan if such person is not registered pursuant to this
chapter or is exempt under section 6-1302.
6-1310 Noncompliance not to affect validity of loan
Failure to comply with the provisions of this chapter does not affect the validity
or enforceability of any loan or extension of credit.