22 Jun Colorado, Maryland and South Carolina Legislative and Montana Regulatory Update
The Colorado legislature recently amended its foreclosure law, effective June 6, 2016. The Maryland legislature recently amended its laws governing recordation and transfer tax, and amended its laws governing disclosure and sharing of information, effective July 1, 2016. The South Carolina legislature recently amended its Consumer Protection Code (“Act”), effective June 5, 2016. The Montana Division of Banking and Financial Institutions amended its regulations concerning surety bonds, effective June 18, 2016.
COLORADO SENATE BILL 16-189
Provisions regarding foreclosure deferment were previously repealed. As a result, the Colorado Division of Housing no longer will provide a description of the foreclosure deferment program to foreclosure counselors or establish uniform standards for foreclosure deferment.
A holder of an evidence of debt is no longer required to file with the public trustee a separate document notifying the public trustee that the property referred to in the notice of election and demand is property that requires posting.
MARYLAND HOUSE BILL 1226/SENATE BILL 597
The transfer of a controlling interest in a real property entity is not subject to recordation tax if the transfer of the real property owned by the real property entity between the same transferor and transferee of the controlling interest and under the same circumstances would have been exempt.
“Real property entity” means a corporation, partnership, association, limited liability company, limited liability partnership, other unincorporated form of doing business, or trust that directly or beneficially owns real property that:
· Constitutes at least 80% of the value of its assets; and
· Has an aggregate value of at least $ 1,000,000.
“Real property entity” does not include an entity with land holdings that, other than homesites or areas of commercial activity related to agricultural production, are entirely subject to an agricultural use assessment.
The recordation tax is not imposed on the transfer of a controlling interest in a real property entity to another entity if the ownership interests in the transferee entity are owned, directly or indirectly, by the same persons and in the same proportions as those persons own, directly or indirectly, the transferor entity or the real property entity the controlling interest of which was transferred.
The following provision has been deleted:
The recordation is not imposed on the transfer of a controlling interest in a real property entity if each transferor, each transferee, and each real property entity is:
- A subsidiary corporation, all of the stock of which is owned, directly or indirectly, by a common parent corporation;
- A partnership, all of the interests in which are owned, directly or indirectly, by one or more subsidiaries or the common parent corporation; or
- The common parent corporation.
MARYLAND HOUSE BILL 188
“Credit Union” means a credit union that is incorporated under the laws of the state of Maryland as a credit union.
“Nationwide Mortgage Licensing System and Registry” (“NMLS”) means a multistate uniform licensing system developed and maintained by the Conference of State Bank Supervisors, or by a subsidiary or an affiliate of the Conference of State Bank Supervisors, that may be used for the licensing of persons required to be licensed under the Maryland laws governing Financial Institutions (the “Article”).
“Other-State Credit Union” means a credit union chartered and primarily regulated by another state.
Disclosure and Sharing of Information Pertaining to Licensed Persons
“Licensed Person” means:
- A person required to be licensed under the Article (which includes licensing for mortgage lenders, mortgage originators, sales finance companies, consumer loan lenders and installment loan lenders) whether or not the person maintains a license; and
- A collection agency required to be licensed under the business regulation article, whether or not the collection agency maintains a license.
The law limits the circumstances under which the Commissioner of Financial Regulation (“Commissioner”) and an employee of and the attorney for the Commissioner’s office, may disclose any information obtained or generated in the course of exercising the Commissioner’s authority to examine Licensed Persons.
These limiting provisions do not apply to:
- Information relating to publicly adjudicated disciplinary or enforcement actions against a Licensed Person; or
- Information or material provided to the NMLS.
Disclosure and Sharing of Information Pertaining to Banking Institutions and Credit Unions
The law limits the circumstances under which the Commissioner and an employee of and the attorney for the Commissioner’s office, may disclose any information obtained or generated in the course of exercising the Commissioner’s authority to examine banking institutions or credit unions.
These provisions do not apply to information relating to publicly adjudicated disciplinary or enforcement actions against banking institutions or credit unions and designated by the Commissioner for access to the public.
SOUTH CAROLINA HOUSE BILL 5040
The definition of “Consumer Credit Transactions Made in this State” was amended to include a creditor inducing the consumer who is a resident of South Carolina to enter into the transaction by offering or advertising in South Carolina by any means, including, but not limited to, face-to-face solicitation, mail, brochure, print, radio, television, internet or any other electronic means.
The Act now covers the conduct of any “person” (previously “creditor”) when such conduct is subject to the Act.
The Act was amended to clarify that creditors intending to impose a credit service in excess of 18% and every creditor making supervised or restricted loans must file a rate schedule with the Department of Consumer Affairs (“Department”). The Department will issue a maximum rate schedule and the creditor must post it in one conspicuous place in every place of its business in South Carolina. The Department is no longer required to maintain a file for each creditor. A creditor wishing to change any of the maximum rates on the previously filed and posted schedule must file an updated schedule with the Department. The revised rate schedule is effective on the date issued by the Department (previously after the close of business on the day the certified schedule is received by creditor or seven days after the date of submission postmark, whichever is earlier). The Commission on Consumer Affairs (“Commission”) must promulgate a regulation establishing the filing procedures for the format of the rate schedules.
“Administrator” means the officer appointed by the Commission to administer this Act. The administrative section of the Act (Chapter 6) applies to persons in South Carolina who:
· Make or solicit consumer credit sales, consumer leases, consumer loans, and consumer rental-purchase agreements;
· Directly collect payments from or enforce rights against debtors arising from sales, leases, loans, or agreements specified above wherever they are made; or
· Are subject to the Act or action by the Administrator.
The law currently sets forth the procedures for the Administrator to investigate complaints of unfair trade practices in consumer transactions and to provide notice of findings of fact and conclusions to the person investigated. The law has been amended as to how the person being investigated must respond in order to have review before an Administrative Law Court. If that person fails to respond, the Administrator’s decision becomes final and subject to enforcement.
MONTANA ADMINISTRATIVE RULE 2.59.1735
An entity applying for a license as a mortgage broker or mortgage lender in Montana with no prior business history, or a business history of less than one year at the time of application, must purchase a surety bond in the amount of $25,000 (previously $50,000).