- August 10, 2017 | Authors: Christia A. Pritts; Lawrence D. Coppel; Andrew D. Bulgin; Marjorie A. Corwin; Peter B. Rosenwald; D. Robert Enten; David S. Musgrave; Robert A. Gaumont; Christopher R. Rahl; Bryan M. Mull; Chastity E.C. Threadcraft
- Law Firm: Gordon Feinblatt LLC - Baltimore Office
Maryland law already requires mortgage lenders, mortgage originators, and money transmitters to obtain their annual licenses through a multistate, electronic uniform licensing system called the Nationwide Mortgage Licensing System and Registry (NMLS). This Act requires 7 additional categories of Maryland licensees to obtain their licenses annually and through NMLS. Beginning July 1, 2017, new or renewal licensing must be accomplished through NMLS for: check cashers; collection agencies; consumer loan lenders; credit services businesses; debt management companies; installment lenders; and sales finance companies. The Maryland Commissioner of Financial Regulation will establish a time period within which each existing licensee must transfer its licensing information to NMLS and obtain a valid unique identifier issued by NMLS. Among other changes, this Act also conforms the statutes applicable to these 7 categories of licensees to last year’s enactment (Chapter 478 of the 2016 Laws of Maryland) which both authorized and limited the Commissioner’s ability to share information about Maryland licensees with certain State and federal regulatory officials.
Practice Point: Existing Maryland check casher, collection agency, consumer loan lender, credit services business, debt management company, installment lender, and sales finance company licensees need to review the new licensing process. Experience suggests that the first time using NMLS may be confusing and lead to frustration. All existing exemptions from licensing remain unaffected by this new law.
Chapter 479 standardizes surety bond requirements for certain businesses required to be licensed or registered by the Commissioner of Financial Regulation or the Collection Agency Licensing Board. The new standardized surety bond requirements apply to: collection agencies; consumer loan lenders; debt management companies; debt settlement companies; installment lenders; mortgage lenders; and money transmitters. The law establishes, among other requirements, that surety bonds are now obtained only once at the time of initial application (and not with renewal applications). The bonds must be continuous and must not end until 3 years after the later of cancellation of the bond or cessation of the license/registration. In addition to claims filed by a claimant (or by the regulator on behalf of a claimant), bond proceeds may be used to pay regulatory penalties imposed against a licensee. The new law does not affect the amount of the surety bond required.Practice Point: Licensees should contact their surety companies to determine if the requirements of this new law will impact existing surety bonds or the cost for those bonds.