Credit Repair Laws for
Source:
State Regulation:
Maine
Note: Maine regulates credit repair
organizations as “loan brokers” and applies the
full set of registration and other requirements
that apply to brokers of loans to credit
services organizations. This was a change
implemented in 2005 which changed the previous
“Credit Services Organizations Act” to the text
that follows. Licensed lawyers, however, are
exempted.
ME ST T. 9-A § 10-102
Article X. Loan Brokers
Maine Revised Statutes Annotated Currentness
Title 9-a. Maine Consumer Credit Code (Refs &
Annos)
Article X. Loan Brokers (Refs & Annos)
Part 1. General Provisions (Refs & Annos)
§ 10-101. Short title
This article may be known and cited as the
“Maine Consumer Credit Code- Loan Brokers.”
§ 10-102. Definitions
As used in this article, unless the context
otherwise indicates, the following terms have
the following meanings.
1. “Loan broker” is defined as follows.
A. “Loan broker” means any person who, with
respect to the extension of consumer credit by
others, provides or offers to provide, in return
for the separate payment of money or other
valuable consideration, any of the following
services:
(1) Improving a consumer's credit record,
history or rating;
(2) Arranging for or obtaining an extension of
credit for a consumer; or
(3) Providing advice or assistance to a consumer
with respect to subparagraph (1) or (2).
B. “ Loan broker” does not include:
(1) A supervised financial organization;
(2) A supervised lender other than a supervised
financial organization, except that, with
respect to any transaction in which a supervised
lender other than a supervised financial
organization is acting solely as a loan broker,
section 10-302 applies;
(3) A person licensed by the Real Estate
Commission to the extent that the person is
engaged in activities regulated by that
commission;
(4) A person currently admitted to the practice
of law in this State;
(5) Any nonprofit organization exempt from
taxation under the United States Internal
Revenue Code, Section 501(c)(3) [FN1] to the
extent that the organization's activities are
consistent with those set forth in its
application for tax exemption to the Internal
Revenue Service;
(6) A consumer reporting agency, as defined in
the Fair Credit Reporting Act, Title 10, chapter
210; [FN2]
(7) An affiliate of a supervised lender when the
affiliate provides services described in
paragraph A, subparagraph (1), (2) or (3) for or
on behalf of that supervised lender and when the
affiliate is not compensated by the consumer for
those services;
(8) An employee of a supervised lender or an
employee of an affiliate of a supervised lender
when the employee provides services described in
paragraph A, subparagraph (1), (2) or (3) for or
on behalf of that supervised lender or affiliate
and when the employee or the affiliate is not
compensated by the consumer for those services;
(9) A person paid by a supervised lender or a
consumer to document a loan, attend or conduct a
loan closing, disburse loan proceeds or record
or file loan documents;
(10) A person who performs marketing services
for a creditor, such as a telemarketer, an
advertising agency or a mailing house, when the
person is not compensated by the consumer for
those services;
(11) A seller of consumer goods or services that
provides services described in paragraph A,
subparagraph (1), (2) or (3) in connection with
a sale or proposed sale of consumer goods or
services by that seller when the seller is not
compensated by a consumer for those services;
or
(12) An employee of a seller of consumer goods
or services that provides services described in
paragraph A, subparagraph (1), (2) or (3) in
connection with a sale or proposed sale of
consumer goods or services by that seller when
the employee or seller is not compensated by a
consumer for those services.
For the purposes of this paragraph, “affiliate”
has the same meaning as defined in Title 9-B,
section 131, subsection 1-A.
2. “Bona fide 3rd-party fee” means a verifiable
fee paid to a 3rd party for a credit report,
appraisal, investigation, title examination or
survey.
3. “Loan officer” has the same meaning as in
section 1-301, subsection 22-A.
[FN1] 26 U.S.C.A. § 501.
[FN2] 10 M.R.S.A. § 1311 et seq.
§ 10-201. Licensing and biennial relicensing
A person desiring to engage or continue in
business in this State as a loan broker shall
apply to the administrator for a license under
this article on or before January 31st of each
even-numbered year. The application must be in a
form prescribed by the administrator. The
administrator may refuse the application if it
contains erroneous or incomplete information. At
the time of application and on an ongoing basis
during the term of any such license, the
applicant shall apply to the administrator for
registration of all loan officers employed or
retained by the applicant. An application for
registration as a loan officer must be filed in
a manner prescribed by the administrator and
include the name, address and work location of
the loan officer and such additional information
as is reasonably requested by the administrator.
An applicant's registration of a loan officer
within 90 days of the date that registration
would otherwise be required does not constitute
a violation of this section. A license may not
be issued unless the administrator, upon
investigation, finds that the financial
responsibility, character and fitness of the
applicant and, where applicable, its partners,
officers or directors and the character and
fitness of its loan officers, warrant belief
that the business will be operated honestly and
fairly within the purposes of this Title. The
administrator may adopt rules requiring that
applicants, applicants' partners, officers or
directors and employees of applicants satisfy
initial and continuing educational requirements.
The reasonable costs of meeting such educational
requirements are assessed to applicants. Rules
adopted pursuant to this section are routine
technical rules pursuant to Title 5, chapter
375, subchapter 2-A. [FN1]
The initial application for a license as a loan
broker must include a fee of $400. The biennial
relicensing application must include a fee of
$200. Initial applicants and biennial
relicensing applicants must pay an additional
fee of up to $20 for registration of each loan
officer, up to a maximum of $200 in total.
A licensee may conduct business only at or from
a place of business for which the licensee holds
a license and not under any other name than that
on the license.
A licensed loan broker may conduct business only
through a loan officer who possesses a current,
valid registration. A loan officer must be
registered at the loan officer's principal
licensed work location and may then work from
any licensed location of the loan broker. The
registration of a loan officer is valid only
when that person is employed or retained and
supervised by a licensed loan broker. When a
loan officer ceases to be employed by a licensed
loan broker, the loan broker shall promptly
notify the administrator in writing.
[FN1] 5 M.R.S.A. § 8071 et seq.
§ 10-202. Bond
Each application must be accompanied by evidence
of a surety bond, in a form approved by the
administrator in the aggregate amount of
$25,000, to run to the State for use by the
State and any person or persons who may have a
cause of action against a loan broker. The terms
of the bond must run concurrent with the period
of time during which the license is in effect.
§ 10-301. Escrow of funds
Each loan broker shall place fees from
consumers, other than bona fide 3rd-party fees,
in an escrow account separate from any operating
accounts of the business, pending completion of
services offered. With respect to loan brokers
offering to arrange for or obtain extensions of
credit for consumers, or provide advice or
assistance to arrange for or obtain extensions
of credit, “completion of services offered”
means procurement of credit under the terms
agreed to by the parties.
§ 10-302. Requirement for written agreement
Each agreement between a consumer and a loan
broker must be in writing, dated and signed by
the consumer and must include the following:
1. A full and detailed description of the
services to be performed for the consumer,
including all guarantees and all promises of
full or partial refund of fees paid, whether or
not services are completed, and the length of
time for which the agreement remains in effect
before return of the fees for nonperformance can
be required by the consumer;
2. The terms and conditions of payment,
including the total of all payments to be made
by the consumer for the service, whether to the
loan broker or to some other person; and
3. The following notice:
NOTICE TO CONSUMER: Do not sign this agreement
before you read it. You are entitled to a copy
of this agreement.
§ 10-303. Requirement for written disclosure
Before any agreement is entered into, or before
any money is paid by a consumer, whichever
occurs first, the loan broker shall provide the
consumer with written disclosure of material
consumer protections, including the following:
1. The existence and purpose of the surety bond
on file with the State, and the procedure for
instituting an action against that bond;
2. The requirement that all fees from the
consumer, other than bona fide 3rd-party fees,
be placed in an escrow account; and
3. The requirement for a written, signed
agreement between the parties.
§ 10-304. Advertising
1. A loan broker may not engage in this State in
false or misleading advertising concerning the
terms and conditions of any services or
assistance offered.
2. This section imposes no liability on the
owner or personnel of any medium in which an
advertisement appears or through which it is
disseminated.
3. A loan broker shall include its license
number in all print advertising in this State.
§ 10-305. Rulemaking
The administrator may adopt reasonable rules
pursuant to the Maine Administrative Procedure
Act, Title 5, chapter 375, [FN1] and in
accordance with this article governing loan
brokers.
[FN1] 5 M.R.S.A. § 8001 et seq.
§ 10-306. Privacy of consumer financial
information
A loan broker shall comply with the provisions
of the federal Gramm-Leach-Bliley Act, 15 United
States Code, Section 6801 et seq. (1999) and the
applicable implementing federal Privacy of
Consumer Information regulations, as adopted by
the Office of the Comptroller of the Currency,
12 Code of Federal Regulations, Part 40 (2001);
the Board of Governors of the Federal Reserve
System, 12 Code of Federal Regulations, Part 216
(2001); the Federal Deposit Insurance
Corporation, 12 Code of Federal Regulations,
Part 332 (2001); the Office of Thrift
Supervision, 12 Code of Federal Regulations,
Part 573 (2001); the National Credit Union
Administration, 12 Code of Federal Regulations,
Part 716 (2001); the Federal Trade Commission,
16 Code of Federal Regulations, Part 313 (2001);
or the Securities and Exchange Commission, 17
Code of Federal Regulations, Part 248 (2001), if
the loan broker is a financial institution as
defined in those regulations. This section is
not intended to permit the release of health
care information except as permitted by Title
22, section 1711-C or Title 24-A, chapter 24.
§ 10-401. Effects of violations on rights of
parties
Any loan broker or loan officers of any loan
broker that violate any provision of this Title
or any rule issued by the administrator, or that
through any unfair, unconscionable or deceptive
practice cause actual damage to a consumer, are
subject to the following:
1. After notice and hearing, a cease and desist
order from the administrator;
2. After notice and hearing, forfeiture of such
portion of the required bond as proportionately
may make aggrieved parties whole;
3. A civil action, by the administrator through
the Attorney General, after which a court may
assess a civil penalty of not more than $5,000;
4. A civil action by an aggrieved consumer in
which that consumer has the right to recover
actual damages from the loan broker or its loan
officers in an amount determined by the court,
plus costs of the action together with
reasonable attorney's fees; and
5. Revocation, suspension or nonrenewal of its
license.
Current with emergency legislation through
Chapter 50 of the 2007 First Regular Session of
the 123rd Legislature
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