State Regulation:
Nebraska
NE ST § 45-801
Neb.Rev.St. § 45-801
NEBRASKA REVISED STATUTES OF 1943
CHAPTER 45. INTEREST, LOANS, AND DEBT
ARTICLE 8. CREDIT SERVICES ORGANIZATIONS
§ 45-801. Act, how cited.
Sections 45-801 to 45-815 shall be known and may be cited as
the Credit Services Organization Act.
§ 45-802. Terms, defined.
For purposes of the Credit Services Organization Act:
(1) Buyer shall mean an individual who is solicited to
purchase or who purchases the services of a credit services
organization;
(2) Consumer reporting agency shall have the meaning
assigned by the Fair Credit Reporting Act, 15 U.S.C.
1681a(f);
(3) Credit services organization shall mean a person who,
with respect to the extension of credit by others and in
return for the payment of money or other valuable
consideration, provides or represents that the person can or
will provide any of the following services:
(a) Improving a buyer's credit record, history, or rating;
(b) Obtaining an extension of credit for a buyer; or
(c) Providing advice or assistance to a buyer with regard to
subdivision (a) or (b) of this subdivision;
(4) Extension of credit shall mean the right to defer
payment of debt or to incur debt and defer its payment
offered or granted primarily for personal, family, or
household purposes; and
(5) Person shall include individual, corporation, company,
association, partnership, limited liability company, and
other business entity.
§ 45-803. Exemptions.
(1) The following shall be exempt from the Credit Services
Organization Act:
(a) A person authorized to make loans or extensions of
credit under the laws of this state or the United States who
is subject to regulation and supervision by this state or
the United States or a lender approved by the United States
Secretary of Housing and Urban Development for participation
in a mortgage insurance program under the National Housing
Act, 12 U.S.C. 1701 et seq.;
(b) A bank or savings and loan association whose deposit or
accounts are eligible for insurance by the Federal Deposit
Insurance Corporation or a subsidiary of such a bank or
savings and loan association;
(c) A credit union doing business in this state;
(d) A nonprofit organization exempt from taxation under
section 501(c)(3) of the Internal Revenue Code;
(e) A person licensed as a real estate broker or salesperson
under the Nebraska Real Estate License Act acting within the
course and scope of that license;
(f) A person licensed to practice law in this state acting
within the course and scope of the person's practice as an
attorney;
(g) A broker-dealer registered with the Securities and
Exchange Commission or the Commodity Futures Trading
Commission acting within the course and scope of that
regulation;
(h) A consumer reporting agency;
(i) A person whose primary business is making loans secured
by liens on real property;
(j) A person, firm, corporation, or association licensed as
a collection agency in this state or a person holding a
solicitor's certificate in this state acting within the
course and scope of that license or certificate; and
(k) A person licensed to engage in the business of debt
management pursuant to sections 69-1201 to 69-1217.
(2) The burden of proving an exemption under this section
shall be on the person claiming the exemption.
§ 45-804. Prohibited acts.
A credit services organization, a salesperson, agent, or
representative of a credit services organization, or an
independent contractor who sells or attempts to sell the
services of a credit services organization shall not:
(1) Charge a buyer or receive from a buyer money or other
valuable consideration before completing performance of all
services, other than those described in subdivision (2) of
this section, which the credit services organization has
agreed to perform for the buyer unless the credit services
organization has obtained a surety bond or established and
maintained a surety account as provided in section 45-805;
(2) Charge a buyer or receive from a buyer money or other
valuable consideration for obtaining or attempting to obtain
an extension of credit that the credit services organization
has agreed to obtain for the buyer before the extension of
credit is obtained;
(3) Charge a buyer or receive from a buyer money or other
valuable consideration solely for referral of the buyer to a
retail seller who will or may extend credit to the buyer if
the credit that is or will be extended to the buyer is
substantially the same as that available to the general
public;
(4) Make or use a false or misleading representation in the
offer or sale of the services of a credit services
organization, including (a) guaranteeing to erase bad credit
or words to that effect unless the representation clearly
discloses that this can be done only if the credit history
is inaccurate or obsolete and (b) guaranteeing an extension
of credit regardless of the person's previous credit problem
or credit history unless the representation clearly
discloses the eligibility requirements for obtaining an
extension of credit;
(5) Engage, directly or indirectly, in a fraudulent or
deceptive act, practice, or course of business in connection
with the offer or sale of the services of a credit services
organization;
(6) Make or advise a buyer to make a statement with respect
to a buyer's credit worthiness, credit standing, or credit
capacity that is false or misleading or that should be known
by the exercise of reasonable care to be false or misleading
to a consumer reporting agency or to a person who has
extended credit to a buyer or to whom a buyer is applying
for an extension of credit; or
(7) Advertise or cause to be advertised, in any manner
whatsoever, the services of a credit services organization
without filing a registration statement with the Secretary
of State under section 45-806 unless otherwise provided by
the Credit Services Organization Act.
§ 45-805. Surety bond or surety account; requirements;
action on surety; depository; Secretary of State; powers and
duties.
(1) A credit services organization conducting business in
this state shall obtain a surety bond or establish a surety
account which complies with this section. The bond or
account shall be in the amount of one hundred thousand
dollars.
(2) If a surety bond is obtained, the bond shall be issued
by a surety company authorized to do business in this state
and a copy of the bond shall be filed with the Secretary of
State. If a surety account is established, the account shall
be established and maintained at a federally insured bank or
savings and loan association located in this state and
notification of the depository, the trustee, and the account
number shall be filed with the Secretary of State.
(3) The bond or account shall be in favor of the state for
the benefit of any person who is damaged by any violation of
the Credit Services Organization Act. The bond or account
shall also be in favor of any person damaged by such a
violation.
(4) Any person claiming against the bond or account for a
violation of the act may maintain an action at law against
the credit services organization and against the surety or
trustee. The surety or trustee shall be liable only for
damages awarded under section 45-810. The aggregate
liability of the surety or trustee to all persons damaged by
a credit services organization's violation of the act shall
not exceed the amount of the bond or account.
(5) A depository holding money in a surety account under the
act shall not convey money in the account to the credit
services organization that established the account or a
representative of the credit services organization unless
the credit services organization or representative presents
a statement issued by the Secretary of State indicating that
subsection (6) of this section has been satisfied in
relation to the account. The Secretary of State may conduct
investigations and require submission of information as
necessary to enforce this subsection.
(6) The bond or account shall be maintained until two years
after the date that the credit services organization ceases
operation in this state.
§ 45-806. Registration statement; contents; requirements;
fee.
(1) A credit services organization shall file a registration
statement with the Secretary of State before conducting
business in this state. The registration statement shall
contain:
(a) The name and address of the credit services
organization; and
(b) The name and address of any person who directly or
indirectly owns or controls ten percent or more of the
outstanding shares of stock in the credit services
organization.
(2) The registration statement shall also contain either:
(a) A full and complete disclosure of any litigation or
unresolved complaint filed with a governmental authority of
this state relating to the operation of the credit services
organization; or
(b) A notarized statement that there has been no litigation
or unresolved complaint filed with a governmental authority
of this state relating to the operation of the credit
services organization.
(3) The credit services organization shall update the
registration statement within ninety days after the date on
which a change in the information required in the statement
occurs.
(4) Each credit services organization registering under this
section shall maintain a copy of the registration statement
in the files of the credit services organization. The credit
services organization shall allow a buyer to inspect the
registration statement on request.
(5) The Secretary of State may charge each credit services
organization that files a registration statement with the
Secretary of State a reasonable fee not to exceed one
hundred dollars to cover the cost of filing. The Secretary
of State shall not require a credit services organization to
provide information other than that provided in the
registration statement.
§ 45-807. Written statement to buyer; contents; credit
services organization; duties.
(1) Before executing a contract or agreement with or
receiving money or other valuable consideration from a
buyer, a credit services organization shall provide the
buyer with a written statement containing:
(a) A complete and detailed description of the services to
be performed by the credit services organization for the
buyer and the total cost of the services;
(b) A statement explaining the buyer's right to proceed
against the surety bond or surety account required by
section 45-805;
(c) The name and address of the surety company that issued
the bond or the name and address of the depository and the
trustee and the account number of the surety account;
(d) A complete and accurate statement of the buyer's right
to review any file on the buyer maintained by a consumer
reporting agency as provided by the Fair Credit Reporting
Act, 15 U.S.C. 1681 et seq.;
(e) A statement that the buyer's file is available for
review at no charge on request made to the consumer
reporting agency within thirty days after the date of
receipt of notice that credit has been denied and that the
buyer's file is available for a minimal charge at any other
time;
(f) A complete and accurate statement of the buyer's right
to dispute directly with the consumer reporting agency the
completeness or accuracy of any item contained in a file on
the buyer maintained by the consumer reporting agency;
(g) A statement that accurate information cannot be
permanently removed from the files of a consumer reporting
agency;
(h) A complete and accurate statement of when consumer
information becomes obsolete and of when consumer reporting
agencies are prevented from issuing reports containing
obsolete information; and
(i) A complete and accurate statement of the availability of
nonprofit credit counseling services.
(2) The credit services organization shall maintain on file,
for a period of two years after the date the statement is
provided, an exact copy of the statement, signed by the
buyer, acknowledging receipt of the statement.
§ 45-808. Contract; requirements; cancellation; procedure;
notice; breach; effect.
(1) Each contract between the buyer and a credit services
organization for the purchase of the services of the credit
services organization shall be in writing, dated, and signed
by the buyer and shall include:
(a) A statement in type that is boldface, capitalized,
underlined, or otherwise set out from surrounding written
materials so as to be conspicuous, in immediate proximity to
the space reserved for the signature of the buyer, as
follows: "You, the buyer, may cancel this contract at any
time before midnight of the third day after the date the
contract is signed. See the attached notice of cancellation
form for an explanation of this right.";
(b) The terms and conditions of payment, including the total
of all payments to be made by the buyer, whether to the
credit services organization or to another person;
(c) A full and detailed description of the services to be
performed by the credit services organization for the buyer,
including all guarantees and all promises of full or partial
refunds, and the estimated length of time, not to exceed one
hundred eighty days, for performing the services; and
(d) The address of the credit services organization's
principal place of business and the name and address of its
agent in the state authorized to receive service of process.
(2) The credit services organization shall return any
payment made by a buyer under the contract if the buyer
cancels the contract within three days after it is signed.
The payment shall be returned within ten days after the date
the organization receives the cancellation notice from the
buyer.
(3) The contract shall have attached two easily detachable
copies of a notice of cancellation. The notice shall be in
boldface in the following form:
Notice of Cancellation
You may cancel this contract, without any penalty or
obligation, within three days after the date the contract is
signed.
If you cancel, any payment made by you under this contract
will be returned within ten days after the date of receipt
by the seller of your cancellation notice.
To cancel this contract, mail or deliver a signed, dated
copy of this cancellation notice or other written notice to:
(name of seller) at (address of seller) (place of business)
not later than midnight (date) I hereby cancel this
transaction.
(date) .ce(purchaser's signature)
(4) The credit services organization shall give to the buyer
a copy of the completed contract and all other documents the
credit services organization requires the buyer to sign at
the time they are signed.
(5) The breach by a credit services organization of a
contract under the Credit Services Organization Act or of
any obligation arising from a contract under the act shall
be a violation of the act.
§ 45-809. Waiver of rights; void.
A credit services organization shall not attempt to cause a
buyer to waive a right under the Credit Services
Organization Act. A purported waiver by a buyer of any part
of the act shall be void.
§ 45-810. Damages.
A buyer injured by a violation of the Credit Services
Organization Act may bring an action for recovery of
damages. The damages awarded shall not be less than the
amount paid by the buyer to the credit services organization
plus reasonable attorney's fees and court costs.
§ 45-811. Violation; injunction.
The Attorney General or a buyer may bring an action in
district court to enjoin a violation of the Credit Services
Organization Act.
§ 45-812. Violation; deceptive trade practice.
A violation of the Credit Services Organization Act shall be
a deceptive trade practice under the Uniform Deceptive Trade
Practices Act.
§ 45-813. Statute of limitations.
An action may not be brought under section 45-810 or 45-812
after four years after the date of the execution of the
contract for services to which the action relates.
§ 45-814. Violation; penalty.
A person who violates the Credit Services Organization Act
shall be guilty of a Class II misdemeanor.
§ 45-815. Remedies.
The remedies provided by the Credit Services Organization
Act shall be in addition to other remedies provided by law.
|