Oregon Department of Consumer and Business Services Finance/Securities Statutes & Administrative Rules Update

Until 2009, Oregon law required credit service organizations – entities registered to improve a consumer’s credit record or to help obtain an extension of credit for a consumer – to register with DCBS. In 2009, the Legislature enacted House Bill 2191 (2009 Or Laws ch 604; the Act). The Act consolidated statutes regulating the practices of credit service organizations and debt consolidation agencies into a single series. As part of the consolidation section 27 of the Act, a provision that was not codified in the Oregon Revised Statutes, repealed the existing provisions of law governing credit service organizations. However, several existing rules that implemented the credit service organization statutes remained in the administrative rule compilation. This rulemaking activity proposes to remove these duplicative and unneeded rules relating to credit service organizations.

In response to the recent housing crisis, the Congress enacted the S.A.F.E. Mortgage Licensing Act of 2008 (Pub. L. 110-289). The S.A.F.E. Act sets minimum standards for the states to adopt for the licensing of mortgage loan originators; i.e., individuals that take mortgage loan applications and negotiate mortgage loan terms. After passage of the federal law and implementation at the state level, various groups raised concerns that the S.A.F.E. Act could apply to nonprofit organizations and government entities engaged in loan origination activities. In response, the U.S. Department of Housing and Urban Development issued final regulations in July 2011 (see 76 Fed. Reg. 38464). HUD determined that the S.A.F.E. Act applies to businesses, not "bona fide" nonprofit organizations and government entities. HUD’s interpretation required states to establish criteria for the nonprofit organization to be considered bona fide, for purposes of the S.A.F.E. Act, and to establish a basic process for making the determination. This proposed rulemaking activity establishes the process and criteria used to determine when a nonprofit organization is bona fide and clarifies that certain government employees need not obtain mortgage loan originator licenses.