Skip Maine state header navigation

Agencies | Online Services | Help

Skip First Level Navigation | Skip All Navigation

 
Maine.gov > PFR Home > Consumer Credit Home Page > License Types > Loan Broker FAQ

Loan Broker FAQ

Is Maine a "brick and mortar state" (i.e., does an out-of-state loan broker that desires to do business in Maine need to maintain a physical office in the state)?

No, a loan broker does not need to maintain a physical office in the state. However, it does need to be licensed by the Maine Office of Consumer Credit Regulation (OCCR), and registered as a foreign (i.e.) out-of-state) corporation with the Maine Secretary of State's Corporate Division's Office. A loan broker must also post a $25,000 surety bond for each licensed location (main office and branches).

What is a Loan Broker?

As defined in the Maine Consumer Credit Code, the phrase loan broker means any person that provides or offers to provide the following services for compensation: improving a consumer's credit record, history, or rating; arranging for or obtaining an extension of credit for a consumer; or providing advice or assistance to a consumer regarding the procurement of consumer credit or the improvement one's credit record, history, or rating.

Must an applicant have previous experience in order to qualify for license?

No, previous loan broker experience is not required. However, the licensing standard is that "upon investigation, the Administrator finds that the financial responsibility, character, and fitness, of the applicant, and where applicable, its partners, officers, or directors, warrant belief that the business will be operated honestly and fairly within the purposes of this Title (Maine Consumer Credit Code, Title 9-A, Maine Revised Statutes Annotated (MRSA))." Please note that a loan broker's initial application (main office or branch) does require submission of a resume of the principal party(s). In addition, two letters of professional reference are also required.

Are there continuing education requirements in order to maintain my license?

No, but loan brokers should check this site periodically to stay abreast of any changes in law. This can be done by checking the Maine Creditor Update, a newsletter posted on our website (http://www.maine.gov/pfr/ccp/ccp_issue.htm), which is updated every year or so. The Maine Creditor Update summarizes all the new laws that are relevant to, or are part of, the Maine Consumer Credit Code.

Do each of my W-2 employees have to be individually registered?

Yes. Registration is required of loan officers employed by loan brokers, as well as those employed by non-bank mortgage lenders. Those loan officers who will have direct contact (by phone or in person) with Maine consumers must be registered. Employees performing clerical or administrative functions don't need to be registered. The registration fee is $20 per loan officer per year, up to a maximum of $400 per company per year.

Does Maine have any special disclosures that I will need to utilize?

Yes. The first special disclosure is the Disclosure Form to the Consumer. It can be found online at: http://www.maine.gov/pfr/ccp/Lic-reg_forms/CSO/agreement.htm

The second special disclosure is the Disclosure Form required by the "Maine Fair Credit Reporting Act". It can be found online at: http://www.maine.gov/pfr/ccp/Lic-reg_forms/CSO/disforms.rtf. Both forms are included in the loan broker license materials packet.

Is there a difference between W-2 employees and 1099 employees with respect to license and branch location status?

No. All loan officers need to be registered at the location of their place of employment.

I already am licensed as a loan broker. How do I apply for a branch license?

Recently, our office drafted a loan broker branch office application so that both our office and already licensed loan broker could save time. This application is available upon request and is also available online at http://www.maine.gov/pfr/consumercredit/professions/loan_broker/CSObranch.doc. Please note that a new location necessitates either an additional, separate new $25,000 surety bond, or an increase of $25,000 of the original surety bond, to account for the new location. The address of the new location must be listed on the surety bond.

Can I broker one or two loans in Maine without being licensed?

No. Loan brokers must obtain a license with the Maine OCCR prior to brokering any loans with Maine citizens.

Do commercial loan brokers have to be licensed?

No, regulation of commercial loan brokers does not fall under the jurisdiction of the Maine OCCR. Transactions involving two businesses are legal/contractual in nature. Therefore, disputes involving a commercial loan between a business and commercial loan provider or broker must be settled in the court system.

If the loan I broker is closed in another state (other than Maine), do I still need to be licensed in Maine?

No; a loan which is closed in another state is not considered a "Maine transaction"; thus, the broker is not required to licensed with the Maine OCCR. For example, a New Hampshire firm that brokers a loan for a New Hampshire consumer buying a Maine property may close such loan in New Hampshire and need not be licensed as a loan broker in the state of Maine.

How long does it take to receive a decision on license approval?

If your application is complete and you have met the requirements to operate as a loan broker in the state of Maine, your license will typically be approved within three weeks following receipt by OCCR. The use of the application checklist increases your chances of filng a complete application, and thereby expidites the process.

Where can I find information on locating an individual or company to act as my designated agent for service of process in Maine?

The Maine state government provides a list of registered agents in Maine at: http://www.maine.gov/sos/cec/corp/regagent.htm (See additional question about agents at the end.)

Do loan broker's always have to maintain a consumer trust/escrow account?

It depends. If a loan broker accepts upfront fees from its clients that are not made payable to third-party service providers (credit reports, appraisals, title work, etc.), those funds must be maintained in an escrow/trust account until the conclusion of the loan process. If the loan broker maintains a policy of not accepting non-third-party fees, an escrow/trust account is not required.

Are there any net worth requirements for approval of loan broker license?

No, there are no net worth requirements for a loan broker; however, to become licensed, a loan broker must post a $25,000 surety bond and be prepared to demonstrate financial responsibility.

How long is the licensing period for?

One year- February 1 through January 31.

What term should my $25,000 surety bond run for?

The $25,000 surety bond must either run concurrent with the loan broker's license period, or it must be continuous in nature.

Should my mailing address or physical address be listed on the surety bond?

Your physical address should be printed on the bond.

Do I need additional surety bonds for my proposed branch locations?

Yes, each branch requires a separate $25,000 surety bond with the address of that branch contained therein. A single bond may be issued that includes the aggregate amount needed to cover the sum of amounts due for each individual location of the loan broker. Such a bond must list each individual location's address. For example: a main office plus one branch= $50,000 aggregate bond; a main office plus three branches= $100,000 aggregate bond.

If my license is approved, what does my company have to provide to the Maine Office of Consumer Credit Regulation at license renewal time?

Other than basic information about your firm and its activity in Maine, a renewal loan broker application must include the following five items: 1) for non-continuous bonds, a Bond Confirmation form (use the form contained in the application package) or a new completed bond (use the bond form only if changing bonding companies); 2) a sample copy, completed so as to reflect a hypothetical transaction, of the signed Written Agreement containing a description of services offered, guarantees or promises of refund, effective term of agreement, terms of payment, and the "Notice to Consumer," as required by Section 10-302 of the Act; 3) a sample copy, showing provision for proof of receipt by the consumer, of the Written Disclosure, setting forth material consumer protections as required by Section 10-303 of the Act; 4) a check, made payable to "Treasurer, State of Maine," in the amount of $300; and 5) Volume information of loans and total dollar amount of loans brokered to Maine residents during the previous registration period.

When should I expect to receive my renewal package?

The Maine OCCR generally mails renewal application packets either the first or second week of December.

Upon receipt, how long should I wait to forward the completed renewal material in order to avoid a "gap" in my registration status?

Completed loan broker renewal packets should be received by the Maine OCCR no later than the end of the second week in January.

If my renewal information is received after January 31 by your agency, is there a penalty assessed in order to renew?

There is an additional fee of $100 for any renewal received after the due date.

If during the course of the year I decide to change my physical address, what steps do I need to take concerning the OCCR?

You must send a cover letter on company letter head to the OCCR detailing the change along with an amended surety bond bearing the new address and a $25 check payable to "Treasurer, State of Maine" to cover the OCCR's file maintenance fee. You must surrender your loan broker license that lists the old address. The OCCR will forward you a new license within a few weeks. Please include your old license in your request for change mailing to our agency.

What are some fact patterns that have resulted in the Maine OCCR terminating a loan broker license?

If during the term of a loan broker's license, the Administrator finds that the financial responsibility, character, and fitness, of the applicant, and where applicable, its partners, officers, or directors, warrant the belief that that the business can no longer be operated honestly and fairly within the provisions of Article X of the Maine Consumer Credit Code, then a loan broker's license may be terminated. Specific reasons for license termination include, but are not limited to, systemic and repeated violations such as: filing false corporate documents, failing to segregate consumer's funds from working capital in escrow accounts, failing to pay loan appraisers, undue mortgage application delays, surprise closing costs, loss of rate-locks, obstructing OCCR investigations, forging customer's documents, demonstrating fiscal irresponsibility by overdrawing one's checking and consumer escrow account, and failing to pay for a state compliance examination.

Where can I find the Maine Consumer Credit Code online so that I may better understand the law and thereby assure my compliance, or better understand my rights as a consumer?

The Maine Consumer Credit Code can be found online here: http://www.maine.gov/sos/cec/rcn/apa/02/chaps02.htm.

Advisory rulings which may modify and clarify certain parts of the Maine Consumer Credit Code may be found here: http://www.maine.gov/pfr/ccp/ccp_advisory_doc.htm.

If I want to close loans in my company's name, is there a special license required?

Yes. The OCCR issues supervised lender licenses which allow your company to act as a lender and also retain your powers to broker consumer loans to Maine citizens. The application form and other documents related to supervised lender licensing can be found at: http://www.maine.gov/pfr/ccp/ccp_applicat.htm#SUPERVISED%20LENDER

Do I need a special license to broker home equity loans?

No. Your loan broker license allows you the ability to broker all types of secured or unsecured consumer loans to Maine consumers.

What is a registered agent?

Virtually all states require corporations and LLCs to appoint a registered agent in the state where the company is conducting business. The registered agent is responsible for receiving important legal and tax documents including: notice of litigation (service of process), franchise tax forms and annual report forms.

The registered agent may be an individual or a company approved by the state to act as agent, located at a street address in the state where the company is conducting business. The registered agent's name and address are included in documents on file with the Secretary of State's Office. This information is a matter of public record.

What services do most registered agents provide?

  • Accept any legal service of process (notice of litigation) documents and record the service in your company file. Notify you via telephone and/or email upon receipt of service of process.
  • Forward any official documents and tax notices received from the Secretary of State and/or tax authorities.
  • Notification of changes to statutes or regulations, ensuring that your company remains compliant with government regulations in any state.

Where can I find a registered agent?

You can check with the Maine Secretary of State Office online at http://www.maine.gov/sos/. You can also find a large list of registered agents on the internet by searching for "registered agents." You should make sure that the agent you choose has been approved by the State to act as an agent and is located in Maine.

[Back to Top]

 

Last Updated: June 4, 2009