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. Loan broker also means any person who serves as a facilitator of a refund anticipation loan or refund anticipation check, whether or not in return for the separate payment of money or other valuable consideration.

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))."

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

No, Maine does not have continuing education requirements in order to maintain a loan broker license.

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.

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.state.me.us/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.state.me.us/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.

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

No. Loan brokers must obtain a license with the Bureau 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 Bureau's jurisdiction. 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 the Bureau.

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 (Trusted Partner Link)

Do loan brokers 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- January 1 through December 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 I want to close loans in my company's name, is there a special license required?

Yes. The Bureau 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.

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 HERE (Trusted Partner Link). 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.

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