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FREQUENTLY ASKED QUESTIONS FOR LOAN SERVICERS
The FAQ is organized by the following categories:
Q. WHO NEEDS A LOAN SERVICER REGISTRATION?
A. A loan servicer is a company that either takes assignment of (purchases) consumer loans made to Maine residents, or that collects payments on those loans.
If your company takes assignments of consumer loans and then hires another company to accept payments, then both your company and the sub-servicer must register as loan servicers.
The loan servicer registration relates solely to loans, not to credit sales. A company that takes assignment of credit sales contracts, or that collects payments from consumers on those contracts, should not register as a loan servicer. Rather, that company should register as a sales finance company.
Keep in mind that the loan servicer and sales finance company registrations are appropriate only in those cases in which the accounts are generally in good standing when assigned or serviced. If the accounts are generally in default when they first come to a loan servicer or sales finance company, then the company likely needs a
debt collector license. The fact that some accounts go into default during the routine servicing process does not make a servicer or sales finance company into a debt collector, but if accounts are generally in default when the company first deals with them, then a debt collector license is appropriate.
Also keep in mind that if your company is located in the state of Maine and takes assignment (purchases) consumer loans, it must obtain a supervised lender license.
Q. MY COMPANY ALREADY HOLDS A SUPERVISED LENDER LICENSE IN THE STATE OF MAINE. DOES MY COMPANY NEED A SEPARATE LOAN SERVICER REGISTRATION TO SERVICE MAINE LOANS?
A. If your company funded the loan and is also the same company that will service the loan and collect payments on the loan, then it is not necessary to obtain a separate loan servicer registration. However, if your company did not fund the loan, but maintains the servicing rights to the loan, than a loan separate loan servicer registration is required.
Q. IS THERE A BONDING REQUIREMENT FOR A LOAN SERVICER?
A. No, a loan servicer registration does not require a surety bond or any other type of bond.
Q. IS THERE A NET WORTH REQUIREMENT FOR A LOAN SERVICER?
A. No, a loan servicer does not have to maintain a certain minimum net worth.
Q. IS MAINE A “BRICK AND MORTER” STATE?
A. No, licensed or registered companies are not required to maintain a physical presence in this state.
Q. WHAT IS THE COST TO APPLY FOR A LOAN SERVICER REGISTRATION?
A. The application fee is $20 for a main/corporate office and $10 for a branch office. All locations that service Maine consumer loans must be registered.
Q. DOES MAINE PERMIT OFFSHORE ENTITIES TO SERVICE LOANS?
A. Yes, the bureau permits companies that are located outside of the United States to apply for, and obtain, a loan servicer registration.
Q. IS THERE A LIMITATION TO THE NUMBER OF OTHER TRADE NAMES OR DOING BUSINESS AS NAMES?
A. Although there is no limitation to the number of other trade names or doing business as names a company may use, the bureau reserves the right to restrict the quantity of, or use of, these other names. It is also important to note that when a registration certificate is printed, due to limited spacing, only one other name can be printed. For such cases when a company has multiple other names, the company should designate which name is preferred to be printed along with the legal name. If no name is designated when two or more other names are requested, the bureau will print only the legal name of the company on the registration.
Q. WHEN IS THE RENEWAL FOR THE LOAN SERVICER REGISTRATION DUE?
A. The loan servicer registration expires annually on January 31st.
Q WILL I RECEIVE A RENEWAL REMINDER NOTICE?
A. Yes, the company is mailed a renewal application prior to renewal. Renewal applications are mailed annually in late November/early December. Renewal applications are sent to the mailing address the bureau has on file. If it comes to the later part of December and your company has not received the renewal, you should contact the bureau to verify that the renewal was sent and to which address it was sent to. If needed, a duplicate renewal can be mailed or emailed upon request.
Q. CAN I RENEW ONLINE?
A. The bureau does not offer an online renewal system for loan servicer registrations. Renewal applications are mailed out to the company and must be mailed back to the bureau.
Q. WHAT IS THE COST TO RENEW A LOAN SERVICER REGISTRATION?
A. The renewal fee is $20 per year for a corporate location or main office and $10 per year for each branch location.
Q. I SUBMITTED MY RENEWAL TO THE BUREAU BUT IT HAS NOT BEEN APPROVED YET AND IT IS BEYOND THE EXPIRATION DATE OF JANUARY 31ST. CAN I STILL SERVICE LOANS IN MAINE?
A. As long as the license status is “active” then the loan servicer is permitted to conduct business. It is best to submit the renewal in advance in order to allow sufficient processing time to avoid this scenario. Once the regulator has reviewed the renewal, the expiration date will be updated accordingly.
Q. HOW DOES THE COMPANY SURRENDER A REGISTRATION?
A. The company should provide written notification of closure to the bureau. The notification should provide a brief description of the reason for closure and the effective date of surrender. The registration certificate should also be returned along with the letter. If the registration certificate cannot be located, the company should make note of that in the letter.
Q. IS THERE A COST ASSOCIATED WHEN SURRENDERING THE REGISTRATION?
A. No, there is no fee for surrendering the registration.
Q. WHAT IS THE PROCEDURE TO CHANGE THE NAME OF THE COMPANY?
A. An administrative fee of $25 is required for changes in legal name or other trade name/doing business as name. The company should submit a name change request to the bureau along with supporting documentation such as approved amendments to bylaws/formation documents, etc. The company should specify the effective date of change.
Q. WHAT IS THE PROCEDURE TO CHANGE THE ADDRESS OF THE COMPANY?
A. An administrative fee of $25 will be applied to changes in physical location (street address). There is no fee to update a company’s mailing address. (This is because the bureau will need to print out a new registration certificate showing the updated location. A change in mailing address is a system update only and does not require reprinting of the registration certificate.) The company should submit an address change request to the bureau indicating the effective date of change.
Q. WHAT IS THE PROCEDURE WHEN THE COMPANY EXPERIENCES CHANGES IN THE CORPORATE STRUCTURE?
A. The company should provide a written explanation of changes including the percentage of change. A pre and post-organizational chart should be included. Depending on the percentage of change involved, the company may be required to submit a new application. Changes greater than 50% ownership require submission of a new application. If there are questions about whether or not a new application request is needed, the company should submit the details in writing to the bureau for a response.
Q. DOES MAINE HAVE AN ADVANCED CHANGE NOTIFICATION REQUIREMENT?
A. Please notify the bureau within 30 days of making changes. It is preferred to receive written requests of change a minimum of 30 days prior to the impending change, but if that is not possible, then it is necessary to notify the bureau about the change as soon after as practicable or within 30 days of the event.