The recently concluded 2017 Session of the Nevada Legislature made some organic changes to state licensing and regulatory oversight schemes governing mortgage companies, savings and loan associations and trust companies. We believe that our financial institution clients may consider these legal developments relevant to current market entry decisions and operational compliance. We also recommend that interested clients monitor rulemaking activities before the Division of Financial Institutions (“NFID”) and Division of Mortgage Lending (“NMLD”), as these agencies implement these changes in governing statutes. For our clients that are currently regulated by NFID, you should also be aware that the methodology for imposing supervision and examination fees under state law has changed. Click here for more information.
Nevada has finally eliminated the archaic distinction between mortgage brokers and mortgage bankers, adopting in Assembly Bill 468 a unitary licensing and regulatory system for “mortgage companies” that essentially adopts the preexisting licensing and oversight standards applied to brokers alone. This is consistent with the recent preference of the NMLD to navigate applicants to broker’s licensing. This same piece of legislation also changes the term “mortgage agent” to "loan originator” consistent with NMLS designation used by most jurisdictions. If your company has been frustrated by the banker versus broker distinction, it exists no more. Click here for more information.
Formation in Nevada of new state-chartered banks and thrifts has been moribund since the financial crisis of 2007-2008. In an effort to encourage new de novo institutions, the former statutory scheme governing savings and loan associations has been gutted and replaced by Senate Bill 81's new licensing and regulatory system for savings banks. Nevada-chartered savings banks may exercise the powers, privileges, and authorities granted by federal law to national banks and by state law to Nevada chartered commercial banks, as well as all the same rights, powers, privileges, immunities and exceptions possessed by a federal savings bank under federal law, including all fiduciary powers that a federal savings bank is authorized to exercise. Commissioner Burns has opined that this will make a state-chartered savings bank, as compared to a federal savings bank charter, attractive and leverage for Nevada the similar experience of Utah and Illinois. Click here for more information.
Industry interest in licensing a trust company in Nevada has been on the rise in our experience. Assembly Bill 61 removes some mandatory licensing barriers to entry for fiduciaries. The statutes will now allow foreign trust companies licensed in another state to use a streamlined authorization procedure with NFID to engage in the solicitation of trust company business in the state or open a qualifying trust representative office in the State. Nevada law also will remove licensing requirements for foreign trust companies regulated under federal law that establish and maintain qualifying offices to solicit and engage in the business of a trust company in Nevada. This legislation also revised the qualifications for serving as a trustee of a spendthrift trust. Click here for more information.