STATE OF VERMONT

Is a license required? Yes. Vermont Statutes Title 8, Chapter 133(Attached as Schedule A) section 4862 state that “No person shall engage in the business of debt adjustment except as authorized by this chapter and without first obtaining a license from the commissioner.”
State specific loan modification law? 8-133-4861-2 states that “”Debt adjustment” means making a contract with a debtor whereby the debtor agrees to pay a sum or sums of money periodically and the other party to the contract distributes, supervises, coordinates, negotiates, or controls the distribution of such money or evidences thereof among one or more of the debtor’s creditors in full or partial payment of obligations of the debtor. For purposes of this chapter, engaging in debt adjustment in this state shall include:

(A) soliciting debt adjustment business from within this state, whether by mail, by telephone, by electronic means, or by other means regardless of whether the debtor resides within this state or outside this state;

(B) soliciting debt adjustment business with an individual residing in this state, whether by mail, by telephone, by electronic means, or by other means;”

Advantages of becoming a licensed Mortgage Broker? None.

 

Penalties for operating in the state without a license:

 

8-133-4874 states that “Any person, partnership, association, or corporation and the several members, officers, directors, agents, and employees thereof, who shall violate or participate in the violation of any of the provisions of this chapter, shall be imprisoned not more than two years or fined not more than $1,500.00, or both.”
Is an advanced fee permitted?

 

There is no specific prohibition, however 8-133-4870 states that ” Each licensee shall maintain a separate federally insured bank account for the benefit of debtors in which all payments received from debtors for the benefit of creditors shall be deposited and in which all payments shall remain until a remittance is made to either a debtor or a creditor.” which regulators interpret to require all fees for loan modification to be set aside, till services are completed.
Is a written agreement required? Yes. 8-133-4869 states that “Prior to taking any fee or receiving any compensation, either directly or indirectly, or payment of any sum of money by the debtor, each licensee shall make a written contract between the licensee and the debtor, which contract shall be in such form and shall contain such conditions as the commissioner shall have approved in writing prior to the use of such contract, and the licensee shall immediately furnish the debtor with a true copy of the contract.”
Other noteworthy information? None.
Vermont Statutes

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Title 8, Chapter 133

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License application:

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SCHEDULE A

 

The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 133: Debt Adjusters

 

§ 4861. Definitions

As used in this chapter:

(1) “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a licensee, whether through the ownership of voting securities, by contract, or otherwise. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the voting securities or other interest of any other licensee.

(2) “Debt adjustment” means making a contract with a debtor whereby the debtor agrees to pay a sum or sums of money periodically and the other party to the contract distributes, supervises, coordinates, negotiates, or controls the distribution of such money or evidences thereof among one or more of the debtor’s creditors in full or partial payment of obligations of the debtor. For purposes of this chapter, engaging in debt adjustment in this state shall include:

(A) soliciting debt adjustment business from within this state, whether by mail, by telephone, by electronic means, or by other means regardless of whether the debtor resides within this state or outside this state;

(B) soliciting debt adjustment business with an individual residing in this state, whether by mail, by telephone, by electronic means, or by other means; or

(C) entering into, or succeeding to, a debt adjustment contract with an individual residing in this state.

(3) “Material litigation” means any litigation that according to generally accepted accounting principles is deemed significant to an applicant’s or a licensee’s financial health, and would be required to be disclosed in the applicant’s or licensee’s annual audited financial statements, report to shareholders, or similar records. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1; 2005, No. 36, § 4, eff. June 1, 2005.)

§ 4862. License

No person shall engage in the business of debt adjustment except as authorized by this chapter and without first obtaining a license from the commissioner. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4863. Application for license

(a) A person applying for a license under this chapter shall do so under oath and in a form and manner prescribed by the commissioner. The application shall state or contain:

(1) the legal name and business address of the applicant, and any fictitious or trade name used by the applicant in conducting its business;

(2) a list of any criminal convictions of the applicant and any material litigation in which the applicant has been involved in the ten-year period next preceding the submission of the application;

(3) a description of any debt adjustment and related services previously provided by the applicant;

(4) the debt adjustment and related services that the applicant seeks to provide in this state;

(5) a description of how the applicant will market its services, along with copies of all scripts, mailings, advertisements, and other marketing materials, provided that submission of these materials shall not waive any legal claim the state may have with respect to the content or use of the materials;

(6) a description of the nature and amount of the fees, or the method of calculating the fees, charged to the debtor;

(7) a list of the applicant’s locations in this state and outside this state where the applicant proposes to engage Vermont residents in debt adjustment services;

(8) a list of other states in which the applicant is licensed to engage in debt adjustment services and information concerning any bankruptcy or receivership proceedings affecting the licensee, and any license revocations, suspensions, or criminal or disciplinary action taken against the applicant in other states;

(9) a blank copy of the contract the applicant intends to use. The applicant shall notify the commissioner of all changes and amendments thereto. The terms and conditions of all contracts shall be subject to prior approval by the commissioner;

(10) the name and address of the federally insured financial institution through which the applicant maintains a separate account for the benefit of debtors; and

(11) any other information the commissioner requires with respect to the applicant.

(b) If an applicant is a corporation, nonprofit corporation, limited liability company, partnership, or other entity, the applicant shall also provide:

(1) the date of the applicant’s incorporation or formation and state or country of incorporation or formation;

(2) if applicable, a certificate of good standing from the state or country in which the applicant is incorporated or formed and a certificate of authority to transact business in the state of Vermont;

(3) a brief description of the structure or organization of the applicant, including any parent, subsidiary, or affiliate of the applicant, and whether any parent, subsidiary, or affiliate is publicly traded;

(4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the ten-year period next preceding the submission of the application of each executive officer, manager, director of, or person that has control of, the applicant;

(5) a list of any criminal convictions, material litigation, or disciplinary actions in which any executive officer, manager, director of, or individual in control of, the applicant has been involved in the ten-year period next preceding the submission of the application;

(6) a copy of the applicant’s audited financial statements, and a copy of the audited financial statements of any person in control of the applicant, for the most recent fiscal year and, if available, for the two-year period next preceding the submission of the application;

(7) a copy of the applicant’s unconsolidated financial statements, and a copy of the unconsolidated financial statements of any person in control of the applicant for the current year, whether audited or not, and, if available, for the two-year period next preceding the submission of the application;

(8) a copy of the applicant’s federal tax returns for the two-year period next preceding the submission of the application;

(9) if the applicant or any person in control of the applicant is publicly traded, a copy of the most recent 10-K report filed with the United States Securities and Exchange Commission;

(10) if the applicant is a wholly-owned subsidiary:

(A) a copy of the federal tax return for the parent company for the most recent year;

(B) a copy of audited financial statements for the parent corporation for the most recent fiscal year; and

(C) of a corporation publicly traded in the United States, a copy of the parent corporation’s most recent 10-K report filed with the United States Securities and Exchange Commission or, if the applicant is a wholly-owned subsidiary of a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation’s domicile outside the United States;

(11) the name and address of the applicant’s registered agent in this state; and

(12) any other information the commissioner requires with respect to the applicant or any person in control of the applicant.

(c) The commissioner may waive one or more requirements of subsections (a) and (b) of this section or permit an applicant to submit substituted information in lieu of the required information. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4864. Fees

At the time of making the application, the applicant shall pay to the commissioner the sum of $250.00 as a fee for investigating the application and the additional sum of $250.00 as an annual license fee for the period terminating on the last day of the then current calendar year. For succeeding calendar years, the annual license fee shall be $250.00. In addition to the annual license fee every licensee shall pay to the commissioner the actual cost of each examination as provided for in this chapter. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4865. Bond required

(a) Each applicant shall submit to the commissioner, with the application for a license, a bond, in such form as the commissioner shall direct, in the amount of $50,000.00, or such greater amount as the commissioner may determine is required by the business circumstances of the applicant.

(b) The bond shall be in a form and in accordance with such terms and conditions satisfactory to the commissioner and payable to the state for use of the state and for the benefit of any claimant against the licensee to secure the faithful performance of the obligations of the licensee.

(c) The commissioner may require a larger bond if he or she determines, in his or her sole discretion, that a licensee has engaged in a pattern of conduct resulting in bona fide consumer complaints of misconduct and that such increased bond is necessary for the protection of consumers; or the commissioner may increase or decrease the amount of such bond based upon the applicant’s or licensee’s financial condition, business plan, number of locations, and the actual or estimated aggregate amount of payments and fees paid by debtors under the debt adjustment contracts. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4866. Qualification of applicant

(a) The commissioner shall issue a license to the applicant upon the filing of the application and the payment of the fees, if the commissioner finds upon investigation:

(1) that the financial responsibility, experience, character, and general fitness of the applicant, and of the members, officers, directors, and persons in control of the applicant, command the confidence of the community and warrant belief that the business will be operated honestly, fairly, and efficiently within the purposes of this chapter; and

(2) that neither the applicant nor any of such members, officers, directors, or persons in control of the applicant have been convicted of a felony or has had a record of having defaulted in the payment of money collected for others, including the discharge of such debts through bankruptcy proceedings; and

(3) that the applicant has the bond required by section 4865 of this title.

(b) If the commissioner does not so find, the commissioner shall notify the applicant of the denial and return the license fee, retaining the $250.00 investigation fee to cover the costs of investigating the application. The commissioner may require as part of the application a credit report and such other information as the commissioner may deem necessary. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4867. Continuing license; annual license fee

Each license shall remain in full force and effect until revoked, surrendered, or suspended as herein provided. On or before December 1 of each year, every licensee shall pay to the commissioner the annual license fee for the next succeeding calendar year, and shall at the same time file with the commissioner a bond in the same amount and of the same character as required by section 4865 of this title. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4867a. Annual report

(a) A licensee under this subchapter shall submit an annual report on or before April 1 for the preceding calendar year in a form and manner prescribed by the commissioner. The annual report shall state or contain:

(1) a copy of the licensee’s most recent audited annual financial statement or, if the licensee is a wholly owned subsidiary of another corporation, the most recent audited consolidated annual financial statement of the parent corporation or the licensee’s most recent audited consolidated annual financial statement;

(2) the number of new debt adjustment contracts entered into with Vermont residents during the preceding year, the number of Vermont residents that have completed the debt adjustment contract during the preceding year, the number of Vermont residents that have cancelled their debt adjustment contract during the preceding year, and the licensee’s total number of debt adjustment contracts with Vermont residents;

(3) a description of each material change in information submitted by the licensee in its original license application that has not been previously reported to the commissioner on any required report;

(4) a list of the locations in this state and outside this state where the licensee engages in debt adjustment activities with Vermont residents; and

(5) any other information the commissioner may require.

(b) If a licensee does not file an annual report on or before April 1 or pay its renewal fee by December 1 or within any extension of time granted by the commissioner, the commissioner shall send the licensee a notice of suspension. The licensee’s license shall be suspended ten calendar days after the commissioner sends the notice of suspension. The licensee has 20 days after its license is suspended in which to file an annual report or pay the renewal fee, plus $100.00 for each day after suspension that the commissioner does not receive the annual report or the renewal fee. The commissioner for good cause may grant an extension of the due date of the annual report or the renewal date.

(c) The commissioner may require more frequent reports from any licensee for the purpose of determining the adequacy of the licensee’s security. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4867b. Additional places of business; change of place of business; change of management; change in control

(a) Any change of location, addition of another place of business, or closing of a place of business of the licensee shall require 30 days’ prior written notice thereof to the commissioner.

(b) A fee of $100.00 shall accompany a notice of change of location or a notice of an additional place of business. Upon receipt of the notice and fee, the commissioner shall attach to the license in writing the commissioner’s record of the change and the date thereof, which shall be authority for the operation of such business under such license at such new or additional location.

(c) The licensee shall notify the commissioner of every change in the senior management, officers, or directors of the licensee within 30 days after such change.

(d) The licensee shall notify the commissioner of any change in control of the licensee at least 30 days prior to such change. The licensee shall also submit a nonrefundable fee of $250.00 with such notification of a change in control of the licensee. If the commissioner finds that the qualifications of section 4866 of this chapter are satisfied, the commissioner shall approve such change in control of the licensee. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4868. Revocation or suspension of license

(a) The commissioner may suspend, revoke, or refuse to renew a license, place a licensee in receivership, impose injunctive orders, or order that a licensee cease and desist in any specified conduct if the commissioner finds that:

(1) the licensee has failed to pay the annual fee or an examination fee as provided in section 4864 of this chapter or to maintain the bond required under section 4865 of this chapter or to comply with any demand, ruling, order, or requirement of the commissioner lawfully made pursuant to and within the authority of this chapter;

(2) the licensee has violated any provision of this chapter, or any rule or regulation lawfully made by the commissioner under and within the authority of this chapter;

(3) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the commissioner’s refusal originally to issue such license, including unconscionable conduct which takes advantage of a consumer’s lack of bargaining power or lack of understanding of the terms or consequences of the agreement;

(4) the licensee does not cooperate with an examination or investigation by the commissioner;

(5) the licensee engages in fraud, intentional misrepresentation, or gross negligence;

(6) the licensee engages in an unsafe or unsound practice; or

(7) the licensee has made any material false representation to the commissioner in any application or report filed with the commissioner.

(b) Unless otherwise specified in this chapter, the licensee shall receive 15 days’ notice and an opportunity to be heard before such order shall be issued. Mailing notice to the licensee’s current address as stated on the license shall be presumptive evidence of its receipt by the licensee. However, if the commissioner finds that the public safety or welfare imperatively requires emergency action, action with no prior notice or prior opportunity to be heard may be taken, pending proceedings for revocation or other action. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4868a. Surrender of license, no effect on liability; reinstatement

(a) Any licensee may surrender any license by delivering to the commissioner the license and notice that the licensee thereby surrenders such license.

(b) Surrender shall not affect the licensee’s civil or criminal liability for acts committed prior to surrender. No revocation, suspension, or refusal to renew or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower.

(c) The commissioner shall have authority to reinstate revoked, suspended, or nonrenewed licenses or to issue new licenses to a licensee whose license or licenses shall have been revoked, suspended, or nonrenewed if no fact or condition then exists which would have justified the commissioner in refusing originally to issue such license under this chapter. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4869. Contract with debtor

(a) Prior to taking any fee or receiving any compensation, either directly or indirectly, or payment of any sum of money by the debtor, each licensee shall make a written contract between the licensee and the debtor, which contract shall be in such form and shall contain such conditions as the commissioner shall have approved in writing prior to the use of such contract, and the licensee shall immediately furnish the debtor with a true copy of the contract.

(b) In addition to such other items as the commissioner may require, the contract shall:

(1) fully disclose all services to be provided;

(2) fully disclose all fees to be charged to the debtor;

(3) disclose that debt adjustment plans are not suitable for all debtors;

(4) if applicable, disclose that creditors may compensate the licensee;

(5) if applicable, disclose that secured debt is not covered by the contract; and

(6) disclose a list of debts covered by the contract and the interest rate of those debts at the time. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4869a. Rescission

(a) Debtor’s right to cancel.

(1) In addition to any other right to revoke the contract, the debtor may cancel the debt adjustment contract until midnight of the third business day after the date on which the debtor signed the debt adjustment contract.

(2) Cancellation occurs when notice of cancellation is given to the licensee.

(3) Notice of cancellation, if given by mail, shall be deemed given when deposited in a mailbox properly addressed and postage prepaid.

(4) Notice of cancellation need not take any prescribed form and shall be sufficient if it indicates the intention of the debtor not to be bound.

(b) Disclosure obligations.

(1) The licensee shall furnish the debtor with a fully completed copy of the contract at the time the debtor signs the debt adjustment contract. The copy of the contract shall show the date of the debt adjustment contract, shall contain the name and address of the licensee, and in immediate proximity to the space reserved in the contract for the signature of the debtor and in boldface type of a minimum size of ten points, a statement in substantially the following form:

You may cancel this transaction at any time prior to midnight of the third business day after the date of this contract. See the attached notice of cancellation for an explanation of this right.

(2) The licensee shall furnish a notice of cancellation to the debtor at the time the debtor signs the debt adjustment contract, which notice shall be attached to the contract and shall be easily detachable.

(A) The notice of cancellation shall contain the following information and statements, printed in not less than ten point boldface type:

NOTICE OF CANCELLATION

(enter date of transaction)

………………………………………………………………..

(date)

You may cancel this transaction, without any penalty or obligation, within three business days from the above date.

If you cancel, any payments made by you under the contract will be returned within ten business days following our receipt of your cancellation notice.

To cancel the debt adjustment contract, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to ………………………….. at

(name of licensee)

…………………………………………………………………………………………….

(address of licensee’s place of business)

not later than midnight of …………………………………………………………………………………..

(date)

I hereby cancel this transaction.

………………………….

(date)

…………………………………………

(debtor’s signature)

(B) Before furnishing copies of the “Notice of Cancellation” to the debtor, the licensee shall complete both copies by entering the name of the licensee, the address of the licensee’s place of business, the date of the contract, and the date, not earlier than the third business day following the date of the transaction, by which the debtor may give notice of cancellation.

(C) The licensee shall leave the “Notice of Cancellation” with the debtor.

(D) In addition to the written notice of cancellation, the licensee shall orally inform the debtor of his or her right to cancel at the time of the debt adjustment contract.

(3) Until the licensee has complied with this subsection, the debtor may cancel the debt adjustment contract by notifying the licensee in any manner and by any means of the debtor’s intention to cancel. The cancellation period of three business days shall begin to run from the time the licensee complies with this subsection.

(c) Restoration of payments. Within ten days after the debt adjustment contract has been cancelled, the licensee shall tender to the debtor any payments made by the debtor.

(d) If the debt adjustment contract is principally negotiated in a language other than English, all of the disclosures required by this section shall be given in that language.

(e) If the debtor is unable to write in his or her own handwriting, any of the statements required to be written by the debtor under this section shall be handwritten by a member of the debtor’s household at the request of the debtor. If there is no other member of the debtor’s household, such statements must be written by the licensee, at the request of the debtor, and the effect of such statements shall be orally explained to the debtor by the licensee.

(f) Use of the cancellation provision provided for in this section shall not prevent any other action being taken under this chapter or otherwise against such licensee. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4869b. Cancellation of contract

A debtor may cancel a debt adjustment contract at any time without a cancellation premium or penalty. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4869c. Periodic statements to debtor

Periodically, but not less frequently than quarterly, the licensee shall provide the debtor with a statement showing the payments made by the debtor, how such payments have been distributed, and for each debt covered by the contract:

(1) the beginning amount of such debt;

(2) the current amount due on such debt; and

(3) the basic terms of such debt. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4870. Separate bank account for the benefit of creditors; books and records

(a) Each licensee shall maintain a separate federally insured bank account for the benefit of debtors in which all payments received from debtors for the benefit of creditors shall be deposited and in which all payments shall remain until a remittance is made to either a debtor or a creditor.

(b) Every licensee shall keep, and use in its business, books, accounts, and records which will enable the commissioner to determine whether such licensee is complying with the provisions of this chapter and with the regulations of the commissioner. Every licensee shall preserve such books, accounts, and records for at least seven years after making the final entry on any transaction recorded therein. The items specified in this subsection may be maintained in any form of record as permitted in subsection 11301(c) of this title. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4870a. Timely payments to creditors

Licensees shall make payments to creditors in a timely manner at least once every 30 days in accordance with the contract between the licensee and the debtor. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4870b. Prohibited activities

(a) No person, partnership, association, corporation, or other entity, except a licensee, may make any representation, directly or indirectly, orally or in writing that he, she, or it is licensed under this chapter.

(b) No licensee shall advertise its services in any media, whether print or electronic, in any manner that may be false or deceptive. All such advertisements shall contain the name and office address of such entity, which shall conform to a name and address on record with the department and which shall indicate that the licensee is licensed by the department.

(c) No person or any other entity, other than a licensee, shall use the title “debt adjuster,” “budget planner,” “licensed debt adjuster,” or “licensed budget planner” or the term “debt adjuster,” “debt reduction,” or “budget planning” in any public advertisement, business card, or letterhead.

(d) No licensee shall commingle monies received from debtors with any other funds associated with the operation of its business or with any funds associated with any other type of business; provided, however, that for the sole purpose of making a single payment to a creditor, a licensee may commingle monies received from debtors under contract with one or more of its affiliates authorized to engage in debt adjustment in another state.

(e) No licensee shall structure an agreement for the debtor that, at the conclusion of the agreement, would result in negative amortization of any of the debtor’s obligations to any creditor.

(f) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee shall purchase any obligation of a debtor.

(g) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee shall lend money or provide credit to the debtor.

(h) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee shall obtain a mortgage or other security interest in property of the debtor.

(i) No licensee shall operate as a person or entity seeking payment of obligations on behalf of any creditors that are not receiving payments pursuant to a contract between a debtor and a licensee.

(j) No licensee shall execute any contract or agreement to be signed by the debtor unless the contract or agreement is fully completed, and the duration of any such contract shall be in conformance with any limitations specified pursuant to regulations of the commissioner.

(k) No licensee shall pay any bonus or other consideration to any person or entity for the referral of a debtor to its business, or accept or receive any bonus, commission, or other consideration for referring any debtor to any person or entity for any reason; provided, however, that nothing herein shall prohibit the payment of rebates from creditors to licensees.

( l) No licensee shall disclose or threaten to disclose information concerning the existence of a debt or any other conduct which could coerce payment of the debt of a debtor with whom it has a contract.

(m) No licensee shall use a communication that simulates in any manner a legal or judicial process, or which gives the false appearance of being authorized, issued, or approved by a government, a governmental agency, or an attorney-at-law.

(n) No licensee, or a director, a manager, or an officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee, shall be a director, a manager, an officer, an owner, or a controlling party of any creditor or a subsidiary of any such creditor, that is receiving or will receive payments from the licensee on behalf of a debtor with whom the licensee has contracted, without the express written consent of the commissioner. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4870c. Financial privacy

The licensee shall be subject to and shall comply with subchapter 2 of chapter 200 of this title and any rules or regulations adopted in connection therewith. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4871. Examinations by commissioner

(a) The commissioner shall examine or cause to be examined, with or without notice, the condition and affairs of each licensee at least once every three years and otherwise as required or determined by the commissioner. The commissioner may accept reports of examinations prepared by another state or federal regulatory agency as substitutes if such reports are available to the commissioner and are determined to be adequate in exercising his or her powers and discharging his or her responsibilities under this chapter.

(b) For the purpose of discovering violations of this chapter, the commissioner and his or her duly designated representatives may at any time investigate the books, accounts, records, and files used therein of every licensee and of every person whom the commissioner believes to be in the business described in this chapter, whether such person shall act or claim to act as principal or agent, or under or without the authority of this chapter.

(c) In connection with any examination or investigation, the commissioner and his or her duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all such persons. The commissioner and his or her designated representatives may examine on oath any licensee, and any director, officer, employee, customer, creditor, or stockholder of a licensee, concerning the affairs and business of the licensee. The commissioner shall ascertain whether the licensee transacts its business in the manner prescribed by law and the regulations issued hereunder. The commissioner may compel the attendance of any person or the production of any books, accounts, records, and files used therein; and may examine under oath all persons in attendance pursuant thereto.

(d) Each licensee and each person investigated shall pay to the department examination, review, and investigation fees as prescribed by section 18 of this title, which fees shall be billed when they are incurred. In addition to the powers set forth in this chapter, the commissioner may maintain an action in Washington superior court for the recovery of examination, review, and investigation costs as prescribed in section 18 of this title. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 1979, No. 157 (Adj. Sess.), § 7; 1999, No. 153 (Adj. Sess.), § 26, eff. Jan. 1, 2001; 2003, No. 81 (Adj. Sess.), § 1.)

§ 4872. Fee of licensee

The fee charged by the licensee shall be agreed upon in advance. The fee retained shall in no case exceed a $50.00 initial set up fee plus ten percent of any payment received by the licensee from the debtor for the purpose of distribution to creditors. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4873. Exceptions

The provisions of this chapter shall not apply to the following:

(1) any attorney admitted to the practice of law in this state, when engaged in such practice;

(2) any financial institution as defined in subdivision 11101(32) of this title or a lender licensed under chapter 73 of this title, which performs debt adjustment in the regular course of its principal business;

(3) any person acting pursuant to any law of this state or of the United States or acting under the order of a court;

(4) any bona fide nonprofit religious, fraternal, or cooperative organization offering debt adjustment services exclusively for members;

(5) any employee of a licensee when acting in the regular course of his or her employment; and

(6) a certified public accountant licensed in this state, when services are rendered in the course of his or her practice as a certified public accountant. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 2003, No. 81 (Adj. Sess.), § 1.)

§ 4874. Penalties

(a) Any person, partnership, association, or corporation and the several members, officers, directors, agents, and employees thereof, who shall violate or participate in the violation of any of the provisions of this chapter, shall be imprisoned not more than two years or fined not more than $1,500.00, or both.

(b) The commissioner may impose an administrative penalty of not more than $1,500.00 per violation upon any person who violates any provision of this chapter, plus the state’s costs and expenses for the investigation and prosecution of the matter, including attorney’s fees.

(c) The commissioner may order any person to make restitution to any person as a result of a violation of this chapter. Additionally, a consumer may bring a private action against such licensee, or such person that should have been licensed under this chapter, for restitution because of a violation of this chapter.

(d) The powers vested in the commissioner by this chapter shall be in addition to any other powers of the commissioner to enforce any penalties, fines, or forfeitures authorized by law.

(e) The powers vested in the commissioner by this chapter shall be in addition to any other powers or rights of consumers or the attorney general or others under any other applicable law or rule, including without limitation the Vermont Consumer Fraud Act and any applicable rules issued in connection therewith, provided that the commissioner’s determinations concerning the interpretation and administration of the provisions of this chapter and any rules adopted thereunder shall carry a presumption of validity. (Added 1969, No. 204 (Adj. Sess.), eff. March 23, 1970; amended 1995, No. 167 (Adj. Sess.), § 21; 2003, No. 81 (Adj. Sess.), § 1.)

§ 4875. Administrative procedures

All administrative proceedings under this chapter shall be conducted in accordance with chapter 25 of Title 3 and any rules adopted by the department on hearing procedure. (Added 2003, No. 81 (Adj. Sess.), § 1.)

§ 4876. Rules

The commissioner may adopt rules necessary for the implementation and administration of this chapter. (Added 2003, No. 81 (Adj. Sess.), § 1.)



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