Department of Consumer and Business Services
Division of Finance and Corporate Securities

Summary of Related Legislation - 2011 Session

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Privacy for consumer mortgage loan documents - HB 2083. Personal information that is submitted by a consumer as part of a mortgage loan application, and included in the examination files of a mortgage broker or mortgage broker, is exempt from disclosure under the Oregon Public Records Law. With proof of their identity, consumers are allowed to access to their own loan documents if they are held in a DCBS examination file, and all such documents may be released as part of litigation. (Chapter 350, 2011 Laws)

Mortgage lending rulemaking advisory committees - HB 2084. Deletes the requirement that the Department consult with “an equal number of mortgage bankers and mortgage brokers” when using a rule making advisory committee. Instead, it allows the Department to seek broad public input, including from a variety of constituencies potentially affected by the rule, consistent with the Administrative Procedures Act. (Chapter 351, 2011 Laws)

Future regulation of Appraisal Management Companies by the ACLB - HB 2499. The Legislature adopted HB 3624 (2010) to require appraisal management companies (AMC) to register with the Department of Consumer and Business Services (DCBS). Under this law, an AMC is a business that performs appraisal management services, administers networks of independent contractor appraisers to perform real estate appraisal activity for clients, or otherwise serves as a third-party broker of real estate appraisal activity between clients and appraisers. This law transfers regulatory authority over AMCs from DCBS to Oregon’s appraiser regulator, the Appraiser Certification and Licensure Board (ACLB). It also revised the requirements to comply with minimum AMC registration standards set in the federal Dodd-Frank Wall Street Reform and Consumer Protection Act and to allow the pass-through collection of some federal fees. It also removes the requirement that AMCs have a dispute resolution process and verify the competency of individual appraisers. It also allows bank subsidiaries to do business as an AMC without being registered and removes the requirement for auditing each AMC every two years. The property, records, and unexpended fund balances of the AMC registration program are transferred from DCBS to ACLB by January 1, 2012. (Chapter 447, 2011 Laws)

Collateral for public funds - HB 2612. Banks and credit unions may accept public fund deposits up to $250,000 insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Insurance Fund (NCUIF). They may also accept public fund deposits above the insured amount if they also pledge collateral that is sufficient to protect the funds. This law clarifies that this requirement to pledge collateral applies only to the “uninsured” portion of deposited public funds. (Chapter 25, 2011 Laws)

Program for large deposits of public funds - HB 2613. Under current law, an Oregon bank must provide collateral for public fund deposits that exceed the statutory limit. This law allows an Oregon bank to accept public funds that exceed insured amount by redepositing these funds into insured accounts in other financial institutions, if these funds will be insured and if the bank receives an equal amount of deposits from the other financial institutions. Oregon banks currently have authority to reciprocal deposit programs (such as Certificate of Deposit Account Registry Service (CDARS) for funds from individuals and businesses. This expands the options of a CDARS-type program for funds from public entities. (Chapter 477, 2011 Laws)

Real estate owned by banks - HB 2614. Current law requires an Oregon chartered bank to reduce the value of real estate it owns by at least 5% of its original book value each year, beginning the year the title is vested with bank. This law eliminates this reduction but requires real estate owned by the bank to always be valued and recorded in the bank's books in accordance with Generally Acceptable Accounting Principles (GAAP). The bill also reduces the time a bank may hold such real estate to 10 years for real estate acquired by the bank on or after the effective date (June 23, 2011).

Fees for mortgage lenders, loan originators, certified providers, and master trustees - HB 5014. ORS 291.055 requires legislative review and approval of state agency fees that are established or increased during the interim. This law sets DFCS fees for various mortgage lenders and loan originators, and fees for master trustees, certified providers, and limited operations certified providers. These fees are lower than those proposed by the Department through administrative rules. The proposed fees originally took effect on July 1, 2010 (mortgage), and January 1, 2011 (preneed). (Chapter 618, 2011 Laws)

Resolution urging Congress to establish additional financial insurance system - HJM 10. The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Share Insurance Fund (NCUSIF) provide insurance for deposits in banks and credit unions. The current insurance limit is $250,000 per depositor.
Public funds deposits typically exceed this threshold and must be secured by collateral by the institution. This joint memorial urges Congress and the President to enact legislation to assist in establishing a voluntary system of full insurance for public funds accounts.

Excludes most historic cemeteries from private cemetery laws - SB 29. This law allows historic cemeteries operated by a nonprofit organization to be exempt from many of the regulations of ORS 97, including: regulations for deposit of human remains; dedication, platting, survey and subdivision of land to cemetery purposes; resurvey and alteration; and sales and rights in respect of cemetery plots. (Chapter 162, 2011 Laws)

Endowment care deposits for grave liners - SB 30. Endowment care, perpetual care, cemeteries deposit funds into a trust in order finance the future care, maintenance, and preservation of the lots and grounds, and the upkeep of renewal of the buildings and property that are part of the cemetery. Grave liners, also known as burial vaults, are an optional container that is placed in a grave to hold a casket and to help prevent the ground from caving in. Although current law requires that such cemeteries deposit 15 percent of the gross sales price of each grave sold and five percent of the gross sales price for each niche, crypt, and private mausoleum to be placed in trust, there has been no requirement for grave liners. This law requires endowment care cemeteries to deposit at least nine percent of the gross sales price of a grave sold with an installed grave liner and that graves sold without liners at the time of sale must deposit at least 15 percent of the gross sales price. (Chapter 163, 2011 Laws)

Consumer protection and enhanced enforcement for manufactured structures dealers - SB 85. Consumers who buy manufactured homes do not have the same protections as consumer who buy traditional, site-built homes from mortgage lenders. This law requires that the $40,000 surety bond dealers are required to hold must be fully accessible to retail customers, rather than accessible by contractors or other businesses. It also gives DCBS enhanced investigative authority and authority to issue cease and desist orders related to regulation of sale of manufactured structures. Requires manufactured structure dealer’s bond or letter of credit be in form approved by the Director. (Chapter 166, 2011 Laws)

Revisions to bank regulations - SB 92. Current law allows federally chartered banks, or banks chartered in another state, to provide banking services in Oregon if they purchase or merge with an existing bank or branch that has operated in Oregon for at least three years. The federal Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits such requirements and require states to make it easier for national banks and banks regulated by other states to establish branches in any other state, including Oregon. This law eliminates the current standard but allows DCBS to conduct an investigation comparable to the current process used for evaluating a proposed bank merger or acquisition. It increases the application fee for these bank applications to $2,500 (from $500). It establishes protection for depositors’ ownership interest in a nonstock bank, such as a federal savings bank, if they convert to an Oregon stock bank. The measure also updates the current requirement that extranational institutions (chartered by a sovereign country) to have Federal Deposit Insurance (FDIC) insurance that complies with the $250,000 requirements of the Dodd-Frank Act. (Chapter 263, 2011 Laws)

Credit union operations and mergers - SB 177. This law makes several technical and operational changes to credit union operations, including allowing board meetings 10 times in separate months per year, rather than monthly, and giving credit unions authority to appoint a credit manager instead of a credit committee. It revises how credit unions invest funds not loaned to members. The amount a credit union can invest in stocks, memberships, or loans to a corporation, limited liability company or mutual association is increased from one percent to five percent. The amount a credit union can loan to credit union service association is increased from two percent to five percent. It establishes criteria for credit unions to lend to their president or chief executive officer, or officers with policymaking or credit approval authority. It allows credit unions chartered under Oregon law to merge with credit unions chartered under laws of another state in same manner as mergers between two credit unions chartered under Oregon law. Finally, it creates a process for members to provide input on a credit union’s merger plans and provide information to fellow members regarding their opposition to a merger proposal. (Chapter 327, 2011 Laws)