Laws and rules

Under the Oregon Bank Act, the Director of the Department of Consumer and Business Services (DCBS or department) may assess financial institutions a fee under a schedule adopted by rule. In adopting the schedule, the Director takes into consideration three factors: the amount of other moneys available for the director to use in performing the director’s duties, the costs the director will incur in performing the director’s duties in the year in which the director will collect the fee, and the amount the director needs to establish and maintain a reasonable emergency fund. ORS 706.530. Under long-standing administrative policy, the department interprets the meaning of the term “reasonable emergency fund” as requiring the set-aside of two to four quarters of operating costs.

The department’s fee schedule developed under the terms of the statute assesses financial institutions a base fee, and then a variable fee determined by multiplying all assets by a fractional number. The department divides the schedule into tiers in order to equitably assess financial institutions fees based on the institution’s size. In 2016, the department adopted a temporary rule that increased assessment rates by five percent and also extended the due date for the fees by 15 days to provide banks and trust companies additional time to pay the revised assessment. The department revised its regulations to make fees more equitable and to ensure that Oregon chartered banks and trust companies pay fees that reasonably reflect the costs of supervision. The changes to fee assessments under the proposed rule incorporate the five percent increase under the temporary rule and raises the assessment by 2.5 percent for a total increase of approximately 7.5 percent.

Operating revenue for the banking program is calculated on the average assets of Oregon based institutions, based on quarterly Call Reports of Condition and Income filed with the applicable federal supervisory agency for the calendar year immediately preceding the due date of the fee assessment. Since 2010, the revenue for the banking program has dropped significantly due to the declining number of Oregon state-chartered banks. As a consequence, and despite best efforts to control expenses, between FY 2009 and FY 2014, expenses have exceeded revenues every year except in FY 2012 when the banking program intentionally left examiner positions vacant and received higher than normal amounts of risk-based assessment premiums due to the large number of banks that required more supervision based on their less-than-satisfactory ratings. The revised fees are not being used to pay for an expansion of the banking program or to cover the cost of any special pay increases to banking program employees; rather, the increase in fees will help to cover the ongoing expenses of the banking program.

The Agency requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing the negative economic impact of the rule on business.

Filed: December 14, 2016

Public hearing: January 19, 2017, 1:30 p.m.

Last day for public comment: January 25, 2017, 5 p.m.

Documents

Please note that this rulemaking involves two parts: OAR 441-505-3090 and 441-505-3030. In 2012, the Department of Consumer and Business Services (DCBS or department) adopted OAR 441-505-3090 permitting Oregon chartered banks to act, as an intermediary, in customer-driven interest rate swap transactions and to pledge bank assets as collateral for such transactions. In 2015, the legislature amended ORS 708A.010 to clarify that Oregon banks could engage, as principal or agent, in activities permissible for national banks. The proposed changes to OAR 441-505-3090 simply update the rule to accommodate the legislative changes to ORS 708A.010 and, under the department’s wildcard authority contained in ORS 706.795, expressly provide authority for Oregon chartered banks to pledge collateral to counterparties in connection with swap transactions.

This rulemaking further addresses when Oregon commercial banks may use an evaluation rather than an appraisal to establish the market value of other real estate owned. With respect to OAR 441-505-3030, ORS 708A.175 (3) and (4) require Oregon chartered commercial banks to use appraisals that are current at the time the banks acquire real property to satisfy a lien on a real estate loan. Collectively, property acquired under ORS 708A.175(3) and (4) is known as Other Real Estate Owned (OREO). Unlike Oregon commercial banks, national banks may use an evaluation rather than an appraisal to establish the market value of OREO when its value is less than $250,000. 12 C.F.R. § 34.43. The proposed changes to OAR 441-505-3030 will enhance and maintain competition between Oregon chartered commercial banks and national banks by allowing Oregon banks to use evaluations determine the fair market value of OREO under similar circumstances. Where the value of the property is over $250,000, the proposed changes also give banks three months time following the date the property is acquired as OREO to obtain an appraisal.

The Agency requests public comment on whether other options should be considered for achieving the rules’ substantive goals while reducing the negative economic impact of the rule on business.

Filed: December 15, 2016

Public hearing: January 19, 2017 at 9:30 a.m.

Last day for public comment: January 25, 2017, 5 p.m.

Documents

These proposed rules establish the process by which registrants and applicants for a debt management service provider submit applications, renewals, and other information through the Nationwide Mortgage Licensing System and Registry (NMLS). Currently, registered debt management service providers and applicants submit registration materials by paper documentation. The department found the current registration system needed for greater efficiency and to facilitate uniformity for multi-state entities. The NMLS creates efficiencies for the industry, consumers, and department as a replacement for the current system. These proposed rules modify and clarify the registration and application procedures to make the use of the NMLS mandatory. This includes all registration and renewal activity, including surety bonds, for debt management service providers to the NMLS. These proposed rules are necessary to enact a uniform application process resulting in greater efficiencies to the state and industry.

ORS 697.612 exempts non-profit entities that provide advice, assistance, instructional materials in return for a fee reasonably calculated to pay the cost of making the advice, assistance, or material available. Currently the rules cap reasonably fees at $25. The department has learned that the current $25 cap is too low to reasonably cover the cost of those services and it is impacting the availability of credit repair services in Oregon. These proposed rules would add a requirement that credit repair organizations comply with the federal Credit Repair Organizations Act, and provide that $25 an hour with a monthly cap of $150 with an overall cap of $300 per consumer is a reasonably calculated fee.

The Agency requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing negative economic impact of the rule on business.

Filed: December 15, 2016

Public hearing: January 23, 2017, 2:00 p.m.

Last day for public comment: January 27, 2017, 5 p.m.

Documents

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Adopt: 441-035-0300

Amend: 441-025. 441-035, 441-049. and 441-175

Repeal: 441-025-0010, 441-035-0040, and 441-065-0270

This proposed rulemaking makes technical changes to several rules addressing new statutory sections at the state and federal levels. The rules propose repealing the "exchange exemption" and relying on the federal rules regarding exchanges. The proposed rules remove references to Standard and Poor's Manual which ceased publication in May 2016. In order to provide adequate options for broker-dealers and salespersons utilizing the "manual exemption" provided for in ORS 59.035(10)(c) these rules propose adding the OTCQX and OTCQB Markets to the manual exemption for equity security offerings. The proposed rulemaking also makes changes to the registration requirements for SEC Rule 701 employee benefit stock option plans. The proposed rules would repeal the registration requirement, annual renewal, and salesperson licensing fees and establish a notice filing. The proposed rules also raise filing and renewal fees for investment company portfolios and reduce the fees related to broker-dealer salesperson registration renewals. The proposed rules are consistent with the intent of Oregon Revised Statute Chapter 59 to ensure licensing of individuals engaged in brokering or selling securities to the public.

A public rulemaking hearing may be requested in writing by 10 or more people, or by an association with 10 or more members, within 21 days following the publication of the Notice of Proposed Rulemaking in the Oregon Bulletin or 28 days from the date Notice was sent to people on the agency mailing list, whichever is later. If sufficient hearing requests are received, the notice of the date and time of the rulemaking hearing must be published in the Oregon Bulletin at least 14 days before the hearing.

The Agency requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing negative economic impact of the rule on business.

Filed: November 15, 2016

Last day for public comment: December 30, 2016, 5 p.m.

Documents

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ORS 743B.020 requires the Department to adopt by rule the method for determining whether an employer is a small employer for purposes of group health benefit plans. The Department defines small employers in OAR 836-053-0015 as those with "an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year." This definition is applicable from January 1, 2016 through December 31, 2017. The proposed amendment would abolish the sunset provision and maintain the current definition of small employer indefinitely.

The Agency requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing negative economic impact of the rule on business.

Filed: November 15, 2016

Public hearing: January 5, 2017, 11:00 a.m.

Last day for public comment: January 12, 2017, 5 p.m.

Public comments

Documents

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In 2016, the Director reorganized the department by combining two divisions, the Oregon Insurance Division and the Division of Finance and Corporate Securities, into one Division of Financial Regulation. This rule establishes the basis to maintain continuity between the actions the divisions have taken before and after the merger of the Oregon Insurance Division and the Division of Finance and Corporate Securities in particular regarding existing rules and orders. The proposed rules only provide greater clarity to readers of the administrative rules promulgated by the Department of Consumer and Business Services, through the administrative divisions the Director may reorganize from time to time under the director's organic statutes. These rules do not impose any new substantive provisions on regulated entities, nor does the proposed rulemaking activity apply rules from one division to another division in a manner that was not already occurring.

The agency requests public comment on whether other options should be considered for achieving the rule's substantive goals while reducing the negative economic impact of the rule on business.

Filed: September 14, 2016

Public hearing: October 27, 2016, 10:00 a.m.

Last day for public comment: November 09, 2016, 5 p.m.

Documents

Amend: 441-730-0026, 441-860-0020, 441-860-0025, 441-860-0050 & 441-885-0010

The Department of Consumer and Business Services has been working toward full utilization of the Nationwide Mortgage Licensing System and Registry's (NMLS) features. The NMLS released the first phase allowing for the electronic submission of surety bonds in January 2016.The feature will be fully available, and licensees will be able to electronically submit surety bonds to the Director of the Department through NMLS, by the end of 2016. Requiring electronic submission of the surety bond will make it easier for consumers to access the bond information and will streamline the mortgage licensing process. Currently, the surety bond is the only piece of paper that is still required for the mortgage licensing process. The proposed rules also remove the grace period after a bond is cancelled that was meant to provide time for new bonds to be sent through the U.S. mail. This protects consumers by reducing the period during which a mortgage loan originator may originate loans without the protection of a bond. Because NMLS can be used to quickly notify, and continually remind, licensees of their bond status licensees will receive more effective notice regarding their bonds.

Last date for public comment: 10-31-2016 5:00 p.m.

Filed date: 9-15-16

Documents:

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Where to send comments on proposed rules

Division of Financial Regulation
ins.rules@oregon.gov

Rulemaking advisory committees

Key links

Oregon Revised Statutes