Louisiana Revised Statutes 9:3574.3 – Advance fees; prohibited acts
Terms Used In Louisiana Revised Statutes 9:3574.3
- Advance fee: means any consideration which is assessed or collected prior to the issuance of a written commitment to make a loan that is binding on the lender, provided that certain conditions precedent are satisfied. See Louisiana Revised Statutes 9:3574.2
- Appraisal: A determination of property value.
- Borrower: means a person obtaining or desiring to obtain a loan of money, a credit card, or a line of credit. See Louisiana Revised Statutes 9:3574.2
- Fraud: Intentional deception resulting in injury to another.
- Loan originator or broker: means any person, except any regulated or supervised financial organization, credit union, licensed commercial or consumer lender, insurance company, consumer loan broker, or mortgage broker or lender, provided that the person excepted is licensed or registered with and subject to regulation or supervision by an agency of the United States or any state and is acting within the scope of the license, charter, or other permit, who:
(a) For, or in expectation of, consideration paid by the borrower, directly or indirectly arranges or attempts to arrange, or offers to fund or make a loan of money, a credit card, or a line of credit. See Louisiana Revised Statutes 9:3574.2
- Office: means the Office of Financial Institutions in the office of the governor. See Louisiana Revised Statutes 9:3574.2
- Person: means an individual or corporation, partnership, trust, association, joint venture pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein. See Louisiana Revised Statutes 9:3574.2
No loan originator or broker shall:
(1) Assess or collect an advance fee from a borrower to provide services as a loan originator or broker. Notwithstanding the foregoing, a person who originates or brokers commercial loans may accept from a potential borrower an advance expense deposit for commercial loans, but such deposit shall not exceed the good faith estimate of the actual cost of any appraisal, title search, or credit reports performed by a person independent of the loan originator or broker, and required by the originating lender for the evaluation of the potential borrower’s commercial loan application. Any expense deposit which exceeds the actual cost of any appraisal, title search, or credit reports shall be promptly refunded to the borrower or credited to the borrower’s account at the time of the commercial loan closing. For purposes of this Part, a “commercial loan” means any loan the purpose of which is not for personal, family, or household use.
(2) Make or use any false or misleading representations or omit any material fact in the offer or sale of his services, or engage, directly or indirectly, in any act that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a loan originator or broker, notwithstanding the absence of reliance by the buyer.
(3) Make or use any false or deceptive representation in its business dealings.
(4) Make or use any false or deceptive representation to the office or conceal a material fact from the office.
Acts 1992, No. 346, §1, eff. June 17, 1992.