Maryland Enacts Bill Changing Branch Licensing Requirements
The Governor of Maryland recently signed House Bill 686 into law which removes the requirement for collection agencies and certain non-depository financial institutions to separately license branch locations and alters certain other licensing-related requirements, such as those addressing surety bonds and annual assessments. The newly enacted bill primarily amends provisions applying to collection agencies, consumer loan lenders, sales finance companies, mortgage lenders, mortgage brokers, mortgage servicers, check cashing services, money transmitters, and debt management services (collectively, the “Licensees”).
The newly enacted bill generally requires Licensees to list, maintain, and update in the NMLS, among other things, the Licensee’s legal name and any trade names used by the Licensee, the address of the Licensee’s principal executive office, and the address of each additional location where the Licensee does business and that: the general public may reasonably view as a location that conducts business for which the Licensee is licensed (including any location that investigates customer complaints or directly communicates with customers verbally, electronically, or in writing); houses core operational infrastructure or technology systems; conducts any core management, information security and technology, risk and compliance, or finance functions; or is otherwise required to be listed in the NMLS per state regulation. A Licensee must provide notice to its regulator through the NMLS to add, delete, or modify a location listed in the NMLS.
Additionally, under the new bill, Licensees must register trade names with the State Department of Assessments and Taxation and obtain approval of the Commissioner or the State Collection Agency Licensing Board, as applicable, before using a trade name to engage in licensable activity. The bill also provides requirements to properly maintain registration of the trade name, list the trade name in the NMLS, and immediately notify the Commissioner or State Collection Agency Licensing Board, as applicable, if amending, cancelling, or otherwise failing to renew the trade name registration.
Maryland stopped issuing individual branch licenses to Licensees as of July 1, 2023. Instead, Licensees are to disclose additional locations where Maryland business may be conducted under the license issued for the principal executive office using this form or a list in substantially similar form and uploading it to the NMLS.
