# Title 13 — Department of Financial Institutions

## Article 13-05 — Money Brokers

## Chapter 13-05-01 — Money Brokers

### § 13-05-01-01. No advance fee - Exception.

Except as specified by this section, no money broker may accept any type of fee in advance, to
include expense deposits, from a potential borrower for the procurement of a loan. A money broker may
accept an advance expense deposit which may not exceed the money broker's good-faith estimate of
the actual cost of any appraisal or credit reports performed by an independent appraiser or
independent credit reporting agency and required by the originating lender for the evaluation of the
potential borrower's loan application. Any expense deposit that exceeds the actual cost of any appraisal
or credit reports must be promptly refunded to the borrower or credited to the borrower's account at the
time of the loan closing.
History: Effective February 1, 1984; amended effective October 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-02. Contracts to be in writing.

Before a money broker performs any services for a potential borrower, the money broker and the
borrower shall enter into a written contract specifying the duties and conditions under which the money
broker shall perform the broker's services. The contract must fully disclose estimated commissions and
fees, must have a definite expiration date, and must indicate costs to be paid if the loan is not closed. A
provision must be made designating the timing of fee payments (i.e., on commitment, on closing, on
funding).
History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-03. Full disclosure required.

In all dealings between a borrower and a money broker, the money broker is charged with a duty to
fully and fairly inform the prospective borrower of all liabilities, costs, and other financial obligations that
can or will be incurred by the borrower if the borrower uses the services of the money broker.

History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-04. Contents of loan disclosure statement.

Whenever a money broker arranges a loan for a borrower, the following loan disclosure statements
must be prepared by the money broker for the borrower and set forth in a plain language and
meaningful order:
1. Summary of loan terms. Money brokers must provide all loan disclosures mandated under
title 12, Code of Federal Regulations, part 1024 and title 12, Code of Federal Regulations,
part 1026.
2. General information concerning loans.
a. The amount of principal and interest payable, the interest rate, the number of payments
and whether they are monthly or quarterly, and whether there is a final or balloon
payment to pay off the loan in full. If there is a balloon payment, the following cautionary
instructions must be printed in bold type on the contract: CAUTION TO BORROWER: IF
b. Other information necessary, including the land description, types of instruments to be
executed, and type of lien that will be against the property if the instruments are
executed.
c. Any prepayment penalty on full disclosure of the terms thereof.
d. Whether credit life or credit disability will be required of the borrower as a condition of
making the loan.
History: Effective February 1, 1984; amended effective April 1, 2013.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-01, 13-04.1-06, 13-04.1-07
### § 13-05-01-05. Restrictions on chargeable costs and expenses.

In addition to the initial written contract, the money broker shall give to the potential borrower an
estimate of the amount of chargeable costs and expenses that will be collected by the money broker in
case no loan is found for the borrower. An estimated total cost to the borrower under these conditions
must be itemized and stated to the borrower. All of these costs and expenses, if actually expended and
chargeable to the borrower, must have been actually and reasonably expended for the potential
borrower's benefit.
History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-06. Filing of annual reports.

Repealed effective April 1, 2013.

### § 13-05-01-07. Availability of records.

The money broker shall maintain all records of its transactions at its office for at least six years and
these records must be subject to examination by the department of financial institutions.
History: Effective February 1, 1984; amended effective June 1, 2002.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-07
### § 13-05-01-08. Statements to borrowers.

When loan funds are not provided or arranged for a borrower, any statement from the money
broker to the potential borrower whereby the money broker seeks reimbursement of any costs and
expenses must contain an itemized listing of costs and expenses chargeable to the potential borrower.
History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-09. Notice to borrower regarding regulation by the department of financial

institutions.
The written contract as provided in section 13-05-01-03 of these regulations must contain the
following notice in capital letters: NOTICE: MONEY BROKERS ARE LICENSED AND REGULATED BY
History: Effective February 1, 1984; amended effective December 1, 1995; November 1, 1997; June 1,
2002.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-10. Copy of written contracts to the potential borrower.

A copy of all written contracts between the money broker and the potential borrower must be given
to the potential borrower at the time that the contract is signed.
History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-06
### § 13-05-01-11. Unprofessional conduct and grounds for revocation of license.

Any act or conduct violating any of the provisions of this chapter or any law or rule regarding money
brokers constitutes unprofessional conduct and constitutes grounds for revocation of the money broker
license.
History: Effective February 1, 1984.
General Authority: NDCC 13-04.1-01
Law Implemented: NDCC 13-04.1-08
