North Dakota 2025-2026 Regular Session

North Dakota House Bill HB1372 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	25.0389.03000
2	2	Sixty-ninth
3	3	Legislative Assembly
4	4	of North Dakota
5	5	Introduced by
6	6	Representative Klemin
7	7	Senator Larson
8	8	A BILL for an Act to create and enact a new chapter to title 13 of the North Dakota Century
9	9	Code, relating to litigation financing; to provide a penalty; and to provide for application.
10	10	BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
11	11	SECTION 1. A new chapter to title 13 of the North Dakota Century Code is created and
12	12	enacted as follows:
13	13	Definitions.
14	14	As used in this chapter:
15	15	1."Commissioner" means the commissioner of financial institutions.
16	16	2."Consumer" means any individual who resides, is present, or is domiciled in this state
17	17	or who is or may become a plaintiff, claimant, or complainant in a civil action or in
18	18	pursuit of any claim or cause of action in this state.
19	19	3."Entity" means any domestic or foreign corporation, partnership, limited partnership,
20	20	limited liability company, trust, fund, plan, or any other business, enterprise,
21	21	association, or organization of any kind or nature.
22	22	4."Foreign country or person of concern" includes the following:
23	23	a.A foreign government or person listed in 15 CFR 791.4.
24	24	b.A country prohibited from purchasing or otherwise acquiring title to real property
25	25	in this state under section 47 - 01 - 09.
26	26	5."Foreign entity of concern" means a partnership, association, corporation,
27	27	organization, or other combination of persons:
28	28	a.Organized or incorporated in a foreign country of concern;
29	29	b.Owned or controlled by the government, a political subdivision, or a political party
30	30	of a foreign country of concern;
31	31	c.That has a principal place of business in a foreign country of concern; or
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60	60	d.That is owned, organized, or controlled by or affiliated with a foreign organization
61	61	that has been:
62	62	(a)Placed on the federal office of foreign assets control specially designated
63	63	nationals and blocked persons list (SDN list); or
64	64	(b)Designated by the United States secretary of state as a foreign terrorist
65	65	organization.
66	66	6."Legal representative" means an attorney, group of attorneys, or law firm duly licensed
67	67	and authorized to practice law and to represent a consumer in a civil action or claim to
68	68	recover damages in this state.
69	69	7."Litigation financer" means any individual or entity engaged in, formed, created, or
70	70	established for the purpose of engaging in the business of litigation financing or any
71	71	other business or economic activity in which the individual or entity receives a
72	72	percentage of an anticipated recovery in a civil legal action brought by a consumer,
73	73	lawyer, or law firm asserting legal claims on behalf of a consumer, in exchange for
74	74	providing litigation financing.
75	75	8."Litigation financing" means the financing, funding, or advancing of money to pay for
76	76	expenses or any other sums arising from a civil action, claim, or cause of action, if the
77	77	financing, funding, or advancing of money is provided by any person other than a
78	78	person that is:
79	79	a.A party to the civil action, claim, or cause of action;
80	80	b.A legal representative engaged, directly or indirectly, through another legal
81	81	representative, to represent a party in the civil action, claim, or cause of action; or
82	82	c.An entity or insurer with a pre - existing contractual obligation to indemnify or
83	83	defend a party to the civil action, claim, or cause of action.
84	84	9.a."Litigation financing contract" means a written contract in which a person agrees
85	85	to provide litigation financing to any person in conjunction with a civil action or in
86	86	pursuit of any claim or cause of action in this state in consideration for:
87	87	(1)The payment of fees or other consideration to the person providing the
88	88	litigation financing; or
89	89	(2)Granting or assigning to the person providing the litigation financing a right
90	90	to receive payment from the value of any proceeds or other consideration
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124	124	realized from any judgment, award, settlement, verdict, or other form of
125	125	monetary relief any consumer or other person may receive or recover in
126	126	relation to the civil action, claim, or cause of action.
127	127	b.The term does not include an agreement, contract, or engagement of a legal
128	128	representative to render legal services to a consumer on a contingency fee basis,
129	129	including the advancement of legal costs by the legal representative, in which the
130	130	services or costs are provided to or on behalf of a consumer by the legal
131	131	representative representing the consumer in the civil action, claim, or cause of
132	132	action.
133	133	10."Nationwide multistate licensing system" means the registry developed by the
134	134	conference of state bank supervisors and the American association of residential
135	135	mortgage regulators and owned and operated by the state regulatory register or any
136	136	successor or affiliated entity, for the licensing and registration of persons in financial
137	137	services industries.
138	138	11."Regulated lender" means:
139	139	a.A bank, building and loan association, savings and loan association, trust
140	140	company, credit union, credit association, consumer loan licensee, money broker,
141	141	deferred presentment service provider, residential mortgage lender licensee,
142	142	development corporation, bank holding company, or mutual or stock insurance
143	143	company organized pursuant to state or federal statutory authority and subject to
144	144	supervision, control, or regulation by:
145	145	(1)An agency of the state; or
146	146	(2)An agency of the federal government;
147	147	b.A subsidiary of an entity described in subdivision a;
148	148	c.A state agency or a federal agency that is authorized to lend money; and
149	149	d.A corporation or other entity established by congress or the state which is owned,
150	150	in whole or in part, by the United States or the state and is authorized to lend
151	151	money.
152	152	License.
153	153	1.A person may not engage in litigation financing in this state unless the litigation
154	154	financer has received a license from the commissioner.
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188	188	2.If the licensed litigation financer is an entity, the entity must be active and in good
189	189	standing with the secretary of state.
190	190	3.The application for a license as a litigation financer must be in writing, under oath, and
191	191	in the form prescribed by the commissioner. The application must include the following
192	192	information:
193	193	a.The legal name of the litigation financer;
194	194	b.The physical street address and mailing address of the litigation financer;
195	195	c.A telephone number or electronic mail address at which the litigation financer
196	196	may be contacted;
197	197	d.The physical street address and mailing address of the licensed financer's
198	198	licensed office and the name of the registered agent at the licensed office who is
199	199	authorized to accept service of process on behalf of the licensed financer; and
200	200	e.Any other information the commissioner considers necessary.
201	201	4.A litigation financer subject to licensure shall file an amended application within twenty
202	202	business days whenever the information contained in the most recently filed
203	203	application changes, becomes inaccurate, or incomplete in any respect.
204	204	5.The commissioner may prescribe forms to carry out this chapter, including the use of
205	205	the nationwide multistate system.
206	206	6.At the time of making an application, the applicant shall include payment of four
207	207	hundred dollars, which is not subject to refund, as a fee for investigating the
208	208	application, and four hundred dollars for the annual license fee. Fees must be
209	209	deposited in the financial institution's regulatory fund.
210	210	7.All documents and information filed with the commissioner are public records.
211	211	8.The commissioner's duty to file documents under this section is ministerial. The
212	212	commissioner's filing or refusing to file a document does not create a presumption
213	213	that:
214	214	a.The document does or does not conform to the requirements of this chapter; or
215	215	b.The information contained in the document is correct or incorrect.
216	216	9.Additional fees may be assessed to cover costs associated with the use of the
217	217	nationwide multistate licensing system.
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250	250	Surety bond required.
251	251	1.Each licensee shall maintain a surety bond in an amount not less than fifty thousand
252	252	dollars. The surety bond must be in a form prescribed by the commissioner.
253	253	2.When an action is commenced on a licensee's bond, the commissioner may require
254	254	the filing of a new bond.
255	255	3.Immediately upon recovery upon any action on the bond, the licensee shall file a new
256	256	bond.
257	257	Minimum net worth required.
258	258	1.A minimum net worth must be maintained continuously by every licensee in
259	259	accordance with this section.
260	260	2.Minimum net worth must be maintained in the amount of twenty-five thousand dollars.
261	261	3.If the net worth of a licensee falls below the minimum net worth set forth in
262	262	subsection 1, the licensee shall provide a plan, subject to the approval of the
263	263	commissioner, to increase the licensee's net worth to an amount in conformance with
264	264	this section. Submission of a plan under this section must be made within twenty
265	265	business days of a notice from the commissioner which states the licensee is not in
266	266	compliance with subsection 1. If the licensee does not submit a plan under this
267	267	section, fails to comply with an approved plan, or has repeated violations of
268	268	subsection 1, the commissioner may revoke the license.
269	269	Expiration of licensure - Renewal.
270	270	1.Licensure under this chapter expires December thirty-first of each year.
271	271	2.Licensure may be renewed for the ensuing twelve-month period upon application and
272	272	the payment to the commissioner of the annual license fee, which is not subject to
273	273	refund, before December first of each year.
274	274	3.The form and content of renewal applications must be determined by the department
275	275	of financial institutions and a renewal application may be denied on the same grounds
276	276	as would justify denial of an initial application.
277	277	4.If a licensee has been delinquent in renewing the licensee's license, the department
278	278	may charge an additional fee of fifty dollars for the renewal of the license.
279	279	5.The commissioner may deny an application to renew a license if the licensee no
280	280	longer meets the criteria for licensure or otherwise fails to comply with this chapter.
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314	314	Response to department requests.
315	315	An applicant, licensee, or other person subject to this chapter shall comply with requests for
316	316	information, documents, or other requests from the department of financial institutions within the
317	317	time specified in the request, which must be a minimum of ten days, or, if no time is specified,
318	318	within thirty days of the request by the department of financial institutions. If the request for
319	319	information is in regard to a new application or renewal of an existing application and is not
320	320	received within the time specified in the request, the department may deny the application.
321	321	Revocation of license - Suspension of license - Surrender of license.
322	322	1.The commissioner may issue upon any licensee an order suspending or revoking a
323	323	licensee's license if the commissioner finds:
324	324	a.The licensee has failed to pay the annual license fee under this chapter or any
325	325	examination fee imposed by the commissioner under the authority of this chapter.
326	326	b.The licensee, either knowingly or without the exercise of due care to prevent the
327	327	same, has violated any provision of this chapter or any rule or order lawfully
328	328	made under the authority of this chapter.
329	329	c.Any fact or condition existing at the time of the original application for the license
330	330	which clearly would have warranted the department of financial institutions in
331	331	refusing originally to issue the license.
332	332	d.The licensee has failed to maintain the required bond.
333	333	e.The licensee has failed to maintain registration with the secretary of state if so
334	334	required.
335	335	2.The order must contain a notice of opportunity for hearing under chapter 28 - 32.
336	336	3.If no hearing is requested within twenty days of the date the order is served upon the
337	337	licensee, the order is final. If a hearing is held and the commissioner finds that the
338	338	record so warrants, the commissioner may enter a final order. The final order is final
339	339	suspending or revoking the license.
340	340	4.If the commissioner finds that probable cause for revocation of any license exists and
341	341	that enforcement of the chapter requires immediate suspension of the license pending
342	342	investigation, the commissioner may enter an order suspending the license for a
343	343	period not exceeding the time required to serve upon the licensee written notice plus
344	344	sixty days, pending the holding of a hearing as prescribed in this chapter.
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378	378	5.Any licensee may surrender the licensee's license by providing the department of
379	379	financial institutions with written notice of its surrender, but the surrender does not
380	380	affect the licensee's civil or criminal liability for acts committed before the surrender of
381	381	the license.
382	382	Suspension and removal of money broker officers and employees.
383	383	1.The commissioner of financial institutions may issue upon a current or former litigation
384	384	financing officer or employee and upon the licensee involved an order stating:
385	385	a.That the current or former officer or employee is engaging or has engaged in any
386	386	of the following conduct:
387	387	(1)Violating a law, rule, order, or written agreement with the commissioner.
388	388	(2)Engaging in harassment or abuse, the making of false or misleading
389	389	representations, or engaging in unfair practices involving litigation financing
390	390	activity.
391	391	(3)Performing an act of commission or omission or practice that is a breach of
392	392	trust or a breach of fiduciary duty.
393	393	b.The term of the suspension or removal from employment and participation within
394	394	the conduct or the affairs of a financial corporation, financial institution, credit
395	395	union, or any other entity licensed by the department of financial institutions.
396	396	2.The order must contain a notice of opportunity for hearing under chapter 28 - 32.
397	397	3.If a hearing is not requested within twenty days of the date the order is served, the
398	398	order is final. If a hearing is held and the commissioner finds that the record so
399	399	warrants, the commissioner may enter a final order.
400	400	4.A contested or default suspension or removal order is effective immediately upon
401	401	issuance on the current or former officer or employee and upon the licensee. A
402	402	consent order is effective as agreed. Any current or former officer or employee
403	403	suspended or removed from employment and participation within the conduct or the
404	404	affairs of a licensee under this section is not eligible, while under suspension or
405	405	removal, to be employed or otherwise participate in the affairs of any financial
406	406	corporation, financial institution, credit union, or any other entity licensed by the
407	407	department of financial institutions.
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440	440	5.When any current or former officer or employee, or other person participating in the
441	441	conduct of the affairs of a licensee is charged with a felony in state or federal court
442	442	which involves dishonesty or breach of trust, the commissioner may immediately
443	443	suspend the individual from office or prohibit the individual from further participation in
444	444	the affairs of the licensee, or both. The order is effective immediately upon issuance of
445	445	the order on the licensee and the individual charged, and remains in effect until the
446	446	criminal charge is finally disposed of or until modified by the commissioner. If a
447	447	judgment of conviction, federal pretrial diversion, conviction or agreement to plea to
448	448	lesser charges, or similar state order or judgment is entered, the commissioner may
449	449	order the suspension or prohibition be made permanent. A finding of not guilty or other
450	450	disposition of the charge does not preclude the commissioner from pursuing
451	451	administrative or civil remedies.
452	452	Litigation financing protections.
453	453	1.A litigation financer may not:
454	454	a.Accept any commissions, referral fees, rebates, or other forms of consideration
455	455	from any person rendering any services to the consumer;
456	456	b.Receive or recover any payment that exceeds thirty-six percent of the amount of
457	457	any judgment, award, settlement, verdict, or other form of monetary relief
458	458	obtained in the civil action, claim, or cause of action that is the subject of the
459	459	litigation contract;
460	460	c.Advertise false or misleading information regarding its products or services;
461	461	d.Refer or require any consumer to hire or engage any person providing any goods
462	462	or rendering any services to the consumer;
463	463	e.Fail to promptly deliver a fully completed and signed litigation financing contract
464	464	to the consumer and the consumer's legal representative;
465	465	f.Attempt to secure a remedy or obtain a waiver of any remedy, including
466	466	compensatory, statutory, or exemplary damages, which the consumer may or
467	467	may not be entitled to pursue or recover otherwise;
468	468	g.Offer or provide legal advice to the consumer;
469	469	h.Assign a litigation financing contract in whole or in part;
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502	502	i.Report a consumer to a credit reporting agency if insufficient funds remain to
503	503	repay the litigation financer in full from the proceeds received from any judgment,
504	504	award, settlement, verdict, or other form of monetary relief obtained in the civil
505	505	action, claim, or cause of action that is the subject of the litigation financing
506	506	contract; and
507	507	j.Demand, request, receive, or exercise any right to influence, affect, or otherwise
508	508	make any decision in the handling, conduct, administration, litigation, settlement,
509	509	or resolution of any civil action, claim, or cause of action in which the litigation
510	510	financer has provided litigation financing. All rights remain solely with the
511	511	consumer and the consumer's legal representative.
512	512	k.Knowingly enter an agreement creating a right for anyone, other than the named
513	513	parties, counsel of record, or law firm of record, to receive or make any payment
514	514	that is contingent on the outcome of a claim, or cause of action, the terms of
515	515	which are to be satisfied by funds directly sourced, in whole or in part, from a
516	516	foreign entity of concern.
517	517	l.A litigation financier may not enter a commercial litigation financing contract
518	518	directly or indirectly with a foreign entity of concern or a foreign country or person
519	519	of concern.
520	520	2.A legal representative who renders any services to the consumer may not have a
521	521	financial interest in litigation financing and may not receive any commissions, referral
522	522	fees, rebates, or other forms of consideration from any litigation financer or the
523	523	litigation financer's employees, owners, or affiliates.
524	524	Litigation financing contract - Disclosures.
525	525	1.The terms and conditions of a litigation financing contract must be set forth in a fully
526	526	completed written contract with no terms or conditions omitted.
527	527	2.The litigation financing contract must identify who is responsible for paying the
528	528	litigation financer, the source the funds, and when the funds are to be paid to the
529	529	litigation financer.
530	530	3.The litigation financing contract must state the amount of funding to be provided to the
531	531	consumer and the future amounts owed to the litigation financer or the method of
532	532	calculating the amounts owed to the litigation financer.
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566	566	4.The litigation financing contract must reflect all costs and fees and must show the
567	567	maximum amount a litigation financer may own of the consumer's recovery.
568	568	5.On execution of a litigation financing contract, a litigation financer may not amend the
569	569	terms or conditions of the litigation financing contract without full disclosure to and the
570	570	prior written consent of all parties to the litigation financing contract.
571	571	6.A litigation financing contract must set forth the name, physical street address, and
572	572	mailing address of the litigation financer in the litigation financing contract.
573	573	7.A litigation financing contract must contain the following disclosures that constitute
574	574	material terms and conditions of the litigation financing contract and must be typed in
575	575	at least fourteen-point boldface type and be placed clearly and conspicuously
576	576	immediately above the consumer's signature line in the litigation financing contract:
577	577	IMPORTANT DISCLOSURES -- PLEASE READ CAREFULLY
578	578	1.Right to Cancellation: You may cancel this litigation financing contract without
579	579	penalty or further obligation within five (5) business days from the date you sign
580	580	this contract or the date you receive financing from the litigation financer,
581	581	whichever date is later. You may cancel by sending a notice of cancellation to the
582	582	litigation financer and returning to the litigation financer any funds received from
583	583	the litigation financer at the litigation financer's address set forth in this contract.
584	584	2.The maximum amount the litigation financer may receive or recover from any
585	585	contingent payment may not exceed twenty-five percent (25%) of the amount of
586	586	any judgment, award, settlement, verdict, or other form of monetary relief
587	587	obtained in the civil action, claim, or cause of action that is the subject of this
588	588	litigation contract.
589	589	3.The litigation financer agrees that it has no right to, and will not demand, request,
590	590	receive, or exercise any right to, influence, affect, or otherwise make any decision
591	591	in the handling, conduct, administration, litigation, settlement, or resolution of
592	592	your civil action, claim, or cause of action. All of these rights remain solely with
593	593	you and your legal representative.
594	594	4.If there is no recovery of any money from your civil action, claim, or cause of
595	595	action, or if there is not enough money to satisfy in full the portion assigned to the
596	596	litigation financer, you will not owe anything to the litigation financer.
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630	630	5.You are entitled to a fully completed contract with no terms or conditions omitted
631	631	prior to signing. Before signing this contract, you should read the contract
632	632	completely and consult an attorney.
633	633	8.If the consumer is represented by a legal representative in the civil action, claim, or
634	634	cause of action that is the subject of the litigation financing contract, the consumer
635	635	must provide the litigation funding contract to the consumer's legal representative.
636	636	Upon receipt, the legal representative shall acknowledge in the contract that the legal
637	637	representative and the legal representative's employer and employees have not
638	638	received or paid a referral fee or any other consideration from or to the litigation
639	639	financer and have no obligation to do so in the future.
640	640	Litigation financing contracts - Service.
641	641	1.If a party or party's attorney initiates a civil action and is a party to a litigation financing
642	642	agreement, the party or party's attorney shall serve a copy of the litigation financing
643	643	contract with the complaint.
644	644	2.If a party or party's attorney is served with a litigating financing contract, the person
645	645	shall serve a copy of any insurance policy relevant to the civil action to the other party
646	646	within fourteen days.
647	647	3.If either party in a civil action enters a litigation financing agreement after the
648	648	commencement of the civil action, the party shall serve a copy of the agreement on
649	649	the other party within fourteen days.
650	650	Exemptions.
651	651	This chapter does not apply to the following:
652	652	1.A nonprofit entity that provides litigation financing, directly or indirectly, for the benefit
653	653	of the nonprofit or one or more of its members without receiving, in consideration for
654	654	the litigation financing:
655	655	a.The payment of interest, fees, or other consideration; or
656	656	b.Except for in-house counsel of the nonprofit, any right to recovery or payment
657	657	from the amount of a judgment, award, settlement, verdict, or other form of
658	658	monetary relief obtained in the civil action, claim, or cause of action;
659	659	2.A regulated lender that does not receive, in consideration for loaning money to any
660	660	person, a right to receive payment from the value of any proceeds or other
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694	694	consideration realized from a judgment, award, settlement, verdict, or other form of
695	695	monetary relief a person may receive or recover in relation to a civil action, claim, or
696	696	cause of action.
697	697	Class actions.
698	698	1.This chapter applies to any civil action filed or certified as a class action in which
699	699	litigation financing is provided.
700	700	2.In addition to the disclosure requirements set forth in this chapter, the legal
701	701	representative of the putative class shall disclose to all putative class members, any
702	702	relationship between the legal representative and the litigation financer.
703	703	3.A class member is entitled to receive from the class counsel a true and correct copy of
704	704	the litigation financing contract on request.
705	705	Regulatory oversight - Rulemaking - Records.
706	706	1.The department of financial institutions shall administer and enforce this chapter. The
707	707	department may adopt rules reasonably necessary to carry out this chapter, in
708	708	accordance with chapter 28 - 32. Any hearing held and any orders issued under this
709	709	chapter must be in accordance with chapter 28 - 32. In addition to those powers set
710	710	forth in chapter 28 - 32, the department has additional powers as set forth in this
711	711	chapter.
712	712	2Insofar as consistent with the provisions of law, the department of financial institutions
713	713	may:
714	714	a.Determine the qualifications of all applicants based on financial responsibility,
715	715	financial condition, business experience, character, and general fitness which
716	716	must reasonably warrant the belief that the applicant's business will be conducted
717	717	lawfully and fairly. In determining whether this qualification is met, and for the
718	718	purpose of investigating compliance with the chapter, the commissioner may
719	719	review and consider the relevant business records and capital adequacy of the
720	720	applicant and the competence, experience, integrity, and financial ability of an
721	721	individual who is a member, partner, director, officer, or twenty-five percent or
722	722	more shareholder of the applicant.
723	723	b.Establish codes of ethical conduct for licensees.
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756	756	3Every licensee licensed under this chapter shall keep a record of all sums collected by
757	757	the licensee and of litigation financing completed as a result of the licensee's efforts
758	758	for six years from the date of last entry. The records of a licensee may be maintained
759	759	electronically if the records can be reproduced upon request by the department of
760	760	financial institutions and within the required statutory time period provided in this
761	761	section. When a licensee ceases operations for any reason, the licensee shall inform
762	762	the department of the location of the records. In addition, the licensee shall provide the
763	763	name of the individual responsible for maintenance of the records.
764	764	4When it appears to the department of financial institutions either upon complaint or
765	765	otherwise, that any person has engaged in, is engaging in, or is about to engage in
766	766	any act or practice or transaction prohibited by this chapter, or by any order of the
767	767	department issued under this chapter or which is declared to be illegal in this chapter,
768	768	the department may:
769	769	a.Issue any order that is effective upon issuance, including cease and desist, stop,
770	770	and suspension orders, which the department deems necessary or appropriate in
771	771	the public interest or for the protection of the public; provided, however, that any
772	772	person aggrieved by an order issued under this subsection may request a
773	773	hearing before the department if the request is made within ten days after receipt
774	774	of the order. The hearing and any appeal of the hearing must be held in
775	775	accordance with chapter 28 - 32.
776	776	b.Apply to the district court of Burleigh County, for an injunction restraining the
777	777	person and the agents, employees, partners, officers, and directors of the person
778	778	from continuing the act, practice, or transaction and for the other relief the facts
779	779	may warrant. In any proceeding for an injunction, the department may apply for
780	780	and on due showing be entitled to have issued the court's subpoena requiring the
781	781	appearance of any defendants and their agents, employees, partners, officers, or
782	782	directors, and the production of the documents, books, and records as may
783	783	appear necessary for the hearing upon the petition for an injunction. Upon proof
784	784	of any of the offenses described in this section, the court may grant the injunction
785	785	as the facts may warrant. The court may not require the department to post a
786	786	bond.
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820	820	Investigations, subpoenas, and examination authority.
821	821	In addition to any authority allowed under this chapter, the commissioner may conduct
822	822	investigations and examinations as follows:
823	823	1.The department of financial institutions:
824	824	a.May make the public or private investigation or examination within or outside this
825	825	state as it deems necessary to determine whether any person has violated or is
826	826	about to violate any provision of this chapter or any rule or order, or to aid in the
827	827	enforcement of this chapter or in the prescribing of rules and forms under this
828	828	chapter. The licensee shall pay an investigation or examination fee and must be
829	829	charged by the department of financial institutions at an hourly rate to be set by
830	830	the commissioner, sufficient to cover all reasonable expenses of the department
831	831	associated with the visitation provided for by this section. Fees must be
832	832	deposited in the financial institutions regulatory fund.
833	833	b.May require or permit any person to file a statement in writing, under oath, or
834	834	otherwise as the department determines, as to all the facts and circumstances
835	835	concerning the matter to be investigated or examined.
836	836	c.May publish information concerning any violation of this chapter or any rule or
837	837	order under the chapter.
838	838	2.For the purpose of any investigation, examination, or proceeding under this chapter,
839	839	the department of financial institutions may administer oaths and affirmations,
840	840	subpoena witnesses, compel the attendance of witnesses, take evidence, and require
841	841	the production of any books, papers, correspondence, memoranda, agreements, or
842	842	other documents or records the department deems relevant or material to the inquiry.
843	843	3.In the case of a failure or refusal to obey a subpoena issued to any person, the district
844	844	court, upon application by the department of financial institutions, may issue to the
845	845	person an order requiring the person to appear before the department, to produce
846	846	documentary evidence if so ordered, or to give evidence touching the matter in
847	847	question under investigation or examination. Failure to obey the order of the court may
848	848	be punished by the court as a contempt of court.
849	849	4.An individual is not excused from attending and testifying or from producing any
850	850	document or record before the department of financial institutions, or in obedience to
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884	884	the subpoena of the department, or in any proceeding instituted by the department, on
885	885	the grounds that the testimony or evidence, documentary or otherwise, required of the
886	886	individual may tend to incriminate the individual or subject the individual to a penalty
887	887	forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture
888	888	for or on account of any transaction, matter, or thing concerning which the individual is
889	889	compelled, after claiming the privilege against self-incrimination, to testify or produce
890	890	evidence, documentary or otherwise, except that the individual testifying is not exempt
891	891	from prosecution and punishment for perjury or contempt committed in testifying.
892	892	5.For purposes of initial licensing, license renewal, license suspension, license
893	893	conditioning, license revocation or termination, or general or specific inquiry or
894	894	investigation to determine compliance with this chapter, the commissioner may
895	895	access, receive, and use any books, accounts, records, files, documents, information,
896	896	or evidence, including:
897	897	a.Criminal, civil, and administrative history information, including nonconviction
898	898	data;
899	899	b.Personal history and experience information, including independent credit reports
900	900	obtained from a consumer reporting agency described under the Fair Credit
901	901	Reporting Act [15 U.S.C. 1681a]; and
902	902	c.Any other documents, information, or evidence the commissioner deems relevant
903	903	to the inquiry or investigation regardless of the location, possession, control, or
904	904	custody of the documents, information, or evidence.
905	905	6.For purposes of investigating violations or complaints arising under this chapter, or for
906	906	purposes of examination, the commissioner may review, investigate, or examine any
907	907	licensee or person subject to this chapter, as often as necessary in order to carry out
908	908	the purposes of this chapter.
909	909	7.Each licensee or person subject to this chapter shall make available to the
910	910	commissioner upon request the books and records relating to the operations of the
911	911	licensee or person subject to this chapter. The commissioner shall have access to the
912	912	books and records and interview the officers, principals, mortgage loan originators,
913	913	employees, independent contractors, agents, and customers of the licensee or person
914	914	subject to this chapter concerning their business.
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948	948	8.Each licensee or person subject to this chapter shall make or compile reports or
949	949	prepare other information as directed by the commissioner to carry out the purposes of
950	950	this section, including:
951	951	a.Accounting compilations;
952	952	b.Information lists and data concerning litigation financing transactions in a format
953	953	prescribed by the commissioner; or
954	954	c.Any other information deemed necessary to carry out the purposes of this
955	955	section.
956	956	9.In making any investigation or examination authorized by this chapter, the
957	957	commissioner may control access to any documents and records of the licensee or
958	958	person under investigation or examination. The commissioner may take possession of
959	959	the documents and records or place a person in exclusive charge of the documents
960	960	and records in the place in which the records are usually kept. During the period of
961	961	control, an individual may not remove or attempt to remove any of the documents and
962	962	records except pursuant to a court order or with the consent of the commissioner.
963	963	Unless the commissioner has reasonable grounds to believe the documents or
964	964	records of the licensee have been, or are at risk of being altered or destroyed for
965	965	purposes of concealing a violation of this chapter, the licensee or owner of the
966	966	documents and records may have access to the documents or records as necessary
967	967	to conduct its ordinary business affairs.
968	968	10.To carry out the purposes of this section, the commissioner may:
969	969	a.Retain accountants or other professionals and specialists as examiners, auditors,
970	970	or investigators to conduct or assist in the conduct of examinations or
971	971	investigations;
972	972	b.Enter agreements or relationships with other government officials or regulatory
973	973	associations to improve efficiencies and reduce regulatory burden by sharing
974	974	resources, standardized or uniform methods or procedures, and documents,
975	975	records, information, or evidence obtained under this section;
976	976	c.Use, hire, contract, or employ publicly or privately available analytical systems,
977	977	methods, or software to examine or investigate the licensee, individual, or person
978	978	subject to this chapter;
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1012	1012	d.Accept and rely on examination or investigation reports made by other
1013	1013	government officials, within or without this state; and
1014	1014	e.Accept audit reports made by an independent certified public accountant for the
1015	1015	licensee or person subject to this chapter in the course of that part of the
1016	1016	examination covering the same general subject matter as the audit and may
1017	1017	incorporate the audit report in the report of the examination, report of
1018	1018	investigation, or other writing of the commissioner.
1019	1019	11.The authority of this section remains in effect, whether a licensee or person subject to
1020	1020	this chapter acts or claims to act under any licensing or registration law of this state or
1021	1021	claims to act without the authority.
1022	1022	12.A licensee or person subject to investigation or examination under this section may not
1023	1023	knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records,
1024	1024	computer records, or other information.
1025	1025	Act violation - Unenforceable contract.
1026	1026	Any violation of this chapter by the litigation financer renders the litigation financing contract
1027	1027	unenforceable by the litigation financer or any successor-in-interest to the litigation financing
1028	1028	contract.
1029	1029	Penalty.
1030	1030	1.Any person violating any provision of this chapter or any rule or order of the
1031	1031	department of financial institutions made under this chapter or who engages in any
1032	1032	act, practice, or transaction declared by any provision of this chapter to be unlawful is
1033	1033	guilty of a class C felony.
1034	1034	2.The commissioner may impose a civil money penalty not to exceed one hundred
1035	1035	thousand dollars for each occurrence and one thousand dollars per day for each day
1036	1036	the violation continues after issuance of the order against any person who violates a
1037	1037	law, rule, written agreement, or order under this chapter.
1038	1038	3.An interested party may appeal the assessment of a civil money penalty under the
1039	1039	provisions of chapter 28 - 32 by filing a written notice of appeal within twenty days after
1040	1040	service of the assessment of civil money penalties.
1041	1041	4.A civil money penalty collected under this section must be paid to the department of
1042	1042	financial institutions and deposited in the financial institution's regulatory fund.
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1076	1076	Confidentiality.
1077	1077	1.Except as otherwise provided in Public Law 110 - 289, section 1512, the requirements
1078	1078	under any federal law, chapter 44 - 04, or section 6 - 01 - 07.1, regarding the privacy or
1079	1079	confidentiality of any information or material provided to the nationwide multistate
1080	1080	licensing system and registry, and any privilege arising under federal or state law,
1081	1081	including the rules of any federal or state court, with respect to the information or
1082	1082	material, continue to apply to the information or material after the information or
1083	1083	material has been disclosed to the nationwide multistate licensing system and registry.
1084	1084	Any information and material may be shared with all state and federal regulatory
1085	1085	officials with mortgage industry oversight authority without the loss of privilege or the
1086	1086	loss of confidentiality protections provided by federal law, chapter 44 - 04, or section
1087	1087	6 - 01 - 07.1.
1088	1088	2.For these purposes, the commissioner may enter agreements or sharing
1089	1089	arrangements with other governmental agencies, the conference of state bank
1090	1090	supervisors, the American association of residential mortgage regulators, or other
1091	1091	associations representing governmental agencies.
1092	1092	3.Information or material that is subject to a privilege or confidentiality under
1093	1093	subsection 1 is not subject to:
1094	1094	a.Disclosure under any federal or state law governing the disclosure to the public of
1095	1095	information held by an officer or an agency of the federal government or the
1096	1096	respective state; or
1097	1097	b.Subpoena or discovery, or admission into evidence, in any administrative
1098	1098	process, unless with respect to any privilege held by the nationwide multistate
1099	1099	licensing system and registry with respect to the information or material, the
1100	1100	person to whom the information or material pertains waives, in whole or in part, in
1101	1101	that privilege.
1102	1102	4.The commissioner shall take all necessary steps, under any applicable law or rule, to
1103	1103	protect the disclosure of information or material subject to a privilege or confidentiality
1104	1104	under subsection 1. Records subject to a privilege or confidentiality under
1105	1105	subsection 1 may be required to be disclosed only pursuant to an order of the court.
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1138	1138	The court ordering the disclosure shall issue a protective order to protect the
1139	1139	confidential nature of the records.
1140	1140	5.Application of chapter 44 - 04 or section 6 - 01 - 07.1, relating to the disclosure of
1141	1141	confidential supervisory information or any information or material described in
1142	1142	subsection 1 which is inconsistent with subsection 1, is superseded by the
1143	1143	requirements of this section.
1144	1144	6.Except for provisions of chapter 6 - 08.1 that are inconsistent with this chapter, chapter
1145	1145	6 - 08.1 applies to all money brokers licensed under this chapter.
1146	1146	SECTION 2. APPLICATION. This Act applies to any civil action commenced after the
1147	1147	effective date of this Act.
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