2014 -- S 2785 SUBSTITUTE A

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LC004315/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - REAL ESTATE BROKERS AND

SALESPERSONS

     

     Introduced By: Senator Roger Picard

     Date Introduced: March 25, 2014

     Referred To: Senate Commerce

     (Business Regulation)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-20.5-12 and 5-20.5-15 of the General Laws in Chapter 5-20.5

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entitled "Real Estate Brokers and Salespersons" are hereby amended to read as follows:

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     5-20.5-12. Commission -- Creation -- Composition -- Appointment, terms, and

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compensation of members -- Officers -- Deputy directors -- Seal. -- (a) (1) Within the

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department of business regulation there is created the Rhode Island real estate commission,

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subsequently referred to as "commission", to consist of nine (9) persons at least one from each

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county to be appointed by the governor, each of whom has been a citizen of this state for at least

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ten (10) years prior to the date of appointment, three (3) current licensed brokers each of whom

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have been engaged as a licensed broker in this state for at least ten (10) five (5) years prior to the

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date of appointment, four (4) of whom are members of the general public, at least one of whom

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has substantial academic experience in real estate and at least one who has been active in citizen

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groups concerned with real estate practices and activities. Two (2) members appointed for one

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year; two (2) members shall be appointed for two (2) years; one member for three (3) years; one

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member for four (4) years; and one member for five (5) years; beginning on December 31, 1973.

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Successors of all members shall be appointed by the governor for terms of five (5) years each and

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until their successors are appointed and qualify by subscribing to the constitutional oath of office,

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which shall be filed with the secretary of state. Members to fill vacancies shall be appointed for

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the unexpired term. No member shall be appointed to succeed himself or herself for more than

 

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one full term. There are two (2) ex-officio members of the commission and they are the attorney

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general or his or her designee and the director of the department or his or her designee. All ex-

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officio members have full voting powers and serve without compensation. Upon qualification of

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the members appointed, the commission shall organize by selecting from its members a

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chairperson.

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      (2) The commission shall adopt reasonable rules and regulations to carry out its

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purposes. The department of business regulation with the assistance of the commission shall

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establish any reasonable rules and regulations that are appropriate for that program to insure that

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education and practice requirements of license holders meet the public interest.

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      (b) The director shall employ a deputy director and any other employees that he or she

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deems necessary and proper to discharge the duties imposed by this chapter, and shall determine

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and prescribe their duties and fix their compensation, subject to the general laws of the state.

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      (c) No member of the commission shall receive compensation for his or her official

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duties but shall be reimbursed for his or her actual and necessary expenses incurred in the

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performance of his or her official duties.

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      (d) The commission shall adopt a seal of any design that it prescribes. Copies of all

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records and papers in the office of the commission, duly certified and authenticated by its seal,

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shall be received in evidence in all courts with like effect as the original. All records of the

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commission are open to public inspection under any reasonable rules and regulations that it

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prescribes.

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      (e) The commission shall have a policy-making role in the preparation and composition

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of the examinations to be administered by the division of professional regulation real estate

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division within the department of business regulation. Subsequent to the administration of the

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examination, the commission shall review the examinations to evaluate their effectiveness. The

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commission shall supervise the operations of the real estate division within the department of

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business regulation division in an advisory capacity in promulgating any policy that is necessary

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to improve the operations of the division real estate division within the department of business

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regulation in their areas of expertise. The promulgation of that policy is subject to the approval of

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the director of the department of business regulation.

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     5-20.5-15. Hearings before revocation or suspension of license. -- (a) (1) Before

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refusing to issue a license or suspending or revoking a license on its own motion, the division of

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professional regulation shall notify the applicant or licensee of its intended action and the grounds

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for the action. The applicant or licensee may, within twenty (20) days file with the division, in

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triplicate, a request for a hearing stating his or her answer to the grounds specified in the

 

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notification. The division shall consider the answer and set a date for a hearing, notifying the

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applicant or licensee of the date at least twenty (20) days prior to the hearing date.

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      (2) Before refusing to issue a license or suspending or revoking an existing license upon

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the verified written complaint of any person stating a cause of action under section 5-20.5-17, the

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department of business regulation shall, in writing, notify the accused applicant or licensee of its

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receipt of the complaint, enclosing a copy of the complaint. The accused applicant or licensee

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shall within twenty (20) days, file his or her answer to the complaint or complaints with the

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department, in quadruplicate, his or her answer to the complainant or complainants.

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      (3) The division shall transmit a copy of the answer to the complainant or complainants

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and set a time and place for a hearing, which is at least twenty (20) days prior to the hearing date.

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      (4) All notices and answers required or authorized to be made or filed under this section

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may be served or filed personally, or by certified mail to the last known business address of the

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addressee. If served personally, the time runs from the date of service; if by registered mail, from

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the postmarked date of the letter enclosing the document.

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      (5) Hearings are open to the public, and are conducted in accordance with the provisions

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of title 42, chapter 35 relating to Administrative Procedures, and the department's rules of

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procedure for administrative hearings, and the applicant or licensee has an opportunity to be

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heard in person or by counsel. A hearing officer appointed by the director shall render a decision

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on any application or complaint within sixty (60) days after the final hearing in the matter and

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shall immediately notify the parties to the proceedings, in writing, its ruling, order or decision. In

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the event the matter contained in the complaint has been filed or made a part of a case pending in

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any court in this state, the division may then withhold its decision until the court action has been

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concluded. Hearings shall be held in accordance with rules promulgated by the division in

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conformity with law.

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      (b) Any unlawful act or violation of any of the provisions of this chapter by any

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salesperson is not cause for the suspension or revocation of the license of the broker with whom

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he or she is affiliated unless it appears to the satisfaction of the division of professional regulation

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that the broker had knowledge of the unlawful act or violation.

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      (c) The division of professional regulation is authorized and empowered to issue

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subpoenas for the attendance of witnesses and the production of records or documents. The

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process issued by the division may extend to all parts of the state, and process may be served by

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any person designated by the division. The person serving that process shall receive any

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compensation that is allowed by the division, not to exceed the fee prescribed by law for similar

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services. All witnesses subpoenaed who appear in any proceedings before the division shall

 

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receive the same fees and mileage allowances allowed by law, and all those fees and allowances

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are taxed as part of the cost of the proceedings.

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      (d) Where, in any proceeding before the division of professional regulation, any witness

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fails or refuses to attend upon subpoena issued by the division, or refuses to testify, or refuses to

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produce any records or documents the production of which is called for by the subpoena, the

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attendance of the witness and the giving of his or her testimony and the production of the

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documents and records shall be enforced by any court of competent jurisdiction of this state in the

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same manner as are enforced the attendance, testimony of witnesses, and production of records in

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civil cases in the courts of this state.

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     SECTION 2. Sections 5-20.7-5, 5-20.7-6, 5-20.7-22, 5-20.7-24, and 5-20.7-25 of the

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General Laws in Chapter 5-20.7 entitled "Real Estate Appraiser Certification Act" are hereby

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amended to read as follows:

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     5-20.7-5. Powers of the board. -- The board shall:

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      (1) Establish criteria, standards, and requirements for the certifying and licensing of real

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estate appraisers, including, but not limited to, educational criteria, experience criteria, and

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examination requirements for certifying, licensing, and recertifying.

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      (2) Establish administrative procedures for disciplinary proceedings conducted pursuant

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to the provisions of this chapter and the board shall censure, suspend, and revoke certificates

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pursuant to the disciplinary proceedings established by the board.

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      (3) Have a policy-making role in the preparation and composition of the examinations to

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be administered by the department or its designee. Subsequent to the administration of the

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examination, the board shall review the examinations to evaluate their effectiveness.

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      (4) Supervise the operations in the department in an advisory capacity and promulgate

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any policy, procedures, and rules that are necessary to improve the operations of the department

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in their areas of expertise and to implement this chapter. The promulgation of those policies is

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subject to the approval of the director of the department.

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      (5) Provide any advisory opinions to the department that are necessary for the

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implementation of this chapter, title XI of the Federal Financial Institutions Reform, Recovery

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and Enforcement Act of 1989, 12 U.S.C. 3331 et seq., as may be amended from time to time and

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with the federal regulatory standards promulgated thereunder, as well as any other standards of

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expertise and certification deemed appropriate by the board.

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      (6) Establish administrative procedures for disciplinary proceedings conducted pursuant

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to the provisions of this chapter and censure, suspend, and revoke certificates pursuant to the

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disciplinary proceedings provided.

 

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     5-20.7-6. Powers of the department. -- (a) The department shall have the following

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powers and duties:

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      (1) Establish within the department an independent section named the real estate

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appraisers section, which shall operate independent of the real estate section;

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      (2) Establish the examination specifications for certification and licensing of each

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category of state certified and licensed real estate appraiser consistent with the advice of the

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board and establish procedures for grading examinations;

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      (3) Administer the standards for education and experience as established by the board as

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a prerequisite to examination and recertification as specified in this chapter;

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      (4) Administer the approval or disapproval of applications for certification and licensing

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and to issue certificates;

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      (5) Administer the approval or disapproval of applications for the renewal of certificates;

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      (6) Establish any rules and regulations that are necessary for the implementation of this

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chapter, title XI of the Federal Financial Institutions Reform, Recovery and Enforcement Act of

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1989, 12 U.S.C. 3331 et seq., as may be amended from time to time, and with the federal

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regulatory standards promulgated thereunder;

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      (7) Receive applications for state certification and licensing and establish administrative

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procedures for the processing of those applications;

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      (8) Maintain a registry of names and addresses of individuals certified and licensed

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under this chapter and retain all records and all application materials submitted to the department

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pursuant to the certification and licensing process established by the department; and

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      (9) Assist the board, from time to time, in any other manner that the board requests.

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      (b) The department, pursuant to the provisions of this chapter, shall employ any

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administrative personnel and employees that are necessary and proper to discharge the duties

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imposed by this chapter and to determine and prescribe their duties and fix their compensation

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subject to the general laws of this state.

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     5-20.7-22. Hearing before revocation or suspension; refusal of certification or

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licensing. -- (a) Before refusing to issue a certificate or license or suspending or revoking a

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certificate or license on its own motion, the director shall notify the applicant of his or her

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intended action and the grounds for the action. The applicant may, within twenty (20) days, file

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with the director, in triplicate, a request for a hearing setting out his or her answer to the grounds

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specified in the notification. The director shall consider the answer and set a date for the hearing,

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notifying the applicant of that date at least twenty (20) days prior to the hearing date.

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      (b) Before refusing to issue a certification or suspending or revoking an existing

 

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certificate or license upon the verified written complaint of any person setting out a cause of

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action under section 5-20.7-20, the director shall, in writing, notify the accused applicant or

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certificate holder of its receipt of the complaint, enclosing a copy of the complaint. The accused

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applicant, certificate, or license holder shall, within twenty (20) days, file his or her answers to

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the complaint or complaints with the department, in triplicate, his or her answer to the complaint

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or complaints.

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      (c) The board shall transmit a copy of the answer to the complainant or complainants and

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set a time and place for a hearing, which shall be at least twenty (20) days prior to the hearing

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date.

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      (d) All notices and answers required or authorized to be made or filed under this section

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may be served or filed personally, or by certified mail to the last know business address of the

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addressee. If served personally, the time runs from the date of service; if by registered mail, from

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the postmarked date of the letter enclosing the document.

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      (e) The director shall render a decision on any application or complaint within sixty (60)

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days after the final hearing in the matter and shall immediately notify the parties to the

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proceedings, in writing, of its rulings, orders, or decisions. If the matter contained in the

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complaint has been filed or made a part of a case pending in any court in this state, the director

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may then withhold its decision until the court action has been concluded. Hearings shall be held

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in accordance with rules promulgated by the department in conformity with law. Any party

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aggrieved by a final administrative decision of the director may appeal the decision in accordance

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with the provisions of the Administrative Procedures Act, chapter 35 of title 42.

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     5-20.7-24. Mortgage loan appraisers -- Relationship with lending institution. -- (a)

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Every bank, trust company, loan investment company, mortgage company, and credit union or

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any other lending institution, which accepts an application for any residential mortgage loan or

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any commercial mortgage loan which requires an appraisal in order to process the loan is not

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permitted to use an appraisal company that is either owned by or has directors, stockholders, or

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employees of that bank, trust company, loan investment company, mortgage company, and credit

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union or any other lending institution.

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      (b) All appraisal companies doing business in the state are required to disclose with the

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Rhode Island department of business regulation those lending institutions that may have an

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ownership interest in the appraisal company. If an ownership relationship exists between the

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lending institution and an appraisal company, then the appraisal company is prohibited from

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conducting any appraisals for that lending institution.

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      (c) Any appraisal companies doing business within the state are prohibited from doing

 

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business within the state if a violation of this chapter is discovered shall comply with the

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provisions of this chapter, title XI of the Federal Financial Institutions Reform, Recovery and

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Environment Act of 1989, 12 U.S.C. 3331 et seq., as may be amended from time to time, and

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with the federal and state regulatory standards promulgated thereunder.

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      (d) Any lending institution which maintains Federal Deposit Insurance Corporation

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(FDIC) or National Credit Union Association (NCUA) insurance protection for its deposits at a

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lending institution is exempt from this provision.

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      (e) A violation of this section shall also be held deemed to be a violation of chapter 13.1

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of title 6.

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     5-20.7-25. Effect of federal law. -- Notwithstanding any provision in this chapter to the

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contrary, any applicable provisions of title XI of the "Federal Financial Institutions Reform,

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Recovery & Enforcement Act of 1989 (FIRREA)," 12 U.S.C. section 3331 et seq., as may be

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amended from time to time, and any federal regulatory standards promulgated thereunder shall

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supersede any inconsistent provisions of this chapter when applicable.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - REAL ESTATE BROKERS AND

SALESPERSONS

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     This act would provide for the implementation of Title XI of the "Federal Financial

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Institutions Reform, Recovery and Enforcement Act of 1989" and would further provide that the

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real estate division with the department of business regulation administer examinations pursuant

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to this chapter.

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     This act would take effect upon passage.

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