TITLE 19
Financial institutions

CHAPTER 19-14
Licensed Activities

SECTION 19-14-23


§ 19-14-23 Examinations and investigations.

(a) For the purpose of discovering violations of this title or securing information lawfully required, the director, or the director's designee(s), may at any time investigate the loans and business and examine the books, accounts, records, and files used therein, of every licensee and person who shall be engaged in any activity that requires a license under this title, whether the person shall act, or claim to act, as principal or agent, or under or without the authority of this title. For that purpose, the director, or the director's designee(s), shall have free access to the offices and places of business, books, accounts, paper, records, files, and safes, of all such persons. The director, or the director's designee(s), shall have authority to require the attendance of, and to examine under oath, any person whose testimony may be required relative to the loans or the business or to the subject matter of any examination, investigation, or hearing.

(b) The director, or the director's designee, shall make an examination of the affairs, business, office, and records of each licensee and branch location as often as is necessary, based upon all relevant factors including the volume of activity within the state. The department shall provide a report to the legislature after July 1, 2017, but no later than December 31, 2017, regarding the timing of examinations conducted pursuant to this section and shall make recommendations regarding the sufficiency of conducting examinations based on these factors versus on a stated, periodic basis. The director, or the director's designee, may accept, in lieu of an examination of the business of a licensed mortgage loan originator, the examination by the director, or the director's designee, of the licensed lender(s) or licensed loan broker who employ the licensed mortgage loan originator and/or who employed the licensed mortgage loan originator during the period under examination. The total cost of an examination made pursuant to this section shall be paid by the licensee or person being examined and shall include the following expenses:

(1) One hundred fifty percent (150%) of the total salaries and benefits plus one hundred percent (100%) for the travel and transportation expenses for the examining personnel engaged in the examinations. The cost of an examination of a mortgage loan originator licensee shall be limited to twenty-five percent (25%) of the total salary and benefits for the personnel engaged in an examination specific to a mortgage loan originator. The fees shall be paid to the director to, and for the use of, the state. The examination fees shall be in addition to any taxes and fees otherwise payable to the state;

(2) All reasonable technology costs related to the examination process. Technology costs shall include the actual cost of software and hardware utilized in the examination process and the cost of training examination personnel in the proper use of the software or hardware; and

(3) All necessary and reasonable education and training costs incurred by the state to maintain the proficiency and competence of the examination personnel. All such costs shall be incurred in accordance with appropriate state of Rhode Island regulations, guidelines, and procedures.

(c) All expenses incurred pursuant to subsections (b)(2) and (b)(3) of this section shall be allocated equally to each licensee, other than licensed mortgage loan originators, no more frequently than annually and shall not exceed an annual average assessment of fifty dollars ($50.00) per company for any given three (3) calendar-year period. All revenues collected pursuant to this section shall be deposited as general revenues. That assessment shall be in addition to any taxes and fees otherwise payable to the state.

(d) The provisions of § 19-4-3 shall apply to records of examinations or investigations of licensees; provided, however, the director, or the director's designee, is authorized to make public the number of valid consumer complaints as determined by the director, or the director's designee, filed against the licensee for a twelve-month (12) period immediately preceding the request for the information; and provided, further, that promptly following the completion of any examination under § 19-14-23(b), the director, or the director's designee, shall provide to the person examined a copy of the written report of the examination, together with a notice requiring the person examined to file a written response or rebuttal to the comments and recommendations contained in the examination report within thirty (30) days of receipt thereof or such longer period as the director, or the director's designee, may specify.

(e) If the director, or his or her designee, has reason to believe that any person required to be licensed under this chapter is conducting a business without having first obtained a license under this chapter, or who, after the denial, suspension, or revocation of a license is conducting that business, the director, or his or her designee, may issue an order to that person commanding him or her to cease and desist from conducting that business. The order shall provide an opportunity to request a hearing to be held not sooner than three (3) days after issuance of that order to show cause why the order should not become final. Any order issued pursuant to this section shall become final if no request for a hearing is received by the director, or his or her designee, within thirty (30) days of the issuance of the order. The order may be served on any person by mailing a copy of the order, certified mail, return receipt requested, and first-class mail to that person at any address at which that person has done business or at which that person lives. Any hearing held pursuant to this section shall be governed in accordance with chapter 35 of title 42. If that person fails to comply with an order of the director, or his or her designee, after being afforded an opportunity for a hearing, the superior court for Providence County has jurisdiction upon complaint of the department to restrain and enjoin that person from violating this chapter.

(f) The director may impose an administrative assessment, as well as the penalties provided for under § 19-14-26, against any person named in an order issued under subsection (e) or, in accordance with the rules and regulations promulgated pursuant to § 19-14-30, against any person who violates, or participates in the violation of, any of the applicable provisions of this title, or any regulation promulgated pursuant to any provisions of this title. The amount of the administrative assessment may not exceed one thousand dollars ($1,000) for each violation of this chapter or each act or omission that constitutes a basis for issuing the order. Any person aggrieved by an administrative assessment shall have the opportunity to request a hearing to be held in accordance with chapter 35 of title 42 within thirty (30) days of the imposition of such administrative assessment.

History of Section.
(P.L. 1995, ch. 82, § 52; P.L. 1999, ch. 156, § 3; P.L. 2001, ch. 125, § 1; P.L. 2003, ch. 56, § 1; P.L. 2003, ch. 70, § 1; P.L. 2007, ch. 73, art. 16, § 1; P.L. 2007, ch. 244, § 1; P.L. 2009, ch. 148, § 1; P.L. 2009, ch. 160, § 1; P.L. 2011, ch. 145, § 2; P.L. 2014, ch. 106, § 3; P.L. 2014, ch. 125, § 3.)