6 Del. Admin. Code § 102-4.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 102-4.0 - Applications

4.1 Applications for licensure shall be submitted on forms approved by the Director of the Consumer Protection Unit. Application forms will be mailed to an applicant upon request and are also available in person or through the web site at the addresses provided in Rule 3.1.

4.2 Applications must be complete before they are submitted for consideration. Incomplete applications may be denied or returned to the applicant. Applications shall include:

4.2.1 An audited review by a certified accountant of the applicant's financial statements for the two years preceding the application or the period of existence, whichever is less. 6 Del.C. § 2406A (8).

4.2.2 At the applicant's expense, the results of a criminal history record check, including fingerprints, provided pursuant to the Federal Bureau of Investigation appropriation of Title II of Public Law 92-544(28 U.S.C. § 534) and 28 C.F.R. § 50.12., conducted within the last 12 months for every officer of the applicant and every employee with access to the trust account.

4.2.2.1 The applicant may request sufficient fingerprint cards and authorization forms from the Consumer Protection Unit of the Delaware Attorney General's Office for the individuals needing criminal records checks. The cards can then be taken to a local law enforcement agency for fingerprinting. The completed cards and authorizations shall be returned to the Consumer Protection Unit for further processing by the Delaware Bureau of Identification.

4.2.2.2 The Delaware Bureau of Identification shall be the intermediary and the Office of the Attorney General of Delaware - Consumer Protection Unit shall be the screening point for the receipt of the federal criminal history records.

4.2.2.3 A license will not be denied based on the information contained in an FBI identification record until a person has a reasonable time to correct or complete the record, or has declined to do so. Procedures for obtaining a change, correction or updating an FBI identification record are set forth in 28 C.F.R. § 50.12.

4.2.2.4 A criminal records check obtained for the purpose of doing business in any state, that was issued within the last 12 months and based on the fingerprints of the officer or person with access to the trust account, satisfies this requirement if the criminal records check is provided by the licensing state and received by that state from a central repository.

4.2.2.5 The criminal records check of an individual obtained for licensure in Delaware will be provided to another State regulator only with the express written consent of the individual.

4.2.3 A corporate surety bond on the form provided in an amount of at least $50,000 from a surety company authorized to do business in Delaware (or an irrevocable letter of credit with the consent of the Attorney General) as provided in 6 Del.C. §§ 2405A (b)(2), 2413A, and 2414A.

4.2.3.1 The amount of the bond may be required to be increased after consideration of the value of the applicant's business in Delaware and the balance of the trust account.

4.2.3.2 The term of the bond is continuous.

4.2.3.3 The bond shall run to the State for the benefit of the Attorney General and consumers injured by any wrongful act, omission, default, fraud or misrepresentation by the applicant.

4.2.3.4 If the bond is amended, the licensee shall provide an amended copy of the original security bond to the Director of the Consumer Protection Unit of the Attorney General's Office.

4.2.3.5 No cancellation of a bond by the surety shall be effective unless written notice of an intent to cancel is filed with the Director of the Consumer Protection Unit of the Attorney General's Office at least 30 days before the effective date of cancellation.

4.2.3.6 A surety company that receives a claim against the bond shall immediately notify the Director of the Consumer Protection Unit of the Attorney General's Office. No payment shall be made without the approval of the Director of the Consumer Protection Unit of the Attorney General's Office.

4.2.4 Evidence of insurance against the risks of dishonesty, fraud, theft, and other misconduct on the part of the applicant or a director, employee, or agent of the applicant in the amount of $250,000. The evidence shall identify any exclusions from coverage and include all endorsements related to Delaware. 6 Del.C. § 2405A (b)(4).

4.2.4.1 Insurer must be authorized to do business in the State of Delaware and be rated at least A by a nationally recognized rating organization.

4.2.4.2 The deductible shall be no greater than $5,000.

4.2.4.3 The Attorney General shall be named as an interested party to receive timely notice of cancellation.

4.2.5 Identification of trust accounts and an irrevocable consent permitting the Attorney General and/or the designee(s) of the Attorney General to review and examine accounts. 6 Del.C. §§ 2405A (b)(3) and 2422A.

4.2.6 Evidence of accreditation by an independent accrediting organization approved by the Director of the Consumer Protection Unit of the Attorney General's Office that assures compliance with industry standards. A list of organizations that have been approved can be found on the website provided in Rule 3.1.2 or obtained by contacting the Consumer Protection Unit.

4.2.7 Documentation of counselor certifications or a statement that a counselor will become certified within 12 months of employment. Certification shall be by a bona fide third-party provider approved by the Director of the Consumer Protection Unit of the Attorney General's Office. Documentation can be in a log or other record of counselors, their certifications, and dates of certification. A list of organizations or programs that have been approved can be found on the website provided in Rule 3.1.2 or obtained by contacting the Consumer Protection Unit.

4.2.8 A description of the three most common educational programs provided for Delaware residents and a copy of the materials. 6 Del.C. § 2406A (11).

4.2.8.1 An educational program must include material on financial literacy, personal finance, and budgeting.

4.2.9 A description of the financial analysis and initial budget plan including any form or electronic model used to evaluate the financial conditions of individuals. 6 Del.C. § 2406A (2).

4.2.10 A copy of each form of agreement used with Delaware residents. 6 Del.C. § 2406A (13).

4.2.11 A schedule of all fees, including any recommended donations, used with Delaware residents.6 Del.C. § 2406A (14).

4.2.11.1 If a plan contemplates that creditors will reduce finance charges or fees for late payment, default, or delinquency, the provider may charge an initial fee of up to $50 and a monthly service fee not to exceed $10 times the number of creditors in the plan when the fee is assessed, but not more than $50 in any month.

4.2.11.2 If a plan or program contemplates settling a debt for less than the principal amount of the debt, the provider may charge a non-refundable initial fee that represents the value of obtaining a credit report and consultation.

4.2.11.2.1 Each plan or program payment may include a reasonable monthly service fee and must include an amount designated for the settlement fund to pay the creditors following a negotiated settlement.

4.2.11.2.2 The settlement fee, which represents the compensation for services in connection with settling a debt, paid to the provider cannot exceed 18% of the principal amount of the debt including the initial fee and monthly service fees.

4.2.11.2.3 The settlement fee may be collected in installments over the expected length of the program but in no event shall the final installment be due before the conclusion of the program either by termination or by settlement of all debts included in the program.

4.2.12 The application fee in the amount of $2000. 6 Del.C. § 2405A (b)(1).

4.2.13 An applicant submitting an application that does not satisfy the statutory or regulatory requirements may receive one or more deficiency letters and have an opportunity to submit additional or modified information. If there is no response to a deficiency letter within 90 days of its mailing, the application is incomplete and may be administratively closed after notice to the applicant. Any new application requires a new fee as provided in 4.1.12. Nothing herein shall impair the authority of the Director to deny an erroneous or incomplete application.

4.3 The Director of the Consumer Protection Unit:

4.3.1 will make a preliminary decision on a completed application within 120 days unless additional information is needed. In that case, the period is extended by 60 days.

4.3.2 may deny a license application for any of the reasons in 6 Del.C. § 2409A (b) including:

4.3.2.1 the application contains information that is materially erroneous or incomplete;

4.3.2.2 an officer, director, or owner of the applicant has been convicted of a crime, or suffered a civil judgment, involving dishonesty or the violation of state or federal securities laws;

4.3.2.3 the applicant or any of its officers, directors, or owners has defaulted in the payment of money collected for others; or

4.3.2.4 the Attorney General, or designee, finds that the financial responsibility experience, character, or general fitness of the applicant or its owners, directors, employees, or agents does not warrant belief that the business will be operated in compliance with this chapter.

4.3.3 shall deny a license as provided in 6 Del.C. § 2409A (c) if no fee accompanies the application or if the Board of Directors of a not-for-profit or tax exempt applicant is not independent of the applicant's employees and agents.

4.4 An applicant must be notified in writing of a preliminary decision to deny the application within 7 days of the decision along with the reasons for the intended action. The notification must advise the applicant of the right to a hearing.

4.5 An applicant may request a hearing within twenty (20)days after receipt of the preliminary decision to deny the application.

4.5.1 If an applicant does not timely request a hearing, the preliminary decision is final.

4.5.2 A hearing will be scheduled upon timely request by the applicant as provided in Subchapter IV of the Administrative Procedures Act.

4.5.3 The Director, or an attorney designated by the Director, will serve as hearing officer after a preliminary decision to deny a license is made.

6 Del. Admin. Code § 102-4.0

11 DE Reg. 1062 (02/01/08)
14 DE Reg. 318 (10/01/10)