§ 13-11-01 — Definitions

North Dakota § 13-11-01

• Jurisdiction: North Dakota
• Title 13: Debtor and Creditor Relationship
• Ch. 13-11: Debt-Settlement Providers

Text

For the purposes of this chapter:
1. "Affiliate":
a. With respect to an individual, means:
(1) The spouse of the individual;
(2) A sibling of the individual or the spouse of a sibling;
(3) An individual or the spouse of an individual who is a lineal ancestor or lineal
descendant of the individual or the individual's spouse;
(4) An aunt, uncle, great aunt, great uncle, first cousin, niece, nephew,
grandniece, or grandnephew, whether related by the whole or the half blood
or adoption, or the spouse of any of them; or
(5) Any other individual occupying the residence of the individual; and
b. With respect to an entity, means:
(1) A person that directly or indirectly controls, is controlled by, or is under
common control with the entity;
(2) An officer of, or an individual who performs similar functions with respect to,
the entity;
(3) A director of, or an individual who performs similar functions with respect to,
the entity;
(4) A person that receives or received more than twenty-five thousand dollars
from the entity in either the current year or the preceding year or a person
that owns more than ten percent of, or an individual who is employed by or
is a director of, a person that receives or received more than twenty-five
thousand dollars from the entity in either the current year or the preceding
year;
(5) An officer or director of, or an individual performing similar functions with
respect to, a person described in paragraph 1;
(6) The spouse of, or an individual occupying the residence of, an individual
described in paragraphs 1 through 5; or
(7) An individual who has the relationship specified in paragraph 4 of
subdivision a to an individual or the spouse of an individual described in
paragraphs 1 through 5.
2. "Commissioner" means the commissioner of the department of financial institutions.
3. "Consumer" means any person who purchases or contracts for the purchase of
debt-settlement services.
4. "Consumer settlement account" means any account or other means or device in which
payments, deposits, or other transfers from a consumer are arranged, held, or
transferred by or to a debt-settlement provider for the accumulation of the consumer's
funds in anticipation of proffering an adjustment or settlement of a debt or obligation of
the consumer to a creditor on behalf of the consumer.
5. "Contract" means a contract or other legally binding agreement between a provider
and an individual for the performance of debt-management services.
6. "Debt-settlement provider" means any person engaging in, or holding itself out as
engaging in, the business of providing debt-settlement service in exchange for any fee
or compensation, or any person who solicits for or acts on behalf of any person
engaging in, or holding itself out as engaging in, the business of providing
debt-settlement service in exchange for any fee or compensation. "Debt-settlement
provider" does not include:
a. An attorney licensed or otherwise authorized to practice in this state who is
engaged in the practice of law;
b. An escrow agent, accountant, broker-dealer in securities, or investment advisor in
securities, when acting in the ordinary practice of the person's profession and
through the entity used in the ordinary practice of the person's profession;

c. Any bank, agent of a bank, operating subsidiary of a bank, affiliate of a bank, trust
company, savings and loan association, savings bank, credit union, farm credit
system institution, crop credit association, development credit corporation,
industrial development corporation, title insurance company, title insurance agent,
independent escrowee or insurance company operating or organized under the
laws of a state or the United States, or any other person authorized to make
loans under state law while acting in the ordinary practice of that business;
d. Any person who performs credit services for that person's employer while
receiving a regular salary or wage when the employer is not engaged in the
business of offering or providing debt-settlement service;
e. A collection agency licensed pursuant to chapter 13-05 which is collecting a debt
on the collection agency's own behalf or on behalf of a third party;
f. A public officer while acting in the officer's official capacity and any person acting
under court order;
g. Any person while performing services incidental to the dissolution, winding up, or
liquidating of a partnership, corporation, or other business enterprise; or
h. Any person currently licensed under any chapter administered by the department
of financial institutions or registered with the attorney general's office when acting
in the ordinary practice of that person's profession and not holding oneself out as
a debt-settlement provider.
7. a. "Debt-settlement service" means:
(1) Offering to provide advice or service, or acting as an intermediary between
or on behalf of a consumer and one or more of a consumer's creditors,
where the primary purpose of the advice, service, or action is to obtain a
settlement, adjustment, or satisfaction of the consumer's unsecured debt to
a creditor in an amount less than the full amount of the principal amount of
the debt or in an amount less than the current outstanding balance of the
debt;
(2) Offering to provide services related to or providing services advising,
encouraging, assisting, or counseling a consumer to accumulate funds for
the primary purpose of proposing or obtaining or seeking to obtain a
settlement, adjustment, or satisfaction of the consumer's unsecured debt to
a creditor in an amount less than the full amount of the principal amount of
the debt or in an amount less than the current outstanding balance of the
debt; or
(3) Offering to provide advice or service, or acting as an intermediary between
or on behalf of a person and a state or federal government agency where
the primary purpose of the advice, service, or action is to obtain a
settlement, adjustment, or satisfaction of the person's tax obligation to the
government agency in an amount less than the current outstanding balance
of the tax obligation.
b. "Debt-settlement service" does not include:
(1) Legal services provided in an attorney-client relationship by an attorney
licensed or otherwise authorized to practice law in this state;
(2) Accounting services provided in an accountant-client relationship by a
certified public accountant licensed to provide accounting services in this
state;
(3) Financial planning services provided in a financial planner-client relationship
by a member of a financial planning profession whose members the
commissioner, by rule, determines are:
(a) Licensed by this state;
(b) Subject to a disciplinary mechanism;
(c) Subject to a code of professional responsibility; and
(d) Subject to a continuing education requirement; or
(4) A person engaged in consumer credit counseling services under chapter 13-
07.

8. "Enrollment or setup fee" means any fee, obligation, or compensation paid or to be
paid by the consumer to a debt-settlement provider in consideration of or in connection
with establishing a contract or other agreement with a consumer related to the
provision of debt-settlement service.
9. "Maintenance fee" means any fee, obligation, or compensation paid or to be paid by
the consumer on a periodic basis to a debt-settlement provider in consideration of
maintaining the relationship and services to be provided by a debt-settlement provider
in accordance with a contract with a consumer related to the provision of
debt-settlement service.
10. "Person" means an individual, corporation, limited liability company, partnership, trust,
firm, association, or other legal entity. The term does not include a public corporation,
government, or governmental subdivision, agency, or instrumentality.
11. "Principal amount of the debt" means the total amount or outstanding balance owed by
a consumer to one or more creditors for a debt that is included in a contract for
debt-settlement service at the time when the consumer enters a contract for
debt-settlement service.
12. "Record" means information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.
13. "Savings" means the difference between the principal amount of the debt and the
amount paid by the debt-settlement provider to the creditor or negotiated by the
debt-settlement provider and paid by the consumer to the creditor pursuant to a
settlement negotiated by the debt-settlement provider on behalf of the consumer as full
and complete satisfaction of the creditor's claim with regard to that debt.
14. "Settlement fee" means any fee, obligation, or compensation paid or to be paid by the
consumer to a debt-settlement provider in consideration of or in connection with a
completed agreement or other arrangement on the part of a creditor to accept less
than the principal amount of the debt as satisfaction of the creditor's claim against the
consumer.
15. "Willfully" means the person acted intentionally in the sense that the person was aware
of what the person was doing.