§ 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) 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 calendar-year (3) 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 the director's 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 the director's
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 the director's 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 the director's
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.