Until recently, all Maryland credit services businesses (CSBs) were required to provide consumers with a written statement that includes the information listed at Md. Code Ann. Com. Law § 14-905 prior to either (1) the execution of a contract or agreement between the consumer and the CSB, or (2) the receipt by the CSB of any money or other valuable consideration. But as of October 1, 2019, CSBs that are solely engaged in obtaining an extension of credit for a consumer, or providing advice or assistance to a consumer with regard to obtaining an extension of credit for the consumer, are exempt from the requirement.
For those companies that fall within the scope of the exemption and are applying for a Maryland CSB license, we note that the NMLS new application checklist requires that the information statement be uploaded to the NMLS Company Form:
Upload copies of the following sample documents used in the regular course of business in connection with this license: Maryland Disclosures, Information Statement, and Contract, which must be compliant with Maryland Code Annotated, Commercial Law Article §§ 14-1905 & 1906.
In light of this, we recommend that any eligible Maryland CSB license applicant include with its sample documents an explanation of the basis upon which it is exempt from the information statement requirement. This will help to avoid an application processing delay.
And while the CSBs referenced above are exempt from the information statement requirement, they are now required to (1) provide all consumers with a copy of the written contract before the consumer executes the contract, and (2) include additional disclosures in such contract. Such CSBs would be well served to confirm that their contract has been reviewed and updated as appropriate, and then uploaded to their NMLS Company Form (being sure to replace any old version that may be uploaded).
If you need assistance preparing and submitting a Maryland CSB license application (or any license application for that matter), contact APPROVED.