2006 Louisiana Laws - RS 9:3573.1 — Short title; purpose; license; renewal; application; change of location; change of name; fees

PART XV.  CREDIT REPAIR SERVICES ORGANIZATIONS ACT

§3573.1.  Short title; purpose; license; renewal; application; change of location; change of name; fees

A.  This Part shall be known and may be cited as the "Credit Repair Services Organizations Act".

B.  The Legislature of Louisiana recognizes the right of the citizens of the state to utilize the services of qualified credit repair organizations for advice and assistance in improving their credit matters.  The Legislature of Louisiana does hereby declare that it is in the best interest of the citizens of the state to protect consumers in their efforts to improve their credit record, history, and rating. The purpose of this Part is to promote the safety and welfare of the people of this state by providing for regulatory oversight in an area in which unqualified or unscrupulous individuals may injure or mislead the public.

C.  No person shall conduct business as a credit repair services organization without first having obtained a license from the commissioner and paying a five hundred dollar application fee.

D.(1)  No license shall be issued unless the commissioner, upon investigation, finds that the financial responsibility, character, and fitness of the applicant, its owners, its partners if the applicant is a partnership, its members if the applicant is a limited liability company, and its officers and directors if the applicant is a corporation, are such as to warrant a belief that the business will be conducted honestly and fairly within the purposes of this Part.  The commissioner may grant restricted or conditional licenses.

(2)(a)  Upon written request, an applicant may seek a hearing on the question of his qualification for a license if either:

(i)  The commissioner has notified the applicant in writing that his application has been denied.

(ii)  The commissioner has not issued a license within sixty days of the date a complete application was filed.

(b)  A request for a hearing may not be made more than thirty days after the applicant has received the written notice notifying him that the application was denied and stating the commissioner's findings in support of the denial of the application.

E.  Every application for a license shall contain such information as the commissioner may require to determine if the applicant qualifies for a license.

F.  Annually by November first each credit repair services organization shall file a renewal application and pay a renewal fee of four hundred dollars.  An annual renewal application received by the commissioner postmarked after December first shall be accompanied by a late filing fee of two hundred dollars, in addition to the annual renewal fee.

G.  If the annual renewal application and renewal fee is not received postmarked by December thirty-first, the license shall lapse without a hearing or notification, and the license shall not be reinstated; however, the person whose license has lapsed may apply for a new license.  No new license shall be issued upon the filing of a new application by any person against whom any penalty or fee has been imposed unless and until such penalty or fee previously accrued under this Section has been paid.

H.  A license cannot be sold or transferred by any means.

I.  A credit repair services organization shall not change location or change its name without prior written approval of the commissioner.  A fee of one hundred dollars is required to change a location or name.  In addition to the one hundred dollar fee, a penalty of two hundred dollars shall be paid if prior written approval is not obtained.

J.(1)  Any person whose application, or renewal application, for licensure under this Part, has been denied for any reason, may not reapply for a license under this Part until after at least three years from the date of the order of denial, unless the commissioner, in his sole discretion, prescribes an earlier or later date.

(2)  For purposes of this Subsection,  the term "order" shall mean the first to occur of either:

(a)  The date of the issuance of the commissioner's notification of denial of the person's application; or

(b)  Sixty days after the filing of that application.

(3)  For purposes of this Subsection, the term "person" shall mean the applicant, its owners, and its members if the applicant is a limited liability company, its partners if the applicant is a partnership, its officers and directors if the applicant is a corporation, and any other person determined by the commissioner, in his sole discretion, to be closely related to the person.

K.(1)  No person shall acquire or control a credit repair service organization license through the acquisition or control of more than fifty percent of the ownership interest in a licensee without first having obtained written approval from the commissioner, pursuant to an application for a change of control in ownership of the licensee, filed in the manner and on a form prescribed by the commissioner and accompanied by a fee of three hundred dollars.  Any person who acquires controlling interest in a licensee without first having filed an application for change of control with the commissioner shall be deemed to be operating without proper authority and subject to the penalties of this Part.

(2)  For the purposes of this Section, a person acquires or controls the licensee when at least one of the following conditions exists:

(a)  The person, directly or acting through one or more other persons, owns, controls, or has the power to vote more than fifty percent of any class of stock of the corporation.

(b)  The person controls, in any manner, the election of a majority of the directors of the corporation.

(c)  The commissioner determines, after notice and an opportunity for hearing, that the person directly or indirectly exercises a controlling influence over the management or the policies of the licensee.

(3)  When the licensee is a limited liability company or a limited liability partnership, the licensee is acquired or controlled if one of the following occurs:

(a)  There is a change of managers or general partners.

(b)  An existing manager or general partner acquires or controls the licensee as provided in Paragraph (2) of this Subsection.

(c)  The commissioner determines that there has been a significant change in the membership or partnership interests, including but not limited to a change in ownership or control, directly or indirectly affecting twenty-five percent or more of the total interest of the licensee.

(4)  A corporation that is a licensee shall notify the commissioner within sixty days of a stockholder becoming a principal stockholder, which is defined for purposes of this Section as owning ten percent or greater of the outstanding stock of the corporation.

Acts 1992, No. 345, §1; Acts 2003, No. 1027, §1, eff. Dec. 31, 2003; Acts 2006, No. 190, §1.