OAR 441-880-0008: Criteria for Determining if Nonprofit Organization is Bona Fide

As required by 12 C.F.R. § 1008.103(e)(7)(ii), a bona fide nonprofit organization is an organization that meets all of the following criteria: (1) The nonprofit organization has been granted a tax-exempt status under section 501(c)(3) of the Internal Revenue Code of 1986, 26 U.S.C. § 501(c)(3). (2) The nonprofit organization promotes affordable housing, provides homeownership education, or provides similar services. (3) The nonprofit organization conducts its activities in a manner that serves public or charitable purposes. (a) The director may consider the following activities conclusive when making a determination under this section: (A) Making loans for the purpose of providing assistance for downpayments, closing costs, or other home purchase subsidies; (B) Making loans for the purpose of funding housing rehabilitation projects; (C) Making loans for the purpose of providing energy efficiency assistance; or (D) Making loans for the purpose of avoiding or preventing foreclosure. (b) For purposes of this section, organizations that engage in the brokering of mortgage loans in a manner that would require a license under ORS 86A.100(5) will not be considered to have conclusively met the presumption in subsection (a). (4) The nonprofit organization charges no more in fees than is necessary to support the organization’s loan origination program activities. The director may consider recordation fees, application fees and housing counseling fees that together do not exceed one percent of the principal of loan as conclusive when making a determination under this section. (5) The nonprofit organization compensates its employees in a manner that does not incentivize employees to act other than in the best interests of the borrower. For purposes of this section, compensation based on loan volume, loan terms, or other measures of performance will not be considered to have conclusively met the presumption that the nonprofit organization compensates employees in a manner that does not incentivize employees to act other than in the best interests of the borrower. (6) The nonprofit organization provides for the borrower residential mortgage loans that are consistent with loan origination in a public or charitable context, that contain terms in the best interest of the borrower, and that are comparable to mortgage loans and housing assistance provided under government housing assistance programs. The director may consider any one of the following loan terms conclusive when making a determination that a loan is made in the best interest of the borrower: (a) Loan terms that do not charge a recipient for the accrual of interest; (b) Loan terms that charge interest at below market rates; (c) Loan terms that require a borrower to qualify for the loan by the contribution of sweat equity; (d) Loan terms that forgive repayment in whole or in part, whether over a period of time, on a specified date, or subject to ownership or occupancy conditions; or (e) Loan terms that defer repayment for a minimum amount of time, until the residential dwelling is sold, or until the recipient no longer occupies the residential dwelling. This subsection does not apply to home equity conversion mortgages, commonly known as reverse mortgages. (f) A loan whose terms restrict the use of the property by the borrower to the borrower’s principal residence shall not be deemed to be a term that is unfavorable to the borrower so long as the loan otherwise qualifies under subsections (a) through (e) of this rule. (7) The nonprofit organization requires or provides to employees subject to 441-880-0006 training on state and federal fair lending laws and consumer protection laws that are relevant to the loan origination services that the nonprofit organization provides to its borrowers. The director may consider training in one or more of the following laws directly related to the nonprofit organization’s loan origination activities conclusive when making a determination under this section: (a) The Equal Credit Opportunity Act, 15 U.S.C. § 1601 et seq. and Regulation B, 12 C.F.R. Part 1002. (b) The Truth in Lending Act, 15 U.S.C. § 1601 et seq. and Regulation Z, 12 C.F.R. Part 1026. (c) The Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. and Regulation V, 12 C.F.R. Part 1022. (d) The Home Ownership and Equity Protection Act, 15 U.S.C. § 1639 et seq. (e) The Home Mortgage Disclosure Act, 12 U.S.C. § 2801 et seq. and Regulation C, 12 C.F.R. Part 1003. (f) The Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. and regulations implementing the Act, 12 C.F.R. Part 1024. (g) The Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. and Regulation F, 12 C.F.R. Part 1006. (h) Portions of the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801-6809 and §§ 6821-6827, and regulations implementing the Act, 12 C.F.R. Part 1016, that relate to the privacy of consumers' personal financial information. (i) The S.A.F.E. Mortgage Licensing Act of 2008, 12 U.S.C. § 5101 et seq., and regulations implementing the Act, 12 C.F.R. Part 1008. (8) The nonprofit organization requires a state criminal records check of each individual employed by the nonprofit organization to engage, in whole or in part, in loan origination activities. (9) The nonprofit organization requires or provides continuing education on state and federal fair lending laws and consumer protection laws referenced under section (7) of this rule that are relevant to the loan origination services that the nonprofit organization provides to its borrowers. (10) The nonprofit organization implements and administers a complaint process that, at a minimum, provides a process for receiving complaints from borrowers and creates a record of the resolution of the complaint, if any.