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Below is a list of frequently asked questions relating to the new rules affecting loan brokers, 710 IAC 1-22. If you do not see your question on this list, please e-mail the Secretary of State, Securities Division, at sshambaugh@sos.in.gov or call (800) 223 - 8791. If you would like more information about one of these questions, you are encouraged to contact your attorney for guidance specific to your business.

1. Must wages and/or commissions be reported on IRS form W2 or may IRS form 1099 be used?
   
   Both the Loan Broker Act and the rules provide that originators are "employees" of the loan broker licensee. Thus, the Secretary of State, Securities Division, considers the licensee responsible for the actions of its originators. Tax treatment of originators is beyond the jurisdiction of the Secretary of State, Securities Division. The licensee may wish to refer questions on tax treatment to its tax preparer.
2. I don't control my originators' work schedules so how can I consider them employees?
   
   Please also see the Question and Answer for No. 1. The Secretary of State, Securities Division, will treat the originator as being under the direction and control of the licensee for the purposes of supervision.
3. When did the rules go into effect?
   
   The rules went into effect on February 18, 2006.
4. If I have a new originator that has already taken an on-line or a correspondence course, is that still acceptable?
   
   Yes. The rules went into effect February 18, 2006, but will not be published in the Indiana Register until March 1, 2006. We will accept courses taken on or before March 1, 2006.
5. May my new originator purchase an on-line or correspondence course prior to March 1, 2006, but not complete it until after March 1, 2006?
   
   No. The course must be completed on or before March 1, 2006.
6. What if the person has already started the course?
   
   The person should complete the course prior to March 1, 2006.
7. Does the Secretary of State, Securities Division, have a list of courses that fulfill the initial education requirement, including the Indiana and federal law requirement?
   

   Yes, the most current course list may be found at www.in.gov/sos/securities/public.html. This list distinguishes between courses offered in live or other formats and those courses that satisfy the Indiana and federal law requirements required by Ind. Admin. Code 710 IAC 1-22-4(b).

8. Does the Secretary of State, Securities Division, provide a sample of the required loan broker agreement?
   
   The rules do not prescribe a particular form for the loan broker agreement. They merely prescribe certain terms that must be included in the loan broker agreement. The loan broker is permitted to use any loan broker agreement as long as it includes the required terms.
9. I have not kept the original registration certificates for my originators. Do I need to get replacement certificates? What should I do upon termination of that originator?
   
   The rules are prospective and not retrospective. A licensee does not need to apply for replacement certificates. If the licensee does not have the original certificate that was issued prior to February 18, 2006, the licensee will just need to submit a written explanation as to why the original cannot be returned to the Secretary of State, Securities Division, when the originator is terminated.