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May 2, 2017

Nevada Attorney General Opinion States Purchase of RISCs Does Not Trigger Chapter 675 Licensing

The Nevada Attorney General has issued an opinion clarifying that when a financial institution purchases a retail installment sales contract from a vehicle dealer whose financing activities are governed exclusively by Chapter 97 of the Nevada Revised Statutes (which governs retail installment transactions) it does not need to be licensed under Chapter 675 (which governs installment lending).

The Nevada Financial Institutions Division asked the attorney general whether a financial institution that purchases or takes an assignment of a RISC from a vehicle dealer, by virtue of the assignment alone, must obtain a lenders license under Chapter 675. In its April 17, 2017 opinion, the attorney general answered that no person or financial institution in this scenario must be licensed under Chapter 675. The attorney general reasoned that because the definition of "retail seller" in Nevada Revised Statutes ยง 97.125(1) includes an "assignee," the purchaser of the RISC is governed by Chapter 97 in the same way as a retail seller. Thus, the assignee stands in the shoes of the retail seller and Chapter 97 is the exclusive regulatory scheme applicable to that scenario. Therefore, a Chapter 675 license is not required for those entities that purchase or take assignment of RISCs governed by Chapter 97.