Chapter 056
2010 -- S 2398 SUBSTITUTE A AS
AMENDED
Enacted 06/12/10
A N A C T
RELATING TO FINANCIAL INSTITUTIONS -- LICENSED ACTIVITIES
Introduced By: Senator Joshua Miller
Date Introduced: February 11, 2010
It is enacted by the
General Assembly as follows:
SECTION 1. Sections 19-14-1, 19-14-3, and 19-14-22 of the
General Laws in Chapter
19-14 entitled
"Licensed Activities" are hereby amended to
read as follows:
19-14-1.
Definitions. -- Unless otherwise specified, the
following terms shall have the
following meanings throughout chapters 14, 14.1, 14.2,
14.3, 14.4, 14.6, 14.8 and 14.10 of this
title:
(1) "Check"
means any check, draft, money order, personal money order, or other
instrument for the transmission or payment of money. For the
purposes of check cashing,
travelers checks or foreign denomination instruments shall not
be considered checks. "Check
cashing" means providing currency for checks;
(2) "Deliver"
means to deliver a check to the first person who in payment for the check
makes or purports to make a remittance of or against the
face amount of the check, whether or not
the deliverer also charges a fee in addition to the face
amount, and whether or not the deliverer
signs the check;
(3) "Electronic
money transfer" means receiving money for transmission within the
United States or to locations abroad by any means
including, but not limited to, wire, facsimile or
other electronic transfer system;
(4) (i) "Lender" means any
person who makes or funds a loan within this state with the
person's own funds, regardless of whether the person is the
nominal mortgagee or creditor on the
instrument evidencing the loan;
(ii) A loan is made or
funded within this state if any of the following conditions exist:
(A) The loan is secured
by real property located in this state;
(B) An application for
a loan is taken by an employee, agent, or representative of the
lender within this state;
(C) The loan closes
within this state;
(D) The loan
solicitation is done by an individual with a physical presence in this state;
or
(E) The lender
maintains an office in this state.
(iii) The term
"lender" shall also include any person engaged in a transaction
whereby
the person makes or funds a loan within this state using
the proceeds of an advance under a line
of credit over which proceeds the person has dominion
and control and for the repayment of
which the person is unconditionally liable. This
transaction is not a table funding transaction. A
person is deemed to have dominion and control over the
proceeds of an advance under a line of
credit used to fund a loan regardless of whether:
(A) The person may,
contemporaneously with or shortly following the funding of the
loan, assign or deliver to the line of credit lender one
or more loans funded by the proceeds of an
advance to the person under the line of credit;
(B) The proceeds of an
advance are delivered directly to the settlement agent by the line
of credit lender, unless the settlement agent is the
agent of the line of credit lender;
(C) One or more loans
funded by the proceeds of an advance under the line of credit is
purchased by the line of credit lender; or
(D) Under the circumstances
as set forth in regulations adopted by the director or the
director's designee pursuant to this chapter;
(5)
"Licensee" means any person licensed under this chapter;
(6) "Loan"
means any advance of money or credit including, but not limited to:
(i)
Loans secured by mortgages;
(ii) Insurance premium
finance agreements;
(iii) The purchase or
acquisition of retail installment contracts or advances to the holders
of those contracts;
(iv)
Educational loans;
(v) Any other advance
of money; or
(vi)
Any transaction such as those commonly known as "pay day
loans," "pay day
advances," or "deferred presentment loans," in
which a cash advance is made to a customer in
exchange for the customer's personal check, or in exchange for
the customer's authorization to
debit the customer's deposit account, and where the parties
agree either that the check will not be
cashed or deposited, or that customer's deposit account will
not be debited, until a designated
future date.
(7) "Loan
broker" means any person who, for compensation or gain, or in the
expectation
of compensation or gain, either directly or indirectly,
solicits, processes, negotiates, places or sells
a loan within this state for others in the primary
market, or offers to do so. A loan broker shall
also mean any person who is the nominal mortgagee or
creditor in a table funding transaction. A
loan is brokered within this state if any of the following
conditions exist:
(i)
The loan is secured by real property located in this state;
(ii) An application for
a loan is taken or received by an employee, agent or representative
of the loan broker within this state;
(iii) The loan closes
within this state;
(iv)
The loan solicitation is done by an individual with a physical presence
in this state;
or
(v) The loan broker
maintains an office in this state.
(8) "Personal
money order" means any instrument for the transmission or payment of
money in relation to which the purchaser or remitter
appoints or purports to appoint the seller as
his or her agent for the receipt, transmission, or
handling of money, whether the instrument is
signed by the seller or by the purchaser or remitter or some
other person;
(9) "Primary
market" means the market in which loans are made
to borrowers by lenders,
whether or not through a loan broker or other conduit;
(10) "Principal
owner" means any person who owns, controls, votes or has a beneficial
interest in, directly or indirectly, ten percent (10%) or more
of the outstanding capital stock
and/or equity interest of a licensee;
(11) "Sell"
means to sell, to issue, or to deliver a check;
(12) "Small
loan" means a loan of less than five thousand dollars ($5,000), not
secured
by real estate, made pursuant to the provisions of
chapter 14.2 of this title;
(13) "Small loan
lender" means a lender engaged in the business of making small loans
within this state;
(14) "Table
funding transaction" means a transaction in which there is a
contemporaneous advance of funds by a lender and an assignment by the
mortgagee or creditor of
the loan to the lender;
(15) "Check
casher" means a person or entity that, for compensation, engages, in whole
or in part, in the business of cashing checks;
(16) "Deferred
deposit transaction" means any transaction such as those commonly
known as "pay-day loans," "pay-day advances,"
or "deferred presentment loans" in which a cash
advance is made to a customer in exchange for the customer's
personal check or in exchange for
the customer's authorization to debit the customer's
deposit account and where the parties agree
either that the check will not be cashed or deposited, or
that the customer's deposit account will
not be debited until a designated future date;
(17) "Insurance
premium finance agreement" means an agreement by which an insured,
or prospective insured, promises to pay to an insurance
premium finance company the amount
advanced or to be advanced, under the agreement to an insurer
or to an insurance producer, in
payment of a premium or premiums on an insurance contract or
contracts, together with interest
and a service charge, as authorized and limited by this
title;
(18) "Insurance
premium finance company" means a person engaged in the business of
making insurance premium finance agreements or acquiring
insurance premium finance
agreements from other insurance premium finance companies;
(19) "Simple
interest" means interest computed on the principal balance outstanding
immediately prior to a payment for the actual number of days
between payments made on a loan
over the life of a loan;
(20) "Nonprofit
organization" means a corporation qualifying as a 26 U.S.C. section
501(c)(3) nonprofit
organization, in the operation of which no member, director, officer, partner,
employee, agent, or other affiliated person profits
financially other than receiving reasonable
salaries if applicable;
(21) "Mortgage
loan originator" has the same meaning set forth in subdivision 19-14.10-
3(6);
(22) "Mortgage
loan" means a loan secured in whole or in part by real property located
in this state;
(23) "Loan
solicitation" shall mean an effectuation, procurement, delivery and offer,
and
advertisement of a loan. Loan solicitation also includes providing
or accepting loan applications
and assisting persons in completing loan applications and/or
advising, conferring, or informing
anyone regarding the benefits, terms and/or conditions of a
loan product or service. Loan
solicitation does not include loan processing or loan underwriting
as defined in this section. Loan
solicitation does not include telemarketing which is defined for
purposes of this section to mean
contacting a person by telephone with the intention of
collecting such person's name, address and
telephone number for the sole purpose of allowing a mortgage
loan originator to fulfill a loan
inquiry;
(24)
"Processes" shall mean, with respect to a loan, any of a series of
acts or functions
including the preparation of a loan application and supporting
documents performed by a person
which leads to or results in the acceptance, approval,
denial, and/or withdrawal of a loan
application, including, without limitation, the rendering of
services including loan underwriting,
obtaining verifications, credit reports or appraisals,
communicating with the applicant and/or the
lender or loan broker, and/or other loan processing and
origination services for consideration by a
lender or loan broker. Loan processing does not include the
following:
(A) Providing loan
closing services;
(B) Rendering of credit
reports by an authorized credit reporting agency; and
(C) Rendering of
appraisal services.
(25) "Loan
underwriting" shall mean a loan process that involves the analysis of risk
with respect to the decision whether to make a loan to a
loan applicant based on credit,
employment, assets, and other factors including evaluating a
loan applicant against a lender's
various lending criteria for creditworthiness, making a
determination for the lender as to whether
the applicant meets the lender's pre-established credit
standards and/or making a recommendation
regarding loan approval;
(26)
"Negotiates" shall mean, with respect to a loan, to confer directly
with or offer
advice directly to a loan applicant or prospective loan
applicant for a loan product or service
concerning any of the substantive benefits, terms, or conditions
of the loan product or service;
(27) "Natural
person employee" shall mean any natural person performing services as a
bona-fide employee for a person licensed under the provisions
of
section 19-14-1, et. seq., in return for a salary, wage, or
other consideration, where such salary,
wage, or consideration is reported by the licensee on a
federal form W-2 payroll record. The term
does not include any natural person or business entity
performing services for a person licensed
under the provisions of
consideration, where such salary, wage, or consideration is
reported by the licensee on a federal
form 1099;
(28) "Bona-fide
employee" shall mean an employee of a licensee who works under the
oversight and supervision of the licensee;
(29) "Oversight
and supervision of the licensee" shall mean that the licensee provides
training to the employee, sets the employee's hours of work,
and provides the employee with the
equipment and physical premises required to perform the
employee's duties;
(30) "Operating
subsidiary" shall mean a majority-owned subsidiary of a financial
institution or banking institution that engages only in
activities permitted by the parent financial
institution or banking institution;
(31) "Provisional
employee" means a natural person who, pursuant to a written
agreement between the natural person and a wholly owned
subsidiary of a financial holding
company, as defined in The Bank Holding Company Act of 1956,
as amended, a bank holding
company, savings bank holding company, or thrift holding
company, is an exclusive agent for the
subsidiary with respect to mortgage loan originations, and the
subsidiary: (a) holds a valid loan
broker's license and (b) enters into a written agreement with
the director or the director's designee
to include:
(i)
An "undertaking of accountability" in a form prescribed by the
director or the
director's designee, for all of the subsidiary's exclusive
agents to include full and direct financial
and regulatory responsibility for the mortgage loan
originator activities of each exclusive agent as
if said exclusive agent was an employee of the
subsidiary;
(ii) A business plan to
be approved by the director or the director's designee, for the
education of the exclusive agents, the handling of consumer
complaints related to the exclusive
agents, and the supervision of the mortgage loan origination
activities of the exclusive agents;
(iii) A restriction of
the exclusive agents' mortgage loan originators' activities to loans to
be made only by the subsidiary's affiliated bank; and
(32) "Multi-state
licensing system" means a system involving one or more states, the
regulatory information and the licensing, application, reporting
and payment processes, by
electronic or other means, for mortgage lenders and loan
brokers, and other licensees required to
be licensed under this chapter.
(33) "Negative
equity" means the difference between the value of an asset and the
outstanding portion of the loan taken out to pay for the asset,
when the latter exceeds the former
amount.
(34) "Loan closing
services" means providing title services, including title searches, title
examinations, abstract preparation, insurability determinations, and
the issuance of title
commitments and title insurance policies, conducting loan
closings, and preparation of loan
closing documents when performed by or under the supervision
of a licensed attorney, licensed
title agency, of licensed title insurance company.
19-14-3.
Application for license. -- (a) The
application for a license shall be in the form
prescribed by the director and shall contain the name and
address or addresses where the business
of the applicant is located and if the applicant is a
partnership, association, corporation or other
form of business organization, the names and addresses of
each member, director and principal
officer thereof or any individual acting in the capacity of
the manager of an office location. Such
application shall also include a description of the activities of
the applicant, in such detail and for
such periods as the director may require, as well as such
further information as the director may
require. The director may require a background investigation
of each applicant for a license by
means of fingerprint checks pursuant to
14, utilizing the federal bureau of investigation, or
other agency as determined by the director for
state and national criminal history record checks. If the
applicant is a partnership, association,
corporation or other form of business organization, the director
may require a background
investigation by means of fingerprint checks on each member,
director, trustee or principal officer
of such applicant or and any individual
acting in the capacity of the manager of an office location.
The director will determine by rule those items of
information appearing on a criminal records
check that will constitute disqualifying information and
therefore render the applicant ineligible
for licensing under this chapter in accordance with the
provisions of section 19-14-7. Receipt of
criminal history record information by a private entity is
prohibited. Each application for a license
shall be accompanied by an investigation fee. The applicant
at the time of making application
shall pay to the director or the director's designee the
sum of one half (1/2) of the annual license
fee as a fee for investigating the application. If the
application for license is approved, the
applicant shall pay a fee equal to the annual license fee as
provided in this chapter. The license
shall be continuous and the license fee shall cover the
period through December 31 of each year.
The annual license fee for any application approved
after November 1 of any given year shall
satisfy the annual license fee requirement through the end of
the next succeeding calendar year
ending December 31. The director or the director's designee
is authorized to participate in a
multi-state licensing system for licensees. The director may
establish requirements for
participation by an applicant for a license or a person licensed
under this chapter. Any such
requirements that may be established by the director shall be
published on the website of the
department of business regulation. Upon implementation,
participation by an applicant for a
license or by a person licensed under the provisions of this
chapter shall be mandatory. The
applicant may be required to an additional fee for a license or
other participation in such multi-
state licensing system.
(b) [Reserved].
(c) [Reserved].
(d) Any license issued
under the provisions of former section 5-66-2 shall remain in full
force and effect until its expiration and shall be subject
to the provisions of this chapter.
(e) An applicant for
issuance of a mortgage loan originator license shall file with the
director or the director's designee evidence acceptable to the
director or the director's designee
that said applicant has complied with the provisions of
sections 19-14.10-5, 19-14.10-7 and 19-
14.10-8.
19-14-22.
Reporting requirements. -- (a) Each
licensee shall annually on or before
March 31 file a report with the director or the
director's designee giving any relevant information
that the director or the director's designee may
reasonably require concerning the business and
operations during the preceding calendar year of each licensed
place of business conducted by the
licensee within the state. The report shall be made under oath
and shall be in a form prescribed by
the director or the director's designee. At the time of
filing each report, the sum of fifty-five
dollars ($55.00) per license and fifty-five dollars ($55.00)
per branch certificate shall be paid by
the licensee to the director for the use of the state.
Any licensee who shall delay transmission of
any report required by the provisions of this title
beyond the limit, unless additional time is
granted, in writing, for good cause, by the director or the
director's designee, shall pay a penalty
of twenty-five dollars ($25) for each day of the delay.
In lieu of a report by any licensed mortgage
loan originator, the director or the director's designee
may accept a report by the licensed lender
or licensed loan broker who employed the licensed
mortgage loan originator for the activities of
the licensed mortgage loan originator while employed by
such lender or loan broker during the
applicable calendar year.
(b) Any licensee shall,
within twenty-four (24) hours after actual knowledge, notify the
director or the director's designee, in writing, of the
occurrence of any of the following events: the
institution of bankruptcy, receivership, reorganization or
insolvency proceedings regarding a
licensee, the institution of any adverse government action
against a licensee, or any felony
indictment or conviction of any licensee or any officers,
directors, owners, employees, members
or partners thereof, as the case may be.
(c) Each mortgage loan
originator licensee shall, on or before March 31, 2010 and every
March 31st thereafter, file with the director or the
director's designee evidence acceptable to the
director or the director's designee that said loan originator
licensee has filed with the nationwide
mortgage licensing system and registry a report of condition,
which shall be in such form and
shall contain such information as the nationwide mortgage
licensing system and registry may
require along with evidence that the licensee, during the
twelve (12) months immediately
preceding March 31, satisfied the requirements of section
19-14.10-10 with respect to continuing
education.
(d) Both the mortgage
loan originator and his or her licensed employer shall promptly
notify the director or the director's designee, in writing,
within fifteen (15) business days of the
termination of employment or services of a mortgage loan
originator.
SECTION 2. Sections 19-14.10-3, 19-14.10-4 and 19-14.10-6 of
the General Laws in
Chapter 19-14.10 entitled
"An Act Adopting the Federal Secure and Fair Enforcement for
Mortgage Licensing Act of
2009" are hereby amended to read as follows:
19-14.10-3.
Definitions. -- For purposes of this chapter, the
following definitions shall
apply:
(1) "Depository
institution" has the same meaning as in section 3 of the Federal Deposit
Insurance Act, and includes any credit union.
(2) "Federal
banking agencies" means the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Director
of the Office of Thrift Supervision, the
National Credit Union Administration,
and the Federal Deposit Insurance Corporation.
(3) "Immediate
family member" means a spouse, child, sibling, parent, grandparent, or
grandchild. This includes stepparents, stepchildren,
stepsiblings, and adoptive relationships.
(4) "Individual"
means a natural person.
(5) (i) "Loan processor or
underwriter" means an individual who performs clerical or
support duties as an employee at the direction of and subject
to the supervision and instruction of
a person licensed as a lender or as a loan broker, or
exempt from licensing under chapters 19-14,
or 19-14.1.
(ii) For purposes of
subsection (5)(i),
"clerical or support duties" may include subsequent
to the receipt of an application:
(A) The receipt,
collection, distribution, and analysis of information common for the
processing or underwriting of a residential mortgage loan; and
(B) Communicating with
a consumer to obtain the information necessary for the
processing or underwriting of a loan, to the extent that such
communication does not include
offering or negotiating loan rates or terms, or counseling
consumers about residential mortgage
loan rates or terms.
(iii) Representatives
to the public. - An individual engaging solely in loan processor or
underwriter activities, shall not represent to the public,
through advertising or other means of
communicating or providing information including the use of
business cards, stationery,
brochures, signs, rate lists, or other promotional items, that
such individual can or will perform
any of the activities of a mortgage loan originator.
(6) (i) "Mortgage loan
originator" means:
(A) An individual who,
for compensation or gain or in the expectation of compensation
or gain:
(I) Takes a residential
mortgage loan application; or
(II) Offers or
negotiates terms of a residential mortgage loan;
(B) Does not include an
individual engaged solely as a loan processor or underwriter
except as otherwise provided in subsection 19-14.10(c)
19-14.10-4(c);
(C) Does not include a
person or entity that only performs real estate brokerage activities
and is licensed or registered in accordance with
compensated by a lender, a mortgage broker, or other mortgage
loan originator or by any agent of
such lender, mortgage broker, or other mortgage loan
originator;
(D) Does not include a
person or entity solely involved in extensions of credit relating to
timeshare plans, as that term is defined in section 101(53D) of
title 11, United States Code, as
amended; and
(E) Does not include a
person (or its employees) engaged in servicing mortgage loans.
For purposes of this exclusion, "servicing
mortgage loans" means, on behalf of the note holder,
collecting and receiving payments, including payments of
principal, interest, escrow amounts,
and other sums due, on obligations due and owing to the
note holder pursuant to a residential
mortgage loan, and, when the borrower is in default, or in
reasonably foreseeable likelihood of
default, working with the borrower on behalf of the note
holder and pursuant to the contract
between the person servicing mortgage loans and the note
holder, to modify but not refinance,
either temporarily or permanently, the obligations, or
otherwise finalizing collection of the
obligation through the foreclosure process.
(ii) "Real estate
brokerage activity" means any activity that involves offering or
providing real estate brokerage services to the public,
including:
(A) Acting as a real
estate agent or real estate broker for a buyer, seller, lessor,
or lessee
of real property;
(B) Bringing together
parties interested in the sale, purchase, lease, rental, or exchange
of real property;
(C) Negotiating, on
behalf of any party, any portion of a contract relating to the sale,
purchase, lease, rental, or exchange of real property (other
than in connection with providing
financing with respect to any such transaction);
(D) Engaging in any
activity for which a person engaged in the activity is required to be
registered or licensed as a real estate agent or real
estate broker under any applicable law; and
(E) Offering to engage
in any activity, or act in any capacity, described in subparagraphs
(A), (B), (C), or (D) of this
section.
(7) "Nationwide
Mortgage Licensing System and Registry" means a mortgage licensing
system developed and maintained by the conference of state
bank supervisors and the American
association of residential mortgage regulators for the licensing
and registration of licensed
mortgage loan originators.
(8)
"Nontraditional mortgage product" means any mortgage product other
than a thirty
(30) year fixed rate
mortgage.
(9) "Person"
means a natural person, corporation, company, limited liability company,
partnership, association, or any other entity however organized.
(10) "Registered
mortgage loan originator" means any individual who:
(i)
Meets the definition of mortgage loan originator and is an employee of:
(A) A depository
institution;
(B) A subsidiary that
is:
(I) Owned and
controlled by a depository institution; and
(II) Regulated by a
Federal banking agency; or
(C) An institution
regulated by the farm credit administration; and
(D) Is registered with,
and maintains a unique identifier through, the nationwide
mortgage licensing system and registry.
(11) "Residential
mortgage loan" means any loan primarily for personal, family, or
household use that is secured by a mortgage, deed of trust, or
other equivalent consensual security
interest on a dwelling (as defined in section 103(v) of the
Truth in Lending Act) or residential real
estate upon which is constructed or intended to be
constructed a dwelling (as so defined).
(12) "Residential
real estate" means any real property located in
which is constructed or intended to be constructed a
dwelling.
(13) "Unique
identifier" means a number or other identifier assigned by protocols
established by the nationwide mortgage licensing system and
registry.
19-14.10-4.
License and registration required. -- (a) An
individual, unless specifically
exempted from this chapter under subsection (b) of this
section, shall not engage in the business
of a mortgage loan originator with respect to any
dwelling located in this state without first
obtaining and maintaining annually a license under this
chapter. Each licensed mortgage loan
originator must register with and maintain a valid unique
identifier issued by the nationwide
mortgage licensing system and registry.
(b) The following individuals
are exempt from this chapter:
(1) Registered mortgage
loan originators, when acting for an entity described in
subparagraphs 19-14.10-3(10)(A), (B), or (C) are exempt from this
chapter.
(2) Any individual who
offers or negotiates terms of a residential mortgage loan with or
on behalf of an immediate family member of the
individual.
(3) Any individual who
offers or negotiates terms of a residential mortgage loan secured
by a dwelling that served as the individual's residence.
(4) A licensed attorney
who negotiates the terms of a residential mortgage loan on behalf
of a client as an ancillary matter to the attorney's
representation of the client, unless the attorney
is compensated by a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other mortgage loan
originator.
(5) A licensed attorney
when performing loan closing services for a licensed lender,
licensed loan broker, or for an entity exempt from licensing
under subdivision 19-14.1-10(a)(4);
(c) A An individual loan processor or underwriter
who is an independent contractor may
not engage in the activities of a loan processor or
underwriter unless such independent contractor
loan processor or underwriter obtains and maintains a
license under chapters 19-14 or 19-14.1
and 19-14.10.
Each independent contractor loan processor or underwriter licensed as a
mortgage
loan originator must have and maintain a valid unique
identifier issued by the nationwide
mortgage licensing system and registry.
(d) For the purposes of
implementing an orderly and efficient licensing process the
director or the director's designee may establish licensing
rules or regulations and interim
procedures for licensing and acceptance of applications. For
previously registered or licensed
individuals the director or the director's designee may establish
expedited review and licensing
procedures as follows:
(1) A mortgage loan
originator applicant whose employer at the time of application for a
mortgage loan originator license is an entity described in
subparagraphs 19-14.10-3(10)(A), (B),
or (C) and who has been assigned a unique identifier
through the nationwide mortgage licensing
system and registry and who has completed and filed with the
director or the director's designee
all information, documents and requirements for licensure
pursuant to this chapter shall be
permitted to continue to act as a mortgage loan originator for
the period prior to action being
taken on his or her application by the director or the
director's designee;
(2) A mortgage loan
originator applicant who has been assigned a unique identifier
through the nationwide mortgage licensing system and registry
and who has completed and filed
with the director or the director's designee all
information, documents and requirements for
licensure pursuant to this chapter and whose employer at the
time of application for a mortgage
loan originator license is a lender or loan broker
licensed under chapter 19-14 and 19-14.1, shall
be permitted to continue to act as a mortgage loan
originator for the period prior to action being
taken on his or her application by the director or
director's designee if the applicant and a senior
officer or principal of such lender or loan broker files
written attestation to the director or the
director's designee that:
(i)
The applicant is currently or has within the six (6) month period prior to the
date of
the application been acting as a registered mortgage loan
originator in this state or as a state-
licensed mortgage loan originator in another state, in either
case under the provisions of Section
1507 of the SAFE Act;
(ii) The applicant has
never had a mortgage loan license or registration denied, revoked,
or suspended in any governmental jurisdiction; and
(iii) the applicant has not been convicted of a felony that would
otherwise authorize the
director or the director's designee to deny the applicant a
license.
(3) Any provisional
authority to act as a mortgage loan originator issued pursuant to this
subsection (d) shall expire on the earlier of: (i) The date on which the director or the director's
designee issues or denies the application for the license; or
(ii) One hundred twenty (120) days
from the date of application for the license.
(4) The director or the
director's designee may deny or suspend the rights of a lender or
loan broker licensed under chapter 19-14 or 19-14.1 to
employ a mortgage loan originator under
this subsection (d) if the director or the director's
designee finds that such lender or loan broker, a
senior official or principal thereof, or the applicant
failed to exercise due diligence and good faith
when submitting the attestations required in subdivision
(d)(1) or (d)(2) above.
19-14.10-6.
Issuance of license. -- The director or the
director's designee shall not
approve a mortgage loan originator license unless the
director or the director's designee makes at
a minimum the following findings:
(1) The applicant has
never had a mortgage loan originator license revoked in any
governmental jurisdiction, except that a subsequent formal
vacation of such revocation shall not
be deemed a revocation.
(2) The applicant has
not been convicted of, or pled guilty or nolo contendere to, a
felony in a domestic, foreign, or military court:
(i)
During the seven (7) year period preceding the date of the application for
licensing
and registration; or
(ii) At any time
preceding such date of application, if such felony involved an act of
fraud, dishonesty, or a breach of trust, or money
laundering.
(iii) Pardon of a
conviction shall not be a conviction for purposes of this subsection.
(3) The applicant has
demonstrated financial responsibility, character, and general fitness
such as to command the confidence of the community and to
warrant a determination that the
mortgage loan originator will operate honestly, fairly, and
efficiently within the purposes of this
chapter.
(i)
For purposes of this subsection a person has shown that he or she is not
financially
responsible when he or she has shown a disregard in the
management of his or her own financial
condition. A determination that an individual has not shown
financial responsibility may include,
but not be limited to:
(i)(A) Current outstanding judgments,
except judgments solely as a result of medical
expenses;
(ii)(B)
Current outstanding tax liens or other government liens and filings;
(iii)(C)
Foreclosures within the past three years;
(iv)(D)
A pattern of seriously delinquent accounts within the past three (3) years.
(d)(4)
The applicant has completed the pre-licensing education requirement described
in
section 19-14.10-7.
(e)(5)
The applicant has passed a written test that meets the test requirement
described in
section 19-14.10-8.
(f)(6)
The applicant has met the net worth or surety bond requirements required
pursuant
to section 19-14.10-14.
SECTION 3. This act shall take effect upon passage.
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LC01565/SUB A
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