ENROLLED
COMMITTEE SUBSTITUTE
FOR
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 532
(Senators Minard, Jenkins and Kessler, original sponsors)
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[Passed April 9, 2009; to take effect July 1, 2009.]
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AN ACT to amend and reenact §31-17-1, §31-17-2, §31-17-3, §31-17-4,
§31-17-5, §31-17-7, §31-17-11, §31-17-12, §31-17-13 and
§31-17-20 of the Code of West Virginia, 1931, as amended; to
amend said code by adding thereto a new article, designated
§31-17A-1, §31-17A-2, §31-17A-3, §31-17A-4, §31-17A-5,
§31-17A-6, §31-17A-7, §31-17A-8, §31-17A-9, §31-17A-10,
§31-17A-11, §31-17A-12, §31-17A-13, §31-17A-14, §31-17A-15,
§31-17A-16, §31-17A-17, §31-17A-18, §31-17A-19 and §31-17A-20;
and to amend and reenact §46A-4-102 of said code, all relating
to the Division of Banking's participation in the Nationwide
Mortgage Licensing System and Registry; complying with the
SAFE Mortgage Licensing Act; amending and creating
definitions; exempting federally insured depository
institutions from broker licensing; allowing the Division of Banking to participate in the Nationwide Mortgage Licensing
System and Registry; permitting the Nationwide Mortgage
Licensing System and Registry to process background and credit
checks on behalf of the Commissioner of Banking; creating a
tiered bond structure for licensed lenders and brokers;
reducing the license processing time for lenders and brokers;
requiring a new application for certain changes in control of
mortgage licensees; clarifying the fee for licensee office
relocation; synchronizing the mortgage annual report
requirement with the Nationwide Mortgage Licensing System and
Registry; outlining the purpose of the West Virginia SAFE
Mortgage Licensing Act; defining terms associated with the
SAFE Mortgage Licensing Act; requiring licensing and
registration of mortgage loan originators; creating an
application procedure for mortgage loan originators with
minimum standards; requiring prelicensure education of
mortgage loan originators; implementing a prelicensure testing
requirement for mortgage loan originators; explaining
standards for mortgage loan originator license renewal;
clarifying annual continuing education requirements for
mortgage loan originators; granting the commissioner authority
to require mortgage loan originator licensing through the
Nationwide Mortgage Licensing System and Registry; requiring
the commissioner to create a challenge process for the
Nationwide Mortgage Licensing System and Registry; creating
enforcement authority for mortgage loan originators; defining violations and penalties of the SAFE Mortgage Licensing Act;
requiring a surety bond to cover licensed mortgage loan
originators that is tied to the amount of mortgage
originations by each lender, broker or regulated consumer
lender licensee; creating confidentiality provisions; granting
investigation and examination authority to the Commissioner of
Banking for violations of the SAFE Mortgage Licensing Act;
outlining prohibited acts and practices for mortgage loan
originators; requiring the Commissioner of Banking to report
to the Nationwide Mortgage Licensing System and Registry;
clarifying the use of unique identifiers; creating a
severability section; defining effective dates; requiring the
licensure of mortgage loan originators employed by licensed
regulated consumer lenders; and implementing a bond
requirement for regulated consumer lenders that originate
mortgage loans.
Be it enacted by the Legislature of West Virginia:
That §31-17-1, §31-17-2, §31-17-3, §31-17-4, §31-17-5,
§31-17-7, §31-17-11, §31-17-12, §31-17-13 and §31-17-20 of the Code
of West Virginia, 1931, as amended, be amended and reenacted; that
said code be amended by adding thereto a new article, designated
§31-17A-1, §31-17A-2, §31-17A-3, §31-17A-4, §31-17A-5, §31-17A-6,
§31-17A-7, §31-17A-8, §31-17A-9, §31-17A-10, §31-17A-11,
§31-17A-12, §31-17A-13, §31-17A-14, §31-17A-15, §31-17A-16,
§31-17A-17, §31-17A-18, §31-17A-19 and §31-17A-20; and that
§46A-4-102 of said code be amended and reenacted, all to read as follows:
CHAPTER 31. CORPORATIONS.
ARTICLE 17. WEST VIRGINIA RESIDENTIAL MORTGAGE LENDER, BROKER AND
SERVICER ACT.
§31-17-1. Definitions and general provisions.
As used in this article:
(a) "Additional charges" means every type of charge arising
out of the making or acceptance of a primary or subordinate
mortgage loan, except finance charges, including, but not limited
to, official fees and taxes, reasonable closing costs and certain
documentary charges and insurance premiums and other charges which
definition is to be read in conjunction with and permitted by
section one hundred nine, article three, chapter forty-six-a of
this code;
(b) "Affiliated" means persons under the same ownership or
management control. As to corporations, limited liability
companies or partnerships, where common owners manage or control a
majority of the stock, membership interests or general partnership
interests of one or more such corporations, limited liability
companies or partnerships, those persons are considered affiliated.
In addition, persons under the ownership or management control of
the members of an immediate family shall be considered affiliated.
For purposes of this section, "immediate family" means mother,
stepmother, father, stepfather, sister, stepsister, brother,
stepbrother, spouse, child and grandchildren;
(c) "Amount financed" means the total of the following items
to the extent that payment is deferred:
(1) The cash price of the goods, services or interest in land,
less the amount of any down payment, whether made in cash or in
property traded in;
(2) The amount actually paid or to be paid by the seller
pursuant to an agreement with the buyer to discharge a security
interest in or a lien on property traded in; and
(3) If not included in the cash price:
(A) Any applicable sales, use, privilege, excise or
documentary stamp taxes;
(B) Amounts actually paid or to be paid by the seller for
registration, certificate of title or license fees; and
(C) Additional charges permitted by this article;
(d) "Applicant" means a person who has applied for a lender or
broker license;
(e) "Broker" means any person acting in the regular course of
business who, for a fee or commission or other consideration,
negotiates or arranges, or who offers to negotiate or arrange, or
originates or assigns a primary or subordinate mortgage loan
between a lender and a borrower. A person is considered to be
acting in the regular course of business if he or she negotiates or
arranges, or offers to negotiate or arrange, or originates,
processes or assigns any primary or subordinate mortgage loans in
any one calendar year; or if he or she seeks to charge a borrower
or receive from a borrower money or other valuable consideration in any primary or subordinate mortgage transaction before completing
performance of all broker services that he or she has agreed to
perform for the borrower;
(f) "Brokerage fee" means the fee or commission or other
consideration charged by a broker or loan originator for the
services described in subdivision(e) of this section;
(g) "Commissioner" means the Commissioner of Banking of this
state;
(h) "Finance charge" means the sum of all interest and similar
charges payable directly or indirectly by the debtor imposed or
collected by the lender incident to the extension of credit as
coextensive with the definition of "loan finance charge" set forth
in section one hundred two, article one, chapter forty-six-a of
this code;
(i) "Lender" means any person who makes or offers to make or
accepts or offers to accept or purchases or services any primary or
subordinate mortgage loan in the regular course of business. A
person is considered to be acting in the regular course of business
if he or she makes or accepts, or offers to make or accept, any
primary or subordinate mortgage loans in any one calendar year;
(j) "Licensee" means any person duly licensed by the
commissioner under the provisions of this article or article
seventeen-a of this chapter as a lender, broker or mortgage loan
originator;
(k) "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 brokers and lenders licensed
under this article and mortgage loan originators licensed under
article seventeen-a of this chapter;
(l) "Person" means an individual, partnership, association,
trust, corporation or any other legal entity, or any combination
thereof;
(m) "Primary 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;
(n) "Servicing" or "servicing a residential mortgage loan"
means through any medium or mode of communication the collection or
remittance for, or the right or obligation to collect or remit for
another lender, note owner or noteholder, payments of principal,
interest, including sales finance charges in a consumer credit
sale, and escrow items as insurance and taxes for property subject
to a residential mortgage loan; and
(o) "Subordinate 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 and is subject to the lien of one or more
prior recorded mortgages or deeds of trust."
§31-17-2. License required for lender and broker originator;
exemptions.
(a) A person may not engage in this state in the business of
lender or broker unless and until he or she first obtains a license
to do so from the commissioner, which license remains unexpired,
unsuspended and unrevoked, and no foreign corporation may engage in
business in this state unless it is registered with the Secretary
of State to transact business in this state.
(b) All mortgage loan originators, as that term is defined by
section two, article seventeen-a of this chapter, shall obtain a
mortgage loan originator license pursuant to said article.
(c) Brokerage fees, additional charges and finance charges
imposed by licensed mortgage brokers, lenders and loan originators
are exempt from the tax imposed by article fifteen, chapter eleven
of this code beginning on January 1, 2004.
(d) The provisions of this article do not apply to loans made
by the following:
(1) Federally insured depository institutions;
(2) Regulated consumer lender licensees;
(3) Insurance companies;
(4) Any other lender under the regular supervision and
examination for consumer compliance of any agency of the federal
government;
(5) Any agency or instrumentality of this state, federal,
county or municipal government or on behalf of the agency or
instrumentality;
(6) By a nonprofit community development organization making
mortgage loans to promote home ownership or improvements for the
disadvantaged which loans are subject to federal, state, county or
municipal government supervision and oversight; or
(7) Habitat for Humanity International, Inc., and its
affiliates providing low-income housing within this state. Loans
made subject to this exemption may be assigned, transferred, sold
or otherwise securitized to any person and shall remain exempt from
the provisions of this article, except as to reporting requirements
in the discretion of the commissioner where the person is a
licensee under this article. Nothing herein shall prohibit a
broker licensed under this article from acting as broker of an
exempt loan and receiving compensation as permitted under the
provisions of this article.
(e) The provisions of this article do not apply to loans
brokered by a federally insured depository institution.
(f) A person or entity designated in subsection (d) of this
section may take assignments of a primary or subordinate mortgage
loan from a licensed lender and the assignments of said loans that
they themselves could have lawfully made as exempt from the
provisions of this article under this section do not make that
person or entity subject to the licensing, bonding, reporting or
other provisions of this article except as the defense or claim would be preserved pursuant to section one hundred two, article
two, chapter forty-six-a of this code.
(g) The placement or sale for securitization of a primary or
subordinate mortgage loan into a secondary market by a licensee may
not subject the warehouser or final securitization holder or
trustee to the provisions of this article: Provided, That the
warehouser, final securitization holder or trustee under an
arrangement is either a licensee, or person or entity entitled to
make exempt loans of that type under this section, or the loan is
held with right of recourse to a licensee.
§31-17-3. Supervision by Commissioner of Banking; rules and
regulations; personnel; participation in the
Nationwide Mortgage Licensing System and Registry.
(a) It shall be the duty of the commissioner to enforce the
provisions of this article and, to implement and make effective
such provisions, he or she is hereby authorized and empowered to
promulgate reasonable rules in accordance with the provisions of
article three, chapter twenty-nine-a of this code and to employ
such personnel as may be necessary.
(b) The commissioner may participate in the Nationwide
Mortgage Licensing System and Registry and permit such system to
process applications for mortgage lender and mortgage broker
licenses in this state and receive and maintain records related to
such licenses that are allowed or required to be maintained by the
commissioner. The commissioner is authorized to establish relationships or contracts with the Nationwide Mortgage Licensing
System and Registry or other entities designated by the Nationwide
Mortgage Licensing System and Registry to collect and maintain
records and process transaction fees or other fees related to
licensees subject to this article. The Nationwide Mortgage
Licensing System and Registry shall transfer electronically all
fees payable to the Division of Banking directly to the credit of
the commissioner's special revenue account with the State
Treasurer.
(c) Mortgage lenders and brokers licensed pursuant to this
article shall submit renewals for calendar year 2010 on or before
October 1, 2009, in accordance with the amendments to this article
and on a form prescribed by the commissioner. Beginning January 2,
2010, licensees shall transition to the Nationwide Mortgage
Licensing System and Registry according to the terms established by
that system.
§31-17-4. Applications for licenses; requirements; bonds; fees;
renewals; waivers and reductions; per loan fee.
(a) In connection with an application for licensing as a
mortgage lender or mortgage broker, the applicant shall, at a
minimum, furnish to the Nationwide Mortgage Licensing System and
Registry information concerning the applicant's identity,
including:
(1) Fingerprints for submission to the Federal Bureau of
Investigation and any governmental agency or entity authorized to receive such information for a state, national and international
criminal history background check; and
(2) Personal history and experience in a form prescribed by
the Nationwide Mortgage Licensing System and Registry and the
commissioner, including the submission of authorization for the
Nationwide Mortgage Licensing System and Registry and the
commissioner to obtain:
(A) An independent credit report obtained from a consumer
reporting agency described in Section 603(p) of the Fair Credit
Reporting Act; and
(B) Information related to any administrative, civil or
criminal findings by any governmental jurisdiction.
(b) In order to reduce the points of contact which the Federal
Bureau of Investigation may have to maintain for purposes of this
article, the commissioner may use the Nationwide Mortgage Licensing
System and Registry or its designated vendor as a channeling agent
for requesting information from and distributing information to the
Department of Justice or any governmental agency.
(c) In order to reduce the points of contact which the
commissioner may have to maintain, for purposes of this article,
the commissioner may use the Nationwide Mortgage Licensing System
and Registry as a channeling agent for requesting and distributing
information to and from any source so directed by the commissioner.
(d) Application for a lender's or broker's license shall each
year be submitted under oath, in the form prescribed by the
commissioner, and shall contain the full name and address of the applicant and, if the applicant is a partnership, limited liability
company or association, of every member thereof, and, if a
corporation, of each officer, director and owner of ten percent or
more of the capital stock thereof and further information as the
commissioner may reasonably require. Background and credit checks
shall be conducted in accordance with this section for any officer,
director or owner, directly or indirectly, of ten percent or more
of the capital stock of a corporation or any member of a limited
liability or partnership with, directly or indirectly, a ten
percent or greater ownership interest. Any application shall also
disclose the location at which the business of lender or broker is
to be conducted.
(e) At the time of making application for a lender's license,
the applicant therefor shall:
(1) If a foreign corporation, submit a certificate from the
Secretary of State certifying that the applicant is registered with
the Secretary of State to transact business in this state;
(2) Submit proof that he or she has available for the
operation of the business at the location specified in the
application net worth of at least $250,000;
(3) File with the commissioner a bond in favor of the state
for the benefit of consumers or for a claim by the commissioner for
an unpaid civil administrative penalty or an unpaid examination
invoice in the amount of $100,000 for licensees with West Virginia
annual loan originations of $0 to $3 million, $150,000 for West
Virginia annual loan originations greater than $3 million and up to $10 million, and $250,000 for West Virginia annual loan
originations over $10 million in a form and with conditions as the
commissioner may prescribe and executed by a surety company
authorized to do business in this state: Provided, That lender
licensees who service West Virginia mortgage loans shall file with
the commissioner a bond under the same conditions listed above in
the amount of $200,000;
(4) Pay to the commissioner a license fee of $1,250 plus the
actual cost of fingerprint processing and the processing fees
assessed by the Nationwide Mortgage Licensing System and Registry.
If the commissioner shall determine that an investigation outside
this state is required to ascertain facts or information relative
to the applicant or information set forth in the application, the
applicant may be required to advance sufficient funds to pay the
estimated cost of the investigation. An itemized statement of the
actual cost of the investigation outside this state shall be
furnished to the applicant by the commissioner and the applicant
shall pay or shall have returned to him or her, as the case may be,
the difference between his or her payment in advance of the
estimated cost and the actual cost of the investigation; and
(5) Submit a full and complete disclosure of any litigation or
unresolved complaint filed by a governmental authority or class
action lawsuit on behalf of consumers relating to the operation of
the license applicant.
(f) At the time of making application for a broker's license,
the applicant therefor shall:
(1) If a foreign corporation, submit a certificate from the
Secretary of State certifying that the applicant is registered with
the Secretary of State to transact business in this state;
(2) Submit proof that he or she has available for the
operation of the business at the location specified in the
application net worth of at least $10,000;
(3) File with the commissioner a bond in favor of the state
for the benefit of consumers or for a claim by the commissioner for
an unpaid civil administrative penalty or an unpaid examination
invoice in the amount of $50,000 for licensees with West Virginia
loan originations of $0 to $3 million, $75,000 for West Virginia
loan originations greater than $3 million and up to $10 million,
and $100,000 for West Virginia loan originations over $10 million
in a form and with conditions as the commissioner may prescribe and
executed by a surety company authorized to do business in this
state: Provided, That the bond must be in the amount of $150,000
before a broker may participate in a table-funded residential
mortgage loan;
(4) Pay to the commissioner a license fee of $350 plus the
actual cost of fingerprint processing and the processing fees
assessed by the Nationwide Mortgage Licensing System and Registry;
and
(5) Submit a full and complete disclosure of any litigation or
unresolved complaint filed by a governmental authority or class
action lawsuit on behalf of consumers relating to the operation of
the license applicant.
(g) The aggregate liability of the surety on any bond given
pursuant to the provisions of this section shall in no event exceed
the amount of the bond.
(h) Nonresident lenders and brokers licensed under this
article by their acceptance of the license acknowledge that they
are subject to the jurisdiction of the courts of West Virginia and
the service of process pursuant to section one hundred
thirty-seven, article two, chapter forty-six-a of this code and
section thirty-three, article three, chapter fifty-six of this
code.
(i) The commissioner may elect to reduce or waive the
application fees, bond amounts and net worth requirements imposed
by this section for nonprofit corporations whose residential
mortgage lending or brokering activities provide housing primarily
to households or persons below the HUD-established median income
for their area of residence.
(j) Every broker and lender licensee shall pay a fee of $5 for
each residential mortgage loan originated, made or brokered in a
calendar year. This fee shall be paid annually to the Division of
Banking and remitted with the report required pursuant to
subsection (b), section eleven of this article for loans made,
brokered or originated during the previous calendar year. If a
licensee ceases operation, it shall remit any fees due since the
last reporting period when it relinquishes its license.
(k) If a claim for a consumer restitution is pending on a bond
required pursuant to this section when the commissioner makes a claim for a civil administrative penalty or an unpaid examination
invoice, the consumer claim shall be resolved before any payments
may be made for an unpaid penalty or examination invoice.
§31-17-5. Refusal or issuance of license.
(a) Upon an applicant's full compliance with the provisions of
section four of this article, the commissioner shall investigate
the relevant facts with regard to the applicant and his or her
application for a lender's or broker's license, as the case may be.
Upon the basis of the application and all other information before
him or her, the commissioner shall make and enter an order denying
the application and refusing the license sought if the commissioner
finds that:
(1) The applicant does not have available the net worth
required by the provisions of section four of this article, if
applicable;
(2) The financial responsibility, character, reputation,
experience or general fitness of the applicant, including its
officers, directors, principals and employees, reasonably warrants
the belief that the business will not be operated lawfully and
properly in accordance with the provisions of this article; and
(3) The applicant has done any act or has failed or refused to
perform any duty or obligation for which the license sought could
be suspended or revoked were it then issued and outstanding.
Otherwise, the commissioner shall issue to the applicant a
lender's or broker's license which shall entitle the applicant to
engage in the business of lender or broker, as the case may be, during the period, unless sooner suspended or revoked, for which
the license is issued.
(b) Every application for a lender's or broker's license shall
be passed upon and the license issued or refused within sixty days
after the applicant therefor has fully complied with the provisions
of this article. Under no circumstances whatever may a person or
licensee act as a broker and lender in the same transaction.
Whenever an application for a lender's or broker's license is
denied and the license sought is refused, which refusal has become
final, the commissioner shall retain all fees to cover
administrative costs of processing the broker or lender
application.
§31-17-7. License not transferable or assignable; license may not
be franchised; renewal of license.
(a) A license may not be transferable or assignable. A
licensee may not offer a franchise under that license to another
person. The commissioner may allow licensees to have branch
offices without requiring additional licenses provided the location
of all branch offices is registered with the Division of Banking by
the licensee. Whenever a licensee changes his or her place of
business to a location other than that set forth in his or her
license and branch registration, he or she shall give written
notice thirty days prior to such change to the commissioner and pay
a relocation fee of $100 for each office relocation.
(b) Every lender's or broker's license shall, unless sooner suspended or revoked, expire on December 31 of each year and any
license may be renewed each year in the same manner, for the same
license fee or fees specified above and upon the same basis as an
original license is issued in accordance with the provisions of
this article. All applications for the renewal of licenses shall
be filed with the Nationwide Mortgage Licensing System and Registry
according to the renewal schedule published for the system, but no
later than sixty days before the expiration thereof.
(c) Any change in control of a licensee whereby equitable
interest of fifty percent or more is transferred to an outside
party, a new application must be submitted according to this
article.
§31-17-11. Records and reports; examination of records; analysis.
(a) Every lender and broker licensee shall maintain at his or
her place of business in this state, if any, or if he or she has no
place of business in this state, at his or her principal place of
business outside this state, such books, accounts and records
relating to all transactions within this article as are necessary
to enable the commissioner to enforce the provisions of this
article. All the books, accounts and records shall be preserved,
exhibited to the commissioner and kept available as provided herein
for the reasonable period of time as the commissioner may by rules
require. The commissioner is hereby authorized to prescribe by
rules the minimum information to be shown in the books, accounts
and records.
(b) Each licensee shall file with the commissioner a report under oath or affirmation concerning his or her business and
operations in this state for the preceding license year upon
participation in the Nationwide Mortgage Licensing System and
Registry and on a date established by the Nationwide Mortgage
Licensing System and Registry. For license years 2008 and 2009,
all licensees shall submit an annual report to the Division of
Banking on or before March 15, 2009, and March 15, 2010,
respectively, on a form prescribed by the commissioner.
(c) The commissioner may, at his or her discretion, make or
cause to be made an examination of the books, accounts and records
of every lender or broker licensee pertaining to primary and
subordinate mortgage loans made in this state under the provisions
of this article, for the purpose of determining whether each lender
and broker licensee is complying with the provisions hereof and for
the purpose of verifying each lender or broker licensee's annual
report. If the examination is made outside this state, the
licensee shall pay the cost thereof in like manner as applicants
are required to pay the cost of investigations outside this state.
(d) The commissioner shall publish annually an aggregate
analysis of the information furnished in accordance with the
provisions of subsection (b) or (c) of this section, but the
individual reports are not public records and may not be open to
public inspection.
(e) The commissioner may enter into cooperative and
information-sharing agreements with regulators in other states or
with federal authorities to discharge his or her responsibilities under this article.
§31-17-12. Grounds for suspension or revocation of license;
suspension and revocation generally; reinstatement or
new license.
(a) The commissioner may suspend or revoke any broker or
lender license issued hereunder if he or she finds that the
licensee or any owner, director, officer, member, partner,
stockholder, employee or agent of the licensee:
(1) Has knowingly violated any provision of this article or
any order, decision or rule of the commissioner lawfully made
pursuant to the authority of this article;
(2) Has knowingly made any material misstatement in the
application for the license;
(3) Does not have available the net worth required by the
provisions of section four of this article, if applicable;
(4) Has failed or refused to keep the bond required by this
article in full force and effect, if applicable;
(5) In the case of a foreign corporation, does not remain
qualified to do business in this state;
(6) Has committed any fraud or engaged in any dishonest
activities with respect to any mortgage loan business in this state
or failed to disclose any of the material particulars of any
mortgage loan transaction in this state to anyone entitled to the
information; or
(7) Has otherwise demonstrated bad faith, dishonesty or any other quality indicating that the business of the licensee in this
state has not been or will not be conducted honestly or fairly
within the purpose of this article. It shall be a demonstration of
bad faith and an unfair or deceptive act or practice to engage in
a pattern of making loans where the consumer has insufficient
sources of income to timely repay the debt and the lender had the
primary intent to acquire the property upon default rather than to
derive profit from the loan. This section may not limit any right
the consumer may have to bring an action for a violation of section
one hundred four, article six, chapter forty-six-a of this code in
an individual case.
The commissioner may also suspend or revoke the license of a
licensee if he or she finds the existence of any ground upon which
the license could have been refused or any ground which would be
cause for refusing a license to the licensee were he or she then
applying for the same. The commissioner may also suspend or revoke
the license of a licensee pursuant to his or her authority under
section thirteen, article two, chapter thirty-one-a of this code.
(b) The suspension or revocation of the license of any
licensee does not impair or affect the obligation of any
preexisting lawful mortgage loan between the licensee and any
obligor.
(c) The commissioner may reinstate a suspended license, or
issue a new license to a licensee whose license has been revoked,
if the grounds upon which any license was suspended or revoked have
been eliminated or corrected and the commissioner is satisfied that the grounds are not likely to recur.
(d) In addition to the authority conferred under this section,
the commissioner may impose a fine or penalty not exceeding $1000
upon any lender or broker required to be licensed under this
chapter who the commissioner determines has violated any of the
provisions of this chapter. For the purposes of this section, each
separate violation is subject to the fine or penalty herein
prescribed and each day after the date of notification, excluding
Sundays and holidays, that an unlicensed person engages in the
business or holds himself or herself out to the general public as
a mortgage lender or broker shall constitute a separate violation.
§31-17-13. Notice of refusal, or suspension or revocation, of
license; relinquishing license.
(a) Whenever the commissioner refuses to issue a license, or
suspends or revokes a license, he shall make and enter an order to
that effect and shall cause a copy of the order to be served in
person or by certified mail, return receipt requested, or in any
other manner in which process in a civil action in this state may
be served, on the applicant or licensee, as the case may be. The
commissioner shall also submit a copy of any such order for
publication by the Nationwide Mortgage Licensing System and
Registry.
(b) It shall be the duty of the licensee to comply with any
such order: (i) Immediately if the license was suspended either
following a hearing or for failure to keep the bond required by the provisions of section four of this article in full force and
effect; or otherwise (ii) following expiration of the period
provided in section fourteen of this article in which such
licensee, if not previously provided the opportunity to a hearing
on the matter, may demand a hearing before the commissioner without
such demand having been timely made.
§31-17-20. Effective date.
The amendments to this article enacted during the regular
session of the Legislature in the year 2009 shall be effective as
of July 1, 2009.
ARTICLE 17A. WEST VIRGINIA SAFE MORTGAGE LICENSING ACT.
§31-17A-1. Purpose.
The activities of mortgage loan originators and the
origination or offering of financing for residential real property
have a direct, valuable and immediate impact upon West Virginia's
consumers, West Virginia's economy, the neighborhoods and
communities of West Virginia and the housing and real estate
industry. The Legislature finds that accessibility to mortgage
credit is vital to the state's citizens. The Legislature also
finds that it is essential for the protection of the citizens of
West Virginia and the stability of West Virginia's economy that
reasonable standards for licensing and regulation of the business
practices of mortgage loan originators be imposed. The Legislature
further finds that the obligations of mortgage loan originators to
consumers in connection with originating or making residential mortgage loans are such as to warrant the regulation of the
mortgage lending process. The purpose of this article is to
protect consumers seeking mortgage loans and to ensure that the
mortgage lending industry is operating without unfair, deceptive
and fraudulent practices on the part of mortgage loan originators.
§31-17A-2. Definitions.
For purposes of this article, the following definitions shall
apply:
(1) "Depository institution" has the same meaning as in
section three of the Federal Deposit Insurance Act and includes any
federally insured 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) "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 or exempt from licensing under article seventeen of this
chapter.
(A) For purposes of this subsection, "clerical or support
duties" may include subsequent to the receipt of an application: (i) The receipt, collection, distribution and analysis of
information common for the processing or underwriting of a
residential mortgage loan; and (ii) 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.
(B) 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) "Mortgage loan originator" means an individual who for
compensation or gain or in the expectation of compensation or gain
takes a residential mortgage loan application or offers or
negotiates terms of a residential mortgage loan and is sponsored by
a mortgage lender, broker or regulated consumer lender licensed by
the Division of Banking.
(A) "Mortgage loan originator" does not include:
(i) An individual engaged solely as a loan processor or
underwriter except as otherwise provided in section three of this
article;
(ii) A person or entity that only performs real estate brokerage activities and is licensed or registered in accordance
with West Virginia law, unless the person or entity 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;
(iii) 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; and
(iv) A manufactured or modular home retailer employee who
performs purely administrative or clerical tasks and who receives
only the customary salary or commission from the employer in
connection with the sales transaction.
(7) "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 subsection (1), (2), (3) or (4) of this
section.
(8) "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 mortgage brokers and lenders licensed pursuant to
article seventeen of this chapter and mortgage loan originators
licensed pursuant to this article.
(9) "Nontraditional mortgage product" means any mortgage
product other than a fixed rate mortgage.
(10) "Person" means a natural person, corporation, company,
limited liability company, partnership or association.
(11) "Registered mortgage loan originator" means any
individual who:
(A) Meets the definition of mortgage loan originator and is an
employee of:
(i) A depository institution;
(ii) A subsidiary that is:
(1) Owned and controlled by a depository institution; and
(2) Regulated by a federal banking agency; or
(iii) An institution regulated by the Farm Credit
Administration; and
(B) Is registered with, and maintains a unique identifier
through, the Nationwide Mortgage Licensing System and Registry.
(12) "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.
(13) "Residential real estate" means any real property located
in West Virginia, upon which is constructed or intended to be
constructed a dwelling.
(14) "Unique identifier" means a number or other identifier
assigned by protocols established by the Nationwide Mortgage
Licensing System and Registry.
§31-17A-3. License and registration required.
(a) An individual, unless specifically exempted under
subsection (c) 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 article. Each licensed mortgage loan originator
must register with and maintain a valid unique identifier issued by
the Nationwide Mortgage Licensing System and Registry.
(b) To facilitate an orderly transition to licensing and
minimize disruption in the mortgage marketplace, the effective date
for subsection (a) of this section:
(1) For all individuals other than individuals described in
subdivision (2) of this subsection shall be January 31, 2010; and
(2) For all individuals licensed as mortgage loan originators before July 1, 2009, shall be January 1, 2011.
(c) The following are exempt from this article:
(1) Registered Mortgage Loan Originators, when acting for an
entity described in subdivision (11), section two of this article;
(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; and
(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.
(d) A 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 subsection (a) of
this section. 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.
(e) To implement an orderly and efficient licensing and
transition process, the commissioner may establish interim policies and procedures for licensing and acceptance of applications as
follows:
(1) Mortgage loan originators employed by or under exclusive
contract to licensed mortgage brokers after the effective date of
this article shall submit an application on a form prescribed by
the commissioner, including all necessary information, fees and
authorizations for investigation as the commissioner may determine
necessary, and must meet the standards for licensure set forth in
this article. Any license issued under this subdivision and any
license current as of the effective date of this article will
expire on December 31, 2010: Provided, That notwithstanding the
licensing requirements under this section, an individual acting
exclusively as an employee of a servicer who is engaging in loss
mitigation efforts with respect to an existing mortgage transaction
serviced by his or her employer is not required to meet the
education, testing, background and licensing standards of this
article until July 1, 2011, to the extent that this extension of
time is not denied by guideline, rule, regulation or interpretive
letter issued by the United States Department of Housing and Urban
Development. In the event this extension of time is denied, such
individuals shall apply for a license under this section within
ninety days of the denial; and
(2) Mortgage loan originators employed by or under exclusive
contract to licensed mortgage lenders and regulated consumer
lenders shall comply with this article and submit all applications
through the Nationwide Mortgage Licensing System and Registry on or before January 31, 2010.
§31-17A-4. State license application and issuance.
(a) Applicants for a license must apply in a form as
prescribed by the commissioner. Each form shall contain content as
set forth by instruction or procedure of the commissioner and may
be changed or updated as necessary by the commissioner in order to
carry out the purposes of this article. The application must be
submitted with an application fee of $50 plus the actual cost of
fingerprint processing, together with any processing fee assessed
by the Nationwide Mortgage Licensing System and Registry.
(b) The commissioner is authorized to establish relationships
or contracts with the Nationwide Mortgage Licensing System and
Registry or other entities designated by the Nationwide Mortgage
Licensing System and Registry to collect and maintain records and
process transaction fees or other fees related to licensees or
other persons subject to this article.
(c) In connection with an application for licensing as a
mortgage loan originator, the applicant shall, at a minimum,
furnish to the Nationwide Mortgage Licensing System and Registry
information concerning the applicant's identity, including:
(1) Fingerprints for submission to the Federal Bureau of
Investigation and any governmental agency or entity authorized to
receive such information for a state, national and international
criminal history background check; and
(2) Personal history and experience in a form prescribed by
the Nationwide Mortgage Licensing System and Registry and the commissioner, including the submission of authorization for the
Nationwide Mortgage Licensing System and Registry and the
commissioner to obtain:
(A) An independent credit report obtained from a consumer
reporting agency described in Section 603(p) of the Fair Credit
Reporting Act; and
(B) Information related to any administrative, civil or
criminal findings by any governmental jurisdiction.
(d) To reduce the points of contact which the Federal Bureau
of Investigation may have to maintain, the commissioner may use the
Nationwide Mortgage Licensing System and Registry or its designated
vendor as a channeling agent for requesting information from and
distributing information to the Department of Justice or any
governmental agency.
(e) To reduce the points of contact which the commissioner may
have to maintain, the commissioner may use the Nationwide Mortgage
Licensing System and Registry as a channeling agent for requesting
and distributing information to and from any source so directed by
the commissioner.
(f) Nonresident mortgage loan originators licensed under this
article by their acceptance of the license acknowledge that they
are subject to the jurisdiction of the courts of West Virginia and
the service of process pursuant to section one hundred
thirty-seven, article two, chapter forty-six-a of this code and
section thirty-three, article three, chapter fifty-six of this
code.
§31-17A-5. Issuance of license.
The commissioner may not issue a mortgage loan originator
license unless the commissioner makes at a minimum the following
findings:
(a) The applicant has never had a mortgage loan originator
license revoked in any governmental jurisdiction, except that a
subsequent formal vacation of the revocation may not be considered
a revocation.
(b) The applicant has not been convicted of, or pled guilty or
nolo contendere to, a felony in a domestic, foreign or military
court: Provided, That any pardon of a conviction may not be a
conviction for purposes of this subsection:
(1) During the seven-year period preceding the date of the
application for licensing and registration; or
(2) At any time preceding the date of application if the
felony involved an act of fraud, dishonesty or a breach of trust,
or money laundering.
(c) 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 article.
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.
The commissioner shall not use a credit score as the sole basis for license denial. A determination that an individual has not shown
financial responsibility may include, but not be limited to:
(1) Current outstanding judgments, except judgments solely as
a result of medical expenses;
(2) Current outstanding tax liens or other government liens
and filings;
(3) Foreclosures within the past three years; and
(4) A pattern of seriously delinquent accounts within the past
three years.
(d) The applicant has completed the prelicensing education
requirement described in section six of this article.
(e) The applicant has passed a written test that meets the
test requirement described in section seven of this article.
(f) The applicant has met the surety bond requirement as
required pursuant to section thirteen of this article.
§31-17A-6. Prelicensing and relicensing education of loan
originators.
(a) To meet the prelicensing education requirement, a person
must complete at least twenty hours of education approved in
accordance with subsection (b) of this section, which shall include
at least:
(1) Three hours of federal law and regulations;
(2) Three hours of ethics, which shall include instruction on
fraud, consumer protection and fair lending issues;
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace; and
(4) Two hours of training related to West Virginia mortgage
and consumer laws or issues.
(b) For purposes of subsection (a) of this section,
prelicensing education courses shall be reviewed and approved by
the Nationwide Mortgage Licensing System and Registry based upon
reasonable standards. Review and approval of a prelicensing
education course shall include review and approval of the course
provider.
(c) Nothing in this section precludes any prelicensing
education course, as approved by the Nationwide Mortgage Licensing
System and Registry, that is provided by the employer of the
applicant or an entity which is affiliated with the applicant by an
agency contract, or any subsidiary or affiliate of such employer or
entity.
(d) Prelicensing education may be offered either in a
classroom, online or by any other means approved by the Nationwide
Mortgage Licensing System and Registry.
(e) The prelicensing education requirements approved by the
Nationwide Mortgage Licensing System and Registry in subdivisions
(1), (2), (3) and (4), subsection (a) of this section for any state
shall be accepted as credit towards completion of prelicensing
education requirements in West Virginia.
(f) A person previously licensed under this article subsequent
to July 1, 2009, applying to be licensed again must prove that they have completed all of the continuing education requirements for the
year in which the license was last held.
§31-17A-7. Testing of loan originators.
(a) To meet the written test requirement, an individual must
pass, in accordance with the standards established under this
subsection, a qualified written test developed by the Nationwide
Mortgage Licensing System and Registry and administered by a test
provider approved by the Nationwide Mortgage Licensing System and
Registry based upon reasonable standards.
(b) A written test may not be treated as a qualified written
test for purposes of subsection (a) of this section unless the test
adequately measures the applicant's knowledge and comprehension in
appropriate subject areas, including:
(1) Ethics;
(2) Federal law and regulation pertaining to mortgage
origination;
(3) State law and regulation pertaining to mortgage
origination; and
(4) Federal and state law and regulation, including
instruction on fraud, consumer protection, the nontraditional
mortgage marketplace and fair lending issues.
(c) Nothing in this section prohibits a test provider approved
by the Nationwide Mortgage Licensing System and Registry from
providing a test at the location of the employer of the applicant
or the location of any subsidiary or affiliate of the employer of
the applicant or the location of any entity with which the applicant holds an exclusive arrangement to conduct the business of
a mortgage loan originator.
(d) An individual may not be considered to have passed a
qualified written test unless the individual achieves a test score
of not less than seventy-five percent correct answers to questions.
(e) An individual may retake a test three consecutive times
with each consecutive taking occurring at least thirty days after
the preceding test. After failing three consecutive tests, an
individual must wait at least six months before taking the test
again.
(f) A licensed mortgage loan originator who fails to maintain
a valid license for a period of five consecutive years or longer
must retake the test, not taking into account any time during which
the individual is a registered mortgage loan originator.
§31-17A-8. Standards for license renewal.
(a) The minimum standards for license renewal for mortgage
loan originators shall include the following:
(1) The mortgage loan originator continues to meet the minimum
standards for license issuance under section five of this article;
(2) The mortgage loan originator has satisfied the annual
continuing education requirements described in section nine of this
article; and
(3) The mortgage loan originator has paid all required fees
for renewal of the license.
(b) The license of a mortgage loan originator failing to
satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of
expired licenses consistent with the standards established by the
Nationwide Mortgage Licensing System and Registry.
§31-17A-9. Continuing education for mortgage loan originators.
(a) To meet the annual continuing education requirements, a
licensed mortgage loan originator must complete at least eight
hours of education approved in accordance with subsection (b) of
this section, which shall include at least:
(1) Three hours of federal law and regulations;
(2) Two hours of ethics, which shall include instruction on
fraud, consumer protection and fair lending issues;
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace; and
(4) One hour of West Virginia law or regulations.
(b) For purposes of subsection (a) of this section, continuing
education courses shall be reviewed and approved by the Nationwide
Mortgage Licensing System and Registry based upon reasonable
standards. Review and approval of a continuing education course
shall include review and approval of the course provider.
(c) Nothing in this section precludes any education course, as
approved by the Nationwide Mortgage Licensing System and Registry,
that is provided by the employer of the mortgage loan originator or
an entity which is affiliated with the mortgage loan originator by
an agency contract, or any subsidiary or affiliate of the employer
or entity.
(d) Continuing education may be offered either in a classroom,
online or by any other means approved by the Nationwide Mortgage
Licensing System and Registry.
(e) A licensed mortgage loan originator:
(1) Except for subsection (b), section eight of this article
and subsection (i) of this section, may only receive credit for a
continuing education course in the year in which the course is
taken; and
(2) May not take the same approved course in the same or
successive years to meet the annual requirements for continuing
education.
(f) A licensed mortgage loan originator who is an approved
instructor of an approved continuing education course may receive
credit for the licensed mortgage loan originator's own annual
continuing education requirement at the rate of two hours credit
for every one hour taught.
(g) A person having successfully completed the education
requirements approved by the Nationwide Mortgage Licensing System
and Registry in subdivisions (1), (2) and (3), subsection (a) of
this section for any state shall be accepted as credit towards
completion of continuing education requirements in West Virginia.
(h) A licensed mortgage loan originator who subsequently
becomes unlicensed must complete the continuing education
requirements for the last year in which the license was held prior
to issuance of a new or renewed license.
(i) A person meeting the renewal requirements of subsections
(a)(1) and (3) of section eight may make up any deficiency in
continuing education as established by the commissioner.
§31-17A-10. Authority to require license.
In addition to any other duties imposed upon the commissioner
by law, the commissioner shall require mortgage loan originators to
be licensed and registered through the Nationwide Mortgage
Licensing System and Registry. The commissioner is authorized to
participate in the Nationwide Mortgage Licensing System and
Registry to carry out this requirement. The commissioner may
establish requirements as necessary, including, but not limited to:
(1) Background checks for:
(A) Criminal history through fingerprint or other databases;
(B) Civil or administrative records;
(C) Credit history; or
(D) Any other information as deemed necessary by the
Nationwide Mortgage Licensing System and Registry.
(2) The payment of fees to apply for or renew licenses through
the Nationwide Mortgage Licensing System and Registry;
(3) The setting or resetting as necessary of renewal or
reporting dates;
(4) Requirements for amending or surrendering a license; and
(5) Any other activities the commissioner deems necessary for
participation in the Nationwide Mortgage Licensing System and
Registry.
§31-17A-11. Nationwide Mortgage Licensing System and Registry
information challenge process.
The commissioner shall establish a process in accordance with
the Administrative Procedures Act, provided in article five,
chapter twenty-nine-a of this code, whereby mortgage loan
originators may challenge information entered into the Nationwide
Mortgage Licensing System and Registry by the commissioner.
§31-17A-12. Enforcement authorities, violations and penalties.
(a) To ensure the effective supervision and enforcement of
this article, the commissioner may:
(1) Deny, suspend, revoke, condition or decline to renew a
license issued under this article for a violation of this article
or rules or order or directive entered under this article;
(2) Deny, suspend, revoke, condition or decline to renew a
license if an applicant or licensee fails at any time to meet the
requirements of section five or eight of this article, or withholds
information or makes a material misstatement in an application for
a license or renewal of a license;
(3) Order restitution against persons subject to this article
for violations of this article;
(4) Impose civil administrative penalties on persons subject
to this article pursuant to subsections (b), (c) and (d) of this
section; and
(5) Issue orders or directives under this article as follows:
(A) Order or direct persons subject to this article to cease
and desist from conducting business, including immediate temporary
orders to cease and desist;
(B) Order or direct persons subject to this article to cease
any harmful activities or violations of this article, including
immediate temporary orders to cease and desist;
(C) Enter immediate temporary orders to cease business under
a license or interim license issued pursuant to the authority
granted under section three if the commissioner determines that
such license was erroneously issued or the licensee is currently in
violation of this article; and
(D) Order or direct such other affirmative action as the
commissioner deems necessary.
(b) The commissioner may impose a civil administrative penalty
on a mortgage loan originator or person subject to this article if
the commissioner finds, on the record after notice and opportunity
for hearing, that such mortgage loan originator or person subject
to this article has violated or failed to comply with any
requirement of this article or any rule prescribed by the
commissioner under this article or order issued under authority of
this article.
(c) The maximum amount of penalty for each act or omission
described in subsection (b) of this section shall be $25,000.
(d) Each violation or failure to comply with any directive or
order of the commissioner is a separate and distinct violation or
failure.
§31-17A-13. Surety bond required.
(a) Each mortgage loan originator must be covered by a surety
bond in accordance with this section in favor of the state for the
benefit of consumers or for a claim by the commissioner for an
unpaid civil administrative penalty or unpaid examination invoice.
If the mortgage loan originator is an employee or exclusive agent
of a person subject to this article, article seventeen of this
chapter, or article four, chapter forty-six-a of this code, the
surety bond of those other such persons may be used in lieu of the
mortgage loan originator's individual surety bond requirement.
(1) The surety bond must provide coverage for each mortgage
loan originator in an amount as prescribed in subsection (b) of
this section.
(2) The surety bond shall be in a form as prescribed by the
commissioner.
(3) The commissioner may promulgate rules with respect to the
requirements for such surety bonds as are necessary to accomplish
the purposes of this article.
(b) The penal sum of the surety bond shall be maintained in an
amount as required by article seventeen of this chapter for
licensed mortgage lenders and brokers or article four, chapter
forty-six-a of this code for regulated consumer lenders.
(c) When an action is commenced on a licensee's bond or any
bond covering the activities of a licensee under this article, the
commissioner may require the filing of a new bond.
(d) Immediately upon recovery upon any action on a bond
covering any licensee under this article, a new bond shall be
filed.
§31-17A-14. Confidentiality.
(a) Except as otherwise provided in Public Law 110-289,
Section 1512, the requirements under any federal law or any
provision of this code regarding the privacy or confidentiality of
any information or material provided to the Nationwide Mortgage
Licensing System and Registry, and any privilege arising under
federal or state law, including the rules of any federal or state
court, with respect to the information or material, shall continue
to apply to the information or material after the information or
material has been disclosed to the Nationwide Mortgage Licensing
System and Registry. This information and material may be shared
with all state and federal regulatory officials with mortgage
industry oversight authority without the loss of privilege or the
loss of confidentiality protections provided by federal law or any
provision of this code.
(b) For these purposes, the commissioner is authorized to
enter agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the American
Association of Residential Mortgage Regulators or other
associations representing governmental agencies as established by
rule or order of the commissioner.
(c) Information or material that is subject to a privilege or
confidentiality under subsection (a) of this section may not be
subject to:
(1) Disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or an
agency of the federal government or the respective state; or
(2) Subpoena or discovery, or admission into evidence, in any
private civil action or administrative process, unless with respect
to any privilege held by the Nationwide Mortgage Licensing System
and Registry with respect to the information or material, the
person to whom the information or material pertains waives, in
whole or in part, in the discretion of that person, the privilege.
(d) Any provision of this code relating to the disclosure of
confidential supervisory information or any information or material
described in subsection (a) of this section that is inconsistent
with said subsection shall be superseded by the requirements of
this section.
(e) This section does not apply with respect to the
information or material relating to the employment history of, and
publicly adjudicated disciplinary and enforcement actions against,
mortgage loan originators that is included in the Nationwide
Mortgage Licensing System and Registry for access by the public.
§31-17A-15. Investigation and examination authority.
(a) For purposes of initial licensing, license renewal,
license suspension, license conditioning, license revocation or
termination, or general or specific inquiry or investigation to determine compliance with this article, the commissioner may
access, receive and use any books, accounts, records, files,
documents, information or evidence including, but not limited to:
(1) Criminal, civil and administrative history information,
including nonconviction data;
(2) Personal history and experience information including
independent credit reports obtained from a consumer reporting
agency described in Section 603(p) of the Fair Credit Reporting
Act; and
(3) Any other documents, information or evidence the
commissioner deems relevant to the inquiry or investigation
regardless of the location, possession, control or custody of such
documents, information or evidence.
(b) For the purposes of investigating violations or complaints
arising under this article, or for the purposes of examination, the
commissioner may review, investigate or examine any licensee,
individual or person subject to this article and his or her
employer or sponsoring company as often as necessary. The
commissioner may direct, subpoena or order the attendance of and
examine under oath all persons whose testimony may be required
about the loans or the business or subject matter of any such
examination or investigation, and may direct, subpoena or order
such person to produce books, accounts, records, files and any
other documents the commissioner deems relevant to the inquiry.
(c) Each licensee, individual or person subject to this
article, including his or her employer or sponsoring company, must make available to the commissioner upon request the books and
records relating to the operations of the licensee, individual or
person subject to this article. The commissioner shall have access
to the books and records and interview the officers, principals,
mortgage loan originators, employees, independent contractors,
agents and customers of the licensee, individual or person subject
to this article concerning their business.
(d) Each licensee, individual or person subject to this
article, including his or her employer or sponsoring company, shall
make or compile reports or prepare other information as directed by
the commissioner in order to carry out the purposes of this
section, including, but not limited to:
(1) Accounting compilations;
(2) Information lists and data concerning loan transactions in
a format prescribed by the commissioner; or
(3) Such other information considered necessary to carry out
the purposes of this section.
(e) In making any examination or investigation authorized by
this article, the commissioner may control access to any documents
and records of the licensee or person under examination or
investigation. The commissioner may take possession of the
documents and records or place a person in exclusive charge of the
documents and records in the place where they are usually kept.
During the period of control, an individual or person may not
remove or attempt to remove any of the documents and records except
pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the
documents or records of the licensee have been, or are at risk of
being, altered or destroyed for purposes of concealing a violation
of this article, the licensee or owner of the documents and records
shall have access to the documents or records as necessary to
conduct its ordinary business affairs.
(f) In order to carry out the purposes of this section, the
commissioner may:
(1) Retain attorneys, accountants or other professionals and
specialists as examiners, auditors or investigators to conduct or
assist in the conduct of examinations or investigations;
(2) Enter into agreements or relationships with other
government officials or regulatory associations in order to improve
efficiencies and reduce regulatory burden by sharing resources,
standardized or uniform methods or procedures and documents,
records, information or evidence obtained under this section;
(3) Use, hire, contract or employ public or privately
available analytical systems, methods or software to examine or
investigate the licensee, individual or person subject to this
article;
(4) Accept and rely on examination or investigation reports
made by other government officials, within or without this state;
or
(5) Accept audit reports made by an independent certified
public accountant for the licensee, individual or person subject to
this article in the course of that part of the examination covering the same general subject matter as the audit and may incorporate
the audit report in the report of the examination, report of
investigation or other writing of the commissioner.
(g) The authority of this section shall remain in effect
whether a licensee, individual or person subject to this article
acts or claims to act under any licensing or registration law of
this state or claims to act without that authority.
(h) A licensee, individual or person subject to investigation
or examination under this section may not knowingly withhold,
abstract, remove, mutilate, destroy or secrete any books, records,
computer records or other information.
§31-17A-16. Prohibited acts and practices.
It is a violation of this article for a person or individual
subject to this article to:
(1) Directly or indirectly employ any scheme, device or
artifice to defraud or mislead borrowers or lenders or to defraud
any person.
(2) Engage in any unfair or deceptive practice toward any
person.
(3) Obtain property by fraud or misrepresentation.
(4) Solicit or enter into a contract with a borrower that
provides in substance that the person or individual subject to this
article may earn a fee or commission through "best efforts" to
obtain a loan even though no loan is actually obtained for the
borrower.
(5) Solicit, advertise or enter into a contract for specific
interest rates, points, or other financing terms unless the terms
are actually available at the time of soliciting, advertising or
contracting.
(6) Conduct any business covered by this article without
holding a valid license as required under this article, or assist
or aide and abet any person in the conduct of business under this
article without a valid license as required under this article.
(7) Fail to make disclosures as required by this article and
any other applicable state or federal law including rules and
regulations thereunder.
(8) Fail to comply with this article or rules promulgated
under this article, or fail to comply with any other state or
federal law, including the rules and regulations thereunder,
applicable to any business authorized or conducted under this
article.
(9) Make, in any manner, any false or deceptive statement or
representation with regard to the rates, points or other financing
terms or conditions for a residential mortgage loan, or engage in
bait and switch advertising.
(10) Negligently make any false statement or knowingly and
willfully make any omission of material fact in connection with any
information or reports filed with a governmental agency or the
Nationwide Mortgage Licensing System and Registry or in connection
with any investigation conducted by the commissioner or another
governmental agency.
(11) Make any payment, threat or promise, directly or
indirectly, to any person for the purposes of influencing the
independent judgment of the person in connection with a residential
mortgage loan, or make any payment threat or promise, directly or
indirectly, to any appraiser of a property for the purposes of
influencing the independent judgment of the appraiser with respect
to the value of the property.
(12) Collect, charge, attempt to collect or charge or use or
propose any agreement purporting to collect or charge any fee
prohibited by this article.
(13) Cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of the
improvements as established by the property insurer.
(14) Fail to truthfully account for moneys belonging to a
party to a residential mortgage loan transaction.
§31-17A-17. Report to mortgage licensing system and registry.
The commissioner is required to report violations of this act,
as well as enforcement actions and other relevant information to
the Nationwide Mortgage Licensing System and Registry subject to
the provisions of section fourteen of this article.
§31-17A-18. Unique identifier shown.
The unique identifier of any person originating a residential
mortgage loan must be clearly shown on all residential mortgage
loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established
by rule or order of the commissioner.
§31-17A-19. Severability.
If any provision of this article or its application to any
person or circumstance is held invalid, the remainder of the
article or the application of the provision to other persons or
circumstances is not affected.
§31-17A-20. Effective date.
The effective date of this article shall be July 1, 2009.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT AND PROTECTION ACT.
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-102. License to make regulated consumer loans.
(1) The commissioner shall receive and act on all applications
for licenses to make regulated consumer loans under this chapter.
Applications shall be under oath, be filed in the manner prescribed
by the commissioner and contain the information the commissioner
requires to make an evaluation of the financial responsibility,
experience, character and fitness of the applicant and the findings
required of him or her before he or she may issue a license. At
the time of the filing of the application, the sum of $750 shall be
paid to the commissioner as an investigation fee.
(2) A license may not be issued to a supervised financial
organization other than to one primarily engaged in the business of
making consumer loans through offices located within this state or
to one licensed under the provisions of the West Virginia Mortgage Loan Act as contained in article seventeen, chapter thirty-one of
this code, or to any banking institution as defined by the
provisions of section two, article one, chapter thirty-one-a of
this code. A license will not be granted to any office located
outside this state:
Provided, That the limitation of licensing
contained in this subsection does not prevent any supervised
financial organization from making regulated consumer loans when
the applicable state or federal statute, law, rule or regulation
permits. A license may not be issued to any person unless the
commissioner, upon investigation, finds that the financial
responsibility, experience, character and fitness of the applicant,
and of the members thereof (if the applicant is a copartnership or
association) and of the officers and directors thereof (if the
applicant is a corporation), are such as to command the confidence
of the community and to warrant belief that the business will be
operated honestly, fairly and efficiently, within the purposes of
this chapter, and the applicant has available for the operation of
the business at least $10,000 in capital and has, for each
specified location of operation, assets of at least $2,000.
(3) Upon written request, the applicant is entitled to a
hearing on the question of his or her qualifications for a license
if: (a) The commissioner has notified the applicant in writing that
his or her application has been denied; or (b) the commissioner has
not issued a license within sixty days after the application for
the license was filed. A request for a hearing may not be made
more than fifteen days after the commissioner has mailed a writing to the applicant notifying him or her that the application has been
denied and stating in substance the commissioner's findings
supporting denial of the application.
(4) Not more than one place of business shall be maintained
under the same license, but the commissioner may issue more than
one license to the same licensee upon compliance with all the
provisions of this article governing an original issuance of a
license for each such new license. Each license shall remain in
full force and effect until surrendered, forfeited, suspended or
revoked.
(5) Upon giving the commissioner at least fifteen days' prior
written notice, a licensee may: (a) Change the location of any
place of business located within a municipality to any other
location within that same municipality; or (b) change the location
of any place of business located outside of a municipality to a
location no more than five miles from the originally licensed
location, but in no case may a licensee move any place of business
located outside a municipality to a location within a municipality.
A licensee may not move the location of any place of business
located within a municipality to any other location outside of that
municipality.
(6) A licensee may conduct the business of making regulated
consumer loans only at or from a place of business for which he or
she holds a license and not under any other name than that stated
in the license.
(7) A license issued under the provisions of this section
shall not be transferable or assignable.
(8) A licensee must be incorporated under the laws of this
state. The licensee may, however, be a subsidiary of an
out-of-state company or financial institution.
(9) All mortgage loan originators, as defined in article
seventeen-a, chapter thirty-one of this code, who are employed by
a licensed regulated consumer lender must be licensed and issued a
unique identifier by the Nationwide Mortgage Licensing System and
Registry pursuant to the requirements provided in article
seventeen-a, chapter thirty-one of this code.
(10) All regulated consumer lenders must file with the
commissioner a bond in favor of the state for the benefit of
consumers or for a claim by the commissioner for an unpaid civil
administrative penalty or an unpaid examination invoice in the
amount of $100,000 for licensees with West Virginia mortgage loan
originations of $0 to $3 million, $150,000 for West Virginia
mortgage loan originations greater than $3 million and up to $10
million, and $200,000 for West Virginia mortgage loan originations
over $10 million in a form and with conditions as the commissioner
may prescribe and executed by a surety company authorized to do
business in this state.