Committee Substitute
House Bill 4285 History
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COMMITTEE SUBSTITUTE
FOR
H. B. 4285
(By Delegates Moore, Walters, Reynolds
and Azinger)
[Requested by the Division of Banking]
(Originating in the Committee on the Judiciary)
[February 26, 2010]
A BILL to amend and reenact §31-17-4 of the Code of West Virginia,
1931, as amended, and to amend and reenact §31-17A-2,
§31-17A-
3, §31-17A-4, §31-17A-6, §31-17A-9,
§31-17A-12 and §31-17A-13
of said code, all relating to the licensing of residential
mortgage brokers, lenders and loan originators by the Division
of Banking; definitions; allowing the Commissioner of Banking
to reduce or waive application fees, bond amounts and net
worth requirements of bona-fide nonprofit business entities,
including community housing development organizations;
providing that mortgage loan originators may be employed by or
under contract with only one mortgage broker or lender at any
time; allowing the commissioner to reduce or waive the
application fees for mortgage loan originators employed by
bona fide nonprofit organizations or other community housing
development organizations; providing that a mortgage loan
originator license may not be transferred or assigned and that
a mortgage loan originator changing employers must provide thirty days prior notice to the commissioner and pay a fee of
$50; increasing the amount of prelicensing education required
for loan originators from twenty to twenty-two hours;
providing that prelicensing education courses and requirements
and continuing education courses for mortgage loan originators
may be approved by the division of banking; providing a
procedure for the commissioner to follow whenever taking an
enforcement action under article seventeen-a of this code;
allowing any person not licensed as a mortgage lender or
broker under article seventeen of chapter thirty-one of this
code or article four of chapter forty-six-a of this code to
register with the Nationwide Mortgage Licensing System and
Registry and provide a surety bond in the appropriate amount
for any mortgage loan originators it employs; and allowing the
commissioner to reduce or waive the bond amounts imposed by
article seventeen-a for mortgage loan originators employed by
bona fide nonprofit corporations or other bona fide nonprofit
business entities, including community housing development
organizations, if the commissioner determines that such action
would not violate any applicable law.
Be it enacted by the Legislature of West Virginia:
That §31-17-4 of the Code of West Virginia, 1931, as amended,
be amended and reenacted, and that §31-17A-2,
§31-17A-3, §31-17A-4,
§31-17A-6, §31-17A-9,
§31-17A-12 and §31-17A-13, of said code be
amended and reenacted, all to read as follows:
ARTICLE 17. WEST VIRGINIA RESIDENTIAL MORTGAGE LENDER, BROKER AND SERVICER ACT.
§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 bona fide nonprofit corporations or other bona
fide nonprofit business entities, including community housing
development organizations, 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. Any waiver of fees or other costs under this paragraph
shall not be construed as a waiver of the duty to comply with all
other provisions of this article.
(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 for the benefit
of 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.
ARTICLE 17A. WEST VIRGINIA SAFE MORTGAGE LICENSING ACT.
§31-17A-2. Definitions.
For purposes of this article, the following definitions shall
apply As used in this article:
(a) "Commissioner" means the Commissioner of Banking of this
state;
(1)(b) "Depository institution" has the same meaning as in
section three of the Federal Deposit Insurance Act and includes any
federally insured credit union; and,
(c) "Division" means the West Virginia Division of Banking;
(2)(d) "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)(e) "Immediate family member" means a spouse, child,
sibling, parent, grandparent or grandchild. This includes
stepparents, stepchildren, stepsiblings and adoptive relationships;
(4)(f) "Individual" means a natural person; and,
(5)(g) "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)(1) For purposes of this subsection paragraph, "clerical or
support duties" may include subsequent to the receipt of an
application:
(i)(A) The receipt, collection, distribution and analysis of
information common for the processing or underwriting of a
residential mortgage loan; and,
(ii)(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, or
(B)(2) 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)(h) "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)(1) An individual engaged solely as a loan processor or
underwriter except as otherwise provided in section three of this
article;
(ii)(2) 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)(3) 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 or
(iv)(4) 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)(i) "Real estate brokerage activity" means any activity
that involves offering or providing real estate brokerage services
to the public, including:
(A)(1) Acting as a real estate agent salesperson or real
estate broker for a buyer, seller, lessor or lessee of real
property;
(B)(2) Bringing together parties interested in the sale,
purchase, lease, rental or exchange of real property;
(C)(3) 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)(4) 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)(5) Offering to engage in any activity, or act in any
capacity, described in subsection (1), (2), (3) or (4) of this
section;
(8)(j) "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)(k) "Nontraditional mortgage product" means any mortgage
product other than a fixed rate mortgage;
(10)(l) "Person" means a natural person, corporation, company,
limited liability company, partnership or association;
(11)(m) "Registered mortgage loan originator" means any
individual who:
(A)(1) Meets the definition of mortgage loan originator and is
an employee of:
(i)(A) A depository institution;
(ii)(B) A subsidiary that is:
(1)(i) Owned and controlled by a depository institution; and
(2)(ii) Regulated by a federal banking agency; or
(iii)(C) An institution regulated by the Farm Credit
Administration; and
(B)(2) Is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry;
(12)(n) "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)(o) "Residential real estate" means any real property
located in West Virginia, upon which is constructed or intended to
be constructed a dwelling; and
(14)(p) "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. A Mortgage
loan originator licensed under this article may be employed by, or
under contract to provide mortgage loan originator services for,
only one entity licensed or exempt from licensing under article
seventeen of this chapter at any time.
(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. The
commissioner may elect to reduce or waive the application fees for
mortgage loan originators employed by bona fide nonprofit
organizations or other community housing development organizations
that serve the housing needs of households or persons below the
HUD-established median income for their area of residence. Any
waiver of fees or other costs under this paragraph shall not be
construed as a waiver of the cuty to comply with all other provisions of this article.
(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.
(g) The Commissioner may grant a provisional license to a
mortgage loan originator who has met all other requirements for
licensing under this article but: (1) has not passed a test
regarding West Virginia mortgage laws and regulations required for
licensure: Provided, That the provisionally licensed mortgage loan
originator takes and passes that test within
sixty
days of the test
becoming available; or (2) for whom the Commissioner has not
received the results of a criminal background check despite the good faith effort of the applicant to provide in a timely manner the
information necessary to obtain a criminal background check.
§31-17A-6. Prelicensing and relicensing education of loan
originators.
(a) To meet the prelicensing education requirement, a person
must complete at least twenty twenty-two 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 or the Division
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 or the Division, 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 or the Division
in subdivisions (1), (2) and (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-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
or the Division
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-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.
(e) If the
c
ommissioner takes any enforcement action under
this article, he or she shall enter an order to that effect and
shall cause a copy of that 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. The
c
ommissioner shall also submit a copy
of the order for publication in the Nationwide Mortgage Licensing
System and Registry when that functionality of the system becomes
available. An applicant or licensee adversely affected by an order
may request an appeal and shall be provided a hearing as provided
in section fourteen, article seventeen of this chapter.
§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 that person may be used in
lieu of the mortgage loan originator's individual surety bond
requirement. Any person not subject to licensing as a mortgage
lender or broker under article seventeen, chapter thirty-one of this
code or article four, chapter forty-six-a of this code that employs
a mortgage loan originator licensed under this article may elect to
register with the Nationwide Mortgage Licensing System and Registry
and provide a surety bond in the appropriate amount for the mortgage
loan originator employed.
(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.
(e) The commissioner may elect to reduce or waive the bond
amounts imposed by this section for mortgage loan originators
employed by bona fide nonprofit corporations or other bona fide
nonprofit business entities, including community housing development
organizations, or any agency or instrumentality of this state,
federal, county or municipal government 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 if the commissioner determines that a
reduction or waiver would not violate any applicable law. Any
waiver of fees or other costs under this paragraph shall not be
construed as a waiver of the duty to comply with all other
provisions of this article.