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First Substitute H.B. 249
Representative Brent D. Parker proposes the following substitute bill:
1
LICENSING MORTGAGE LOAN OFFICERS
2
2003 GENERAL SESSION
3
STATE OF UTAH
4
Sponsor: Brent D. Parker
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This act modifies the Utah Residential Mortgage Practices Act to require licensing,
6
prelicensing education, prelicensing examinations, and continuing education of persons
7
engaging in the business of residential mortgage loans, and to modify other licensing and
8
bonding requirements. The act modifies the membership of the Residential Mortgage
9
Regulatory Commission. The act prohibits persons from acting in certain multiple
10
capacities with respect to a residential mortgage loan. The act enacts requirements
11
relating to a principal mortgage loan officer. The act makes technical changes. This act
12
takes effect January 1, 2004.
13
This act affects sections of Utah Code Annotated 1953 as follows:
14
AMENDS:
15
61-2c-102, as last amended by Chapter 204, Laws of Utah 2002
16
61-2c-103, as last amended by Chapter 204, Laws of Utah 2002
17
61-2c-104, as last amended by Chapter 204, Laws of Utah 2002
18
61-2c-106, as last amended by Chapter 204, Laws of Utah 2002
19
61-2c-201, as last amended by Chapter 204, Laws of Utah 2002
20
61-2c-202, as last amended by Chapter 204, Laws of Utah 2002
21
61-2c-203, as last amended by Chapter 204, Laws of Utah 2002
22
61-2c-204, as last amended by Chapter 204, Laws of Utah 2002
23
61-2c-205, as last amended by Chapter 204, Laws of Utah 2002
24
61-2c-301, as last amended by Chapter 204, Laws of Utah 2002
25
61-2c-302, as last amended by Chapter 204, Laws of Utah 2002
26
61-2c-401, as last amended by Chapter 204, Laws of Utah 2002
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61-2c-402, as last amended by Chapter 204, Laws of Utah 2002
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ENACTS:
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61-2c-206, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
61-2c-102
is amended to read:
32
61-2c-102. Definitions.
33
As used in this chapter:
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(1) "Affiliate" means an individual or an entity that directly, or indirectly through one
35
or more intermediaries, controls or is controlled by, or is under common control with, a
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specified individual or entity.
37
(2) "Applicant" means an individual or entity applying for [registration] a license
38
under this chapter.
39
(3) (a) "Business of residential mortgage loans" means for compensation to:
40
(i) make or originate a residential mortgage loan;
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(ii) directly or indirectly solicit, [process,] place, or negotiate a residential mortgage
42
loan for another; or
43
(iii) render services related to the origination[, processing,] or funding of a residential
44
mortgage loan including:
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(A) taking applications; and
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[(B) obtaining verifications and appraisals; and]
47
[(C)] (B) communicating with the borrower and lender.
48
(b) "Business of residential mortgage loans" does not include the performance of
49
clerical functions such as:
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(i) gathering information related to a residential mortgage loan on behalf of the
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prospective borrower or a person [registered] licensed under this chapter; or
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(ii) requesting or gathering information, word processing, sending correspondence, or
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assembling files by an individual who works under the instruction of a person [registered]
54
licensed under this chapter.
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(4) "Closed-end" means a loan with a fixed amount borrowed and which does not
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permit additional borrowing secured by the same collateral.
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(5) "Commission" means the Residential Mortgage Regulatory Commission created in
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Section
61-2c-104
.
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(6) "Compensation" means anything of economic value that is paid, loaned, granted,
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given, donated, or transferred to an individual or entity for or in consideration of:
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(a) services;
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(b) personal or real property; or
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(c) other thing of value.
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(7) "Control" means the power, directly or indirectly, to:
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(a) direct or exercise a controlling influence over:
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(i) the management or policies of an entity; or
67
(ii) the election of a majority of the directors, officers, managers, or managing partners
68
of an entity;
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(b) vote 20% or more of any class of voting securities of an entity by an individual; or
70
(c) vote more than 5% of any class of voting securities of an entity by another entity.
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(8) "Control person" means any individual or entity which directly manages or controls
72
another entity's transaction of the business of residential mortgage loans secured by Utah
73
dwellings.
74
(9) "Depository institution" is as defined in Section
7-1-103
.
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(10) "Director" means the director of the division.
76
(11) "Division" means the Division of Real Estate.
77
(12) "Dwelling" means a residential structure attached to real property that contains
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one to four units including any of the following if used as a residence:
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(a) a condominium unit;
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(b) a cooperative unit;
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(c) a manufactured home; or
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(d) a house.
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(13) "Entity" means any corporation, limited liability company, partnership, company,
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association, joint venture, business trust, trust, or other organization.
85
(14) "Executive director" means the executive director of the Department of
86
Commerce.
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[(16)] (15) ["Registrant"] "Licensee" means an individual or entity [registered] licensed
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with the division under this chapter.
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[(15)] (16) "Record" means information that is:
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(a) prepared, owned, received, or retained by an individual or entity; and
91
(b) (i) inscribed on a tangible medium; or
92
(ii) (A) stored in an electronic or other medium; and
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(B) retrievable in perceivable form.
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(17) "Residential mortgage loan" means a closed-end, first mortgage loan or extension
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of credit, if:
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(a) the loan or extension of credit is secured by a:
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(i) mortgage;
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(ii) deed of trust; or
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(iii) lien interest; and
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(b) the mortgage, deed of trust, or lien interest described in Subsection (17)(a):
101
(i) is on a dwelling located in the state; and
102
(ii) created with the consent of the owner of the residential real property.
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(18) "State" means:
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(a) a state, territory, or possession of the United States;
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(b) the District of Columbia; or
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(c) the Commonwealth of Puerto Rico.
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Section 2.
Section
61-2c-103
is amended to read:
108
61-2c-103. Powers and duties of the division.
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(1) The division shall administer this chapter.
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(2) In addition to any power or duty expressly provided in this chapter, the division
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may:
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(a) receive and act on complaints including:
113
(i) taking action designed to obtain voluntary compliance with this chapter; or
114
(ii) commencing administrative or judicial proceedings on the division's own initiative;
115
(b) establish programs for the education of consumers with respect to residential
116
mortgage loans;
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(c) (i) make studies appropriate to effectuate the purposes and policies of this chapter;
118
and
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(ii) make the results of the studies described in Subsection (2)(c)(i) available to the
120
public; and
121
(d) employ any necessary hearing examiners, investigators, clerks, and other employees
122
and agents.
123
(3) The division shall make rules for the administration of this chapter in accordance
124
with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, including:
125
(a) [registration] licensure procedures for individuals and entities required by this
126
chapter to [register] obtain a license with the division;
127
(b) proper handling of funds received by [registrants] licensees;
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(c) record-keeping requirements by [registrants; and] licensees; and
129
(d) standards of conduct for [registrants.] licensees.
130
(4) (a) The division shall make available to the public a list of the names and addresses
131
of all [registrants] licensees.
132
(b) The division may charge a fee established by the division in accordance with
133
Section
63-38-3.2
for obtaining the list described in Subsection (4)(a).
134
Section 3.
Section
61-2c-104
is amended to read:
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61-2c-104. Residential Mortgage Regulatory Commission.
136
(1) There is created within the division the Residential Mortgage Regulatory
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Commission consisting of:
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(a) the following members appointed by the executive director with the approval of the
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governor:
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(i) [two] three members having at least three years of experience in transacting the
141
business of residential mortgage loans and who are currently licensed under this chapter; and
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(ii) [two members] one member from the general public; and
143
(b) the commissioner of the Department of Financial Institutions or the commissioner's
144
designee.
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(2) (a) Except as required by Subsection (2)(b), the executive director shall appoint
146
each new member or reappointed member subject to appointment by the executive director to a
147
four-year term ending June 30.
148
(b) Notwithstanding the requirements of Subsection (2)(a), the executive director shall,
149
at the time of appointment or reappointment, adjust the length of terms to ensure that the terms
150
of commission members are staggered so that approximately half of the commission is
151
appointed every two years.
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(c) If a vacancy occurs in the membership of the commission for any reason, the
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replacement shall be appointed for the unexpired term.
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(3) Members of the commission shall annually select one member to serve as chair.
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(4) (a) The commission shall meet at least quarterly.
156
(b) The director may call a meeting in addition to the meetings required by Subsection
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(4)(a):
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(i) at the discretion of the director;
159
(ii) at the request of the chair of the commission; or
160
(iii) at the written request of three or more commission members.
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(5) (a) Three members of the commission constitute a quorum for the transaction of
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business.
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(b) The action of a majority of a quorum present is an action of the commission.
164
(6) (a) (i) Members who are not government employees shall receive no compensation
165
or benefits for their services, but may receive per diem and expenses incurred in the
166
performance of the member's official duties at the rates established by the Division of Finance
167
under Sections
63A-3-106
and
63A-3-107
.
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(ii) Members who are not government employees may decline to receive per diem and
169
expenses for their service.
170
(b) (i) State government officer and employee members who do not receive salary, per
171
diem, or expenses from their agency for their service may receive per diem and expenses
172
incurred in the performance of their official duties from the commission at the rates established
173
by the Division of Finance under Sections
63A-3-106
and
63A-3-107
.
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(ii) State government officer and employee members may decline to receive per diem
175
and expenses for their service.
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(7) The commission shall:
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(a) concur in the [registration] licensure or denial of [registration] licensure of
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individuals and entities under this chapter in accordance with Part 2, [Registration] Licensure;
179
(b) take disciplinary action with the concurrence of the director in accordance with Part
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4, Enforcement; [and]
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(c) advise the division concerning matters related to the administration and
182
enforcement of this chapter[.]; and
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(d) determine the requirements for:
184
(i) the 45-hour prelicensing course required under Section
61-2c-202
;
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(ii) the examination required under Section
61-2c-202
, covering at least:
186
(A) the fundamentals of the English language;
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(B) arithmetic;
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(C) the provisions of this chapter;
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(D) rules adopted by the division;
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(E) basic residential mortgage principles and practices; and
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(F) any other aspect of Utah law the commission determines is appropriate; and
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(iii) the continuing education requirements under Section
61-2c-205
, including:
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(A) the appropriate number of hours of required continuing education; and
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(B) the subject matter of courses the division may accept for continuing education
195
purposes.
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(8) The commission may appoint a committee to make recommendations to the
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commission concerning approval of continuing education courses.
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(9) The commission shall make the prelicensing course, examination, and continuing
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education requirements described in this Section available through the Internet when
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reasonably practicable.
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Section 4.
Section
61-2c-106
is amended to read:
202
61-2c-106. Addresses provided the division.
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(1) In providing an address to the division under this chapter, a physical location or
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street address shall be provided.
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(2) An individual or entity [registered] licensed under this chapter will be considered to
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have received any notification that is mailed to the last address furnished to the division by the
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individual, or by a control person of the entity, [registered] licensed under this chapter.
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Section 5.
Section
61-2c-201
is amended to read:
209
Part 2. Licensure
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61-2c-201. Licensure required of individuals and entities engaged in the business
211
of residential mortgage loans.
212
(1) Unless exempt from this chapter under Section
61-2c-105
, an individual or entity
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may not transact the business of residential mortgage loans, as defined in Section
61-2c-102
,
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without [registering] obtaining a license under this chapter.
215
(2) For purposes of this chapter, an individual or entity transacts business in this state
216
if:
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(a) (i) the individual or entity engages in an act that constitutes the business of
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residential mortgage loans; and
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(ii) (A) the act described in Subsection (2)(a)(i) is directed to or received in this state;
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and
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(B) the real property that is the subject of the act described in Subsection (2)(a)(i) is
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located in this state; or
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(b) a representation is made by the individual or entity that the individual or entity
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transacts the business of residential mortgage loans in this state.
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(3) Unless otherwise exempted under this chapter, [registration] licensure under this
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chapter is required of both:
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(a) the individual who directly transacts the business of residential mortgage loans; and
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(b) if the individual transacts business as an employee or agent of an entity or
229
individual, the entity or individual for whom the employee or agent transacts the business of
230
residential mortgage loans.
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Section 6.
Section
61-2c-202
is amended to read:
232
61-2c-202. Licensure procedures.
233
(1) To apply for [registration] licensure under this chapter an individual or entity shall:
234
(a) submit to the division a [registration] licensure statement that:
235
(i) lists any name under which the individual or entity will transact business in this
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state;
237
(ii) lists the address of the principal business location of the applicant;
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(iii) if the applicant is an entity, lists the control persons of the applicant;
239
(iv) demonstrates to the satisfaction of the division with the concurrence of the
240
commission that the applicant meets the qualifications listed in Section
61-2c-203
; and
241
(v) includes any information required by the division by rule;
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(b) pay to the division:
243
(i) an application fee established by the division in accordance with Section
63-38-3.2
;
244
and
245
(ii) the reasonable expenses incurred in processing the application for [registration]
246
licensure including the costs incurred by the division under Subsection (4);
247
(c) meet the requirements under Section
61-2c-204
for:
248
(i) obtaining a surety bond;
249
(ii) depositing assets; or
250
(iii) providing a letter of credit; and
251
(d) comply with Subsection (4).
252
(2) The division, with the concurrence of the commission, shall grant a [registration]
253
license to an applicant if the division finds that the applicant:
254
(a) meets the qualifications of Sections
61-2c-203
and
61-2c-204
; and
255
(b) complies with this section.
256
(3) In accordance with Title 63, Chapter 46b, Administrative Procedures Act, an
257
applicant who is denied [registration] licensure under this chapter may submit a request for
258
agency review to the executive director within 30 days following the issuance of the order
259
denying the [registration] licensure.
260
(4) (a) (i) Prior to January 1, 2005, an individual applying for licensure under this
261
chapter and any control person of the applicant shall:
262
(A) submit a fingerprint card in a form acceptable to the division at the time the
263
registration statement is filed; and
264
(B) consent to a fingerprint background check by:
265
(I) the Utah Bureau of Criminal Identification;
266
(II) the Federal Bureau of Investigation; and
267
(C) except as provided in Subsection (4)(a)(ii), provide proof using forms approved by
268
the division of having successfully completed an examination approved by the commission
269
under Section
61-2c-104
.
270
(ii) Notwithstanding Subsection (4)(a)(i)(C), an individual who has unsuccessfully
271
attempted to complete the examination approved by the commission under Section
61-2c-104
272
at least three times is not required to pass the examination approved by the commission under
273
Section
61-2c-104
if the individual provides proof using forms approved by the division of
274
having successfully completed the prelicensing course described in Subsection (4)(b)(iii)(A).
275
[(4) (a) An] (b) On or after January 1, 2005, an individual applying for [registration]
276
licensure under this chapter and any control person of the applicant shall:
277
(i) submit a fingerprint card in a form acceptable to the division at the time the
278
registration statement is filed; and
279
(ii) consent to a fingerprint background check by:
280
(A) the Utah Bureau of Criminal Identification; [and]
281
(B) the Federal Bureau of Investigation[.]; and
282
(iii) provide proof using forms approved by the division of having successfully
283
completed:
284
(A) a 45-hour prelicensing course approved by the commission under Section
285
61-2c-104
; and
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(B) an examination approved by the commission under Section
61-2c-104
.
287
[(b)] (c) The division shall request the Department of Public Safety to complete a
288
Federal Bureau of Investigation criminal background check for each applicant and each control
289
person of an applicant through a national criminal history system.
290
[(c)] (d) The applicant shall pay the cost of:
291
(i) the fingerprinting required by this section; and
292
(ii) the background check required by this section.
293
[(d)] (e) (i) A [registration] license under this chapter is conditional pending
294
completion of the criminal background check required by this Subsection (4).
295
(ii) If a criminal background check discloses that an applicant or an applicant's control
296
person failed to accurately disclose a criminal history, the [registration] license shall be
297
immediately and automatically revoked.
298
(iii) An individual or entity whose conditional [registration] license is revoked under
299
Subsection (4)(d)(ii) may appeal the revocation in a hearing conducted:
300
(A) after the revocation; and
301
(B) in accordance with Title 63, Chapter 46b, Administrative Procedures Act.
302
Section 7.
Section
61-2c-203
is amended to read:
303
61-2c-203. Qualifications for licensure.
304
(1) To qualify for [registration] licensure under this chapter, an individual shall:
305
(a) have good moral character and the competency to transact the business of
306
residential mortgage loans;
307
(b) not have been convicted of a felony or misdemeanor involving moral turpitude in
308
the [five] ten years preceding the date the individual applies for [registration] a license, except
309
as provided in Subsection (3);
310
(c) not have had a license or registration suspended, revoked, surrendered, canceled, or
311
denied in the five years preceding the date the individual applies for [registration,] licensure
312
except as provided in Subsection (3), if:
313
(i) the registration or license is issued by this state or another jurisdiction; and
314
(ii) the suspension, revocation, surrender, cancellation, or denial is based on
315
misconduct in a professional capacity that relates to good moral character or the competency to
316
transact the business of residential mortgage loans.
317
(2) To qualify for [registration] licensure under this chapter an entity may not have:
318
(a) any of the following individuals in management who fails to meet the requirements
319
of Subsection (1):
320
(i) a manager or a managing partner;
321
(ii) a director;
322
(iii) an executive officer; or
323
(iv) an individual occupying a position or performing functions similar to those
324
described in Subsections (2)(a)(i) through (iii); and
325
(b) a control person who fails to meet the requirements of Subsection (1).
326
(3) If an individual or a control person of an entity fails to meet the requirements of
327
Subsection (1)(b) or (c), but otherwise meets the qualifications for [registration] licensure, and
328
provides evidence satisfactory to the division with the concurrence of the commission that the
329
individual or control person has good moral character and the competency to transact the
330
business of residential mortgage loans, notwithstanding the failure to meet the requirements of
331
Subsection (1)(b) or (c) the division may permit that individual or entity to be [registered]
332
licensed under this chapter.
333
Section 8.
Section
61-2c-204
is amended to read:
334
61-2c-204. Requirements for bonding, letter of credit, or deposit of assets.
335
(1) If an applicant is an individual, the applicant shall:
336
(a) file with the division a surety bond:
337
(i) that meets the requirements of Subsection (3); and
338
(ii) in the amount not less than $10,000; or
339
(b) demonstrate to the satisfaction of the division that:
340
(i) the applicant is an employee or agent of an entity [registered] licensed under this
341
chapter; and
342
(ii) the acts of the applicant are covered by a surety bond filed with the division under
343
Subsection (2) by the entity [registered] licensed under this chapter for which the applicant is
344
an employee or agent.
345
(2) If the applicant is an entity, the applicant shall file with the division a surety bond:
346
(a) that meets the requirements of Subsection (4); and
347
(b) in an amount not less than [$25,000] $50,000.
348
(3) A surety bond filed under this section shall name as beneficiaries:
349
(a) the state, for payment of costs incurred and charges made in connection with an
350
enforcement action under Part 4, Enforcement, against the applicant including costs and
351
charges relating to an examination or investigation; and
352
(b) after all claims and charges of the state have been paid in full, any person who has a
353
claim against the surety on the bond based on any default or violation of any duty or obligation
354
of the applicant.
355
(4) If an applicant is an entity, a surety bond filed under this section shall:
356
(a) comply with Subsection (3); and
357
(b) cover the acts of:
358
(i) the entity [registered] licensed under this chapter;
359
(ii) any control person of the entity [registered] licensed under this chapter; and
360
(iii) any agent or employee of the entity [registered] licensed under this chapter.
361
(5) If an individual [registered] licensed under this chapter does not file a surety bond
362
under this section because at the time of applying for [registration] licensure that person met
363
the requirements of Subsection (1)(b), the individual shall post a surety bond meeting the
364
requirements of Subsections (1) and (3) by no later than 30 days from the day on which the
365
person is not covered by a surety bond in accordance with Subsection (1)(b).
366
(6) Notwithstanding the other provisions of this section, an applicant can comply with
367
the requirements of this section, if the applicant deposits assets with or provides a letter of
368
credit to the division:
369
(a) in the amounts required for a surety bond; and
370
(b) subject to the same surety conditions of Subsections (3) and (4).
371
Section 9.
Section
61-2c-205
is amended to read:
372
61-2c-205. Term of licensure -- Renewal -- Reporting of changes.
373
(1) (a) A [registration] license under this chapter is valid for a two-year period.
374
(b) Notwithstanding Subsection (1)(a), the time period of a [registration] license may
375
be extended or shortened by as much as one year to maintain or change a renewal cycle
376
established by rule by the division.
377
(2) To renew a [registration] license, no later than 30 days before the date the
378
[registration] license expires, a [registrant] licensee shall:
379
(a) file a [registration] licensure statement meeting the requirements of Section
380
61-2c-202
; [and]
381
(b) pay a fee to the division established by the division in accordance with Section
382
63-38-3.2
[.]; and
383
(c) if the licensee is an individual, submit proof using forms approved by the division
384
of having completed during the two years prior to application the continuing education required
385
by the commission under Section
61-2c-104
.
386
(3) (a) A [registrant] licensee under this chapter shall amend its [registration] licensure
387
statement filed with the division within ten days of the date on which there is a change in:
388
(i) a name under which the [registrant] licensee transacts the business of residential
389
mortgage loans in this state;
390
(ii) the location of the [registrant] licensee;
391
(iii) the control persons of the [registrant] licensee; or
392
(iv) any other information that is defined as material by rule made by the division.
393
(b) Failure to notify the division of a change described in Subsection (3)(a) is separate
394
grounds for disciplinary action against a [registrant] licensee.
395
(4) A [registrant] licensee shall notify the division by sending the division a signed
396
statement within ten business days of:
397
(a) a conviction of any criminal offense;
398
(b) filing a personal bankruptcy or bankruptcy of a business that transacts the business
399
of residential mortgage loans; or
400
(c) the suspension, revocation, surrender, cancellation, or denial of a professional
401
license or professional registration of the [registrant] licensee, whether the license or
402
registration is issued by this state or another jurisdiction.
403
(5) (a) A license under this chapter expires if the licensee does not apply to renew the
404
license on or before the expiration date of the license.
405
(b) Within 30 calendar days after the expiration date, a licensee whose license has
406
expired may apply to reinstate the expired license upon:
407
(i) payment of a renewal fee and a late fee determined by the division under Section
408
63-38-3.2
; and
409
(ii) providing proof using forms approved by the division of having completed the
410
continuing education required by the commission under Section
61-2c-104
.
411
(c) After the 30 calendar days described in Subsection (5)(b) and within six months
412
after the expiration date, a licensee whose license has expired may apply to reinstate an expired
413
license upon:
414
(i) payment of a renewal fee and a late fee determined by the division under Section
415
63-38-3.2
;
416
(ii) providing proof using forms approved by the division of having completed the
417
continuing education required by the commission under Section
61-2c-104
; and
418
(iii) completing an additional 12 hours of continuing education approved by the
419
commission under Section
61-2c-104
.
420
(d) A licensee whose license has been expired for more than one year may apply to
421
reinstate an expired license upon:
422
(i) satisfying the requirements of Subsection (5)(c); and
423
(ii) passing the examination approved by the commission under Section
61-2c-104
.
424
Section 10.
Section
61-2c-206
is enacted to read:
425
61-2c-206. Principal mortgage loan officer.
426
(1) An individual or entity licensed under this chapter shall affiliate with a principal
427
mortgage loan officer pursuant to this section.
428
(2) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
429
director shall determine the requirements for a person to act as a principal mortgage loan
430
officer.
431
(3) It is unlawful for any licensee under this chapter to accept valuable consideration
432
for the performance of any of the acts specified in this chapter from any person except the
433
principal mortgage loan officer with whom the licensee is affiliated.
434
(4) A licensee under this chapter may not affiliate with more than one principal
435
mortgage loan officer at the same time.
436
(5) A principal mortgage loan officer may not affiliate with more than one entity
437
licensed under this chapter at the same time.
438
Section 11.
Section
61-2c-301
is amended to read:
439
61-2c-301. Prohibited conduct -- Violations of the chapter.
440
(1) An individual or entity transacting the business of residential mortgage loans in this
441
state may not:
442
(a) give or receive compensation or anything of value in exchange for a referral of
443
residential mortgage loan business unless the compensation or thing of value is de minimis as
444
defined by the division;
445
(b) charge a fee in connection with a residential mortgage loan transaction:
446
(i) that is excessive; or
447
(ii) if the individual or entity does not comply with Section
70D-1-6
;
448
(c) give or receive compensation or anything of value in exchange for a referral of
449
settlement or loan closing services related to a residential mortgage loan transaction;
450
(d) make a false statement or representation for purposes of inducing a lender to extend
451
credit as part of a residential mortgage loan transaction;
452
(e) give or receive compensation or anything of value to influence the independent
453
judgment of an appraiser in reaching a value conclusion in a residential mortgage loan
454
transaction;
455
(f) violate or not comply with:
456
(i) this chapter;
457
(ii) an order of the commission or division; or
458
(iii) a rule made by the division;
459
(g) fail to respond within the required time period to:
460
(i) a notice or complaint of the division; or
461
(ii) a request for information from the division;
462
(h) make false representations to the division, including in a [registration] licensure
463
statement;
464
(i) for any residential mortgage loan transaction beginning on or after January 1, 2004,
465
engage in the business of residential mortgage loans with respect to the transaction if the
466
individual or entity also acts in any of the following capacities with respect to the same
467
residential mortgage loan transaction:
468
(i) appraiser;
469
(ii) escrow agent;
470
(iii) real estate agent; or
471
(iii) general contractor;
472
(j) order a title insurance report or hold a title insurance policy unless the individual or
473
entity provides to the title insurer a copy of a valid, current license under this chapter.
474
[(i)] (k) engage in unprofessional conduct as defined by rule; or
475
[(j)] (l) engage in an act or omission in transacting the business of residential mortgage
476
loans that constitutes dishonesty, fraud, or misrepresentation.
477
(2) Whether or not the crime is related to the business of residential mortgage loans, it
478
is a violation of this chapter for a [registrant] licensee or a control person of a [registrant]
479
licensee to do any of the following with respect to a criminal offense which involves moral
480
turpitude:
481
(a) be convicted;
482
(b) plead guilty or nolo contendere;
483
(c) enter a plea in abeyance; or
484
(d) be subjected to a criminal disposition similar to the ones described in Subsections
485
(2)(a) through (c).
486
Section 12.
Section
61-2c-302
is amended to read:
487
61-2c-302. Record requirements.
488
(1) For the time period specified in Subsection (2), a [registrant] licensee shall make or
489
possess any record required for that [registrant] licensee by a rule made by the division.
490
(2) A [registrant] licensee shall maintain in its possession a record described in
491
Subsection (1) until the later of four years from the last to occur of the following:
492
(a) the final entry on a residential mortgage loan is made by that [registrant] licensee;
493
(b) if the residential mortgage loan is serviced by the [registrant] licensee:
494
(i) the residential mortgage loan is paid in full; or
495
(ii) the [registrant] licensee ceases to service the residential mortgage loan; or
496
(c) if the residential mortgage loan is not serviced by the [registrant] licensee, the
497
residential mortgage loan is closed.
498
Section 13.
Section
61-2c-401
is amended to read:
499
61-2c-401. Investigations -- Subpoena power of division.
500
(1) The division may investigate or cause to be investigated the actions of:
501
(a) a [registrant] licensee and the control persons of any [registrant] licensee;
502
(b) an applicant for [registration] licensure under this chapter, and the control persons
503
of any applicant; or
504
(c) any individual or entity that transacts the business of residential mortgage loans
505
within this state, and the control persons of any such entity.
506
(2) In conducting investigations and adjudicative proceedings, the division may:
507
(a) subpoena witnesses;
508
(b) take evidence;
509
(c) require by subpoena duces tecum the production of books, papers, contracts,
510
records, other documents, or information considered relevant to an investigation; and
511
(d) serve a subpoena by certified mail.
512
(3) A failure to respond to a subpoena served by the division is considered as a separate
513
violation of this chapter.
514
Section 14.
Section
61-2c-402
is amended to read:
515
61-2c-402. Disciplinary action -- Reinstatement.
516
(1) Subject to the requirements of this section, if an individual or entity required to be
517
[registered] licensed under this chapter violates this chapter, the commission with the
518
concurrence of the director, may:
519
(a) impose a civil penalty against the individual or entity in an amount not to exceed
520
[$500] $2,500 per violation;
521
(b) do any of the following to a [registration] license under this chapter:
522
(i) suspend;
523
(ii) revoke;
524
(iii) place on probation;
525
(iv) deny renewal; or
526
(v) deny reinstatement; or
527
(c) do both Subsections (1)(a) and (b).
528
(2) (a) Before the commission and the division may take an action described in
529
Subsection (1), the division shall:
530
(i) give notice to the individual or entity; and
531
(ii) schedule an adjudicative proceeding.
532
(b) If after the adjudicative proceeding scheduled under Subsection (2)(a), the
533
commission and the director determine that an individual or entity required to be [registered]
534
licensed under this [section] chapter has violated this chapter, the commission may take an
535
action described in Subsection (1) by written order.
536
(3) In accordance with Title 63, Chapter 46b, Administrative Procedures Act, an
537
individual or entity against whom disciplinary action is taken under this section may seek
538
review by the executive director of the disciplinary action.
539
(4) If an individual or entity prevails in a judicial appeal and the court finds that the
540
state action was undertaken without substantial justification, the court may award reasonable
541
litigation expenses to that individual or entity as provided under Title 78, Chapter 27a, Small
542
Business Equal Access to Justice Act.
543
(5) (a) An order issued under this section takes effect 30 days after the service of the
544
order unless otherwise provided in the order.
545
(b) If an appeal of an order issued under this section is taken by an individual or entity,
546
the division may stay enforcement of the commission's order in accordance with Section
547
63-46b-18
.
548
(6) If ordered by the court of competent jurisdiction, the division shall promptly take an
549
action described in Subsection (1)(b) against a [registration] license granted under this chapter.
550
(7) (a) If a [registration] license under this chapter is revoked, the individual or entity
551
may apply to have the [registration] license reinstated by complying with the requirements of
552
Section
61-2c-202
for [registration] licensure.
553
(b) Notwithstanding Subsection (7)(a), if a [registration] license under this chapter is
554
revoked, the individual or entity may not apply for reinstatement of the [registration] license
555
sooner than five years after the date the [registration] license is revoked in accordance with this
556
section.
557
(c) If an individual or entity whose [registration] license has been revoked applies for
558
reinstatement in accordance with Subsection (7)(b), the commission and the division may grant
559
the application for reinstatement if they find that:
560
(i) there has been good conduct on the part of the applicant subsequent to the events
561
that led to the revocation, and that the subsequent good conduct outweighs the events which led
562
to the revocation; and
563
(ii) the interest of the public is not likely to be harmed by the granting of the
564
[registration] license.
565
Section 15. Effective date.
566
This act takes effect on January 1, 2004.
567
Section 16. Coordination clause.
568
If this bill and H.B. 203, Residential Mortgage Regulatory Commission, both pass, it is
569
the intent of the Legislature that the Office of Legislative Research and General Counsel, in
570
preparing the Utah Code database for publication, shall replace the phrase "and are currently
571
registered as a mortgage lender with the division" in Subsection
61-2c-104
(1)(a)(i) of H.B. 203
572
with the phrase "and who are currently licensed under this chapter".
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