Mississippi Revises State Mortgage Licensing Law

On April 6, Mississippi Governor Phil Bryant signed into law SB 2504, which reenacts and amends the Mississippi S.A.F.E. Mortgage Act. Among other things, the legislation (i) revises licensure and continuing education requirements for mortgage loan originators; (ii) modifies books, accounts, and records storage and filing requirements; (iii) ensures timely and accurate mortgage licensee reporting in the Nationwide Mortgage Licensing System and Registry (NMLS); and (iv) specifically provides that “[f]ailure to file accurate, timely, and complete reports on the [NMLS] may result in a violation of this chapter, resulting in a civil penalty.”

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Illinois Department of Financial and Professional Regulation Proposes Amendments to the Illinois Residential Mortgage License Act

On April 1, the Illinois Department of Financial and Professional Regulation proposed amendments to the Illinois Residential Mortgage License Act of 1987. The proposed amendments would implement uniform state test standards for mortgage loan originators (MLO) and their employees. Implementing the uniform state test standards would bring the Illinois licensing regime closer to uniformity with the majority of other states who already have adopted the same or similar standards. The amendments provide that MLOs must pass a written test developed by the Nationwide Mortgage Licensing System and Registry prior to issuance of their state license. Previously, Illinois required employees to take a separate state test. Under the proposed amendments, pre-licensing and continuing education requirements for MLOs would be expanded to include new Illinois state law courses. Some industry groups are recommending that such courses be designed to overlap with existing federal continuing education requirements under the SAFE Act. The comment period will remain open through May 16, 2016.

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Indiana Passes House Bill to Amend the Indiana Code

On March 21, Indiana Governor Mike Pence signed H.B. 1181, which makes various revisions to Indiana laws concerning, among other things, (i) first mortgage lien lenders; (ii) persons licensed under the Uniform Consumer Credit Code; (iii) exempt threshold amounts for credit; and (iv) debt management companies. Various sections of the bill are effective immediately, while others will take effect July 1, 2016.

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FAST Act to Provide Regulatory Relief to Community Banks

On December 4, President Obama signed into law H.R. 22, the “Fixing America’s Surface Transportation Act” (FAST Act). Although a transportation bill on its surface, the bill also contains various provisions that are intended to provide regulatory relief to community banks and improve the efficiency of state financial regulation. Significant provisions in the bill include: (i) establishing a process that allows parties, including banks and other stakeholders, to petition the CFPB for “rural” or “underserved” designations in certain areas for the purposes of the CFPB’s ability-to-repay rule; (ii) expanding the CFPB’s ability to exempt creditors serving rural or underserved areas from escrow requirements; (iii) granting greater flexibility to the CFPB in regards to treating a balloon loan as a qualified mortgage, if a community bank or creditor operating in a rural or underserved area extended the loan; (iv) increasing the threshold for 18-month exam cycles for well-capitalized banks from $500 million to $1 billion; and (v) authorizing the Nationwide Mortgage Licensing System – which state regulators use to license various nonbank financial services industries, such as money transmitters, payday lenders, and debt collectors – to process background checks for non-mortgage license applicants.

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GA Department of Banking and Finance Enters into Consent Order with Mortgage Lender and Owner

On October 21, the Georgia Department of Banking and Finance (the Department) announced a consent order with a South Carolina-based mortgage lender and its individual owner to resolve a Notice of Intent to Revoke Annual License and an Order to Cease and Desist. The Department alleged that the individual and the company violated the Georgia Residential Mortgage Act by (i) making false statements or misrepresentations to the Department; (ii) making false statements and misrepresenting material facts in mortgage loan documents; (iii) operating an unapproved branch with an unapproved branch manager; (iv) failing to perform the appropriate background checks on covered employees; and (v) transacting business with an unlicensed person who was not exempt from licensing requirements. Under the terms of the Order, the individual is prohibited from (i) applying for a Georgia mortgage loan originator, mortgage broker, or mortgage lender license; (ii) serving as a director, officer, or any other equivalent role for a Georgia mortgage broker or lender; and (iii) acting as a branch manager for a Georgia branch of a Georgia licensed mortgage broker or lender. In addition, the lender must pay $29,000 to the Department and $1,000 to the State Regulatory Registry, LLC to support the NMLS. The lender also must surrender its license from the Department.

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