HF 2600

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to financial institutions; providing for the licensing and regulation 1.3of an individual engaged in the business of a mortgage loan origination or 1.4the mortgage loan business; providing certain conforming and transitional 1.5provisions; appropriating money;amending Minnesota Statutes 2008, sections 1.658.04, subdivision 1; 58.08, by adding a subdivision; 58.09; 58.10, subdivision 1.71; 58.11; Minnesota Statutes 2009 Supplement, section 58.06, subdivision 2; 1.8proposing coding for new law as Minnesota Statutes, chapter 58A; repealing 1.9Minnesota Statutes 2009 Supplement, section 58.126. 1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.11ARTICLE 1 1.12MINNESOTA S.A.F.E. MORTGAGE LICENSING ACT OF 2010 1.13    Section 1. new text begin [58A.01] TITLE. new text end 1.14 new text begin This chapter may be cited as the "Minnesota Secure and Fair Enforcement for new text end 1.15 new text begin Mortgage Licensing Act of 2010" or "Minnesota S.A.F.E. Mortgage Licensing Act of new text end 1.16 new text begin 2010." new text end 1.17    Sec. 2. new text begin [58A.02] DEFINITIONS. new text end 1.18     new text begin Subdivision 1. new text end new text begin Application. new text end new text begin For purposes of this chapter, the definitions in new text end 1.19 new text begin subdivisions 2 to 15 have the meanings given them. new text end 1.20     new text begin Subd. 2. new text end new text begin Depository institution. new text end new text begin "Depository institution" has the meaning given in new text end 1.21 new text begin United States Code, title 12, section 1813, and includes a credit union. new text end 1.22     new text begin Subd. 3. new text end new text begin Federal banking agencies. new text end new text begin "Federal banking agencies" means the Board new text end 1.23 new text begin of Governors of the Federal Reserve System, the comptroller of the currency, the director new text end 1.24 new text begin of the Office of Thrift Supervision, the National Credit Union Administration, and the new text end 1.25 new text begin Federal Deposit Insurance Corporation. new text end 2.1     new text begin Subd. 4. new text end new text begin Immediate family member. new text end new text begin "Immediate family member" means a spouse, new text end 2.2 new text begin child, sibling, a parent, grandparent, or grandchild. This includes stepparents, stepchildren, new text end 2.3 new text begin stepsiblings, and adoptive relationships. new text end 2.4     new text begin Subd. 5. new text end new text begin Individual. new text end new text begin "Individual" means a natural person. new text end 2.5     new text begin Subd. 6. new text end new text begin Loan processor or underwriter. new text end new text begin "Loan processor or underwriter" means new text end 2.6 new text begin an individual who performs clerical or support duties as an employee at the direction new text end 2.7 new text begin of and subject to the supervision and instruction of a person licensed or exempt from new text end 2.8 new text begin licensing under chapter 58. For purposes of this subdivision, the term "clerical or support new text end 2.9 new text begin duties" may include after the receipt of an application: new text end 2.10 new text begin (1) the receipt, collection, distribution, and analysis of information common for the new text end 2.11 new text begin processing or underwriting of a residential mortgage loan; and new text end 2.12 new text begin (2) communicating with a consumer to obtain the information necessary for the new text end 2.13 new text begin processing or underwriting of a loan, to the extent that the communication does not include new text end 2.14 new text begin offering or negotiating loan rates or terms, or counseling consumers about residential new text end 2.15 new text begin mortgage loan rates or terms. new text end 2.16     new text begin Subd. 7. new text end new text begin Mortgage loan originator. new text end new text begin "Mortgage loan originator": new text end 2.17 new text begin (1) means an individual who for compensation or gain or in the expectation of new text end 2.18 new text begin compensation or gain: new text end 2.19 new text begin (i) takes a residential mortgage loan application; or new text end 2.20 new text begin (ii) offers or negotiates terms of a residential mortgage loan; new text end 2.21 new text begin (2) does not include an individual engaged solely as a loan processor or underwriter new text end 2.22 new text begin except as otherwise provided in section 58A.03, subdivision 3; new text end 2.23 new text begin (3) does not include a person or entity that only performs real estate brokerage new text end 2.24 new text begin activities and is licensed or registered according to Minnesota law, unless the person or new text end 2.25 new text begin entity is compensated by a lender, a mortgage broker, or other mortgage loan originator or new text end 2.26 new text begin by an agent of the lender, mortgage broker, or other mortgage loan originator; and new text end 2.27 new text begin (4) does not include a person or entity solely involved in extensions of credit relating new text end 2.28 new text begin to timeshare plans, as that term is defined in United States Code, title 11, section 101(53D). new text end 2.29     new text begin Subd. 8. new text end new text begin Nationwide Mortgage Licensing System and Registry. new text end new text begin "Nationwide new text end 2.30 new text begin Mortgage Licensing System and Registry" means a mortgage licensing system developed new text end 2.31 new text begin and maintained by the Conference of State Bank Supervisors and the American new text end 2.32 new text begin Association of Residential Mortgage Regulators for the licensing and registration of new text end 2.33 new text begin licensed mortgage loan originators. new text end 2.34     new text begin Subd. 9. new text end new text begin Nontraditional mortgage product. new text end new text begin "Nontraditional mortgage product" new text end 2.35 new text begin means a mortgage product other than a 30-year fixed rate mortgage loan. new text end 3.1     new text begin Subd. 10. new text end new text begin Person. new text end new text begin "Person" means a natural person, corporation, company, limited new text end 3.2 new text begin liability company, partnership, or association. new text end 3.3     new text begin Subd. 11. new text end new text begin Real estate brokerage activity. new text end new text begin "Real estate brokerage activity" means new text end 3.4 new text begin an activity that involves offering or providing real estate brokerage services to the public, new text end 3.5 new text begin including: new text end 3.6 new text begin (1) acting as a real estate agent or real estate broker for a buyer, seller, lessor, new text end 3.7 new text begin or lessee of real property; new text end 3.8 new text begin (2) bringing together parties interested in the sale, purchase, lease, rental, or new text end 3.9 new text begin exchange of real property; new text end 3.10 new text begin (3) negotiating, on behalf of a party, a portion of a contract relating to the sale, new text end 3.11 new text begin purchase, lease, rental, or exchange of real property other than in connection with new text end 3.12 new text begin providing financing with respect to the transaction; new text end 3.13 new text begin (4) engaging in an activity for which a person engaged in the activity is required to new text end 3.14 new text begin be registered or licensed as a real estate agent or real estate broker under any applicable new text end 3.15 new text begin law; and new text end 3.16 new text begin (5) offering to engage in any activity, or act in any capacity, described in clause new text end 3.17 new text begin (1), (2), (3), or (4). new text end 3.18     new text begin Subd. 12. new text end new text begin Registered mortgage loan originator. new text end new text begin "Registered mortgage loan new text end 3.19 new text begin originator" means an individual who: new text end 3.20 new text begin (1) meets the definition of mortgage loan originator and is an employee of: new text end 3.21 new text begin (i) a depository institution; new text end 3.22 new text begin (ii) a subsidiary that is owned and controlled by a depository institution and new text end 3.23 new text begin regulated by a federal banking agency; or new text end 3.24 new text begin (iii) an institution regulated by the Farm Credit Administration; and new text end 3.25 new text begin (2) is registered with, and maintains a unique identifier through, the Nationwide new text end 3.26 new text begin Mortgage Licensing System and Registry. new text end 3.27     new text begin Subd. 13. new text end new text begin Residential mortgage loan. new text end new text begin "Residential mortgage loan" means a loan new text end 3.28 new text begin primarily for personal, family, or household use that is secured by a mortgage, deed of new text end 3.29 new text begin trust, or other equivalent consensual security interest on a dwelling, as defined in United new text end 3.30 new text begin States Code, title 15, section 1602(v), or residential real estate upon which a dwelling is new text end 3.31 new text begin constructed or intended to be constructed. new text end 3.32     new text begin Subd. 14. new text end new text begin Residential real estate. new text end new text begin "Residential real estate" means real property new text end 3.33 new text begin located in Minnesota, upon which a dwelling is constructed or is intended to be new text end 3.34 new text begin constructed. new text end 4.1     new text begin Subd. 15. new text end new text begin Unique identifier. new text end new text begin "Unique identifier" means a number or other identifier new text end 4.2 new text begin assigned by protocols established by the Nationwide Mortgage Licensing System and new text end 4.3 new text begin Registry. new text end 4.4    Sec. 3. new text begin [58A.03] LICENSE AND REGISTRATION REQUIRED. new text end 4.5     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin An individual, unless specifically exempted from this new text end 4.6 new text begin chapter under subdivision 2, shall not engage in the business of a mortgage loan originator new text end 4.7 new text begin with respect to a dwelling located in this state without first obtaining and maintaining a new text end 4.8 new text begin license under this chapter. An individual may not engage in the mortgage loan business new text end 4.9 new text begin unless the individual is employed and supervised by an entity which is either licensed new text end 4.10 new text begin or exempt from licensing under chapter 58. A licensed mortgage loan originator must new text end 4.11 new text begin register with and maintain a valid unique identifier issued by the Nationwide Mortgage new text end 4.12 new text begin Licensing System and Registry. new text end 4.13     new text begin Subd. 2. new text end new text begin Exemptions. new text end new text begin The following are exempt from this chapter: new text end 4.14 new text begin (1) a registered mortgage loan originator, when acting for an entity described in new text end 4.15 new text begin section 58A.02, subdivision 12, clause (1); new text end 4.16 new text begin (2) an individual who offers or negotiates terms of a residential mortgage loan with new text end 4.17 new text begin or on behalf of an immediate family member of the individual; new text end 4.18 new text begin (3) an individual who offers or negotiates terms of a residential mortgage loan new text end 4.19 new text begin secured by a dwelling that served as the individual's residence; and new text end 4.20 new text begin (4) a licensed attorney who negotiates the terms of a residential mortgage loan new text end 4.21 new text begin on behalf of a client as an ancillary matter to the attorney's representation of the client, new text end 4.22 new text begin unless the attorney is compensated by a lender, a mortgage broker, or other mortgage new text end 4.23 new text begin loan originator or by any agent of the lender, mortgage broker, or other mortgage loan new text end 4.24 new text begin originator. new text end 4.25     new text begin Subd. 3. new text end new text begin Independent contractor loan processors or underwriters. new text end new text begin A loan new text end 4.26 new text begin processor or underwriter who is an independent contractor may not engage in the activities new text end 4.27 new text begin of a loan processor or underwriter unless the independent contractor loan processor new text end 4.28 new text begin or underwriter obtains and maintains a license under subdivision 1. An independent new text end 4.29 new text begin contractor loan processor or underwriter licensed as a mortgage loan originator must have new text end 4.30 new text begin and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing new text end 4.31 new text begin System and Registry. new text end 4.32 new text begin EFFECTIVE DATE. new text end new text begin In order to facilitate an orderly transition to licensing and new text end 4.33 new text begin minimize disruption in the mortgage marketplace, the effective date for subdivision 1 new text end 4.34 new text begin is July 31, 2010, or a later date approved by the Secretary of the U.S. Department of new text end 5.1 new text begin Housing and Urban Development, under the authority granted in Public Law 110-289, new text end 5.2 new text begin section 1508(a). new text end 5.3    Sec. 4. new text begin [58A.04] STATE LICENSE AND REGISTRATION APPLICATION AND new text end 5.4 new text begin ISSUANCE. new text end 5.5     new text begin Subdivision 1. new text end new text begin Application form. new text end new text begin An applicant for a license shall apply in a form new text end 5.6 new text begin as prescribed by the commissioner. The form must contain content as set forth by rule, new text end 5.7 new text begin instruction, or procedure of the commissioner and may be changed or updated as necessary new text end 5.8 new text begin by the commissioner in order to carry out the purposes of this chapter. new text end 5.9     new text begin Subd. 2. new text end new text begin Commissioner may establish relationships or contracts. new text end new text begin In order new text end 5.10 new text begin to fulfill the purposes of this chapter, the commissioner is authorized to establish new text end 5.11 new text begin relationships or contracts with the Nationwide Mortgage Licensing System and Registry new text end 5.12 new text begin or other entities designated by the Nationwide Mortgage Licensing System and Registry to new text end 5.13 new text begin collect and maintain records and process transaction fees or other fees related to licensees new text end 5.14 new text begin or other persons subject to this chapter. new text end 5.15     new text begin Subd. 3. new text end new text begin Waive or modify requirements. new text end new text begin For the purpose of participating in the new text end 5.16 new text begin Nationwide Mortgage Licensing System and Registry, the commissioner is authorized to new text end 5.17 new text begin waive or modify, in whole or in part, by rule or order, any or all of the requirements of new text end 5.18 new text begin this chapter and to establish new requirements as reasonably necessary to participate in new text end 5.19 new text begin the Nationwide Mortgage Licensing System and Registry. new text end 5.20     new text begin Subd. 4. new text end new text begin Background checks. new text end new text begin In connection with an application for licensing as a new text end 5.21 new text begin mortgage loan originator, the applicant shall, at a minimum, furnish to the Nationwide new text end 5.22 new text begin Mortgage Licensing System and Registry information concerning the applicant's identity, new text end 5.23 new text begin including: new text end 5.24 new text begin (1) fingerprints for submission to the Federal Bureau of Investigation, and a new text end 5.25 new text begin governmental agency or entity authorized to receive the information for a state, national, new text end 5.26 new text begin and international criminal history background check; and new text end 5.27 new text begin (2) personal history and experience in a form prescribed by the Nationwide new text end 5.28 new text begin Mortgage Licensing System and Registry, including the submission of authorization for new text end 5.29 new text begin the Nationwide Mortgage Licensing System and Registry and the commissioner to obtain: new text end 5.30 new text begin (i) an independent credit report obtained from a consumer reporting agency new text end 5.31 new text begin described in United States Code, title 15, section 1681a(p); and new text end 5.32 new text begin (ii) information related to administrative, civil, or criminal findings by a new text end 5.33 new text begin governmental jurisdiction. new text end 5.34     new text begin Subd. 5. new text end new text begin Agent for purposes of requesting and distributing criminal new text end 5.35 new text begin information. new text end new text begin For the purposes of this section and in order to reduce the points of new text end 6.1 new text begin contact which the Federal Bureau of Investigation may have to maintain for purposes of new text end 6.2 new text begin subdivision 4, clauses (1) and (2), the commissioner may use the Nationwide Mortgage new text end 6.3 new text begin Licensing System and Registry as a channeling agent for requesting information from and new text end 6.4 new text begin distributing information to the Department of Justice or any governmental agency. new text end 6.5     new text begin Subd. 6. new text end new text begin Agent for purposes of requesting and distributing noncriminal new text end 6.6 new text begin information. new text end new text begin For the purposes of this section and in order to reduce the points of contact new text end 6.7 new text begin which the commissioner may have to maintain for purposes of subdivision 4, clause (2)(i) new text end 6.8 new text begin and (ii), the commissioner may use the Nationwide Mortgage Licensing System and new text end 6.9 new text begin Registry as a channeling agent for requesting and distributing information to and from any new text end 6.10 new text begin source so directed by the commissioner. new text end 6.11    Sec. 5. new text begin [58A.045] TERM OF LICENSE AND FEES. new text end 6.12     new text begin Subdivision 1. new text end new text begin Term. new text end new text begin Licenses for mortgage loan originators issued under this new text end 6.13 new text begin chapter expire on December 31 and are renewable on January 1 of each year after that date. new text end 6.14     new text begin Subd. 2. new text end new text begin Fees. new text end new text begin The following fees must be paid to the commissioner: new text end 6.15     new text begin (1) for a mortgage loan originator license, $90; and new text end 6.16     new text begin (2) for a renewal mortgage loan originator license, $50. new text end 6.17    Sec. 6. new text begin [58A.05] ISSUANCE OF LICENSE. new text end 6.18 new text begin The commissioner shall not issue a mortgage loan originator license unless the new text end 6.19 new text begin commissioner finds at a minimum, that: new text end 6.20 new text begin (1) the applicant has never had a mortgage loan originator license revoked in a new text end 6.21 new text begin governmental jurisdiction, except that a subsequent formal vacation of a revocation shall new text end 6.22 new text begin not be deemed a revocation; new text end 6.23 new text begin (2) the applicant has not been convicted of, or pled guilty or nolo contendere to, a new text end 6.24 new text begin felony in a domestic, foreign, or military court: new text end 6.25 new text begin (i) during the seven-year period preceding the date of the application for licensing new text end 6.26 new text begin and registration; new text end 6.27 new text begin (ii) at any time preceding the date of application, if the felony involved an act of new text end 6.28 new text begin fraud, dishonesty, or a breach of trust, or money laundering; or new text end 6.29 new text begin (iii) provided that a pardon of a conviction is not a conviction for purposes of this new text end 6.30 new text begin clause; new text end 6.31 new text begin (3) the applicant has demonstrated financial responsibility, character, and general new text end 6.32 new text begin fitness such as to command the confidence of the community and to warrant a new text end 6.33 new text begin determination that the mortgage loan originator will operate honestly, fairly, and efficiently new text end 6.34 new text begin within the purposes of this chapter. For purposes of this chapter, a person has shown that new text end 7.1 new text begin the person is not financially responsible when the person has shown a disregard in the new text end 7.2 new text begin management of the person's own financial condition. A determination that an individual new text end 7.3 new text begin has not shown financial responsibility may include, but is not limited to: new text end 7.4 new text begin (i) current outstanding judgments, except judgments solely as a result of medical new text end 7.5 new text begin expenses; new text end 7.6 new text begin (ii) current outstanding tax liens or other government liens and filings; new text end 7.7 new text begin (iii) foreclosures within the past three years; and new text end 7.8 new text begin (iv) a pattern of seriously delinquent accounts within the past three years; new text end 7.9 new text begin (4) the applicant has completed the prelicensing education requirement described new text end 7.10 new text begin in section 58A.06; new text end 7.11 new text begin (5) the applicant has passed a written test that meets the test requirement described new text end 7.12 new text begin in section 58A.07; and new text end 7.13 new text begin (6) the applicant has met the surety bond requirement as required under section new text end 7.14 new text begin 58A.13. new text end 7.15    Sec. 7. new text begin [58A.06] PRELICENSING AND RELICENSING EDUCATION OF new text end 7.16 new text begin LOAN ORIGINATORS. new text end 7.17     new text begin Subdivision 1. new text end new text begin Minimum educational requirements. new text end new text begin In order to meet the new text end 7.18 new text begin prelicensing education requirement referred to in section 58A.05, clause (4), a person new text end 7.19 new text begin shall complete at least 20 hours of education approved according to subdivision 2, that new text end 7.20 new text begin includes at least: new text end 7.21 new text begin (1) three hours of federal law and regulations; new text end 7.22 new text begin (2) three hours of ethics, which includes instruction on fraud, consumer protection, new text end 7.23 new text begin and fair lending issues; and new text end 7.24 new text begin (3) two hours of training related to lending standards for the nontraditional mortgage new text end 7.25 new text begin product marketplace. new text end 7.26     new text begin Subd. 2. new text end new text begin Approved educational courses. new text end new text begin For purposes of subdivision 1, new text end 7.27 new text begin prelicensing education courses must be reviewed, and approved by the Nationwide new text end 7.28 new text begin Mortgage Licensing System and Registry based upon reasonable standards. Review new text end 7.29 new text begin and approval of a prelicensing education course must include review and approval of new text end 7.30 new text begin the course provider. new text end 7.31     new text begin Subd. 3. new text end new text begin Approval of employer and affiliate educational courses. new text end new text begin Nothing in new text end 7.32 new text begin this section precludes a prelicensing education course, as approved by the Nationwide new text end 7.33 new text begin Mortgage Licensing System and Registry, that is provided by the employer of the applicant new text end 7.34 new text begin or an entity that is affiliated with the applicant by an agency contract, or any subsidiary or new text end 7.35 new text begin affiliate of the employer or entity. new text end 8.1     new text begin Subd. 4. new text end new text begin Venue of education. new text end new text begin Prelicensing education may be offered in a classroom, new text end 8.2 new text begin online, or by any other means approved by the Nationwide Mortgage Licensing System new text end 8.3 new text begin and Registry. new text end 8.4     new text begin Subd. 5. new text end new text begin Reciprocity of education. new text end new text begin The prelicensing education requirements new text end 8.5 new text begin approved by the Nationwide Mortgage Licensing System and Registry in subdivision new text end 8.6 new text begin 1 for a state must be accepted as credit toward completion of prelicensing education new text end 8.7 new text begin requirements in Minnesota. new text end 8.8     new text begin Subd. 6. new text end new text begin Relicensing education requirements. new text end new text begin A person previously licensed under new text end 8.9 new text begin this chapter after the effective date of this chapter applying to be licensed again must new text end 8.10 new text begin prove that the person has completed all of the continuing education requirements for new text end 8.11 new text begin the year in which the license was last held. new text end 8.12    Sec. 8. new text begin [58A.07] TESTING OF LOAN ORIGINATORS. new text end 8.13     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin In order to meet the written test requirement referred to new text end 8.14 new text begin in section 58A.05, clause (5), an individual shall pass, in accordance with the standards new text end 8.15 new text begin established under this section, a qualified written test developed by the Nationwide new text end 8.16 new text begin Mortgage Licensing System and Registry and administered by a test provider approved new text end 8.17 new text begin by the Nationwide Mortgage Licensing System and Registry based upon reasonable new text end 8.18 new text begin standards. new text end 8.19     new text begin Subd. 2. new text end new text begin Qualified test. new text end new text begin A written test must not be treated as a qualified written new text end 8.20 new text begin test for purposes of subdivision 1 unless the test adequately measures the applicant's new text end 8.21 new text begin knowledge and comprehension in appropriate subject areas, including: new text end 8.22 new text begin (1) ethics; new text end 8.23 new text begin (2) federal law and regulation pertaining to mortgage origination; new text end 8.24 new text begin (3) state law and rule pertaining to mortgage origination; and new text end 8.25 new text begin (4) federal and state law and rule, including instruction on fraud, consumer new text end 8.26 new text begin protection, the nontraditional mortgage marketplace, and fair lending issues. new text end 8.27     new text begin Subd. 3. new text end new text begin Testing location. new text end new text begin Northing in this section prohibits a test provider approved new text end 8.28 new text begin by the Nationwide Mortgage Licensing System and Registry from providing a test at the new text end 8.29 new text begin location of the employer of the applicant or the location of a subsidiary or affiliate of the new text end 8.30 new text begin employer of the applicant, or the location of an entity with which the applicant holds an new text end 8.31 new text begin exclusive arrangement to conduct the business of a mortgage loan originator. new text end 8.32     new text begin Subd. 4. new text end new text begin Minimum competence. new text end new text begin (a) An individual is not considered to have new text end 8.33 new text begin passed a qualified written test unless the individual achieves a test score of not less than new text end 8.34 new text begin 75 percent correct answers to questions. new text end 9.1 new text begin (b) An individual may retake a test three consecutive times with each consecutive new text end 9.2 new text begin taking occurring at least 30 days after the preceding test. new text end 9.3 new text begin (c) After failing three consecutive tests, an individual shall wait at least six months new text end 9.4 new text begin before taking the test again. new text end 9.5 new text begin (d) A licensed mortgage loan originator who fails to maintain a valid license for a new text end 9.6 new text begin period of five years or longer shall retake the test, not taking into account any time during new text end 9.7 new text begin which the individual is a registered mortgage loan originator. new text end 9.8    Sec. 9. new text begin [58A.08] STANDARDS FOR LICENSE RENEWAL. new text end 9.9     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin The minimum standards for license renewal for a new text end 9.10 new text begin mortgage loan originator include that the mortgage loan originator: new text end 9.11 new text begin (1) continues to meet the minimum standards for license issuance under section new text end 9.12 new text begin 58A.05; new text end 9.13 new text begin (2) has satisfied the annual continuing education requirements described in section new text end 9.14 new text begin 58A.09; and new text end 9.15 new text begin (3) has paid all required fees for renewal of the license. new text end 9.16     new text begin Subd. 2. new text end new text begin Failure to satisfy minimum standards of license renewal. new text end new text begin The license of new text end 9.17 new text begin a mortgage loan originator failing to satisfy the minimum standards for license renewal new text end 9.18 new text begin expires. The commissioner may adopt procedures for the reinstatement of expired licenses new text end 9.19 new text begin consistent with the standards established by the Nationwide Mortgage Licensing System new text end 9.20 new text begin and Registry. new text end 9.21    Sec. 10. new text begin [58A.09] CONTINUING EDUCATION FOR MORTGAGE LOAN new text end 9.22 new text begin ORIGINATORS. new text end 9.23     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin In order to meet the annual continuing education new text end 9.24 new text begin requirements referred to in section 58A.08, subdivision 1, clause (2), a licensed mortgage new text end 9.25 new text begin loan originator shall complete at least eight hours of education approved according to new text end 9.26 new text begin subdivision 2 that includes at least: new text end 9.27 new text begin (1) three hours of federal law and regulations; new text end 9.28 new text begin (2) two hours of ethics, which includes instruction on fraud, consumer protection, new text end 9.29 new text begin and fair lending issues; and new text end 9.30 new text begin (3) two hours of training related to lending standards for the nontraditional mortgage new text end 9.31 new text begin product marketplace. new text end 9.32     new text begin Subd. 2. new text end new text begin Approved educational courses. new text end new text begin For purposes of subdivision 1, continuing new text end 9.33 new text begin education courses must be reviewed and approved by the Nationwide Mortgage Licensing new text end 10.1 new text begin System and Registry based upon reasonable standards. Review and approval of a new text end 10.2 new text begin continuing education course must include review and approval of the course provider. new text end 10.3     new text begin Subd. 3. new text end new text begin Approval of employer and affiliate educational courses. new text end new text begin Nothing in new text end 10.4 new text begin this section precludes an education course, as approved by the Nationwide Mortgage new text end 10.5 new text begin Licensing System and Registry, that is provided by the employer of the mortgage loan new text end 10.6 new text begin originator or an entity that is affiliated with the mortgage loan originator by an agency new text end 10.7 new text begin contract, or a subsidiary or affiliate of the employer or entity. new text end 10.8     new text begin Subd. 4. new text end new text begin Venue of education. new text end new text begin Continuing education may be offered either in a new text end 10.9 new text begin classroom, online, or by other means approved by the Nationwide Mortgage Licensing new text end 10.10 new text begin System and Registry. new text end 10.11     new text begin Subd. 5. new text end new text begin Calculation of continuing education credits. new text end new text begin A licensed mortgage loan new text end 10.12 new text begin originator: new text end 10.13 new text begin (1) except for subdivision 9 and section 58A.08, subdivision 2, may only receive new text end 10.14 new text begin credit for a continuing education course in the year in which the course is taken; and new text end 10.15 new text begin (2) may not take the same approved course in the same or successive years to meet new text end 10.16 new text begin the annual requirements for continuing education. new text end 10.17     new text begin Subd. 6. new text end new text begin Instructor credit. new text end new text begin A licensed mortgage loan originator who is an approved new text end 10.18 new text begin instructor of an approved continuing education course may receive credit for the licensed new text end 10.19 new text begin mortgage loan originator's own annual continuing education requirement at the rate of new text end 10.20 new text begin two hours credit for every one hour taught. new text end 10.21     new text begin Subd. 7. new text end new text begin Reciprocity of education. new text end new text begin A person having successfully completed the new text end 10.22 new text begin education requirements approved by the Nationwide Mortgage Licensing System and new text end 10.23 new text begin Registry in subdivision 1 for a state must be accepted as credit toward completion of new text end 10.24 new text begin continuing education requirements in Minnesota. new text end 10.25     new text begin Subd. 8. new text end new text begin Lapse in license. new text end new text begin A licensed mortgage loan originator who subsequently new text end 10.26 new text begin becomes unlicensed must complete the continuing education requirements for the last year new text end 10.27 new text begin in which the license was held before a new or renewed license is issued. new text end 10.28     new text begin Subd. 9. new text end new text begin Deficiency. new text end new text begin A person meeting the requirements of section 58A.08, new text end 10.29 new text begin subdivision 1, clauses (1) and (3), may make up a deficiency in continuing education as new text end 10.30 new text begin established by rule of the commissioner. new text end 10.31    Sec. 11. new text begin [58A.10] AUTHORITY TO REQUIRE LICENSE. new text end 10.32 new text begin In addition to any other duties imposed upon the commissioner by law, the new text end 10.33 new text begin commissioner shall require mortgage loan originators to be licensed and registered new text end 10.34 new text begin through the Nationwide Mortgage Licensing System and Registry. In order to carry out new text end 10.35 new text begin this requirement, the commissioner may participate in the Nationwide Mortgage Licensing new text end 11.1 new text begin System and Registry. For this purpose, the commissioner may establish by rule or order new text end 11.2 new text begin requirements as necessary, including but not limited to: new text end 11.3 new text begin (1) background checks for: new text end 11.4 new text begin (i) criminal history through fingerprint or other databases; new text end 11.5 new text begin (ii) civil or administrative records; new text end 11.6 new text begin (iii) credit history; or new text end 11.7 new text begin (iv) other information as determined necessary by the Nationwide Mortgage new text end 11.8 new text begin Licensing System and Registry; new text end 11.9 new text begin (2) the payment of fees to apply for or renew licenses through the Nationwide new text end 11.10 new text begin Mortgage Licensing System and Registry; new text end 11.11 new text begin (3) the setting or resetting as necessary of renewal or reporting dates; and new text end 11.12 new text begin (4) requirements for amending or surrendering a license or other activities the new text end 11.13 new text begin commissioner considers necessary for participation in the Nationwide Mortgage Licensing new text end 11.14 new text begin System and Registry. new text end 11.15    Sec. 12. new text begin [58A.11] NATIONWIDE MORTGAGE LICENSING SYSTEM AND new text end 11.16 new text begin REGISTRY INFORMATION CHALLENGE PROCESS. new text end 11.17 new text begin The commissioner shall establish a process that allows mortgage loan originators new text end 11.18 new text begin to challenge information entered into the Nationwide Mortgage Licensing System and new text end 11.19 new text begin Registry by the commissioner. new text end 11.20    Sec. 13. new text begin [58A.12] ENFORCEMENT AUTHORITIES, VIOLATIONS, AND new text end 11.21 new text begin PENALTIES. new text end 11.22 new text begin (a) In order to ensure the effective supervision and enforcement of this chapter, the new text end 11.23 new text begin commissioner may, pursuant to chapter 14: new text end 11.24 new text begin (1) deny, suspend, revoke, condition, or decline to renew a license for a violation of new text end 11.25 new text begin this chapter, rules issued under this chapter, or order or directive entered under this chapter; new text end 11.26 new text begin (2) deny, suspend, revoke, condition, or decline to renew a license if an applicant new text end 11.27 new text begin or licensee fails at anytime to meet the requirements of section 58A.05 or 58A.08, or new text end 11.28 new text begin withholds information or makes a material misstatement in an application for a license new text end 11.29 new text begin or renewal of a license; new text end 11.30 new text begin (3) order restitution against persons subject to this chapter for violations of this new text end 11.31 new text begin chapter; new text end 11.32 new text begin (4) impose fines on persons subject to this chapter pursuant to paragraphs (b) new text end 11.33 new text begin to (d); and new text end 11.34 new text begin (5) issue orders or directives under this chapter as follows: new text end 12.1 new text begin (i) order or direct persons subject to this chapter to cease and desist from conducting new text end 12.2 new text begin business, including immediate temporary orders to cease and desist; new text end 12.3 new text begin (ii) order or direct persons subject to this chapter to cease any harmful activities or new text end 12.4 new text begin violations of this chapter, including immediate temporary orders to cease and desist; new text end 12.5 new text begin (iii) enter immediate temporary orders to cease business under a license or interim new text end 12.6 new text begin license issued pursuant to the authority granted under section 58A.03, subdivision 4, if new text end 12.7 new text begin the commissioner determines that the license was erroneously granted or the licensee is new text end 12.8 new text begin currently in violation of this chapter; and new text end 12.9 new text begin (iv) order or direct other affirmative action the commissioner considers necessary. new text end 12.10 new text begin (b) The commissioner may impose a civil penalty on a mortgage loan originator or new text end 12.11 new text begin person subject to this chapter, if the commissioner finds, on the record after notice and new text end 12.12 new text begin opportunity for hearing, that the mortgage loan originator or person subject to this chapter new text end 12.13 new text begin has violated or failed to comply with any requirement of this chapter or any rule prescribed new text end 12.14 new text begin by the commissioner under this chapter or order issued under authority of this chapter. new text end 12.15 new text begin (c) The maximum amount of penalty for each act or omission described in paragraph new text end 12.16 new text begin (b) is $25,000. new text end 12.17 new text begin (d) Each violation or failure to comply with any directive or order of the new text end 12.18 new text begin commissioner is a separate and distinct violation or failure. new text end 12.19    Sec. 14. new text begin [58A.13] SURETY BOND REQUIRED. new text end 12.20     new text begin Subdivision 1. new text end new text begin Coverage, form, and rules. new text end new text begin (a) Each mortgage loan originator must new text end 12.21 new text begin be covered by a surety bond meeting the requirements of this section. In the event that new text end 12.22 new text begin the mortgage loan originator is an employee or exclusive agent of a person subject to this new text end 12.23 new text begin chapter, the surety bond of the person subject to this chapter can be used in lieu of the new text end 12.24 new text begin mortgage loan originator's surety bond requirement. new text end 12.25 new text begin (b) The surety bond shall provide coverage for each mortgage loan originator in new text end 12.26 new text begin an amount as prescribed in subdivision 2. new text end 12.27 new text begin (c) The surety bond must be in a form as prescribed by the commissioner. new text end 12.28     new text begin Subd. 2. new text end new text begin Penal sum of surety bond. new text end new text begin The penal sum of the surety bond must be new text end 12.29 new text begin maintained in an amount that reflects the dollar amount of loans originated as determined new text end 12.30 new text begin by the commissioner. new text end 12.31     new text begin Subd. 3. new text end new text begin Action on bond. new text end new text begin When an action is commenced on a licensee's bond the new text end 12.32 new text begin commissioner may require the filing of a new bond. new text end 12.33     new text begin Subd. 4. new text end new text begin New bond. new text end new text begin Immediately upon recovery upon any action on the bond new text end 12.34 new text begin the licensee shall file a new bond. new text end 13.1    Sec. 15. new text begin [58A.14] CONFIDENTIALITY. new text end 13.2     new text begin Subdivision 1. new text end new text begin Protections. new text end new text begin Except as otherwise provided in Public Law 110-289, new text end 13.3 new text begin section 1512, the requirements under chapter 13 or any federal law regarding the privacy new text end 13.4 new text begin or confidentiality of any information or material provided to the Nationwide Mortgage new text end 13.5 new text begin Licensing System and Registry, and any privilege arising under federal or state law, new text end 13.6 new text begin including the rules of any federal or state court, with respect to the information or material, new text end 13.7 new text begin continue to apply to the information or material after the information or material has been new text end 13.8 new text begin disclosed to the Nationwide Mortgage Licensing System and Registry. The information new text end 13.9 new text begin and material may be shared with all state and federal regulatory officials with mortgage new text end 13.10 new text begin industry oversight authority without the loss of privilege or the loss of confidentiality new text end 13.11 new text begin protections provided by chapter 13 or federal law. new text end 13.12     new text begin Subd. 2. new text end new text begin Agreements and sharing arrangements. new text end new text begin For purposes of this section, new text end 13.13 new text begin the commissioner is authorized to enter agreements or sharing arrangements with new text end 13.14 new text begin other governmental agencies, the Conference of State Bank Supervisors, the American new text end 13.15 new text begin Association of Residential Mortgage Regulators, or other associations representing new text end 13.16 new text begin governmental agencies as established by rule or order of the commissioner. new text end 13.17     new text begin Subd. 3. new text end new text begin Nonapplicability of certain requirements. new text end new text begin Information or material that is new text end 13.18 new text begin subject to a privilege or confidentiality under subdivision 1 is not subject to: new text end 13.19 new text begin (1) disclosure under any federal or state law governing the disclosure to the public of new text end 13.20 new text begin information held by an officer or an agency of the federal government or the respective new text end 13.21 new text begin state; or new text end 13.22 new text begin (2) subpoena or discovery, or admission into evidence, in any private civil action new text end 13.23 new text begin or administrative process, unless with respect to any privilege held by the Nationwide new text end 13.24 new text begin Mortgage Licensing System and Registry with respect to the information or material, new text end 13.25 new text begin the person to whom the information or material pertains waives, in whole or in part, in new text end 13.26 new text begin the discretion of the person, that privilege. new text end 13.27     new text begin Subd. 4. new text end new text begin Coordination with Minnesota Government Data Practices Act. new text end new text begin Chapter new text end 13.28 new text begin 13 relating to the disclosure of confidential supervisory information or any information or new text end 13.29 new text begin material described in subdivision 1 that is inconsistent with subdivision 1 is superseded by new text end 13.30 new text begin the requirements of this section. new text end 13.31     new text begin Subd. 5. new text end new text begin Public access to information. new text end new text begin This section does not apply with respect to new text end 13.32 new text begin the information or material relating to the employment history of, and publicly adjudicated new text end 13.33 new text begin disciplinary and enforcement actions against, mortgage loan originators that are included new text end 13.34 new text begin in the Nationwide Mortgage Licensing System and Registry for access by the public. new text end 13.35    Sec. 16. new text begin [58A.15] INVESTIGATION AND EXAMINATION AUTHORITY. new text end 14.1     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin In addition to any authority allowed under this chapter, new text end 14.2 new text begin the commissioner may conduct investigations and examinations according to subdivisions new text end 14.3 new text begin 2 to 9. new text end 14.4     new text begin Subd. 2. new text end new text begin Authority to access information. new text end new text begin For purposes of initial licensing, license new text end 14.5 new text begin renewal, license suspension, license conditioning, license revocation or termination, or new text end 14.6 new text begin general or specific inquiry or investigation to determine compliance with this chapter, the new text end 14.7 new text begin commissioner may access, receive and use any books, accounts, records, files, documents, new text end 14.8 new text begin information or evidence including but not limited to: new text end 14.9 new text begin (1) criminal, civil, and administrative history information, including nonconviction new text end 14.10 new text begin data; new text end 14.11 new text begin (2) personal history and experience information including independent credit reports new text end 14.12 new text begin obtained from a consumer reporting agency described in United States Code, title 15, new text end 14.13 new text begin section 1681a(p); and new text end 14.14 new text begin (3) any other documents, information, or evidence the commissioner considers new text end 14.15 new text begin relevant to the inquiry or investigation regardless of the location, possession, control, or new text end 14.16 new text begin custody of the documents, information, or evidence. new text end 14.17     new text begin Subd. 3. new text end new text begin Investigation, examination, and subpoena authority. new text end new text begin For the purposes new text end 14.18 new text begin of investigating violations or complaints arising under this chapter, or for the purposes of new text end 14.19 new text begin examination, the commissioner may review, investigate, or examine a licensee, individual, new text end 14.20 new text begin or person subject to this chapter, as often as necessary in order to carry out the purposes new text end 14.21 new text begin of this chapter. The commissioner may direct, subpoena, or order the attendance of and new text end 14.22 new text begin examine under oath all persons whose testimony may be required about the loans or the new text end 14.23 new text begin business or subject matter of any such examination or investigation, and may direct, new text end 14.24 new text begin subpoena, or order such person to produce books, accounts, records, files, and any other new text end 14.25 new text begin documents the commissioner considers relevant to the inquiry. new text end 14.26     new text begin Subd. 4. new text end new text begin Availability of books and records. new text end new text begin A licensee, individual, or person new text end 14.27 new text begin subject to this chapter shall make available to the commissioner upon request the books new text end 14.28 new text begin and records relating to the operations of the licensee, individual, or person subject to this new text end 14.29 new text begin chapter. The commissioner shall have access to the books and records and interview new text end 14.30 new text begin the officers, principals, mortgage loan originators, employees, independent contractors, new text end 14.31 new text begin agents, and customers of the licensee, individual, or person subject to this chapter new text end 14.32 new text begin concerning the licensee's, individual's, or person's business. new text end 14.33     new text begin Subd. 5. new text end new text begin Reports and other information as directed. new text end new text begin A licensee, individual, or new text end 14.34 new text begin person subject to this chapter shall make or compile reports or prepare other information new text end 14.35 new text begin as directed by the commissioner in order to carry out the purposes of this section including new text end 14.36 new text begin but not limited to: new text end 15.1 new text begin (1) accounting compilations; new text end 15.2 new text begin (2) information lists and data concerning loan transactions in a format prescribed new text end 15.3 new text begin by the commissioner; or new text end 15.4 new text begin (3) other information the commissioner considers necessary to carry out the new text end 15.5 new text begin purposes of this section. new text end 15.6     new text begin Subd. 6. new text end new text begin Control access to records. new text end new text begin In making an examination or investigation new text end 15.7 new text begin authorized by this chapter, the commissioner may control access to documents and records new text end 15.8 new text begin of the licensee or person under examination or investigation. The commissioner may new text end 15.9 new text begin take possession of the documents and records or place a person in exclusive charge of new text end 15.10 new text begin the documents and records in the place where they are usually kept. During the period of new text end 15.11 new text begin control, no individual or person shall remove or attempt to remove any of the documents new text end 15.12 new text begin and records except pursuant to a court order or with the consent of the commissioner. new text end 15.13 new text begin Unless the commissioner has reasonable grounds to believe the documents or records new text end 15.14 new text begin of the licensee have been, or are at risk of being, altered or destroyed for purposes of new text end 15.15 new text begin concealing a violation of this chapter, the licensee or owner of the documents and records new text end 15.16 new text begin has access to the documents or records as necessary to conduct its ordinary business affairs. new text end 15.17     new text begin Subd. 7. new text end new text begin Additional authority. new text end new text begin In order to carry out the purposes of this section, new text end 15.18 new text begin the commissioner may: new text end 15.19 new text begin (1) retain attorneys, accountants, or other professionals and specialists as examiners, new text end 15.20 new text begin auditors, or investigators to conduct or assist in the conduct of examinations or new text end 15.21 new text begin investigations; new text end 15.22 new text begin (2) enter into agreements or relationships with other government officials or new text end 15.23 new text begin regulatory associations in order to improve efficiencies and reduce regulatory burden new text end 15.24 new text begin by sharing resources, standardized or uniform methods or procedures, and documents, new text end 15.25 new text begin records, information, or evidence obtained under this section; new text end 15.26 new text begin (3) use, hire, contract, or employ public or privately available analytical systems, new text end 15.27 new text begin methods, or software to examine or investigate the licensee, individual, or person subject new text end 15.28 new text begin to this chapter; new text end 15.29 new text begin (4) accept and rely on examination or investigation reports made by other new text end 15.30 new text begin government officials, within or without this state; or new text end 15.31 new text begin (5) accept audit reports made by an independent certified public accountant for the new text end 15.32 new text begin licensee, individual, or person subject to this chapter in the course of that part of the new text end 15.33 new text begin examination covering the same general subject matter as the audit and incorporate the new text end 15.34 new text begin audit report in the report of the examination, report of investigation or other writing of new text end 15.35 new text begin the commissioner. new text end 16.1     new text begin Subd. 8. new text end new text begin Effect of authority. new text end new text begin The authority of this section remains in effect, new text end 16.2 new text begin whether a licensee, individual, or person subject to this chapter acts or claims to act under new text end 16.3 new text begin any licensing or registration law of this state, or claims to act without such authority. new text end 16.4     new text begin Subd. 9. new text end new text begin Withhold records. new text end new text begin A licensee, individual, or person subject to new text end 16.5 new text begin investigation or examination under this section shall not knowingly withhold, abstract, new text end 16.6 new text begin remove, mutilate, destroy, or secrete any books, records, computer records, or other new text end 16.7 new text begin information. new text end 16.8    Sec. 17. new text begin [58A.16] PROHIBITED ACTS AND PRACTICES. new text end 16.9     new text begin Subdivision 1. new text end new text begin Generally. new text end new text begin It is a violation of this chapter for a person or individual new text end 16.10 new text begin subject to this chapter to: new text end 16.11 new text begin (1) directly or indirectly employ any scheme, device, or artifice to defraud or mislead new text end 16.12 new text begin borrowers or lenders or to defraud any person; new text end 16.13 new text begin (2) engage in any unfair or deceptive practice toward any person; new text end 16.14 new text begin (3) obtain property by fraud or misrepresentation; new text end 16.15 new text begin (4) solicit or enter into a contract with a borrower that provides in substance that the new text end 16.16 new text begin person or individual subject to this chapter may earn a fee or commission through "best new text end 16.17 new text begin efforts" to obtain a loan even though no loan is actually obtained for the borrower; new text end 16.18 new text begin (5) solicit, advertise, or enter into a contract for specific interest rates, points, or new text end 16.19 new text begin other financing terms unless the terms are actually available at the time of soliciting, new text end 16.20 new text begin advertising, or contracting; new text end 16.21 new text begin (6) conduct any business covered by this chapter without holding a valid license as new text end 16.22 new text begin required under this chapter, or assist or aide and abet any person in the conduct of business new text end 16.23 new text begin under this chapter without a valid license as required under this chapter; new text end 16.24 new text begin (7) fail to make disclosures as required by this chapter and any other applicable new text end 16.25 new text begin state or federal law or regulations; new text end 16.26 new text begin (8) fail to comply with this chapter or rules adopted under this chapter or fail new text end 16.27 new text begin to comply with any other state or federal law or regulations applicable to any business new text end 16.28 new text begin authorized or conducted under this chapter; new text end 16.29 new text begin (9) make, in any manner, any false or deceptive statement or representation new text end 16.30 new text begin including, with regard to the rates, points, or other financing terms or conditions for a new text end 16.31 new text begin residential mortgage loan; or engage in bait-and-switch advertising; new text end 16.32 new text begin (10) negligently make a false statement or knowingly and willfully make an omission new text end 16.33 new text begin of material fact in connection with any information or reports filed with a governmental new text end 16.34 new text begin agency or the Nationwide Mortgage Licensing System and Registry or in connection with new text end 16.35 new text begin an investigation conducted by the commissioner or another governmental agency; new text end 17.1 new text begin (11) make a payment, threat, or promise, directly or indirectly, to a person for the new text end 17.2 new text begin purposes of influencing the independent judgment of the person in connection with a new text end 17.3 new text begin residential mortgage loan, or make a payment threat or promise, directly or indirectly, to new text end 17.4 new text begin an appraiser of a property, for the purposes of influencing the independent judgment of the new text end 17.5 new text begin appraiser with respect to the value of the property; new text end 17.6 new text begin (12) collect, charge, attempt to collect or charge, or use or propose an agreement new text end 17.7 new text begin purporting to collect or charge a fee prohibited by this chapter; new text end 17.8 new text begin (13) cause or require a borrower to obtain property insurance coverage in an amount new text end 17.9 new text begin that exceeds the replacement cost of the improvements as established by the property new text end 17.10 new text begin insurer; or new text end 17.11 new text begin (14) fail to truthfully account for money belonging to a party to a residential new text end 17.12 new text begin mortgage loan transaction. new text end 17.13     new text begin Subd. 2. new text end new text begin Loan processor or underwriter activities. new text end new text begin An individual engaging solely new text end 17.14 new text begin in loan processor or underwriter activities shall not represent to the public, through new text end 17.15 new text begin advertising or other means of communicating or providing information, including the use new text end 17.16 new text begin of business cards, stationery, brochures, signs, rate lists, or other promotional items, that new text end 17.17 new text begin the individual can or will perform any of the activities of a mortgage loan originator. new text end 17.18    Sec. 18. new text begin [58A.17] MORTGAGE CALL REPORTS. new text end 17.19 new text begin A mortgage licensee shall submit to the Nationwide Mortgage Licensing System and new text end 17.20 new text begin Registry reports of condition, which must be in the form and contain the information the new text end 17.21 new text begin Nationwide Mortgage Licensing System and Registry requires. new text end 17.22    Sec. 19. new text begin [58A.18] REPORT TO NATIONWIDE MORTGAGE LICENSING new text end 17.23 new text begin SYSTEM AND REGISTRY. new text end 17.24 new text begin The commissioner shall regularly report violations of this chapter, as well as new text end 17.25 new text begin enforcement actions and other relevant information, to the Nationwide Mortgage new text end 17.26 new text begin Licensing System and Registry subject to the provisions contained in section 58A.14. new text end 17.27    Sec. 20. new text begin [58A.20] UNIQUE IDENTIFIER SHOWN. new text end 17.28 new text begin The unique identifier of any person originating a residential mortgage loan shall new text end 17.29 new text begin be clearly shown on all residential mortgage loan application forms, solicitations, or new text end 17.30 new text begin advertisements, including business cards or Web sites, and any other documents as new text end 17.31 new text begin established by rule or order of the commissioner. new text end 17.32    Sec. 21. new text begin EFFECTIVE DATE. new text end 18.1 new text begin This article is effective July 31, 2010. new text end 18.2ARTICLE 2 18.3CONFORMING AND TRANSITIONAL PROVISIONS RELATING TO 18.4MINNESOTA STATUTES, CHAPTER 58 18.5    Section 1. Minnesota Statutes 2008, section 58.04, subdivision 1, is amended to read: 18.6    Subdivision 1. Residential mortgage originator licensing requirements. (a) 18.7No person shall act as a residential mortgage originator, or make residential mortgage 18.8loans without first obtaining a license from the commissioner according to the licensing 18.9procedures provided in this chapter. 18.10    (b) A licensee must be either a partnership, limited liability partnership, association, 18.11limited liability company, corporation, or other form of business organization, and must 18.12have and maintain at all times one of the following: approval as a mortgagee by either the 18.13federal Department of Housing and Urban Development or the Federal National Mortgage 18.14Association; a minimum net worth, net of intangibles, of at least $250,000; or a surety 18.15bond or irrevocable letter of credit in the amount of $50,000 new text begin amounts prescribed under new text end 18.16 new text begin section 58.08 new text end . Net worth, net of intangibles, must be calculated in accordance with 18.17generally accepted accounting principles. 18.18    (c) The following persons are exempt from the residential mortgage originator 18.19licensing requirements: 18.20    (1) a person who is not in the business of making residential mortgage loans and who 18.21makes no more than three such loans, with its own funds, during any 12-month period; 18.22    (2) a financial institution as defined in section 58.02, subdivision 10; 18.23    (3) an agency of the federal government, or of a state or municipal government; 18.24    (4) an employee or employer pension plan making loans only to its participants; 18.25    (5) a person acting in a fiduciary capacity, such as a trustee or receiver, as a result of 18.26a specific order issued by a court of competent jurisdiction; or 18.27    (6) a person exempted by order of the commissioner. 18.28    Sec. 2. Minnesota Statutes 2009 Supplement, section 58.06, subdivision 2, is amended 18.29to read: 18.30    Subd. 2. Application contents. (a) The application must contain the name and 18.31complete business address or addresses of the license applicant. The license applicant 18.32must be a partnership, limited liability partnership, association, limited liability company, 18.33corporation, or other form of business organization, and the application must contain the 18.34names and complete business addresses of each partner, member, director, and principal 19.1officer. The application must also include a description of the activities of the license 19.2applicant, in the detail and for the periods the commissioner may require. 19.3    (b) A residential mortgage originator applicant must submit one of the following: 19.4    (1) evidence which shows, to the commissioner's satisfaction, that either the federal 19.5Department of Housing and Urban Development or the Federal National Mortgage 19.6Association has approved the residential mortgage originator applicant as a mortgagee; 19.7    (2) a surety bond or irrevocable letter of credit in the amount of not less than 19.8$50,000 in a form approved by the commissioner, issued by an insurance company or bank 19.9authorized to do so in this state. The bond or irrevocable letter of credit must be available 19.10for the recovery of expenses, fines, and fees levied by the commissioner under this chapter 19.11and for losses incurred by borrowers. The bond or letter of credit must be submitted with 19.12the license application, and evidence of continued coverage must be submitted with each 19.13renewal. Any change in the bond or letter of credit must be submitted for approval by the 19.14commissioner within ten days of its execution; or 19.15    (3) a copy of the residential mortgage originator applicant's most recent audited 19.16financial statement, including balance sheet, statement of income or loss, statements of 19.17changes in shareholder equity, and statement of changes in financial position. Financial 19.18statements must be as of a date within 12 months of the date of application. new text begin a surety bond new text end 19.19 new text begin that meets the requirements of section 58.08, subdivision 1a. new text end 19.20    (c) The application must also include all of the following: 19.21    (1) an affirmation under oath that the applicant: 19.22    (i) is in compliance with the requirements of section 58.125; 19.23    (ii) will maintain a perpetual roster of individuals employed as residential mortgage 19.24originators, including employees and independent contractors, which includes the dates 19.25that mandatory testing, initial education, and continuing education were completed. In 19.26addition, the roster must be made available to the commissioner on demand, within three 19.27business days of the commissioner's request; 19.28    (iii) new text begin (ii) new text end will advise the commissioner of any material changes to the information 19.29submitted in the most recent application within ten days of the change; 19.30    (iv) new text begin (iii) new text end will advise the commissioner in writing immediately of any bankruptcy 19.31petitions filed against or by the applicant or licensee; 19.32    (v) new text begin (iv) new text end will maintain at all times either a net worth, net of intangibles, of at least 19.33$250,000 or a surety bond or irrevocable letter of credit in the amount of at least $50,000 new text begin new text end 19.34 new text begin $100,000 new text end ; 19.35    (vi) new text begin (v) new text end complies with federal and state tax laws; and 20.1    (vii) new text begin (vi) new text end complies with sections 345.31 to 345.60, the Minnesota unclaimed 20.2property law; 20.3    (2) information as to the mortgage lending, servicing, or brokering experience of the 20.4applicant and persons in control of the applicant; 20.5    (3) information as to criminal convictions, excluding traffic violations, of persons in 20.6control of the license applicant; 20.7    (4) whether a court of competent jurisdiction has found that the applicant or persons 20.8in control of the applicant have engaged in conduct evidencing gross negligence, fraud, 20.9misrepresentation, or deceit in performing an act for which a license is required under 20.10this chapter; 20.11    (5) whether the applicant or persons in control of the applicant have been the subject 20.12of: an order of suspension or revocation, cease and desist order, or injunctive order, or 20.13order barring involvement in an industry or profession issued by this or another state or 20.14federal regulatory agency or by the Secretary of Housing and Urban Development within 20.15the ten-year period immediately preceding submission of the application; and 20.16    (6) other information required by the commissioner. 20.17    Sec. 3. Minnesota Statutes 2008, section 58.08, is amended by adding a subdivision to 20.18read: 20.19     new text begin Subd. 1a. new text end new text begin Residential mortgage originators. new text end new text begin (a) An applicant for a residential new text end 20.20 new text begin mortgage originator license must file with the department a surety bond in the amount of new text end 20.21 new text begin $100,000, issued by an insurance company authorized to do so in this state. The bond new text end 20.22 new text begin must cover all mortgage loan originators who are employees or independent agents of new text end 20.23 new text begin the applicant. The bond must be available for the recovery of expenses, fines, and fees new text end 20.24 new text begin levied by the commissioner under this chapter and for losses incurred by borrowers as new text end 20.25 new text begin a result of a licensee's noncompliance with the requirements of this chapter, sections new text end 20.26 new text begin 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach of contract relating to activities new text end 20.27 new text begin regulated by this chapter. new text end 20.28     new text begin (b) The bond must be submitted with the originator's license application and new text end 20.29 new text begin evidence of continued coverage must be submitted with each renewal. Any change in the new text end 20.30 new text begin bond must be submitted for approval by the commissioner, within ten days of its execution. new text end 20.31 new text begin The bond or a substitute bond shall remain in effect during all periods of licensing. new text end 20.32     new text begin (c) Upon filing of the mortgage call report as required by section 58A.17, a licensee new text end 20.33 new text begin shall maintain or increase its surety bond to reflect the total dollar amount of the closed new text end 20.34 new text begin residential mortgage loans originated in this state in the preceding year according to the new text end 20.35 new text begin table in this paragraph. A licensee may decrease its surety bond according to the table in new text end 21.1 new text begin this paragraph if the surety bond required is less than the amount of the surety bond on new text end 21.2 new text begin file with the department. new text end 21.3 21.4 new text begin Dollar Amount of Closed Residential new text end new text begin Mortgage Loans new text end new text begin Surety Bond Required new text end 21.5 new text begin $0 to $5,000,000 new text end new text begin $100,000 new text end 21.6 new text begin $5,000,000.01 to $10,000,000 new text end new text begin $125,000 new text end 21.7 new text begin $10,000,000.01 to $25,000,000 new text end new text begin $150,000 new text end 21.8 new text begin Over $25,000,000 new text end new text begin $200,000 new text end 21.9     new text begin For purposes of this subdivision, "mortgage loan originator" has the meaning given new text end 21.10 new text begin the term in section 58A.02, subdivision 7. new text end 21.11    Sec. 4. Minnesota Statutes 2008, section 58.09, is amended to read: 21.1258.09 TERM OF LICENSE. 21.13    Initial Licenses for residential mortgage originators and residential mortgage 21.14servicers issued under this chapter expire on July 31, 2001, new text begin December 31 new text end and are 21.15renewable on August 1, 2001, and on August 1 new text begin January 1 new text end of each odd-numbered year 21.16after that date. A new licensee whose license expires less than 12 months from the date 21.17of issuance shall pay a fee equal to one-half the applicable initial license fee set forth in 21.18section 58.10, subdivision 1, clause (1) or (3). 21.19    Sec. 5. Minnesota Statutes 2008, section 58.10, subdivision 1, is amended to read: 21.20    Subdivision 1. Amounts. The following fees must be paid to the commissioner: 21.21    (1) for an initial new text begin a new text end residential mortgage originator license, $2,125 new text begin $1,000 new text end , $50 of 21.22which is credited to the consumer education account in the special revenue fund; 21.23    (2) for a renewal license, $1,125 new text begin $500 new text end , $50 of which is credited to the consumer 21.24education account in the special revenue fund; 21.25    (3) for an initial new text begin a new text end residential mortgage servicer's license, $1,000 new text begin $500 new text end ; 21.26    (4) for a renewal license, $500 new text begin $250 new text end ; and 21.27    (5) for a certificate of exemption, $100. 21.28    Sec. 6. Minnesota Statutes 2008, section 58.11, is amended to read: 21.2958.11 LICENSE RENEWAL. 21.30    Subdivision 1. Term. Licenses are renewable on August 1, 2001, and on August 1 new text begin new text end 21.31 new text begin January 1 new text end of each odd-numbered year after that date. 21.32    Subd. 2. Timely renewal. (a) A person whose application is properly and timely 21.33filed who has not received notice of denial of renewal is considered approved for renewal 22.1and the person may continue to transact business as a residential mortgage originator or 22.2servicer whether or not the renewed license has been received on or before August new text begin January new text end 22.31 of the renewal year. Application for renewal of a license is considered timely filed if 22.4received by the commissioner by, or mailed with proper postage and postmarked by, July new text begin new text end 22.5 new text begin December new text end 15 of the renewal year. An application for renewal is considered properly filed 22.6if made upon forms duly executed and sworn to, accompanied by fees prescribed by this 22.7chapter, and containing any information that the commissioner requires. 22.8    (b) A person who fails to make a timely application for renewal of a license and 22.9who has not received the renewal license as of August new text begin January new text end 1 of the renewal year is 22.10unlicensed until the renewal license has been issued by the commissioner and is received 22.11by the person. 22.12    Subd. 3. Contents of renewal application. Application for the renewal of an 22.13existing license must contain the information specified in section 58.06, subdivision 2; 22.14however, only the requested information having changed from the most recent prior 22.15application need be submitted. 22.16    Subd. 4. Cancellation. A licensee ceasing an activity or activities regulated by this 22.17chapter and desiring to no longer be licensed shall so inform the commissioner in writing 22.18and, at the same time, surrender the license and all other symbols or indicia of licensure. 22.19The licensee shall include a plan for the withdrawal from regulated business, including a 22.20timetable for the disposition of the business. 22.21    Sec. 7. new text begin ASSESSMENT. new text end 22.22     new text begin The commissioner may levy a pro rata assessment on institutions licensed under new text end 22.23 new text begin Minnesota Statutes, chapter 58, to recover the costs to the Department of Commerce new text end 22.24 new text begin for administering the licensing and registration requirements of Minnesota Statutes, new text end 22.25 new text begin section 58A.10. The assessment amount must be determined by dividing those costs by new text end 22.26 new text begin the number of licensees. new text end 22.27     new text begin The commissioner shall levy the assessments and notify each institution of the new text end 22.28 new text begin amount of the assessment being levied by September 30, 2010. The institution shall pay new text end 22.29 new text begin the assessment to the department no later than November 30, 2010. If an institution fails new text end 22.30 new text begin to pay its assessment by this date, its license may be suspended by the commissioner new text end 22.31 new text begin until it is paid in full. new text end 22.32     new text begin This section expires December 1, 2010. new text end 22.33    Sec. 8. new text begin RESIDENTIAL MORTGAGE ORIGINATORS AND SERVICERS; new text end 22.34 new text begin TRANSITIONAL LICENSE FEE AND TERMS. new text end 23.1     new text begin A residential mortgage originator licensee and a residential mortgage service new text end 23.2 new text begin licensee operating under a valid license under Minnesota Statutes 2008, chapter 58, new text end 23.3 new text begin with an expiration date of July 31, 2011, shall pay a prorated renewal fee of $200 for a new text end 23.4 new text begin residential mortgage originator, and $100 for a residential mortgage servicer. The prorated new text end 23.5 new text begin license renewal fee must be paid by December 31, 2010, and such payment extends the new text end 23.6 new text begin license term until December 31, 2011. new text end 23.7    Sec. 9. new text begin APPROPRIATION. new text end 23.8 new text begin $261,000 in fiscal year 2011 is appropriated from the general fund to the new text end 23.9 new text begin commissioner of commerce for implementing this act. The base appropriation for this new text end 23.10 new text begin program is $138,000 in fiscal year 2012 and $142,000 in fiscal year 2013. new text end 23.11    Sec. 10. new text begin REPEALER. new text end 23.12 new text begin Minnesota Statutes 2009 Supplement, section 58.126, new text end new text begin is repealed. new text end 23.13    Sec. 11. new text begin EFFECTIVE DATE. new text end 23.14     new text begin This article is effective July 31, 2010. new text end