Arizona Adds Consumer Finance and Debt-Related Licenses to NMLS

On July 1, the Arizona Department of Financial Institutions will start receiving new applications for the following licenses on NMLS:

• Advance Fee Loan Broker License
• Escrow Agent License
• Premium Finance License
• Sales Finance License

Current licensees are encouraged to submit transition applications on NMLS. More information can be found here.

Hawaii Adds Mortgage Servicer Change of Control Provisions

Hawaii has added provisions regarding the criteria used by the commissioner when reviewing a change of control application submitted by mortgage servicers. The commissioner shall approve an application requesting approval of a proposed change of control if, after investigation, the commissioner determines that:

• The person or group of people who will obtain control will be in compliance with this chapter upon approval of the application;
• The person or group of people who will obtain control has the competence, experience, character, and general fitness to control the licensee or person in control of the licensee in a lawful and proper manner; and
• The interests of the public will not be jeopardized by the change of control.

In addition, a provision has been added explaining that an individual is presumed to control an entity if that person is an executive officer of the entity, or a director, general partner, or managing member who directly or indirectly has the right to vote 10 percent or more of a class of voting securities of the entity or has the power to sell or direct the sale of 10 percent or more of a class of voting securities of the entity. “Executive officer” means a president, chairperson of an executive committee, senior officer responsible for the business of the subject entity or organization, chief financial officer, or any other person who performs similar functions related to the subject entity or organization.

These provisions become effective September 1, 2017.

Nevada Revises Mortgage Lending Provisions

Nevada revised provisions related to mortgage lending, including, but not limited to:

• The requirement that continuing education courses for mortgage brokers and mortgage agents include at least three hours on Nevada laws and regulations has been eliminated.
• To renew a mortgage broker license, a licensee must submit proof of attending at least eight hours—instead of the previous requirement of 10 hours—of certified continuing education courses during the 12 months preceding the date the license expires.
• The requirement for annual examination of mortgage brokers and mortgage bankers has been eliminated. Instead, the Commissioner may conduct periodic standard examinations at his discretion.
• The Commissioner may waive the requirement that mortgage brokers and mortgage bankers submit a monthly report of their activities in cases where substantially similar information is available from another source.

These provisions are effective January 1, 2018.

Nevada Institutes Mortgage Company License

Nevada revised provisions of law that currently regulate mortgage bankers and mortgage brokers, including, but not limited to:

• Mortgage brokers and mortgage bankers are now both included in the term “mortgage company.” The term “mortgage company” means a person who, directly or indirectly:

(a) Holds himself or herself out for hire to serve as an agent for any person in an attempt to obtain a loan which will be secured by a lien on real property;

(b) Holds himself or herself out for hire to serve as an agent for any person who has money to lend, if the loan is or will be secured by a lien on real property;

(c) Holds himself or herself out as being able to make loans secured by liens on real property;

(d) Holds himself or herself out as being able to buy or sell notes secured by liens on real property; or

(e) Offers for sale in Nevada any security that is exempt from registration under state or federal law and purports to make investments in promissory notes secured by liens on real property.

The term includes a wholesale lender. The following language has been removed: “[t]he term does not include a person who is licensed as a mortgage banker, as defined in NRS 645E.100, unless the person is also licensed as a mortgage broker pursuant to this chapter.”
 

• “Applicant” means a person who applies for licensure as a mortgage company.
• The term “mortgage agent” is changed to “mortgage loan originator.”
• “Commercial mortgage loan” means a loan primarily for a business, commercial, or agricultural purpose that: (1) directly or indirectly is secured by a lien on commercial property; and (2) is created with the consent of the owner of the commercial property.
• On January 1, 2020, any person who holds a license as a mortgage broker or mortgage banker will hold a mortgage company license.

These provisions are effective January 1, 2020.

Texas Changes RMLO Pre-Licensing Education Requirements

The time period in the requirement that an individual retake the pre-licensing education requirements prescribed by the SAFE Mortgage Licensing Act if he or she fails to maintain a residential mortgage loan originator license for at least five consecutive years has changed. Instead, the time period will be established by the rulemaking authority.

This provision is effective January 1, 2018.