12 Jul Colorado, Minnesota and New Hampshire Legislative Update
The Colorado legislature recently amended its laws related to mortgage loan originator licensing, effective August 8, 2018. The Minnesota legislature recently amended its laws related to mortgage originator licensing, effective August 1, 2018. The New Hampshire legislature recently amended its laws related to mortgage licensing, and exemptions from licensing, effective August 7, 2018.
Colorado House Bill 1174
The law requiring the licensing of mortgage loan originators was scheduled to be repealed on September 1, 2018. This has been extended to September 1, 2029.
Each individual applicant for initial licensing as a mortgage loan originator must have satisfactorily completed:
- At least twenty hours of education (previously nine hours) as administered and approved by the Nationwide Multistate Licensing System and Registry (“NMLS”) or its successor; and
- A written examination approved by the Board of Mortgage Loan Originators (“Board”). For the portion of the examination that represents the state-specific test required in the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“S.A.F.E. Act”), the Board may adopt the uniform state test administered through NMLS or its successor.
The Board must issue or deny a license within 60 days after:
- The applicant has submitted the requisite information to the Board and NMLS, including the completed application and any necessary supplementary information, the application fee, and proof that the applicant has posted a surety bond and obtained errors and omissions insurance; and
- The Board receives the completed criminal history record check and all other relevant information or documents necessary to reasonably ascertain facts underlying the applicant’s criminal history.
The Board will deny an application for a license, refuse to renew, or revoke the license of an applicant or licensee who has:
- Had a mortgage loan originator license or similar license revoked in any jurisdiction. If a revocation is subsequently formally nullified, the license will not be revoked.
- At any time, been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court if the felony involved an act of fraud, dishonesty, breach of trust, or money laundering. If the individual obtains a part of the conviction, the Board may not consider the individual convicted.
- Been convicted of, or pled guilty or nolo contendere to, a felony within the immediately preceding seven years.
The Board must consist of five members appointed by the Governor of Colorado. Of the members of the Board:
- Three must be licensed mortgage loan originators. The general assembly encourages the governor to appoint to at least one of these three positions a licensed mortgage loan originator who is an employee or exclusive agent of, or works as an independent contractor for, a Colorado-based mortgage company.
- Two must be members of the public at large not engaged in mortgage loan origination or mortgage lending.
Minnesota House File 3158
All references to Nationwide Mortgage Licensing System and Registry have been changed to Nationwide Multistate Licensing System and Registry (also referred to as “NMLSR”).
In order to meet the written test requirement to be licensed as a mortgage loan originator, an individual must pass, in accordance with the standards required, a qualified written test developed by the NMLSR and designated as the NMLSR’s National Test Component with Uniform State Content for Mortgage Loan Originator Licensing and administered by a test provider approved by NMLSR based upon reasonable standards.
In order to meet the annual continuing education requirements, a licensed mortgage loan originator must complete at least eight hours of approved education that includes at least:
- Three hours of federal law and regulations;
- Two hours of ethics, which includes instruction on fraud, consumer protection, and fair lending issues;
- Two hours of training related to lending standards for the nontraditional mortgage product marketplace; and
- One hour of Minnesota state law and rules.
New Hampshire Senate Bill 314
The New Hampshire legislature recently amended its laws to exempt a mortgage banker, mortgage broker, mortgage servicer, or mortgage originator from licensing requirements if the individual is not engaged habitually and repeatedly in such activities in a commercial context. It is a rebuttable presumption that an individual is not engaged in the business of a mortgage banker, mortgage broker, mortgage servicer, or mortgage originator if the individual is not involved in more than three loans in any consecutive 12-month period.
New Hampshire House Bill 1687
No person may engage in the business of a mortgage broker, mortgage banker, mortgage originator, or mortgage servicer without holding a valid license, or assist or aid and abet any person in the conduct of business as a mortgage broker, mortgage banker, mortgage originator, or mortgage servicer without a valid license as required.
All references to “Nationwide Mortgage Licensing System” have been replaced with “Nationwide Multistate Licensing System.”