02 Aug Missouri Legislative and Idaho Regulatory Update
The Missouri legislature recently amended its laws to permit banks to charge a convenience fee and to clarify office requirements related to residential mortgage loan brokers who originate loans for manufactured or modular homes, effective August 28, 2017. The Idaho Department of Finance (“Department”) recently issued a policy statement concerning the requirement of financial responsibility/fitness of mortgage loan originators, qualified persons in charge, and designated control persons of mortgage brokers and lenders under the Idaho Residential Mortgage Practices Act. The policy statement replaces former policy statement 2011-01.
Missouri House Bill 292
A bank may impose a convenience fee for payments using an alternative payment channel that accepts a debit or credit card that is not present such as when a borrower inputs or recites the card number, provided that:
- The person making the payment is notified of the convenience fee; and
- The fee is fixed or flat, except that the fee may vary based upon method of payment used.
A residential mortgage loan broker licensed in Missouri originating residential mortgage loans on manufactured or modular homes is not required to maintain a full-service office in Missouri. However, this does not relieve the broker of the requirement to be licensed in Missouri and to obtain a certificate of authority to transact business in Missouri from the Missouri Secretary of State. A broker licensed in Missouri who does not maintain a full-service office in Missouri must file with the license application an irrevocable consent in a form to be determined by the Director of the Missouri Division of Finance (“Director”), duly acknowledged, which provides that, for suits and actions commenced against the broker in the courts of Missouri and, if necessary, for actions brought against the broker, the venue will lie in the circuit court of Cole County. The Director may assess the reasonable costs of any investigation incurred by the Division of Finance (“Division”) that are outside the normal expense of any annual or special examination or any other costs incurred by the Division as a result of such broker who does not maintain a full-service office in Missouri. All such assessed costs will be paid to the Director of the Department of Insurance, Financial Institutions and Professional Registration.
Idaho Department of Finance Policy Statement 2017-01
The policy statement refers to “Individuals” which include mortgage loan originators as well as officers, directors, members, managers, partners, and qualified persons in charge.
The statement includes factors that the Department will consider when determining whether an Individual meets the requirement of financial responsibility/fitness:
- The existence of outstanding judgment(s) (excluding judgments resulting solely from medical expenses);
- The existence of outstanding tax liens or other government liens or filings;
- The existence of any liens or judgments resulting from findings of fraud, embezzlement, misrepresentation, dishonest dealing, deceit and/or mishandling of trust funds;
- The existence of any liens, judgments, or financial or professional disciplinary actions that indicate a pattern of dishonesty;
- A pattern of delinquency in child support or student loan payments;
- The existence of outstanding collection actions against the Individual (unless solely as a result of medical expenses);
- The existence of outstanding charged-off accounts with a remaining past due balance owed (unless solely as a result of medical expenses);
- The existence of one or more accounts, with a cumulative past due balance in excess of $1,000;
- The Individual having gone through a foreclosure within the past three years;
- The existence of a pattern of delinquent accounts within the past three years; and
- The Individual having filed a bankruptcy petition within the past five years. The Department will not consider a bankruptcy as the sole basis for a finding that an Individual lacks the required financial responsibility/fitness.
The policy statement delineates what items the Department will review in order to make a determination as to whether the Individual has sufficiently demonstrated financial responsibility. If an Individual’s credit report or response to any application disclosure question contains adverse information, the Department will notify the Individual in writing of the specific issue and will specify the document that must be provided to the Department. The policy statement includes examples of the type of document that the Department may request and the procedure to follow if such documents cannot be provided.
The policy statement also specifies examples of factors that the Department may consider in determining whether to deny, condition, bar from renewal, suspend, or revoke a mortgage loan originator license or mortgage broker/lender license such as:
- The Individual has failed to fully provide any documentation required by the Department;
- The Individual has made a false attestation associated with a filing related to an application for a license or a license renewal;
- The Individual has failed to pay in full, or has failed to make arrangements with his or her creditor to pay in full, any past due accounts with cumulative balances of $1,000 or more, liens, judgments, or charged-off balances, either as of the date of the issuance of a credit report to the Department or at time of initial licensure, designation as a control person, or at renewal of any license. The Department may make an exception if the accounts, liens, judgments, or charged-off balances are attributable solely to medical expenses;
- The Individual has past due child support payments;
- The Individual has past due loan payments in excess of $1,000;
- The Individual is in arrears or has failed to comply with the terms or a repayment plan or agreement entered into with a creditor;
- The Individual has failed to make timely payments under a plan or agreement with any state or federal tax or other regulatory agency;
- The Individual has three or more accounts of any kind, except those solely related to medical expenses, 90 days or more past due with a cumulative balance of $1,000 or more;
- The Individual has been the subject of one or more foreclosures within the past three years; and
- The Individual has had a pattern of delinquent accounts, except those solely related to medical expenses, within the past three years.
Financial responsibility, character and general fitness are continuing requirements for Individuals and must be met at all times, to include, but not limited to, at initial licensure and renewal.
No mortgage loan originator license or mortgage broker/lender license will be approved on or after April 5, 2017, unless compliance with Idaho’s Financial Responsibility/Fitness Policy has been met. Applications will be deemed withdrawn or abandoned if not completed within 60 days of notification to the applicant by the Department of deficiencies in the application.