30 Aug New York Legislative and Maine Regulatory Update
Our October 26, 2011 Compliance Memorandum discussed New York Assembly Bill 7358-A, effective September 23, 2011, which enacted the Private Transfer Fee Obligation Act (the “Act”). The New York legislature recently amended the Act. The Maine Bureau of Consumer Credit Protection (the “Bureau”) recently adopted rules governing the conversion from Maine’s supervised lender and loan broker licensing system to the Nationwide Mortgage Licensing System (“NMLS”). The Bureau also issued a Memorandum detailing the conversion to the NMLS.
NEW YORK ASSEMBLY BILL 9390 (effective August 17, 2012)
The definition of “private transfer fees” now does not include:
- Any fee, charge, or assessment payable by the transferee to a corporation or company formed pursuant to the Private Housing Finance Law.
- Any fee, charge, or assessment payable by the transferee to a corporation or company that has received a loan or subsidy pursuant to the Private Housing Finance Law or General Municipal Law.
- Any amounts payable to a government entity.
MAINE RULE 02-030-700 (Effective August 31, 2012)
“Supervised financial organization” means:
- A financial institution, which includes a universal bank or limited purpose bank, a trust company, a nondepository trust company, a savings bank, an industrial bank or a savings and loan association;
- A person, other than an insurance company or other organization primarily engaged in an insurance business, that is subject to the supervision of an official or federal or state agency and is:
o Organized, chartered, or holding an authorization certificate under state or federal law that authorizes the person both to make loans and to receive deposits, including a savings, share, certificate, or deposit account; or
o A nondepository trust company, uninsured bank or merchant bank organized, chartered, or holding an authorization certificate under state or federal law that authorizes the limited-purpose financial institution to make loans.
“Supervised lender” means a person authorized to make or take assignments of supervised loans under a license issued by the Superintendent of the Bureau (the “Administrator”). For purposes of the rules, a supervised lender does not include supervised financial organizations.
“Loan broker” means any person who, with respect to the extension of consumer credit by others, provides or offers to provide, in return for the separate payment of money or other valuable consideration, any of the following services:
- Improving a consumer’s credit record, history or rating;
- Arranging for or obtaining an extension of credit for a consumer; or
- Providing advice or assistance to a consumer with respect to the services listed above.
“Nonprofit organization” means an entity that is tax-exempt as a charitable organization and engaged in the financing of housing for low-income people under a program designed specifically for that purpose.
“Exempt Company” means a company that is not required to obtain a Maine supervised lender or loan broker license, but that employs one or more individuals required to be licensed as mortgage loan originators.
“Nationwide Mortgage Licensing System” (“NMLS”) means the Nationwide Mortgage Licensing System and Registry for mortgage lender licensing and loan brokering.
The rules apply only to supervised lenders and loan brokers whose activities include making or arranging residential mortgage loans. The rules do not apply, for example, to supervised lenders that make only unsecured, personal loans, or to loan brokers that only arrange for the origination of tax refund anticipation loans.
To assist the transition of loan broker and supervised lender licensing to the NMLS, the NMLS is authorized to collect fees and remit those fees to the Bureau, collect fees for its processing costs, process and maintain license records, and require use of NMLS uniform electronic and paper forms.
Supervised lender licenses are granted for a 1-year (previously 2-year) period and expire on December 31st (previously September 30th).
Loan broker licenses are granted for a 1-year (previously 2-year) period and expire on December 31st (previously January 31st).
The following provisions apply to supervised lenders and loan brokers that hold a valid Maine license as of August 31, 2012:
The period August 31, 2012 through October 31, 2012 is considered a transitional period, during which all existing supervised lenders and loan brokers will have the opportunity to transition from Maine’s licensing system, and must obtain licenses through the NMLS.
All renewal applications from existing licensees received between November 1, 2012 and November 30, 2012 will be processed, but applicants will be assessed a late fee equal to an additional 50% of their Maine license application renewal fee.
Renewal applications will not be accepted after November 30, 2012. All applications received after that date will be considered new applications, subject to the provisions and fees below.
At the time existing licensees apply to the NMLS for a renewal license, they must pay the NMLS processing fee directly to the NMLS.
During the transitional period and the one-month late transitional period (i.e., from August 31, 2012 through November 30, 2012), license renewal application fees due to the Bureau will be invoiced directly to applicants by the Bureau, outside the NMLS system. (That process will change, starting with new applications received after November 30, 2012 [see below]; at that time, applicants will pay both application fees and processing fees to the NMLS.)
The renewal license application fees are as follows:
- Supervised lender renewal fee: $100;
- Supervised lender branch office renewal fee: $100;
- Loan broker renewal fee: $150;
- Loan broker branch renewal fee: $75;
- Nonprofit lender or broker renewal fee: $10; and
- Exempt company renewal fee: $10.
During the one-month “late renewal” period November 1, 2012 through November 30, 2012, renewal applicants will be billed a late fee equal to an additional 50% of the above application fees.
The following provisions apply to applicants that do not hold a valid Maine supervised lender or loan broker license as of August 31, 2012 (“new applicants”):
Applicants that submit applications after August 31, 2012 and that do not hold a current Maine supervised lender or loan broker license will pay the NMLS processing fee directly to the NMLS.
During the period August 31, 2012 through November 30, 2012, the NMLS will not have the capacity to collect state license application fees. Therefore, those fees will be invoiced directly by the Bureau to applicants after applicants apply for a license through the NMLS. For applications submitted after November 30, 2012, both the NMLS processing fees and Maine license application fees will be collected by the NMLS.
All licenses will be for the term of the calendar year. New licenses issued between August 31, 2012 and December 31, 2012 will be valid from the date of issuance through December 31, 2013.
The Maine license fees for new applicants (as well as existing licensees that apply after November 30, 2012) are as follows:
- Supervised lender application fee: $250;
- Supervised lender branch office application fee: $100;
- Loan broker application fee: $300;
- Loan broker branch application fee: $150;
- Nonprofit lender or broker application fee: $20; and
- Exempt company application fee: $20.
New licenses and renewal licenses issued after December 31, 2013 will be processed according to the procedures established by the NMLS. New licenses and renewal licenses issued after December 31, 2013 will be valid for the time periods established by the NMLS. Application, renewal, and processing fees will be paid directly to the NMLS.
Renewal applications received after December 31 of any year will be considered late. The status of these licenses will be changed to “terminated – failed to renew” or an equivalent status. Late renewal licenses may be reinstated if a renewal application is received between January 1 and the end of February, together with all renewal fees and a late fee equal to an additional 50% of the renewal application fee. Beginning March 1 of any year, renewal requests will not be processed, and companies must apply for a new license.
Supervised lenders and loan brokers must submit mortgage call reports on a quarterly basis. Call reports will be submitted directly to the NMLS in a format established by the Administrator and NMLS.
If any information reported by a licensee changes during a period of licensure, the licensee must amend its information on file with the NMLS within 30 days of the occurrence of the change.
A supervised lender or loan broker must list its NMLS unique identifier in any advertising that references the availability of loans or loan-related services.
MAINE BUREAU OF CONSUMER PROTECTION MEMORANDUM (dated August 10, 2012)
The Memorandum provides that if a company does not intend to transition to the NMLS and plans to cease doing business with Maine residents, then the Bureau must be notified in writing by September 30, 2012, and will permit the license to be withdrawn and the company to voluntarily cease doing business. Timely notice to the Bureau will avoid revocation of the company’s current Maine license and avoid notice of revocation to regulators in other states in which the company continues to conduct business.
If the company already maintains a record in the NMLS and has submitted the forms in the past, it need not re-enter its company information into the NMLS. Instead, the company must go into its NMLS record, identify the business activities conducted by the company and the states in which those activities are conducted, and then apply for the appropriate Maine license by completing the Maine state-specific fields.
The Memorandum also sets forth information about the transition to the NMLS and Rule 02-030-700, and may be found at http://www.maine.gov/pfr/consumercredit/NMLS_company_licensing/Memo_transition_Lenders_Brokers_toNMLS.rtf.