SB-0540, As Passed Senate, June 30, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 540

 

 

May 26, 2005, Introduced by Senators SANBORN, BISHOP, VAN WOERKOM, JACOBS and STAMAS and referred to the Committee on Banking and Financial Institutions.

 

 

 

     A bill to amend 1987 PA 173, entitled

 

"Mortgage brokers, lenders, and servicers licensing act,"

 

by amending section 2 (MCL 445.1652), as amended by 2002 PA 4.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. (1) A person shall not act as a mortgage broker,

 

mortgage lender, or mortgage servicer without first obtaining a

 

license or registering under this act, unless 1 or more of the

 

following apply:

 

     (a) The person is solely performing services as an employee of

 

only 1 mortgage broker, mortgage lender, or mortgage servicer.

 

     (b) The person is exempted from the act under section 25.

 

     (c) The person is licensed as a class I licensee under the

 

consumer financial services act, 1988 PA 161, MCL 487.2051 to


Senate Bill No. 540 as amended June 29, 2005

487.2072.

 

     <<(d) The individual is an employee of a professional employer

 

organization, as that term is defined in section 4 of the single business

 

tax act, 1975 PA 228, MCL 208.4, solely acting as a residential mortgage

 

originator of only 1 mortgage broker or mortgage lender.  The mortgage

 

broker or mortgage lender shall do all of the following:

 

     (i) Direct and control the activities of the individual under this

 

act.

 

     (ii) Be responsible for all activities of the individual and assume

 

responsibility for the individual’s actions that are covered by the proof

of financial responsibility deposit required under section 4.>>

     (2) A person that is licensed to make regulatory loans under

 

the regulatory loan act, of 1963, 1939 PA 21, MCL 493.1 to 493.25

 

493.24, or is licensed to make secondary mortgage loans under the

 

secondary mortgage loan act, 1981 PA 125, MCL 493.51 to 493.81, and

 

is registered with the commissioner shall file with the

 

commissioner an application for a license under section 3(1) or

 

shall discontinue all activities that are subject to this act.

 

     (3) Unless a residential mortgage originator is otherwise

 

licensed or registered under this act, a residential mortgage

 

originator shall not receive directly or indirectly any

 

compensation, commission, fee, points, or other remuneration or

 

benefits from a mortgage broker, mortgage lender, or mortgage

 

servicer other than the employer of the residential mortgage

 

originator.

 

     (4) Unless a residential mortgage originator is otherwise

 

licensed or registered under this act, a mortgage broker, mortgage

 

lender, or mortgage servicer shall not pay directly or indirectly


 

any compensation, commission, fee, points, or other remuneration or

 

benefits to a residential mortgage originator other than an

 

employee of the mortgage broker, mortgage lender, or mortgage

 

servicer. As used in this subsection and subsection (3),

 

"residential mortgage originator" means a person who assists

 

another person in obtaining a mortgage loan.

 

     (5) A mortgage broker, mortgage lender, or mortgage servicer

 

that was exempt from regulation under this act and is a subsidiary

 

or affiliate of a depository financial institution or a depository

 

financial institution holding company that does not maintain a main

 

office or branch office in this state, shall register under section

 

6 or shall discontinue all activities subject to this act.

 

     (6) Except for a state or nationally chartered bank, savings

 

bank, or an affiliate of a bank or savings bank, the person subject

 

to this act shall not include in its name or assumed name, the

 

words "bank", "banker", "banking", "banc", "bankcorp", "bancorp",

 

or any other words or phrases that would imply that the person is a

 

bank, is engaged in the business of banking, or is affiliated with

 

a bank or savings bank. It is not a violation of this subsection

 

for a licensee or registrant to use the term "mortgage banker" or

 

"mortgage banking" in its name or assumed name. A person subject to

 

this act whose name or assumed name on January 1, 1995 contained a

 

word prohibited by this section may continue to use the name or

 

assumed name.