HB-5288, As Passed House, February 13, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5288

A bill to amend 1987 PA 173, entitled

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

(MCL 445.1651 to 445.1684) by adding section 2a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2a. (1) An employee or agent of a licensee or registrant

shall not perform services of a loan officer unless he or she

registers or otherwise complies with this section.

(2) If an individual is employed or engaged as an agent to

originate mortgage loans by a licensee or registrant, that

individual shall apply for loan officer registration under this

section within 90 days after he or she begins providing services as

an employee or agent of the licensee or registrant, by submitting

the application described in subsection (3), in writing, and

including with the application the annual operating fee established

under section 8(3).

(3) The commissioner shall prescribe the form of application

for registration as a loan officer. Subject to subsection (8), the

application form shall require that an applicant provide at least

all of the following to the commissioner:

(a) The name and home address of the applicant.

(b) A statement as to whether the applicant has ever been

convicted of, or pled no contest to, any of the following:

(i) A misdemeanor involving embezzlement, forgery, fraud, a

financial transaction, or securities.

(ii) A felony.

application denied, or a license, registration, or similar

authority revoked or suspended, to practice any profession or

occupation in any jurisdiction, including, but not limited to,

licensure or registration as a mortgage broker, mortgage lender, or

mortgage servicer in which the applicant held more than 25% of the

ownership interest or as a loan officer.

(d) Except for an application described in subsection (6),

proof in the form of a certificate of completion or other evidence

acceptable to the commissioner that the applicant has completed at

least 24 hours of live professional classroom instruction in this

state in an introductory course in residential mortgage lending

that is sponsored or provided by a person, and taught by an

instructor, approved by the commissioner. The 24 hours of

instruction shall include at least 3 hours of live classroom

instruction concerning state and federal laws and regulations

governing residential mortgage lending, the content of which has

been approved by the commissioner.

(e) Evidence acceptable to the commissioner that the applicant

correctly answered at least 75% of the questions on an examination

approved by the commissioner that tests an applicant’s knowledge of

the contents of the introductory course in residential mortgage

lending described in subdivision (d).

(f) The results of a criminal records check of the applicant

conducted by the licensee or registrant that is the employer or

principal of the applicant, that includes a check of the

applicant's fingerprints, taken by a law enforcement agency or any

other person determined by the department to be qualified to take

fingerprints.

(g) Any other information required by the commissioner.

(4) An applicant for loan officer registration may perform

services as a loan officer while his or her application is pending

if all of the following are met:

(a) The applicant has submitted his or her fingerprints to the

licensee or registrant that is the employer or principal of the

applicant for purposes of the criminal records check described in

subsection (3)(f).

(b) The licensee or registrant that is the employer or

principal of the applicant has submitted the request for the

criminal records check of the applicant described in subsection

(3)(f) to the law enforcement agency or person that is conducting

that records check of the applicant on behalf of the licensee or

registrant that is the employer or principal of the applicant.

principal of the applicant receives the results of the criminal

records check submitted under subdivision (b) while the loan

officer registration application is pending, the criminal records

check does not disclose that the applicant has been convicted of,

or pled no contest to, any of the following:

(i) A misdemeanor involving embezzlement, forgery, fraud, a

financial transaction, or securities.

(ii) A felony.

(d) The licensee or registrant that is the employer or

principal of the applicant has provided the commissioner with

written notice that the applicant is beginning to provide services

as a loan officer for the licensee or registrant.

(5) The commissioner shall not issue a registration to any of

the following:

(a) An applicant who has been convicted of, or pled no contest

to, any of the following:

(i) A misdemeanor involving embezzlement, forgery, fraud, a

financial transaction, or securities.

(ii) A felony.

(b) An applicant against whom the commissioner has issued a

prohibition order under section 18a.

(6) The commissioner must register a loan officer who meets

all of the following:

(a) For the 5-year period immediately preceding the effective

date of the amendatory act that added this section, he or she meets

any of the following:

(i) Was employed or engaged as a loan officer for at least 4-

1/2 years by 1 or more licensees, registrants, or persons exempt

from this act under section 25.

(ii) Continuously owned at least a 25% interest in a licensee

or registrant.

(b) He or she was not the subject of any prohibition orders

issued by the commissioner under section 18a in the 5-year period

immediately preceding the effective date of the amendatory act that

added this section.

act that added this section, he or she takes the examination

described in subsection (3)(e) and correctly answers at least 75%

of the questions on the examination.

(d) Within 8 months after the effective date of the amendatory

act that added this section, he or she submits an application under

subsection (3). However, the applicant is not required to complete

or submit proof of completion of the instruction described in

subsection (3)(d).

(e) He or she is not an applicant described in subsection (5).

(7) An employee or agent of a mortgage broker, mortgage

lender, or mortgage servicer that is exempt from licensing or

registration under this act may apply to be a loan officer

registrant under this section.

(8) The commissioner may waive any of the requirements of this

section for loan officer registration if the applicant has a valid,

similar license or registration from another state that has a

reciprocal agreement with the commissioner.

(9) The commissioner may disclose, provide, or make available

to the public the names, business addresses, and business telephone

numbers of loan officer registrants. The commissioner shall not

disclose, provide, or make available to the public any other

personal identifying information about loan officer registrants or

applicants for loan officer registration.

(10) An individual employed or engaged as an agent by a

licensee or registrant as a loan officer shall not use the title or

designation "loan officer", "loan originator", "mortgage loan

officer", or "mortgage loan originator" if he or she is not a loan

officer registrant. A loan officer registrant and the employer or

principal of a loan officer registrant shall not use the word

"registered", "certified", or any word of similar import in his or

her title or designation to identify him or her as an individual

who has met the registration requirements of this act unless use of

that word is approved by the office of financial and insurance

services.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 826.

(b) Senate Bill No. 827.

(d) Senate Bill No. 829.

(e) Senate Bill No. 830.

(f) Senate Bill No. 831.

(g) Senate Bill No. 832.

(h) Senate Bill No. 833.

(i) House Bill No. 5287.

(j) House Bill No. 5289.

(k) House Bill No. 5290.

(l) House Bill No. 5291.