HB-5288, As Passed Senate, February 27, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5288

(As amended, February 27, 2008)

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) Beginning January 1, 2009, 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) Beginning January 1, 2009, a licensee or registrant that employs or offers to employ, or engages or offers to engage as an agent, an individual to originate mortgage loans shall conduct a criminal records check of that individual and submit the results of the criminal records check to the commissioner. A criminal records check under this subsection shall include a check of the individual's fingerprints, taken by a law enforcement agency or other person determined by the commissioner to be qualified to take fingerprints.>>

<<(3)>>Beginning January 1, 2009, 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

House Bill No. 5288 as amended February 27, 2008

subsection <<(4)>>, in writing, and including with the application the

annual operating fee established under section 8(3).

<<(4)>> The commissioner shall prescribe the form of application

for registration as a loan officer. Subject to subsection <<(9)>>, 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 <<(7)>>,

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

House Bill No. 5288 as amended February 27, 2008

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) A copy of the results of the criminal records check described

in subsection (2).

(g) Any other information required by the commissioner.

<<(5)>> Beginning January 1, 2009, 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 licensee or registrant that is the employer or

principal of the applicant has completed the criminal records check

of the applicant described in subsection <<(2) and submitted the results

of that criminal records check to the commissioner>>.

(b) The criminal records check described in subdivision (a)

does not disclose that the applicant has been convicted of, or pled

no contest to, any of the following:

(i) A felony or misdemeanor involving embezzlement, forgery,

fraud, a financial transaction, or securities.

(ii) Within the 10-year period preceding the date of the

House Bill No. 5288 as amended February 27, 2008

application for renewal, a felony other than a felony described in

subparagraph (i).

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.

<<(6)>> 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 felony or misdemeanor involving embezzlement, forgery,

fraud, a financial transaction, or securities.

(ii) Within the 10-year period preceding the date of the

application for renewal, a felony other than a felony described in

subparagraph (i).

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

prohibition order under section 18a.

<<(c) An applicant for whom the commissioner has not received the results of the criminal records check described in subsection (2).

(7)>> 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 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.

(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

House Bill No. 5288 as amended February 27, 2008

added this section.

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

described in subsection <<(4)(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 <<(4)>>. However, the applicant is not required to complete

or submit proof of completion of the instruction described in

subsection <<(4)(d)>>.

(e) He or she is not an applicant described in subsection <<(6)>>.

<<(8)>> 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.

<<(9)>> 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, except <<subsection (6)(a)

and (c)>>

<<(10)>> 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.

<<(11)>> Beginning January 1, 2009, 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.