2004 Legislation
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SENATE BILL NO. 1389 – Residential mortgage practices

SENATE BILL NO. 1389

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S1389................................................by JUDICIARY AND RULES
RESIDENTIAL MORTGAGE PRACTICES - Adds to and amends existing law relating
to the Residential Mortgage Practices Act; to revise definitions and define
terms; to revise exemptions; to revise provisions providing for unlawful
acts and punishment; to revise provisions applicable to licenses to do
business as mortgage brokers or mortgage lenders; to set forth provisions
applicable to licenses to do business as loan originators; to revise
provisions applicable to the revocation or suspension of a license; to
increase the bond amount for mortgage broker and mortgage lender licensees
and to provide for a certificate of deposit in lieu of such bond; to
require a bond for loan originator licensees and to provide for a
certificate of deposit in lieu of such bond; to provide for the adoption of
rules requiring continuing education; to provide notification and records
maintenance requirements for mortgage broker and mortgage lender licensees
who employ or contract with loan originator licensees; to increase the
annual license renewal fee for mortgage broker and mortgage lender
licensees; to set forth an annual license renewal fee for loan originator
licensees; to revise the prohibited practices of mortgage broker and
mortgage lender licensees; to set forth prohibited practices of loan
originators; and to set forth provisions applicable to loan originator
licensing.
                                                                        
02/24    Senate intro - 1st rdg - to printing
02/25    Rpt prt - to Com/HuRes
03/05    Rpt out - rec d/p - to 2nd rdg
03/08    2nd rdg - to 3rd rdg
03/09    3rd rdg - PASSED - 33-1-1
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
      Marley, McKenzie, McWilliams, Noh, Pearce, Richardson, Schroeder,
      Sorensen, Stegner, Stennett, Werk, Williams
      NAYS -- Sweet
      Absent and excused -- Noble
    Floor Sponsor - Goedde
    Title apvd - to House
03/10    House intro - 1st rdg - to Bus
03/18    Rpt out - rec d/p - to 2nd rdg
03/19    2nd rdg - to 3rd rdg
    Rls susp - PASSED - 55-8-7
      AYES -- Andersen, Barraclough, Bayer, Bedke, Bell, Block, Boe, Bolz,
      Bradford, Campbell, Cannon, Clark, Collins, Cuddy, Deal, Denney,
      Douglas, Eberle, Edmunson, Eskridge, Field(18), Field(23), Gagner,
      Garrett, Harwood, Henbest, Jaquet, Jones, Kellogg, Langhorst,
      Martinez, McGeachin, Meyer, Miller, Mitchell, Naccarato, Nielsen,
      Pasley-Stuart, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch,
      Sayler, Schaefer, Shepherd, Shirley, Smith(30), Smith(24), Smylie,
      Snodgrass, Stevenson, Wills, Mr. Speaker
      NAYS -- Barrett, Crow, Kulczyk, Langford, McKague, Raybould, Sali,
      Wood
      Absent and excused -- Bauer, Black, Ellsworth, Lake, Moyle, Skippen,
      Trail
    Floor Sponsor - Meyer
    Title apvd - to Senate
03/19    To enrol
03/20    Rpt enrol - Pres signed - Sp signed
03/22    To Governor
04/02    Governor signed
         Session Law Chapter 377
         Effective: 07/01/04;
         Section 7 - effective on 01/01 of the year
         that Legislature grants appropriation for
         loan originator licensing to Department
         of Finance

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1389
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE RESIDENTIAL MORTGAGE PRACTICES ACT; AMENDING SECTION  26-3101,
  3        IDAHO CODE, TO PROVIDE THAT THE CHAPTER SHALL BE KNOWN AS THE "RESIDENTIAL
  4        MORTGAGE  PRACTICES  ACT"; AMENDING SECTION 26-3102, IDAHO CODE, TO REVISE
  5        AND  UPDATE  DEFINITIONS  AND  TO  DEFINE  "LOAN  ORIGINATOR"  AND   "LOAN
  6        ORIGINATION  ACTIVITIES";  AMENDING SECTION 26-3103, IDAHO CODE, TO REVISE
  7        EXEMPTIONS; AMENDING SECTION 26-3104, IDAHO  CODE,  TO  REVISE  PROVISIONS
  8        PROVIDING  FOR  UNLAWFUL  ACTS  AND  PUNISHMENT; AMENDING SECTION 26-3105,
  9        IDAHO CODE, TO REVISE TERMINOLOGY AND TO MAKE  A  GRAMMATICAL  CORRECTION;
 10        AMENDING  SECTION  26-3108, IDAHO CODE, TO REVISE DESCRIPTIVE LANGUAGE AND
 11        TO REVISE PROVISIONS APPLICABLE TO LICENSES TO  DO  BUSINESS  AS  MORTGAGE
 12        BROKERS OR MORTGAGE LENDERS; AMENDING CHAPTER 31, TITLE 26, IDAHO CODE, BY
 13        THE  ADDITION  OF  A NEW SECTION 26-3108A, IDAHO CODE, TO SET FORTH PROVI-
 14        SIONS APPLICABLE TO LICENSES TO DO BUSINESS AS LOAN ORIGINATORS;  AMENDING
 15        SECTION  26-3109, IDAHO CODE, TO REVISE PROVISIONS APPLICABLE TO THE REVO-
 16        CATION OR SUSPENSION OF A LICENSE; AMENDING SECTION 26-3110,  IDAHO  CODE,
 17        TO  REVISE  DESCRIPTIVE LANGUAGE, TO INCREASE THE BOND AMOUNT FOR MORTGAGE
 18        BROKER AND MORTGAGE LENDER LICENSEES, TO REQUIRE THE LICENSEE TO PLACE THE
 19        BOND ON FILE WITH THE DEPARTMENT, TO PROVIDE FOR A CERTIFICATE OF  DEPOSIT
 20        IN  LIEU  OF  BOND, TO REQUIRE A BOND FOR LOAN ORIGINATOR LICENSEES AND TO
 21        PROVIDE FOR A CERTIFICATE OF DEPOSIT IN LIEU  OF  SUCH  BOND,  TO  PROVIDE
 22        CLARIFYING  LANGUAGE, TO REFERENCE LAWS PERTAINING TO LOAN ORIGINATION AND
 23        MORTGAGE LENDING, TO PROVIDE FOR THE ADOPTION OF RULES REQUIRING  CONTINU-
 24        ING  EDUCATION,  TO  PROVIDE  FOR  THE FILING OF INFORMATION BY ACCREDITED
 25        SPONSORS OF CONTINUING EDUCATION  PROGRAMS  AND  TO  SET  FORTH  FEES  FOR
 26        REVIEWS;  AMENDING  SECTION 26-3111, IDAHO CODE, TO SPECIFY THAT FINANCIAL
 27        RECORDS SHALL BE MAINTAINED, TO PROVIDE THAT  LOAN  RECORDS  NEED  NOT  BE
 28        MAINTAINED FOR MORE THAN THREE YEARS AFTER MAKING THE FINAL ENTRY RELATING
 29        TO  THE LOAN, TO PROVIDE NOTIFICATION AND RECORDS MAINTENANCE REQUIREMENTS
 30        FOR MORTGAGE BROKER AND MORTGAGE LENDER LICENSEES WHO EMPLOY  OR  CONTRACT
 31        WITH LOAN ORIGINATOR LICENSEES, TO INCREASE THE ANNUAL LICENSE RENEWAL FEE
 32        FOR  MORTGAGE  BROKER AND MORTGAGE LENDER LICENSEES, TO PROVIDE CLARIFYING
 33        LANGUAGE AND  TO  SET  FORTH  AN  ANNUAL  LICENSE  RENEWAL  FEE  FOR  LOAN
 34        ORIGINATOR  LICENSEES;  AMENDING  SECTION  26-3112,  IDAHO CODE, TO MAKE A
 35        TECHNICAL CORRECTION; AMENDING SECTION  26-3114,  IDAHO  CODE,  TO  REVISE
 36        DESCRIPTIVE  LANGUAGE  AND  TO REVISE THE PROHIBITED PRACTICES OF MORTGAGE
 37        BROKER AND MORTGAGE LENDER LICENSEES; AMENDING CHAPTER 31, TITLE 26, IDAHO
 38        CODE, BY THE ADDITION OF A NEW SECTION 26-3114A, IDAHO CODE, TO SET  FORTH
 39        PROHIBITED  PRACTICES OF LOAN ORIGINATORS; AMENDING SECTION 26-3116, IDAHO
 40        CODE, TO PROVIDE CORRECT CODE REFERENCES; AMENDING CHAPTER 31,  TITLE  26,
 41        IDAHO  CODE, BY THE ADDITION OF A NEW SECTION 26-3116A, IDAHO CODE, TO SET
 42        FORTH PROVISIONS APPLICABLE TO INITIAL LOAN ORIGINATOR LICENSING; AND PRO-
 43        VIDING EFFECTIVE DATES AND A CONTINGENCY.
                                                                        
 44    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
                                           2
                                                                        
  1        SECTION 1.  That Section 26-3101, Idaho Code, be, and the same  is  hereby
  2    amended to read as follows:
                                                                        
  3        26-3101.  SHORT TITLE. This chapter may shall be known and may be cited as
  4    the "Residential Mortgage Practices Act."
                                                                        
  5        SECTION  2.  That  Section 26-3102, Idaho Code, be, and the same is hereby
  6    amended to read as follows:
                                                                        
  7        26-3102.  DEFINITIONS. As used in this chapter and  in  rules  promulgated
  8    pursuant to this chapter:
  9        (1)  "Act" means this Idaho residential mortgage practices act.
 10        (2)  "Agent"  means  a person who acts with the consent and on behalf of a
 11    licensee, and is subject to the licensee's direct or indirect control, and may
 12    include an independent contractor.
 13        (3)  "Borrower" means the person who has applied to a lender for  a  resi-
 14    dential  mortgage  loan  from  a  licensee, or person required to be licensed,
 15    under this chapter, or on whose behalf the activities set forth in subsections
 16    (178), and  (189), or (20) of this section are conducted.
 17        (4)  "Department" means the department of finance of the state of Idaho.
 18        (5)  "Director" means the director of the department of finance.
 19        (6)  "Licensee" means a person licensed pursuant to this chapter to engage
 20    in the activities regulated by this act.
 21        (7)  "Mortgage banker lender" means any person, other than an exempt  per-
 22    son,  who  makes  residential  mortgage  loans  to borrowers, and performs the
 23    activities described in subsection (178) of this section.
 24        (8)  "Mortgage broker" means any person, other than an exempt person,  who
 25    performs  the  activities  described  in subsection (189) of this section with
 26    respect to a residential mortgage loan. For the purposes of this chapter,  the
 27    term "mortgage broker" does not include persons who are mortgage bankers lend-
 28    ers.
 29        (9)  "Loan  originator" means any person, other than an exempt person, who
 30    performs the activities described in subsection  (20)  of  this  section  with
 31    respect  to a residential mortgage loan. For the purposes of this chapter, the
 32    term "loan originator" does not include persons who are  mortgage  brokers  or
 33    mortgage lenders.
 34        (10) "Mortgage  brokerage  agreement" means a written agreement in which a
 35    mortgage broker agrees to obtain a residential mortgage loan for the  borrower
 36    or assist the borrower in obtaining a residential mortgage loan.
 37        (101) "Person" means an individual, sole proprietorship, partnership, cor-
 38    poration,  limited  liability company, limited liability partnership, or other
 39    association of individuals, however organized.
 40        (112) "Real estate settlement procedures act" means the act set  forth  in
 41    12  U.S.C. section 2601 et seq., as amended to and including January 1, 20034,
 42    or a subsequent date if so defined by administrative rule.
 43        (123) "Regulation X" means regulation X as promulgated by the U.S. depart-
 44    ment of housing and urban development and codified in  24  CFR  part  3500  et
 45    seq., as amended to and including January 1, 20034, or a subsequent date if so
 46    defined by administrative rule.
 47        (134) "Regulation  Z"  means  regulation  Z as promulgated by the board of
 48    governors of the federal reserve system and codified in 12  CFR  part  226  et
 49    seq., as amended to and including January 1, 20034, or a subsequent date if so
 50    defined by administrative rule.
 51        (145) "Residential  mortgage  loan"  means  a loan made primarily for per-
 52    sonal, family, or household use and primarily secured by a  security  interest
                                                                        
                                           3
                                                                        
  1    on residential real property located in this state.
  2        (156) "Residential  real  property"  means  real  property located in this
  3    state improved by a one (1) to four (4) family dwelling.
  4        (167) "Truth in lending act" means the act set forth in 15 U.S.C.  section
  5    1601  et  seq.,  as amended to and including January 1, 20034, or a subsequent
  6    date if so defined by administrative rule.
  7        (178) "Mortgage banking lending  activities"  means  for  compensation  or
  8    gain,  either directly or indirectly, accepting or offering to accept applica-
  9    tions for residential mortgage loans, assisting or offering to assist  in  the
 10    preparation of an application for a residential mortgage loan.
 11        (189) "Mortgage  brokering  activities"  means  for  compensation or gain,
 12    either directly or indirectly, accepting or offering to accept an  application
 13    for a residential mortgage loan, assisting or offering to assist in the prepa-
 14    ration  of  an application for a residential mortgage loan on behalf of a bor-
 15    rower, or negotiating or offering to negotiate the terms or  conditions  of  a
 16    residential mortgage loan with any person making residential mortgage loans.
 17        (20) "Loan  origination activities" means for compensation or gain, either
 18    directly or indirectly, engaging in any of the following activities while rep-
 19    resenting or acting on behalf of a mortgage broker or mortgage lender:
 20        (a)  Soliciting, accepting, or offering to accept  an  application  for  a
 21        residential mortgage loan;
 22        (b)  Assisting a borrower or offering to assist a borrower in the prepara-
 23        tion of a residential mortgage loan application; or
 24        (c)  Negotiating  or  offering  to  negotiate the terms or conditions of a
 25        residential mortgage loan with a borrower.
                                                                        
 26        SECTION 3.  That Section 26-3103, Idaho Code, be, and the same  is  hereby
 27    amended to read as follows:
                                                                        
 28        26-3103.  EXEMPTIONS. The provisions of this chapter do not apply to:
 29        (1)  Agencies  of  the  United  States  and agencies of this state and its
 30    political subdivisions;
 31        (2)  An owner of real property who offers credit secured by a contract  of
 32    sale, mortgage or deed of trust on the property sold;
 33        (3)  A  loan that is made by a person to an employee of that person if the
 34    proceeds of the loan are used to assist the employee in  meeting  his  housing
 35    needs;
 36        (4)  Any  person licensed or chartered under the laws of this state or the
 37    United States as a bank, rRegulated lenders licensed under  the  Idaho  credit
 38    code and regularly engaged in making regulated consumer loans other than those
 39    secured by a security interest in real property, savings and loan association,
 40    credit union, or trust company;
 41        (5)  Trust companies as defined in section 26-3203, Idaho Code;
 42        (6)  Any person licensed or chartered under the laws of any other state or
 43    of the United States as a bank, savings and loan association, or credit union,
 44    or  industrial loan company. The terms "bank," "savings and loan association,"
 45    "credit union" and "industrial  loan  company"  shall  include  employees  and
 46    agents  of  such  organizations  as  well as wholly-owned subsidiaries of such
 47    organizations, provided that the subsidiary is regularly examined by the char-
 48    tering state or federal agency for consumer  compliance  purposes,  and  shall
 49    also  include employees and agents of a licensee if the licensee is an affili-
 50    ate of a bank and is wholly owned by the holding company system that owns  the
 51    bank;
 52        (67)  Attorneys,  or  persons  licensed  under  chapter 2, title 54, Idaho
 53    Code, provided that the license held by such attorneys or  persons  is  in  an
                                                                        
                                           4
                                                                        
  1    active status;
  2        (78)  Persons  employed  by, licensees on a full-time basis or persons who
  3    are employed by no more than one (1) licensee on a part-time basis or who con-
  4    tract with, a licensee under this chapter to perform only clerical or adminis-
  5    trative functions on behalf of such licensee, and who do not solicit borrowers
  6    or negotiate the terms of loans on behalf of the licensee;
  7        (89)  Any person or entity not making more than five (5)  loans  primarily
  8    for  personal,  family,  or  household use and primarily secured by a security
  9    interest on residential real property, with his own funds for his own  invest-
 10    ment, in any period of twelve (12) consecutive months; nor
 11        (910) Any  person  who  funds  a  residential mortgage loan which has been
 12    originated and processed by a licensee or by an exempt person,  who  does  not
 13    directly or indirectly solicit borrowers in this state for the purpose of mak-
 14    ing  residential  mortgage loans, and who does not participate in the negotia-
 15    tion of residential mortgage loans with the borrower. For the purpose of  this
 16    subsection,  "negotiation of residential mortgage loans" does not include set-
 17    ting the terms under which a person may buy or  fund  a  residential  mortgage
 18    loan originated by a licensee or exempt person.
                                                                        
 19        SECTION  4.  That  Section 26-3104, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        26-3104.  UNLAWFUL ACTS. (1) No Any person, except a person  exempt  under
 22    section 26-3103, Idaho Code, shall who engages in mortgage banking  activities
 23    brokering  or  mortgage brokering lending activities without first obtaining a
 24    mortgage broker or mortgage lender license from the department  in  accordance
 25    with this chapter, shall be guilty of a felony.
 26        (2)  Any person, not exempt under section 26-3103, Idaho Code, who engages
 27    in  mortgage banking loan origination activities or mortgage brokering activi-
 28    ties without first obtaining a loan originator license issued pursuant  to  in
 29    accordance with this chapter, shall be guilty of a felony.
                                                                        
 30        SECTION  5.  That  Section 26-3105, Idaho Code, be, and the same is hereby
 31    amended to read as follows:
                                                                        
 32        26-3105.  POWERS AND DUTIES OF DIRECTOR. In addition to any  other  duties
 33    imposed upon the director by law, the director shall:
 34        (1)  Administer  and enforce the provisions and requirements of this chap-
 35    ter;
 36        (2)  Conduct investigations and issue subpoenas as necessary to  determine
 37    whether  a  person has violated any provision of this chapter or rules promul-
 38    gated under the authority of this chapter;
 39        (3)  Conduct examinations of the books and records of licensees  and  con-
 40    duct  investigations as necessary and proper for the enforcement of the provi-
 41    sions of this chapter and the rules promulgated under the  authority  of  this
 42    chapter;
 43        (4)  Appoint  a  volunteer  advisory  board which shall consist of two (2)
 44    individuals who are mortgage bankers lenders and two (2) individuals  who  are
 45    mortgage brokers;
 46        (5)  Pursuant  to  chapter 52, title 67, Idaho Code, issue orders and pro-
 47    mulgate rules that, in the opinion of the director, are necessary to  execute,
 48    enforce and effectuate the purposes of this chapter;
 49        (6)  Be  authorized  to  set, by annual written notification to licensees,
 50    limits on the fees and charges which are set forth in subsections (1) and  (2)
 51    of section 26-3113, Idaho Code;
                                                                        
                                           5
                                                                        
  1        (7)  Require that all funds collected by the department under this chapter
  2    shall be deposited into the finance administrative account pursuant to section
  3    67-2702, Idaho Code; and
  4        (8)  Review and approve forms used by licensees prior to their use as pre-
  5    scribed by the director.
                                                                        
  6        SECTION  6.  That  Section 26-3108, Idaho Code, be, and the same is hereby
  7    amended to read as follows:
                                                                        
  8        26-3108.  LICENSE TO DO BUSINESS AS A MORTGAGE BANKER BROKER  OR  MORTGAGE
  9    BROKER  LENDER. (1) The director shall receive and act on all applications for
 10    licenses to do business as a mortgage banker broker or mortgage broker lender.
 11    Applications shall be filed in the manner prescribed by  the  director,  shall
 12    contain  such  information  as  the  director may reasonably require, shall be
 13    updated as necessary to keep the information current, and shall be accompanied
 14    by an application fee of two three hundred fifty dollars ($20350).    When  an
 15    application  for  licensure  is denied or withdrawn, the director shall retain
 16    all fees paid by the applicant.
 17        (2)  An application for license may be denied if the director finds that:
 18        (a)  The financial responsibility, character, and fitness of  the  license
 19        applicant,  and of the officers and directors thereof, if the applicant is
 20        a corporation, partners thereof if the applicant is a partnership, members
 21        or managers thereof if the applicant is a limited liability  company,  and
 22        individuals  designated  in  charge of the applicant's places of business,
 23        are not such as to warrant belief that the business will be operated  hon-
 24        estly and fairly within the purposes of this chapter;
 25        (b)  The individual designated in charge of applicant's places of business
 26        does  not  have  a  minimum  of three (3) years' experience in residential
 27        mortgage lending;
 28        (c)  The applicant does not have a net worth of at least ten thousand dol-
 29        lars ($10,000);
 30        (d)  The applicant has been convicted  of  any  felony  or  a  misdemeanor
 31        involving  any  aspect  of the financial services business, or a court has
 32        accepted a finding of guilt on the part of the applicant of any felony  or
 33        a misdemeanor involving any aspect of the financial services business;
 34        (ed)  The  applicant  has  had  a  license,  substantially equivalent to a
 35        license under this chapter and issued by any  state,  denied,  revoked  or
 36        suspended under the law of such state;
 37        (fe)  The  applicant has filed an application for a license which is false
 38        or misleading with respect to any material fact;
 39        (gf)  The applicant or any partner, officer,  director,  manager,  member,
 40        employee  or  agent of the applicant has violated this chapter or any rule
 41        or order lawfully made pursuant to this chapter;
 42        (hg)  The applicant or any partner, officer,  director,  manager,  member,
 43        employee  or  agent  of  the  applicant has violated any other law of this
 44        state, or  federal laws, rule or regulations pertaining  to  the  mortgage
 45        banking  or  mortgage  brokering  activities set forth in section 26-3102,
 46        Idaho Code financial services industry; or
 47        (ih)  The applicant has not provided information  on  the  application  as
 48        reasonably  required  by  the  director pursuant to subsection (1) of this
 49        section.
 50        (3)  The director is empowered to conduct investigations as  he  may  deem
 51    necessary,  to  enable  him to determine the existence of the requirements set
 52    out in subsection (2) of this section.
 53        (4)  Upon written request, an applicant is entitled to a  hearing  on  the
                                                                        
                                           6
                                                                        
  1    question of his qualifications for a license if:
  2        (a)  The  director has notified the applicant in writing that his applica-
  3        tion has been denied, or objections filed;
  4        (b)  The director has not issued a license within sixty  (60)  days  after
  5        the  application  for  the  license  was  filed. If a hearing is held, the
  6        applicant and those filing  objections  shall  reimburse,  pro  rata,  the
  7        director for his reasonable and necessary expenses incurred as a result of
  8        the  hearing. A request for hearing may not be made more than fifteen (15)
  9        days after the director has mailed a writing to  the  applicant  notifying
 10        him  that  the  application  has  been denied and stating in substance the
 11        director's finding supporting denial of the application or that objections
 12        have been filed and the substance thereof.
 13        (5)  Every licensee under this section shall have licensed and shall main-
 14    tain a home office licensed under this chapter as a the  licensee's  principal
 15    location for the transaction of mortgage business. The director may, on appli-
 16    cation,  issue additional branch licenses to the same licensee upon compliance
 17    with all the provisions of this chapter governing the  issuance  of  a  single
 18    license.  A separate license shall be required for each place of business from
 19    which mortgage brokering activities or mortgage banking lending activities are
 20    directly or indirectly conducted. The individual in charge of  each  place  of
 21    business must satisfy the requirements of subsections (2)(b), (dc) and (ed) of
 22    this  section.  Each license under this section shall remain in full force and
 23    effect unless the licensee does not satisfy the renewal requirements  of  sec-
 24    tion  26-3111(23),  Idaho  Code, or the license is relinquished, suspended, or
 25    revoked; provided however, branch licenses shall be terminated upon the relin-
 26    quishment or revocation of a home office license.
 27        (6)  No licensee under this section shall change the location of any place
 28    of business, consolidate two (2) or more locations, or close any  home  office
 29    location,  without giving the director at least fifteen (15) days' prior writ-
 30    ten notice. A licensee under this section shall give  written  notice  to  the
 31    director  within three (3) business days of the closure of any branch location
 32    licensed under this chapter. Written notice of the closure of a home or branch
 33    office location shall include a detailed explanation of the disposition of all
 34    loan applications pending at the time of closure of the licensed location.
 35        (7)  A No licensee under this section shall not engage in the business  of
 36    making  or  brokering  residential mortgage loans at any place of business for
 37    which he does not hold a license nor shall he engage  in  business  under  any
 38    other name than that on the license.
 39        (8)  The  director  may  suspend action upon a mortgage broker or mortgage
 40    lender license application pending resolution of any criminal  charges  before
 41    any  court  of  competent  jurisdiction against an applicant which would could
 42    disqualify that applicant if convicted.
 43        (9)  The director may suspend action upon a mortgage  broker  or  mortgage
 44    lender  license application pending resolution of any civil action or adminis-
 45    trative proceeding against an applicant in which the civil action or  adminis-
 46    trative proceeding involves any aspect of a financial service business and the
 47    outcome of which could disqualify the applicant.
 48        (10) An applicant under this section shall make complete disclosure of all
 49    information  required  in  the  application,  including information concerning
 50    officers, directors, partners, members,  managers,  employees  or  agents.  An
 51    applicant,  or  an individual acting on behalf of the applicant, is not liable
 52    in any civil action other than  a  civil  action  brought  by  a  governmental
 53    agency,  related  to an alleged untrue statement made pursuant to this section
 54    unless it is shown by clear and convincing evidence that:
 55        (a)  The applicant, or an individual acting on behalf  of  the  applicant,
                                                                        
                                           7
                                                                        
  1        knew    at  the  time that the statement was made that it was false in any
  2        material respect; or
  3        (b)  The applicant, or an individual acting on behalf  of  the  applicant,
  4        acted in reckless disregard as to the statement's truth or falsity.
  5        (11) Each  mortgage  broker or mortgage lender licensed under this chapter
  6    shall display in plain view the certificate of licensure issued by the depart-
  7    ment in its principal office and in each branch office.
                                                                        
  8        SECTION 7.  That Chapter 31, Title 26, Idaho Code, be,  and  the  same  is
  9    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 10    ignated as Section 26-3108A, Idaho Code, and to read as follows:
                                                                        
 11        26-3108A.  LICENSE TO DO BUSINESS AS A LOAN ORIGINATOR. (1)  The  director
 12    shall  receive  and  act on all loan originator license applications. Applica-
 13    tions shall be filed in the manner prescribed by the director,  shall  contain
 14    such  information  as the director may reasonably require, shall be updated as
 15    necessary to keep the information current, and  shall  be  accompanied  by  an
 16    application  fee of two hundred dollars ($200). When an application for licen-
 17    sure is denied or withdrawn, the director shall retain all fees  paid  by  the
 18    applicant.
 19        (2)  An application for license may be denied if the director finds that:
 20        (a)  The  financial  responsibility, character, and fitness of the license
 21        applicant are not such as to warrant belief that the loan originator  will
 22        operate honestly and fairly within the purposes of this chapter;
 23        (b)  The  applicant  has  been  convicted  of  any felony or a misdemeanor
 24        involving any aspect of the financial services business, or  a  court  has
 25        accepted  a finding of guilt on the part of the applicant of any felony or
 26        a misdemeanor involving any aspect of the financial services business;
 27        (c)  The applicant has  had  a  license,  substantially  equivalent  to  a
 28        license  under  this  chapter  and issued by any state, denied, revoked or
 29        suspended under the law of such state;
 30        (d)  The applicant has filed an application for a license which  is  false
 31        or misleading with respect to any material fact;
 32        (e)  The applicant has violated this chapter or any rule or order lawfully
 33        made pursuant to this chapter;
 34        (f)  The  applicant has violated any state or federal law, rule or regula-
 35        tion  pertaining  to  mortgage  brokering,  mortgage  lending,   or   loan
 36        origination activities set forth in section 26-3102, Idaho Code; or
 37        (g)  The applicant has not provided information on the application as rea-
 38        sonably  required  by the director pursuant to subsection (1) of this sec-
 39        tion.
 40        (3)  The director is empowered to conduct investigations as  he  may  deem
 41    necessary,  to  enable  him to determine the existence of the requirements set
 42    out in subsection (2) of this section.
 43        (4)  Upon written request, an applicant is entitled to a  hearing  on  the
 44    question of his qualifications for a license if:
 45        (a)  The  director has notified the applicant in writing that his applica-
 46        tion has been denied, or objections filed;
 47        (b)  The director has not issued a license within sixty  (60)  days  after
 48        the  application  for  the  license  was  filed. If a hearing is held, the
 49        applicant and those filing  objections  shall  reimburse,  pro  rata,  the
 50        director for his reasonable and necessary expenses incurred as a result of
 51        the  hearing. A request for hearing may not be made more than fifteen (15)
 52        days after the director has mailed a writing to  the  applicant  notifying
 53        him  that  the  application  has  been denied and stating in substance the
                                                                        
                                           8
                                                                        
  1        director's finding supporting denial of the application or that objections
  2        have been filed and the substance thereof.
  3        (5)  A loan originator may transact business only for a mortgage broker or
  4    mortgage lender licensed in accordance with the provisions  of  this  chapter.
  5    The  original  license  issued  by the department to a loan originator must be
  6    provided to and be maintained by the employing  mortgage  broker  or  mortgage
  7    lender  at  the  mortgage broker's or lender's main office. A copy of the loan
  8    originator's  license  must  be  displayed  at  the  office  where  that  loan
  9    originator principally transacts business.
 10        (6)  Each license under this section shall remain in full force and effect
 11    unless the licensee does not  satisfy  the  renewal  requirements  of  section
 12    26-3111(4), Idaho Code, or the license is relinquished, suspended or revoked.
 13        (7)  A  loan  originator  licensee  under this chapter shall not engage in
 14    loan origination activities at any location that is not  a  licensed  home  or
 15    branch office location of the mortgage broker or mortgage lender he represents
 16    or  is acting on behalf of, nor shall he engage in loan origination activities
 17    under any other name than that on the license.
 18        (8)  The director may suspend action upon a loan originator license appli-
 19    cation pending resolution of any criminal charges before any court  of  compe-
 20    tent  jurisdiction  against an applicant which could disqualify that applicant
 21    if convicted.
 22        (9)  The director may suspend action upon a loan originator license appli-
 23    cation pending resolution of any civil  action  or  administrative  proceeding
 24    against  an  applicant, in which the civil action or administrative proceeding
 25    involves any aspect of a financial service business and the outcome  of  which
 26    could disqualify the applicant.
 27        (10) An applicant under this section shall make complete disclosure of all
 28    information required in the application. An applicant, or an individual acting
 29    on  behalf  of  the  applicant, is not liable in any civil action other than a
 30    civil action brought by a governmental agency, related to  an  alleged  untrue
 31    statement  made  pursuant to this section unless it is shown by clear and con-
 32    vincing evidence that:
 33        (a)  The applicant, or an individual acting on behalf  of  the  applicant,
 34        knew  at  the  time  that  the statement was made that it was false in any
 35        material respect; or
 36        (b)  The applicant, or an individual acting on behalf  of  the  applicant,
 37        acted in reckless disregard as to the statement's truth or falsity.
                                                                        
 38        SECTION  8.  That  Section 26-3109, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
 40        26-3109.  REVOCATION OR SUSPENSION OF LICENSE. (1) If the  department  has
 41    reason  to  believe  that  grounds  exist  for  revocation  or suspension of a
 42    license, the department may initiate  a  contested  case  against  a  mortgage
 43    banker  broker, or mortgage broker lender or loan originator, and any partner,
 44    officer, director, manager, member, employee or agent whose activities consti-
 45    tute the basis for revocation or suspension, in accordance  with  chapter  52,
 46    title 67, Idaho Code.  The director may, after proceedings pursuant to chapter
 47    52,  title  67, Idaho Code, suspend the license for a period not to exceed six
 48    (6) months, or revoke the license, if he finds that:
 49        (a)  The licensee or any  partner,  officer,  director,  manager,  member,
 50        employee or agent of the licensee has violated this chapter or any rule or
 51        order lawfully made pursuant to this chapter; or
 52        (b)  The  licensee  or  any  partner,  officer, director, manager, member,
 53        employee or agent of the licensee has violated  any  other  laws  of  this
                                                                        
                                           9
                                                                        
  1        state,  or  federal   laws, rule or regulations pertaining to the mortgage
  2        banking brokering, or mortgage  brokering  lending,  or  loan  origination
  3        activities set forth in section 26-3102, Idaho Code; or
  4        (c)  Facts  or  conditions  exist  which  would clearly have justified the
  5        director in refusing to grant a license had these facts or conditions been
  6        known to exist at the time the license was issued; or
  7        (d)  The licensee or any  partner,  officer,  director,  manager,  member,
  8        employee  or  agent  of the licensee has been convicted of any felony or a
  9        misdemeanor involving any aspect of the financial services business, or  a
 10        court has accepted a finding of guilt on the part of the licensee or part-
 11        ner,  officer,  director, manager, member, employee or agent of the licen-
 12        see, of any felony or a misdemeanor involving any aspect of the  financial
 13        services business; or
 14        (e)  The  licensee  or  any  partner,  officer, director, manager, member,
 15        employee or agent of the licensee has had a license substantially  equiva-
 16        lent to a license under this chapter, and issued by another state, denied,
 17        revoked or suspended under the laws of such state; or
 18        (f)  The  licensee  has filed an application for a license which as of the
 19        date the license was issued, or as of the date of an order  denying,  sus-
 20        pending  or  revoking a license, was incomplete in any material respect or
 21        contained any statement that was, in  light  of  the  circumstances  under
 22        which  it was made, false or misleading with respect to any material fact;
 23        or
 24        (g)  The licensee fails to maintain a net worth of  ten  thousand  dollars
 25        ($10,000) The mortgage broker or mortgage lender licensee has employed, or
 26        has  entered into a contractual relationship with, any person who performs
 27        loan origination activities for the licensee  without  first  obtaining  a
 28        loan originator license under this chapter; or
 29        (h)  The  mortgage broker or mortgage lender licensee has failed to notify
 30        the director of the employment or termination of, or the entering into  or
 31        termination of a contractual relationship with, a licensed loan originator
 32        pursuant to section 26-3111(2), Idaho Code; or
 33        (i)  The  mortgage broker or mortgage lender licensee has failed to super-
 34        vise diligently and control the  mortgage-related  activities  of  a  loan
 35        originator employed by the licensee.
 36        (2)  If the director finds that probable cause for revocation of a license
 37    exists  and  that enforcement of this chapter and the  public interest require
 38    immediate suspension of the license pending investigation,  he  may,  after  a
 39    hearing  upon  five  (5)  days'  written notice, enter an order suspending the
 40    license for not more than thirty (30) days.
 41        (3)  Any licensee may relinquish the license by notifying  the  department
 42    in writing of its relinquishment, but this relinquishment shall not affect his
 43    liability for acts previously committed, and may not occur after the filing of
 44    a complaint for revocation of the license.
 45        (4)  The director may, in his discretion, reinstate a license, terminate a
 46    suspension,  or grant a new license to a person whose license has been revoked
 47    or suspended if no fact or condition then exists which clearly  would  justify
 48    the department in refusing to grant a license.
                                                                        
 49        SECTION  9.  That  Section 26-3110, Idaho Code, be, and the same is hereby
 50    amended to read as follows:
                                                                        
 51        26-3110.  SURETY BONDS AND CONTINUING EDUCATION. (1) All  mortgage  broker
 52    and  mortgage  lender  licensees,  with  or  without an office located in this
 53    state, shall maintain a surety bond to the state of Idaho in  accordance  with
                                                                        
                                           10
                                                                        
  1    this  section. The bond to be maintained shall be in the amount of ten twenty-
  2    five thousand dollars ($1025,000). This amount shall  be  increased  by  addi-
  3    tional sums of ten thousand dollars ($10,000) for each licensed branch office.
  4    The  bond shall be a continuing obligation of the issuing surety. The surety's
  5    liability under the bond for any claims made thereunder either individually or
  6    in the aggregate shall in no event exceed the face amount of the bond  issued.
  7    The bond shall be issued by a surety authorized to do business in the state of
  8    Idaho.  The  licensee  shall  place the bond, including any and all riders and
  9    endorsements executed subsequent to the effective date of the bond,  shall  be
 10    placed on file with the department. In lieu of the bonds required by this sec-
 11    tion, a certificate of deposit issued by an Idaho bank and made payable to the
 12    director  may  be  provided  to  the  director in the same principal amount as
 13    required for bonds. The interest on the certificate of deposit shall  be  pay-
 14    able  to  the  licensee. The certificate of deposit shall be maintained at all
 15    times during which the licensee is authorized to conduct mortgage brokering or
 16    mortgage lending activities under this chapter, and must provide that it  will
 17    remain  in  effect  for  at  least three (3) years following discontinuance of
 18    operations unless released earlier by the director.
 19        (2)  All loan originator licensees under this chapter,  whether  operating
 20    within  or  outside of the state of Idaho, shall maintain a surety bond to the
 21    state of Idaho in accordance with this section.  The  bond  to  be  maintained
 22    shall be in the amount of ten thousand dollars ($10,000). The surety's liabil-
 23    ity  under  the  bond for any claims made thereunder either individually or in
 24    the aggregate shall in no event exceed the face amount of the bond issued. The
 25    bond shall be issued by a surety authorized to do business  in  the  state  of
 26    Idaho.  The  licensee  shall  place the bond, including any and all riders and
 27    endorsements executed subsequent to the effective date of the  bond,  on  file
 28    with  the department. In lieu of the bond required by this section, a certifi-
 29    cate of deposit issued by an Idaho bank and made payable to the  director  may
 30    be  provided  to  the  director in the same principal amount as required for a
 31    bond. The interest on the certificate of  deposit  shall  be  payable  to  the
 32    licensee.  The  certificate of deposit shall be maintained at all times during
 33    which the licensee is authorized to conduct loan origination activities  under
 34    this  chapter,  and  must  provide  that it will remain in effect for at least
 35    three (3) years following discontinuance of operations unless released earlier
 36    by the director.
 37        (3)  In the event that a licensee under this chapter, or any  employee  or
 38    agent  of  a such licensee, has violated any of the provisions of this chapter
 39    or of a rule or order lawfully made pursuant to this chapter, or  federal  law
 40    or  regulation pertaining to the loan origination, mortgage banking lending or
 41    mortgage brokering activities set forth in section 26-3102,  Idaho  Code,  and
 42    has damaged any person by such violation, then the bond shall be forfeited and
 43    paid by the surety to the state of Idaho for the benefit of any person so dam-
 44    aged.
 45        (4)  (a) The  director  may adopt rules to require continuing education of
 46        licensees under this chapter for the purpose of enhancing the professional
 47        competence and the professional responsibility of all licensees. The rules
 48        may include, but shall not be limited to, criteria for the content of con-
 49        tinuing education courses, the accreditation of continuing education spon-
 50        sors and programs, the computation of continuing  education  credits,  and
 51        general compliance with this subsection.
 52        (b)  Continuing professional education requirements shall be determined by
 53        the  director,  provided however, the requirements shall not exceed twenty
 54        (20) credit hours within a two (2) year period.
 55        (c)  The director may require accredited sponsors of continuing  education
                                                                        
                                           11
                                                                        
  1        programs  to  file  information,  in  a manner prescribed by the director,
  2        regarding the contents and materials of proposed courses  to  satisfy  the
  3        education  requirements  with  the  director  for review and approval. The
  4        director may set fees for the initial and continuing review of courses for
  5        which credit hours will be granted. The initial filing fee for  review  of
  6        materials  shall  not  exceed  five hundred dollars ($500) and the fee for
  7        continued review shall not exceed two hundred  fifty  dollars  ($250)  per
  8        annum per course offered.
                                                                        
  9        SECTION  10.  That Section 26-3111, Idaho Code, be, and the same is hereby
 10    amended to read as follows:
                                                                        
 11        26-3111.  RECORDS -- ANNUAL REPORTS  --  RENEWAL  OF  LICENSE.  (1)  Every
 12    licensee  shall  maintain  records, including financial records, in conformity
 13    with generally accepted accounting principles, in a manner  that  will  enable
 14    the  director  to  determine whether the licensee is complying with the provi-
 15    sions of this chapter. The recordkeeping system of a licensee shall be  suffi-
 16    cient  if  he makes the required information reasonably available. The records
 17    need not be kept in the place of business where residential mortgage loans are
 18    made, if the director is given free access to the  records  wherever  located.
 19    The  records  pertaining  to any loan need not be preserved for more than five
 20    three (53) years after making the final entry relating to the loan.
 21        (2)  Any mortgage broker or mortgage lender licensee who employs  or  con-
 22    tracts  with  a  loan  originator licensee, for the purpose of conducting loan
 23    origination activities, shall:
 24        (a)  Notify the director of the employment of, or contractual relationship
 25        with, a loan originator licensee within thirty (30) days of  such  employ-
 26        ment or contract. Notification shall be made in a manner prescribed by the
 27        director;
 28        (b)  Notify  the director of the termination of employment of, or contrac-
 29        tual relationship with, a loan originator licensee within thirty (30) days
 30        of such termination. Notification shall be made in a manner prescribed  by
 31        the director; and
 32        (c)  Maintain  any  records  relating to the employment of, or contractual
 33        relationship with, a loan originator licensee, for a period not to  exceed
 34        three (3) years.
 35        (3)  On  or before August 31 of each year, every mortgage broker and mort-
 36    gage lender licensee under this chapter shall pay an  annual  license  renewal
 37    fee of one hundred fifty dollars ($1500), and file with the director a renewal
 38    form  containing  such information as the director may require and a composite
 39    annual report for the residential mortgage loans made or brokered by him.
 40        (4)  On or before October 31 of each year, every loan originator  licensee
 41    under this chapter shall pay an annual license renewal fee of one hundred dol-
 42    lars  ($100), and file with the director a renewal form containing such infor-
 43    mation as the director may require.
                                                                        
 44        SECTION 11.  That Section 26-3112, Idaho Code, be, and the same is  hereby
 45    amended to read as follows:
                                                                        
 46        26-3112.  EXAMINATION  AND  INVESTIGATIONS. (1) The director shall examine
 47    periodically at intervals he  deems  appropriate,    the  loans  and  business
 48    records  of each licensee.  In addition, for the purpose of discovering viola-
 49    tions of the provisions of  this  chapter  or  securing  information  lawfully
 50    required,  the director may at any time investigate the loans, business, books
 51    and records of any such licensee.  For these purposes, he shall have free  and
                                                                        
                                           12
                                                                        
  1    reasonable access to the offices, places of business, and books and records of
  2    the  licensee.  The director, for purposes of examination of licensees herein,
  3    shall be paid the actual cost of examination by the  licensee,  within  thirty
  4    (30) days of the examination.
  5        (2)  If  a licensee's records are located outside this state, the licensee
  6    shall have the option to make them available to the director at  a  convenient
  7    location  within  this state, or pay the reasonable and necessary expenses for
  8    the director or his representative to examine them at the place where they are
  9    maintained.  The director may designate representatives, including  comparable
 10    officials  of  the  state in which the records are located, to inspect them on
 11    his behalf.
 12        (3)  For the purposes of this section, the director may  administer  oaths
 13    or  affirmations,  and  upon  his own motion or upon request of any party, may
 14    subpoena witnesses, compel their attendance, adduce evidence, and require  the
 15    production of any matter which is relevant to the investigation, including the
 16    existence, description, nature, custody, condition, and location of any books,
 17    documents,  or  other tangible things and the identity and location of persons
 18    having knowledge of relevant facts, or any other matter reasonably  calculated
 19    to lead to the discovery of admissible evidence.
 20        (4)  Upon failure to obey a subpoena or to give testimony and upon reason-
 21    able notice to all persons affected thereby the director may apply to the dis-
 22    trict court for an order compelling compliance.
                                                                        
 23        SECTION  12.  That Section 26-3114, Idaho Code, be, and the same is hereby
 24    amended to read as follows:
                                                                        
 25        26-3114.  PROHIBITED PRACTICES OF MORTGAGE BROKERS AND  MORTGAGE  LENDERS.
 26    No  mortgage  broker or mortgage lender licensee or person required under this
 27    chapter to have a such license shall:
 28        (1)  Obtain any exclusive dealing or exclusive agency agreement  from  any
 29    borrower;
 30        (2)  Delay  closing  of  any  residential mortgage loan for the purpose of
 31    increasing interest, costs, fees, or charges payable by the borrower;
 32        (3)  Accept any fees at closing which were not previously disclosed  fully
 33    to the borrower;
 34        (4)  Obtain  any  agreement  or  instrument in which blanks are left to be
 35    filled in after execution signing by a borrower;
 36        (5)  Engage in any misrepresentation  in  connection  with  a  residential
 37    mortgage loan;
 38        (6)  Make  payment, whether directly or indirectly, of any kind to any in-
 39    house or fee appraiser for the purpose of influencing the independent judgment
 40    of the appraiser with respect to the value of any real estate which is  to  be
 41    covered by a residential mortgage loan;
 42        (7)  Make  any false promises likely to influence or persuade, or pursue a
 43    course of misrepresentations and false promises through  loan  originators  or
 44    other agents, solicitors, or through advertising or otherwise;
 45        (8)  Misrepresent,  circumvent  or conceal, through whatever subterfuge or
 46    device, any of the material particulars or the  nature  thereof,  regarding  a
 47    residential mortgage loan transaction; to which it is a party; nor
 48        (9)  Enter  into  any  agreement, with or without the payment of a fee, to
 49    fix in advance a particular interest rate or other term in a residential mort-
 50    gage loan unless written confirmation of the agreement  is  delivered  to  the
 51    borrower as required by rule pursuant to this chapter.
                                                                        
 52        SECTION  13.  That  Chapter  31, Title 26, Idaho Code, be, and the same is
                                                                        
                                           13
                                                                        
  1    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
  2    ignated as Section 26-3114A, Idaho Code, and to read as follows:
                                                                        
  3        26-3114A.  PROHIBITED  PRACTICES  OF  LOAN ORIGINATORS. No loan originator
  4    licensee or person required under this chapter to have such license shall:
  5        (1)  Be employed simultaneously by more than one (1)  mortgage  broker  or
  6    mortgage lender licensed under this chapter;
  7        (2)  Enter  into concurrent contractual relationships for delivery of loan
  8    origination services to more than one (1) licensee under this chapter;
  9        (3)  Obtain any exclusive dealing or exclusive agency agreement  from  any
 10    borrower;
 11        (4)  Delay  closing  of  any  residential mortgage loan for the purpose of
 12    increasing interest, costs, fees, or charges payable by the borrower;
 13        (5)  Accept any fees at closing which were not previously disclosed  fully
 14    to the borrower;
 15        (6)  Obtain  any  agreement  or  instrument in which blanks are left to be
 16    filled in after signing by a borrower;
 17        (7)  Engage in any misrepresentation  in  connection  with  a  residential
 18    mortgage loan;
 19        (8)  Make  payment, whether directly or indirectly, of any kind to any in-
 20    house or fee appraiser for the purpose of influencing the independent judgment
 21    of the appraiser with respect to the value of any real estate which is  to  be
 22    covered by a residential mortgage loan;
 23        (9)  Make  any false promises likely to influence or persuade, or pursue a
 24    course of misrepresentations and false promises  through  agents,  solicitors,
 25    advertising or otherwise;
 26        (10) Misrepresent,  circumvent  or conceal, through whatever subterfuge or
 27    device, any of the material particulars or the  nature  thereof,  regarding  a
 28    residential mortgage loan transaction; nor
 29        (11) Enter  into  any  agreement, with or without the payment of a fee, to
 30    fix in advance a particular interest rate or other term in a residential mort-
 31    gage loan unless written confirmation of the agreement  is  delivered  to  the
 32    borrower as required by rule pursuant to this chapter.
                                                                        
 33        SECTION  14.  That Section 26-3116, Idaho Code, be, and the same is hereby
 34    amended to read as follows:
                                                                        
 35        26-3116.  INITIAL LICENSING AND COMPLIANCE. A person who conducts  any  of
 36    the  activities  set  forth in subsections (178) and (189) of section 26-3102,
 37    Idaho Code, on the effective date of this act shall, within  sixty  (60)  days
 38    following  the  effective  date  of  this  act,  apply to the department for a
 39    license.
                                                                        
 40        SECTION 15.  That Chapter 31, Title 26, Idaho Code, be, and  the  same  is
 41    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 42    ignated as Section 26-3116A, Idaho Code, and to read as follows:
                                                                        
 43        26-3116A.  INITIAL LOAN ORIGINATOR LICENSING. A person who conducts any of
 44    the activities set forth in section 26-3102(20), Idaho Code, shall have  sixty
 45    (60)  days  to apply to the department for a loan originator license following
 46    the effective date of the loan originator licensing provisions of this chapter
 47    and, notwithstanding the provisions of section 26-3108A, Idaho Code, shall pay
 48    an initial one (1) time reduced loan origination license  application  fee  of
 49    one hundred dollars ($100).
                                                                        
                                           14
                                                                        
  1        SECTION  16.  This act shall be in full force and effect on and after July
  2    1, 2004, provided however, that the loan originator licensing requirements set
  3    forth in Section 7 of this act shall not become effective until the succeeding
  4    January 1 following the legislative session in which the Legislature grants to
  5    the Department of Finance a specific appropriation and approval of  additional
  6    department staffing for implementation of the loan originator licensing provi-
  7    sions of this act and the Director of the Department of Finance files with the
  8    Secretary of State certification that such appropriation and approval require-
  9    ments have been satisfied.

Statement of Purpose / Fiscal Impact


                   Revised Statement of Purpose



                       STATEMENT OF PURPOSE

                             RS 14141


The purpose of this legislation is to establish licensing and
educational requirements for all persons who originate
residential mortgage loans and are not regulated under other laws
of the state. This bill will provide for greater consumer
protection.

The bill also defines the relationship between a mortgage
broker/banker and loan originators, making that relationship the
same as described under Idaho Code as a real estate broker and
sales associates and insurance broker and sales associates. The
bill allows for continuing education requirements.



                            FISCAL NOTE

This bill is revenue neutral, calling for the establishment of
license fees at a level to cover all administrative costs to the
Department of Finance. It increases existing licensing fees to
mortgage brokers.




Contact:

Name: Senator John W. Goedde
Phone: 208-332-1000
            
STATEMENT OF PURPOSE/FISCAL NOTE                    S 1389   

REVISED                   REVISED                   REVISE