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H0450...........................................................by BUSINESS
RESIDENTIAL MORTGAGE BROKERS - Amends and repeals existing law relating to
residential mortgage brokers to revise definitions; to revise a provision
relating to denial of license applications; to authorize the director of
the Department of Finance to adopt rules relating to prerequisites for
certain licenses; to delete provisions relating to loan originator's
original licenses and license display; to delete a provision requiring loan
originators to maintain surety bonds; to revise a provision relating to
mortgage brokers or mortgage lenders and bond forfeiture; to revise the
date for annual license renewal fees; to revise the filing date of
composite annual reports; and to delete provisions relating to initial
licensing and compliance and initial loan originator licensing.
02/01 House intro - 1st rdg - to printing
02/04 Rpt prt - to Bus
02/29 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 67-1-2
AYES -- Anderson, Andrus, Barrett, Bayer, Bell, Bilbao, Black, Block,
Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
Harwood, Henbest, Jaquet, Killen, King, Kren, Labrador, Lake,
LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould,
Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
Shepherd(08), Shirley, Shively, Smith(30), Smith(24), Snodgrass,
Stevenson, Thayn, Thomas, Vander Woude, Wills, Wood(27), Wood(35),
Mr. Speaker
NAYS -- Trail
Absent and excused -- Bedke, Henderson
Floor Sponsor - Mathews
Title apvd - to Senate
03/07 Senate intro - 1st rdg - to Com/HuRes
03/19 Rpt out - rec d/p - to 2nd rdg
03/20 2nd rdg - to 3rd rdg
Rls susp - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - Cameron
Title apvd - to House
03/21 To enrol - Rpt enrol - Sp signed
03/24 Pres signed
03/25 To Governor
03/31 Governor signed
Session Law Chapter 313
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 450 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO RESIDENTIAL MORTGAGE BROKERS; AMENDING SECTION 26-3102, IDAHO 3 CODE, TO REVISE DEFINITIONS; AMENDING SECTION 26-3105, IDAHO CODE, TO PRO- 4 VIDE A CORRECT CODE REFERENCE; AMENDING SECTION 26-3108, IDAHO CODE, TO 5 REVISE A PROVISION RELATING TO DENIAL OF MORTGAGE BROKER OR MORTGAGE 6 LENDER LICENSE APPLICATIONS, TO ADD A PROVISION AUTHORIZING THE DIRECTOR 7 OF THE DEPARTMENT OF FINANCE TO ADOPT RULES RELATING TO PREREQUISITES FOR 8 CERTAIN LICENSES; AMENDING SECTION 26-3108A, IDAHO CODE, TO MAKE TECHNICAL 9 CORRECTIONS, TO DELETE PROVISIONS RELATING TO LOAN ORIGINATORS' ORIGINAL 10 LICENSES AND DISPLAY OF LICENSES AND TO PROVIDE A CORRECT CODE REFERENCE; 11 AMENDING SECTION 26-3110, IDAHO CODE, TO DELETE A PROVISION REQUIRING LOAN 12 ORIGINATOR LICENSEES TO MAINTAIN SURETY BONDS AND TO REVISE A PROVISION 13 RELATING TO MORTGAGE BROKERS OR MORTGAGE LENDERS AND BOND FORFEITURE; 14 AMENDING SECTION 26-3111, IDAHO CODE, TO REVISE THE LICENSE RENEWAL DATE 15 AND ANNUAL REPORT FILING DATE FOR MORTGAGE BROKER AND MORTGAGE LENDER 16 LICENSEES AND TO REVISE THE LICENSE RENEWAL DATE FOR LOAN ORIGINATOR 17 LICENSEES; AND REPEALING SECTION 26-3116, IDAHO CODE, RELATING TO INITIAL 18 LICENSING AND COMPLIANCE FOR THOSE ENGAGED IN MORTGAGE LENDING ACTIVITIES 19 AND MORTGAGE BROKERING ACTIVITIES AND SECTION 26-3116A, IDAHO CODE, 20 RELATING TO INITIAL LOAN ORIGINATOR LICENSING. 21 Be It Enacted by the Legislature of the State of Idaho: 22 SECTION 1. That Section 26-3102, Idaho Code, be, and the same is hereby 23 amended to read as follows: 24 26-3102. DEFINITIONS. As used in this chapter and in rules promulgated 25 pursuant to this chapter: 26 (1) "Act" means this Idaho residential mortgage practices act. 27 (2) "Agent" means a person who acts with the consent and on behalf of a 28 licensee, and is subject to the licensee's direct or indirect control, and may 29 include an independent contractor. 30 (3) "Borrower" means the person who has applied for a residential mort- 31 gage loan from a licensee, or person required to be licensed, under this chap- 32 ter, or on whose behalf the activities set forth in subsection (18), (19), or 33 (20) of this section are conducted. 34 (4) "Department" means the department of finance of the state of Idaho. 35 (5) "Director" means the director of the department of finance. 36 (6) "Licensee" means a person licensed pursuant to this chapter to engage 37 in the activities regulated by this act. 38 (7) "Mortgage lender" means any person, other than an exempt person, who 39 makes residential mortgage loans to borrowers, and performs the activities 40 described in subsection (18) of this section. 41 (8) "Mortgage broker" means any person, other than an exempt person, who 42 performs the activities described in subsection (19) of this section with 43 respect to a residential mortgage loan. For the purposes of this chapter, the 2 1 term "mortgage broker" does not include persons who are mortgage lenders. 2 (9) "Loan originator" means any person, other than an exempt person, who 3 performs the activities described in subsection (20) of this section with 4 respect to a residential mortgage loan. For the purposes of this chapter, the 5 term "loan originator" does not include persons who are mortgage brokers or 6 mortgage lenders. 7 (10) "Mortgage brokerage agreement" means a written agreement in which a 8 mortgage broker agrees to obtain a residential mortgage loan for the borrower 9 or assist the borrower in obtaining a residential mortgage loan. 10 (11) "Person" means an individual, sole proprietorship, partnership, cor- 11 poration, limited liability company, limited liability partnership, or other 12 association of individuals, however organized. 13 (12) "Real estate settlement procedures act" means the act set forth in 12 14 U.S.C. section 2601 et seq., asamended to and including January 1, 2005, or a15subsequent date if so definedidentified by administrative rule. 16 (13) "Regulation X" means regulation X as promulgated by the U.S. depart- 17 ment of housing and urban development and codified in 24 CFR part 3500 et 18 seq., asamended to and including January 1, 2005, or a subsequent date if so19definedidentified by administrative rule. 20 (14) "Regulation Z" means regulation Z as promulgated by the board of gov- 21 ernors of the federal reserve system and codified in 12 CFR part 226 et seq., 22 asamended to and including January 1, 2005, or a subsequent date if so23definedidentified by administrative rule. 24 (15) "Residential mortgage loan" means a loanmade primarily for personal,25family, or household use andprimarily secured by a security interest on resi- 26 dential real property located in this state. 27 (16) "Residential real property" means real property located in this state 28 improved by a one (1) to four (4) family dwelling. 29 (17) "Truth in lending act" means the act set forth in 15 U.S.C. section 30 1601 et seq., asamended to and including January 1, 2005, or a subsequent31date if so definedidentified by administrative rule. 32 (18) "Mortgage lending activities" means for compensation or gain, or in 33 the expectation of compensation or gain, either directly or indirectly, 34 accepting or offering to accept applications for residential mortgage loans, 35 assisting or offering to assist in the preparation of an application for a 36 residential mortgage loan. 37 (19) "Mortgage brokering activities" means for compensation or gain, or in 38 the expectation of compensation or gain, either directly or indirectly, 39 accepting or offering to accept an application for a residential mortgage 40 loan, assisting or offering to assist in the preparation of an application for 41 a residential mortgage loan on behalf of a borrower, or negotiating or offer- 42 ing to negotiate the terms or conditions of a residential mortgage loan with 43 any person making residential mortgage loans. 44 (20) "Loan origination activities" means for compensation or gain, or in 45 the expectation of compensation or gain, either directly or indirectly, engag- 46 ing in any of the following activities while representing or acting on behalf 47 of a mortgage broker or mortgage lender: 48 (a) Soliciting, accepting, or offering to accept an application for a 49 residential mortgage loan; 50 (b) Assisting a borrower or offering to assist a borrower in the prepara- 51 tion of a residential mortgage loan application; or 52 (c) Negotiating or offering to negotiate the terms or conditions of a 53 residential mortgage loan with a borrower. 54 SECTION 2. That Section 26-3105, Idaho Code, be, and the same is hereby 3 1 amended to read as follows: 2 26-3105. POWERS AND DUTIES OF DIRECTOR. (1) In addition to any other 3 duties imposed upon the director by law, the director shall: 4 (a) Administer and enforce the provisions and requirements of this chap- 5 ter; 6 (b) Conduct investigations and issue subpoenas as necessary to determine 7 whether a person has violated any provision of this chapter or rules pro- 8 mulgated under the authority of this chapter; 9 (c) Conduct examinations of the books and records of licensees and con- 10 duct investigations as necessary and proper for the enforcement of the 11 provisions of this chapter and the rules promulgated under the authority 12 of this chapter; 13 (d) Appoint a volunteer advisory board which shall consist of two (2) 14 individuals who are mortgage lenders and two (2) individuals who are mort- 15 gage brokers; 16 (e) Pursuant to chapter 52, title 67, Idaho Code, issue orders and pro- 17 mulgate rules that, in the opinion of the director, are necessary to exe- 18 cute, enforce and effectuate the purposes of this chapter; 19 (f) Be authorized to set, by annual written notification to licensees, 20 limits on the fees and charges which are set forth in subsections (1) and 21 (2) of section 26-3113, Idaho Code; 22 (g) Require that all funds collected by the department under this chapter 23 be deposited into the finance administrative account pursuant to section 24 67-2702, Idaho Code; and 25 (h) Review and approve forms used by licensees prior to their use as pre- 26 scribed by the director. 27 (2) The legislature has determined that a uniform multistate administra- 28 tion of an automated licensing system for mortgage brokers, mortgage lenders 29 and individual mortgage loan originators is consistent with both the public 30 interest and the purposes of this chapter; therefore, for the sole purpose of 31 participating in the establishment and implementation of a multistate auto- 32 mated licensing system for mortgage brokers, mortgage lenders and individual 33 mortgage loan originators, the director is authorized: 34 (a) To modify by rule the license renewal dates set forth in section 35 26-3111(3) and (45), Idaho Code; 36 (b) To establish by rule such new requirements as are necessary for the 37 state of Idaho to participate in a multistate automated licensing system 38 upon the director's finding that each new requirement is consistent with 39 both the public interest and the purposes of this chapter; and 40 (c) To require a background investigation of each applicant for a mort- 41 gage broker, mortgage lender or loan originator license by means of fin- 42 gerprint checks by the Idaho state police and the FBI for state and 43 national criminal history record checks, commencing at such time as Idaho 44 joins a multistate automated licensing system for mortgage brokers, mort- 45 gage lenders and individual mortgage loan originators pursuant to this 46 subsection (2). The information obtained thereby may be used by the direc- 47 tor to determine the applicant's eligibility for licensing under this 48 chapter. The fee required to perform the criminal history record check 49 shall be borne by the license applicant. Information obtained or held by 50 the director pursuant to this subsection (2) shall be considered confiden- 51 tial personal information and shall be exempt from disclosure pursuant to 52 section 9-340C(8) and (9), Idaho Code. 53 (3) Nothing in subsection (2) of this section shall authorize the direc- 54 tor to require any individual or person exempt under section 26-3103, Idaho 4 1 Code, or employees or agents of any such exempt individual or person, to sub- 2 mit information to, or to participate in, the uniform multistate licensing 3 system. 4 SECTION 3. That Section 26-3108, Idaho Code, be, and the same is hereby 5 amended to read as follows: 6 26-3108. LICENSE TO DO BUSINESS AS A MORTGAGE BROKER OR MORTGAGE LENDER. 7 (1) The director shall receive and act on all applications for licenses to do 8 business as a mortgage broker or mortgage lender. Applications shall be filed 9 in the manner prescribed by the director, shall contain such information as 10 the director may reasonably require, shall be updated as necessary to keep the 11 information current, and shall be accompanied by an application fee of three 12 hundred fifty dollars ($350). When an application for licensure is denied or 13 withdrawn, the director shall retain all fees paid by the applicant. 14 (2) An application for license may be denied if the director finds that: 15 (a) The financial responsibility, character, and fitness of the license 16 applicant,andor of the officers and directors thereof, if the applicant 17 is a corporation, partners thereof if the applicant is a partnership, mem- 18 bers or managers thereof if the applicant is a limited liability company, 19 and individuals designated in charge of the applicant's places of busi- 20 ness, are not such as to warrant belief that the business will be operated 21 honestly and fairly within the purposes of this chapter; 22 (b) The individual designated in charge of applicant's places of business 23 does not have a minimum of three (3) years' experience in residential 24 mortgage lending; 25 (c) The applicant has been convicted of any felony, or a misdemeanor 26 involving any aspect of the financial services business, or a court has 27 accepted a finding of guilt on the part of the applicant of any felony, or 28 a misdemeanor involving any aspect of the financial services business; 29 (d) The applicant has had a license, substantially equivalent to a 30 license under this chapter and issued by any state, denied, revoked or 31 suspended under the law of such state; 32 (e) The applicant has filed an application for a license which is false 33 or misleading with respect to any material fact; 34 (f) The applicant or any partner, officer, director, manager, member, 35 employee or agent of the applicant has violated this chapter or any rule 36 or order lawfully made pursuant to this chapter; 37 (g) The applicant or any partner, officer, director, manager, member, 38 employee or agent of the applicant has violated any state or federal law, 39 rule or regulation pertaining to the financial services industry; or 40 (h) The applicant has not provided information on the application as rea- 41 sonably required by the director pursuant to subsection (1) of this sec- 42 tion. 43 (3) The director is empowered to conduct investigations as he may deem 44 necessary, to enable him to determine the existence of the requirements set 45 out in subsection (2) of this section. 46 (4) The director may adopt rules to require, as a prerequisite to licen- 47 sure, testing of loan originator license applicants and sole proprietor 48 mortgage broker or mortgage lender license applicants who intend to engage 49 in this state in the activities set forth in section 26-3102(20)(a), (b) 50 or (c), Idaho Code. 51 (5) Upon written request, an applicant is entitled to a hearing on the 52 question of his qualifications for a license if: 53 (a) The director has notified the applicant in writing that his applica- 5 1 tion has been denied, or objections filed; 2 (b) The director has not issued a license within sixty (60) days after 3 the application for the license was filed. If a hearing is held, the 4 applicant and those filing objections shall reimburse, pro rata, the 5 director for his reasonable and necessary expenses incurred as a result of 6 the hearing. A request for hearing may not be made more than fifteen (15) 7 days after the director has mailed a writing to the applicant notifying 8 him that the application has been denied and stating in substance the 9 director's finding supporting denial of the application or that objections 10 have been filed and the substance thereof. 11 (56) Every licensee under this section shall maintain a home office 12 licensed under this chapter as the licensee's principal location for the 13 transaction of mortgage business. The director may, on application, issue 14 additional branch licenses to the same licensee upon compliance with all the 15 provisions of this chapter governing the issuance of a single license. A sepa- 16 rate license shall be required for each place of business from which mortgage 17 brokering activities or mortgage lending activities are directly or indirectly 18 conducted. The individual in charge of each place of business must satisfy the 19 requirements of subsections (2)(b), (c) and (d) of this section. Each license 20 under this section shall remain in full force and effect unless the licensee 21 does not satisfy the renewal requirements of section 26-3111(3), Idaho Code, 22 or the license is relinquished, suspended, or revoked; provided however, 23 branch licenses shall be terminated upon the relinquishment or revocation of a 24 home office license. 25 (67) No licensee under this section shall change the location of any 26 place of business, consolidate two (2) or more locations, or close any home 27 office location, without giving the director at least fifteen (15) days' prior 28 written notice. A licensee under this section shall give written notice to the 29 director within three (3) business days of the closure of any branch location 30 licensed under this chapter. Written notice of the closure of a home or branch 31 office location shall include a detailed explanation of the disposition of all 32 loan applications pending at the time of closure of the licensed location. 33 (78) No licensee under this section shall engage in the business of mak- 34 ing or brokering residential mortgage loans at any place of business for which 35 he does not hold a license nor shall he engage in business under any other 36 name than that on the license. 37 (89) The director may suspend action upon a mortgage broker or mortgage 38 lender license application pending resolution of any criminal charges before 39 any court of competent jurisdiction against an applicant which could disqual- 40 ify that applicant if convicted. 41 (910) The director may suspend action upon a mortgage broker or mortgage 42 lender license application pending resolution of any civil action or adminis- 43 trative proceeding against an applicant in which the civil action or adminis- 44 trative proceeding involves any aspect of a financial service business and the 45 outcome of which could disqualify the applicant. 46 (101) An applicant under this section shall make complete disclosure of 47 all information required in the application, including information concerning 48 officers, directors, partners, members, managers, employees or agents. An 49 applicant, or an individual acting on behalf of the applicant, is not liable 50 in any civil action other than a civil action brought by a governmental 51 agency, related to an alleged untrue statement made pursuant to this section 52 unless it is shown by clear and convincing evidence that: 53 (a) The applicant, or an individual acting on behalf of the applicant, 54 knew at the time that the statement was made that it was false in any 55 material respect; or 6 1 (b) The applicant, or an individual acting on behalf of the applicant, 2 acted in reckless disregard as to the statement's truth or falsity. 3 (112) Each mortgage broker or mortgage lender licensed under this chapter 4 shall display in plain view the certificate of licensure issued by the depart- 5 ment in its principal office and in each branch office. 6 SECTION 4. That Section 26-3108A, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 26-3108A. LICENSE TO DO BUSINESS AS A LOAN ORIGINATOR. (1) The director 9 shall receive and act on all loan originator license applications. Applica- 10 tions shall be filed in the manner prescribed by the director, shall contain 11 such information as the director may reasonably require, shall be updated as 12 necessary to keep the information current, and shall be accompanied by an 13 application fee of two hundred dollars ($200). When an application for licen- 14 sure is denied or withdrawn, the director shall retain all fees paid by the 15 applicant. 16 (2) An application for license may be denied if the director finds that: 17 (a) The financial responsibility, character, and fitness of the license 18 applicant are not such as to warrant belief that the loan originator will 19 operate honestly and fairly within the purposes of this chapter; 20 (b) The applicant has been convicted of any felony, or a misdemeanor 21 involving any aspect of the financial services business, or a court has 22 accepted a finding of guilt on the part of the applicant of any felony, or 23 a misdemeanor involving any aspect of the financial services business; 24 (c) The applicant has had a license, substantially equivalent to a 25 license under this chapter and issued by any state, denied, revoked or 26 suspended under the law of such state; 27 (d) The applicant has filed an application for a license which is false 28 or misleading with respect to any material fact; 29 (e) The applicant has violated this chapter or any rule or order lawfully 30 made pursuant to this chapter; 31 (f) The applicant has violated any state or federal law, rule or regula- 32 tion pertaining to mortgage brokering, mortgage lending, or loan 33 origination activities set forth in section 26-3102, Idaho Code; or 34 (g) The applicant has not provided information on the application as rea- 35 sonably required by the director pursuant to subsection (1) of this sec- 36 tion. 37 (3) The director is empowered to conduct investigations as he may deem 38 necessary, to enable him to determine the existence of the requirements set 39 out in subsection (2) of this section. 40 (4) Upon written request, an applicant is entitled to a hearing on the 41 question of his qualifications for a license if: 42 (a) The director has notified the applicant in writing that his applica- 43 tion has been denied, or objections filed; 44 (b) The director has not issued a license within sixty (60) days after 45 the application for the license was filed. If a hearing is held, the 46 applicant and those filing objections shall reimburse, pro rata, the 47 director for his reasonable and necessary expenses incurred as a result of 48 the hearing. A request for hearing may not be made more than fifteen (15) 49 days after the director has mailed a writing to the applicant notifying 50 him that the application has been denied and stating in substance the 51 director's finding supporting denial of the application or that objections 52 have been filed and the substance thereof. 53 (5) A loan originator may transact business only for a mortgage broker or 7 1 mortgage lender licensed in accordance with the provisions of this chapter. 2The original license issued by the department to a loan originator must be3provided to and be maintained by the employing mortgage broker or mortgage4lender at the mortgage broker's or lender's main office. A copy of the loan5originator's license must be displayed at the office where that loan6originator principally transacts business.7 (6) Each license under this section shall remain in full force and effect 8 unless the licensee does not satisfy the renewal requirements of section 9 26-3111(45), Idaho Code, or the license is relinquished, suspended or revoked. 10 (7) A loan originator licensee under this chapter shall not engage in 11 loan origination activities at any location that is not a licensed home or 12 branch office location of the mortgage broker or mortgage lender he represents 13 or is acting on behalf of, nor shall he engage in loan origination activities 14 under any other name than that on the license. 15 (8) The director may suspend action upon a loan originator license appli- 16 cation pending resolution of any criminal charges before any court of compe- 17 tent jurisdiction against an applicant which could disqualify that applicant 18 if convicted. 19 (9) The director may suspend action upon a loan originator license appli- 20 cation pending resolution of any civil action or administrative proceeding 21 against an applicant, in which the civil action or administrative proceeding 22 involves any aspect of a financial service business and the outcome of which 23 could disqualify the applicant. 24 (10) An applicant under this section shall make complete disclosure of all 25 information required in the application. An applicant, or an individual acting 26 on behalf of the applicant, is not liable in any civil action other than a 27 civil action brought by a governmental agency, related to an alleged untrue 28 statement made pursuant to this section unless it is shown by clear and con- 29 vincing evidence that: 30 (a) The applicant, or an individual acting on behalf of the applicant, 31 knew at the time that the statement was made that it was false in any 32 material respect; or 33 (b) The applicant, or an individual acting on behalf of the applicant, 34 acted in reckless disregard as to the statement's truth or falsity. 35 SECTION 5. That Section 26-3110, Idaho Code, be, and the same is hereby 36 amended to read as follows: 37 26-3110. SURETY BONDS AND CONTINUING EDUCATION. (1) All mortgage broker 38 and mortgage lender licensees, with or without an office located in this 39 state, shall maintain a surety bond to the state of Idaho in accordance with 40 this section. The bond to be maintained shall be in the amount of twenty-five 41 thousand dollars ($25,000). This amount shall be increased by additional sums 42 of ten thousand dollars ($10,000) for each licensed branch office. The bond 43 shall be a continuing obligation of the issuing surety. The surety's liabil- 44 ity under the bond for any claims made thereunder either individually or in 45 the aggregate shall in no event exceed the face amount of the bond issued. The 46 bond shall be issued by a surety authorized to do business in the state of 47 Idaho. The licensee shall place the bond, including any and all riders and 48 endorsements executed subsequent to the effective date of the bond, on file 49 with the department. In lieu of the bonds required by this section, a certifi- 50 cate of deposit issued by an Idaho bank and made payable to the director may 51 be provided to the director in the same principal amount as required for 52 bonds. The interest on the certificate of deposit shall be payable to the 53 licensee. The certificate of deposit shall be maintained at all times during 8 1 which the licensee is authorized to conduct mortgage brokering or mortgage 2 lending activities under this chapter, and must provide that it will remain in 3 effect for at least three (3) years following discontinuance of operations 4 unless released earlier by the director. 5 (2)All loan originator licensees under this chapter, whether operating6within or outside of the state of Idaho, shall maintain a surety bond to the7state of Idaho in accordance with this section. The bond to be maintained8shall be in the amount of ten thousand dollars ($10,000). The surety's liabil-9ity under the bond for any claims made thereunder either individually or in10the aggregate shall in no event exceed the face amount of the bond issued. The11bond shall be issued by a surety authorized to do business in the state of12Idaho. The licensee shall place the bond, including any and all riders and13endorsements executed subsequent to the effective date of the bond, on file14with the department. In lieu of the bond required by this section, a certifi-15cate of deposit issued by an Idaho bank and made payable to the director may16be provided to the director in the same principal amount as required for a17bond. The interest on the certificate of deposit shall be payable to the18licensee. The certificate of deposit shall be maintained at all times during19which the licensee is authorized to conduct loan origination activities under20this chapter, and must provide that it will remain in effect for at least21three (3) years following discontinuance of operations unless released earlier22by the director.23(3)In the event that a mortgage broker or mortgage lender licensee under 24 this chapter, or any employee or agent of such licensee, has violated any of 25 the provisions of this chapter or of a rule or order lawfully made pursuant to 26 this chapter, or federal law or regulation pertaining to loan origination, 27 mortgage lending or mortgage brokering activities set forth in section 28 26-3102, Idaho Code, and has damaged any person by such violation, then the 29 bond shall be forfeited and paid by the surety to the state of Idaho for the 30 benefit of any person so damaged. 31 (43) (a) The director may adopt rules to require continuing education of 32 licensees under this chapter for the purpose of enhancing the professional 33 competence and the professional responsibility of all licensees. The rules 34 may include, but shall not be limited to, criteria for the content of con- 35 tinuing education courses, the accreditation of continuing education spon- 36 sors and programs, the computation of continuing education credits, and 37 general compliance with this subsection. 38 (b) Continuing professional education requirements shall be determined by 39 the director, provided however, the requirements shall not exceed twenty 40 (20) credit hours within a two (2) year period. 41 (c) The director may require accredited sponsors of continuing education 42 programs to file information, in a manner prescribed by the director, 43 regarding the contents and materials of proposed courses to satisfy the 44 education requirements with the director for review and approval. The 45 director may set fees for the initial and continuing review of courses 46 for which credit hours will be granted. The initial filing fee for review 47 of materials shall not exceed five hundred dollars ($500) and the fee for 48 continued review shall not exceed two hundred fifty dollars ($250) per 49 annum per course offered. 50 SECTION 6. That Section 26-3111, Idaho Code, be, and the same is hereby 51 amended to read as follows: 52 26-3111. RECORDS -- ANNUAL REPORTS -- RENEWAL OF LICENSE. (1) Every 53 licensee shall maintain records, including financial records, in conformity 9 1 with generally accepted accounting principles, in a manner that will enable 2 the director to determine whether the licensee is complying with the provi- 3 sions of this chapter. The recordkeeping system of a licensee shall be suffi- 4 cient if he makes the required information reasonably available. The records 5 need not be kept in the place of business where residential mortgage loans are 6 made, if the director is given free access to the records wherever located. 7 The records pertaining to any loan need not be preserved for more than three 8 (3) years after making the final entry relating to the loan. 9 (2) Any mortgage broker or mortgage lender licensee who employs or con- 10 tracts with a loan originator licensee, for the purpose of conducting loan 11 origination activities, shall: 12 (a) Notify the director of the employment of, or contractual relationship 13 with, a loan originator licensee within thirty (30) days of such employ- 14 ment or contract. Notification shall be made in a manner prescribed by the 15 director; 16 (b) Notify the director of the termination of employment of, or contrac- 17 tual relationship with, a loan originator licensee within thirty (30) days 18 of such termination. Notification shall be made in a manner prescribed by 19 the director; and 20 (c) Maintain any records relating to the employment of, or contractual 21 relationship with, a loan originator licensee, for a period not to exceed 22 three (3) years. 23 (3) On or beforeAugustDecember 31 of each year, every mortgage broker 24 and mortgage lender licensee under this chapter shall pay an annual license 25 renewal fee of one hundred fifty dollars ($150), and file with the director a 26 renewal form containing such information as the director may require.and a27composite annual report for the residential mortgage loans made or brokered by28him.29 (4) On or before March 31 of each year, or other date established by the 30 director by rule, every mortgage broker and mortgage lender licensee under 31 this chapter shall file with the director a composite annual report containing 32 such information as the director may require for the residential mortgage 33 loans made or brokered by him for the preceding calendar year. 34 (5) On or beforeOctoberDecember 31 of each year, every loan originator 35 licensee under this chapter shall pay an annual license renewal fee of one 36 hundred dollars ($100), and file with the director a renewal form containing 37 such information as the director may require. 38 SECTION 7. That Sections 26-3116 and 26-3116A, Idaho Code, be, and the 39 same are hereby repealed.
STATEMENT OF PURPOSE
RS 17417
The purpose of this bill is to amend the Idaho Residential
Mortgage Practices Act to promote greater uniformity in mortgage
licensing by eliminating a $10,000 individual surety bond
requirement for mortgage loan originator licensees. This bill
also enables the Director to adopt a pre-license test
requirement by rule. This bill also clarifies that the
definitions of "mortgage lending activities," "mortgage
brokering activities," and "loan origination activities" include
engaging in such activities for compensation or gain or "in the
expectation of compensation or gain." This bill also clarifies
that the Idaho Residential Mortgage Practices Act applies to
loans on all 1-4 family dwellings in Idaho regardless of
occupancy. This bill also repeals the requirement that mortgage
broker and mortgage lender licensees maintain the original
licenses of their employed loan originators. This bill also
eliminates the requirement that loan originator licenses be
posted on site by the employing mortgage broker or mortgage
lender. This bill will also amend the annual mortgage license
renewal dates to December 31, to promote uniformity in the
nationwide mortgage licensing system.
FISCAL NOTE
No fiscal impact on the state
CONTACT
Name: Michael Larsen
Agency: Finance, Dept. of
Phone: (208) 332-8060
STATEMENT OF PURPOSE/FISCAL NOTE H 450