REGISTER INFORMATION PAGE
Vol. 33 Iss. 18 - May 01, 2017

The Virginia Register OF REGULATIONS is an official state publication issued every other week throughout the year. Indexes are published quarterly, and are cumulative for the year. The Virginia Register has several functions. The new and amended sections of regulations, both as proposed and as finally adopted, are required by law to be published in the Virginia Register. In addition, the Virginia Register is a source of other information about state government, including petitions for rulemaking, emergency regulations, executive orders issued by the Governor, and notices of public hearings on regulations.

ADOPTION, AMENDMENT, AND REPEAL OF REGULATIONS

An agency wishing to adopt, amend, or repeal regulations must first publish in the Virginia Register a notice of intended regulatory action; a basis, purpose, substance and issues statement; an economic impact analysis prepared by the Department of Planning and Budget; the agency’s response to the economic impact analysis; a summary; a notice giving the public an opportunity to comment on the proposal; and the text of the proposed regulation.

Following publication of the proposal in the Virginia Register, the promulgating agency receives public comments for a minimum of 60 days. The Governor reviews the proposed regulation to determine if it is necessary to protect the public health, safety and welfare, and if it is clearly written and easily understandable. If the Governor chooses to comment on the proposed regulation, his comments must be transmitted to the agency and the Registrar no later than 15 days following the completion of the 60-day public comment period. The Governor’s comments, if any, will be published in the Virginia Register. Not less than 15 days following the completion of the 60-day public comment period, the agency may adopt the proposed regulation.

The Joint Commission on Administrative Rules (JCAR) or the appropriate standing committee of each house of the General Assembly may meet during the promulgation or final adoption process and file an objection with the Registrar and the promulgating agency. The objection will be published in the Virginia Register. Within 21 days after receipt by the agency of a legislative objection, the agency shall file a response with the Registrar, the objecting legislative body, and the Governor.

When final action is taken, the agency again publishes the text of the regulation as adopted, highlighting all changes made to the proposed regulation and explaining any substantial changes made since publication of the proposal. A 30-day final adoption period begins upon final publication in the Virginia Register.

The Governor may review the final regulation during this time and, if he objects, forward his objection to the Registrar and the agency. In addition to or in lieu of filing a formal objection, the Governor may suspend the effective date of a portion or all of a regulation until the end of the next regular General Assembly session by issuing a directive signed by a majority of the members of the appropriate legislative body and the Governor. The Governor’s objection or suspension of the regulation, or both, will be published in the Virginia Register. If the Governor finds that changes made to the proposed regulation have substantial impact, he may require the agency to provide an additional 30-day public comment period on the changes. Notice of the additional public comment period required by the Governor will be published in the Virginia Register.

The agency shall suspend the regulatory process for 30 days when it receives requests from 25 or more individuals to solicit additional public comment, unless the agency determines that the changes have minor or inconsequential impact.

A regulation becomes effective at the conclusion of the 30-day final adoption period, or at any other later date specified by the promulgating agency, unless (i) a legislative objection has been filed, in which event the regulation, unless withdrawn, becomes effective on the date specified, which shall be after the expiration of the 21-day objection period; (ii) the Governor exercises his authority to require the agency to provide for additional public comment, in which event the regulation, unless withdrawn, becomes effective on the date specified, which shall be after the expiration of the period for which the Governor has provided for additional public comment; (iii) the Governor and the General Assembly exercise their authority to suspend the effective date of a regulation until the end of the next regular legislative session; or (iv) the agency suspends the regulatory process, in which event the regulation, unless withdrawn, becomes effective on the date specified, which shall be after the expiration of the 30-day public comment period and no earlier than 15 days from publication of the readopted action.

A regulatory action may be withdrawn by the promulgating agency at any time before the regulation becomes final.

FAST-TRACK RULEMAKING PROCESS

Section 2.2-4012.1 of the Code of Virginia provides an exemption from certain provisions of the Administrative Process Act for agency regulations deemed by the Governor to be noncontroversial.  To use this process, Governor's concurrence is required and advance notice must be provided to certain legislative committees.  Fast-track regulations will become effective on the date noted in the regulatory action if no objections to using the process are filed in accordance with § 2.2-4012.1.

EMERGENCY REGULATIONS

Pursuant to § 2.2-4011 of the Code of Virginia, an agency, upon consultation with the Attorney General, and at the discretion of the Governor, may adopt emergency regulations that are necessitated by an emergency situation. An agency may also adopt an emergency regulation when Virginia statutory law or the appropriation act or federal law or federal regulation requires that a regulation be effective in 280 days or less from its enactment. The emergency regulation becomes operative upon its adoption and filing with the Registrar of Regulations, unless a later date is specified. Emergency regulations are limited to no more than 18 months in duration; however, may be extended for six months under certain circumstances as provided for in § 2.2-4011 D. Emergency regulations are published as soon as possible in the Register.

During the time the emergency status is in effect, the agency may proceed with the adoption of permanent regulations through the usual procedures. To begin promulgating the replacement regulation, the agency must (i) file the Notice of Intended Regulatory Action with the Registrar within 60 days of the effective date of the emergency regulation and (ii) file the proposed regulation with the Registrar within 180 days of the effective date of the emergency regulation. If the agency chooses not to adopt the regulations, the emergency status ends when the prescribed time limit expires.

STATEMENT

The foregoing constitutes a generalized statement of the procedures to be followed. For specific statutory language, it is suggested that Article 2 (§ 2.2-4006 et seq.) of Chapter 40 of Title 2.2 of the Code of Virginia be examined carefully.

CITATION TO THE VIRGINIA REGISTER

The Virginia Register is cited by volume, issue, page number, and date. 29:5 VA.R. 1075-1192 November 5, 2012, refers to Volume 29, Issue 5, pages 1075 through 1192 of the Virginia Register issued on
November 5, 2012.

The Virginia Register of Regulations is published pursuant to Article 6 (§ 2.2-4031 et seq.) of Chapter 40 of Title 2.2 of the Code of Virginia.

Members of the Virginia Code Commission: John S. Edwards, Chair; James M. LeMunyon, Vice Chair; Gregory D. Habeeb; Ryan T. McDougle; Robert L. Calhoun; Carlos L. Hopkins; Leslie L. Lilley; E.M. Miller, Jr.; Thomas M. Moncure, Jr.; Christopher R. Nolen; Timothy Oksman; Charles S. Sharp; Mark J. Vucci.

Staff of the Virginia Register: Jane D. Chaffin, Registrar of Regulations; Karen Perrine, Assistant Registrar; Anne Bloomsburg, Regulations Analyst; Rhonda Dyer, Publications Assistant; Terri Edwards, Operations Staff Assistant.


PUBLICATION SCHEDULE AND DEADLINES
Vol. 33 Iss. 18 - May 01, 2017

May 2017 through April 2018

Volume: Issue

Material Submitted By Noon*

Will Be Published On

33:18

April 12, 2017

May 1, 2017

33:19

April 26, 2017

May 15, 2017

33:20

May 10, 2017

May 29, 2017

33:21

May 24, 2017

June 12, 2017

33:22

June 2, 2017 (Friday)

June 26, 2017

33:23

June 21, 2017

July 10, 2017

33:24

July 5, 2017

July 24, 2017

33:25

July 19, 2017

August 7, 2017

33:26

August 2, 2017

August 21, 2017

34:1

August 16, 2017

September 4, 2017

34:2

August 30, 2017

September 18, 2017

34:3

September 13, 2017

October 2, 2017

34:4

September 27, 2017

October 16, 2017

34:5

October 11, 2017

October 30, 2017

34:6

October 25, 2017

November 13, 2017

34:7

November 8, 2017

November 27, 2017

34:8

November 21, 2017 (Tuesday)

December 11, 2017

34:9

December 6, 2017

December 25, 2017

34:10

December 19, 2017 (Tuesday)

January 8, 2018

34:11

January 3, 2018

January 22, 2018

34:12

January 17, 2018

February 5, 2018

34:13

January 31, 2018

February 19, 2018

34:14

February 14, 2018

March 5, 2018

34:15

February 28, 2018

March 19, 2018

34:16

March 14, 2018

April 2, 2018

34:17

March 28, 2018

April 16, 2018

34:18

April 11, 2018

April 30, 2018

*Filing deadlines are Wednesdays unless otherwise specified.


PETITIONS FOR RULEMAKING
Vol. 33 Iss. 18 - May 01, 2017

TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

BOARD OF PHYSICAL THERAPY

Agency Decision

Title of Regulation: 18VAC112-20. Regulations Governing the Practice of Physical Therapy.

Statutory Authority: §§ 54.1-2400 and 54.1-3473 through 54.1-3483 of the Code of Virginia.

Name of Petitioner: Peggy Belmont.

Nature of Petitioner's Request: To expand the list of Type I approved providers for continuing education to include the Virginia Occupational Therapy Association and the American Occupational Therapy Association.

Agency Decision: Request denied.

Statement of Reason for Decision: The Virginia Board of Physical Therapy voted to take no action at this time but to refer the matter to the Legislative/Regulatory Committee for further review. The committee will be seeking additional information and will include this item on the agenda for its next meeting.

Agency Contact: Elaine J. Yeatts, Regulatory Coordinator, Department of Health Professions, 9960 Mayland Drive, Suite 300, Richmond, VA 23233, telephone (804) 367-4688, or email elaine.yeatts@dhp.virginia.gov.

VA.R. Doc. No. R17-08; Filed March 30, 2017, 9:40 a.m.

 


NOTICES OF INTENDED REGULATORY ACTION
Vol. 33 Iss. 18 - May 01, 2017

REGULATIONS
Vol. 33 Iss. 18 - May 01, 2017

TITLE 2. AGRICULTURE
BOARD OF AGRICULTURE AND CONSUMER SERVICES
Final Regulation

REGISTRAR'S NOTICE: The Board of Agriculture and Consumer Services is claiming an exemption from the Administrative Process Act in accordance with § 3.2-703 of the Code of Virginia, which exempts quarantine to prevent or retard the spread of a pest into, within, or from the Commonwealth.

Title of Regulation: 2VAC5-330. Rules and Regulations for Enforcement of the Virginia Pest Law - Virginia Gypsy Moth Quarantine (amending 2VAC5-330-30).

Statutory Authority: § 3.2-703 of the Code of Virginia.

Effective Date: April 5, 2017.

Agency Contact: Debra Martin, Program Manager, Office of Plant Industry Services, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-3515, FAX (804) 371-7793, TTY (800) 828-1120, or email debra.martin@vdacs.virginia.gov.

Summary:

The amendment adds Wythe County to the regulated areas under the gypsy moth quarantine.

2VAC5-330-30. Regulated areas.

A. Any area of another state or the District of Columbia, whether designated high risk or low risk, in which gypsy moth is known to occur and is so geographically described and regulated by the United States Department of Agriculture under federal Gypsy Moth Quarantine (7 CFR Part 301 Subpart - Gypsy Moth) or under a state gypsy moth quarantine or other state legislation.

B. The following areas in Virginia:

1. The entire counties of: Accomack, Albemarle, Alleghany, Amelia, Amherst, Appomattox, Arlington, Augusta, Bath, Bedford, Bland, Botetourt, Brunswick, Buckingham, Campbell, Caroline, Charles City, Charlotte, Chesterfield, Clarke, Craig, Culpeper, Cumberland, Dinwiddie, Essex, Fairfax, Fauquier, Floyd, Fluvanna, Franklin, Frederick, Giles, Gloucester, Goochland, Greene, Greensville, Halifax, Hanover, Henrico, Highland, Isle of Wight, James City, King George, King and Queen, King William, Lancaster, Loudoun, Louisa, Lunenburg, Madison, Mathews, Mecklenburg, Middlesex, Montgomery, Nelson, New Kent, Northampton, Northumberland, Nottoway, Orange, Page, Pittsylvania, Powhatan, Prince Edward, Prince George, Prince William, Pulaski, Rappahannock, Richmond, Roanoke, Rockbridge, Rockingham, Shenandoah, Southampton, Spotsylvania, Stafford, Surry, Sussex, Tazewell, Warren, Westmoreland, Wythe, and York.

2. The entire independent cities of: Alexandria, Bedford, Buena Vista, Charlottesville, Chesapeake, Clifton Forge, Colonial Heights, Covington, Danville, Emporia, Fairfax City, Falls Church, Franklin, Fredericksburg, Hampton, Harrisonburg, Hopewell, Lexington, Lynchburg, Manassas, Manassas Park, Newport News, Norfolk, Petersburg, Poquoson, Portsmouth, Radford, Richmond, Roanoke, Salem, Staunton, Suffolk, Virginia Beach, Waynesboro, Williamsburg, and Winchester.

VA.R. Doc. No. R17-5032; Filed April 5, 2017, 4:26 p.m.
TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS
STATE CORPORATION COMMISSION
Final Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Titles of Regulations: 10VAC5-160. Rules Governing Mortgage Lenders and Brokers (amending 10VAC5-160-10 through 10VAC5-160-90; adding 10VAC5-160-15, 10VAC5-160-25).

10VAC5-161. Mortgage Loan Originators (amending 10VAC5-161-60).

Statutory Authority: §§ 6.2-1613 and 12.1-13 of the Code of Virginia (10VAC5-160-10 through 10VAC5-160-90).

§§ 6.2-1720 and 12.1-13 of the Code of Virginia (10VAC5-161-60).

Effective Date: May 15, 2017.

Agency Contact: Susan Hancock, Deputy Commissioner, Bureau of Financial Institutions, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 371-9701, FAX (804) 371-9416, or email susan.hancock@scc.virginia.gov.

Summary:

The amendments (i) define various terms including "bona fide employee," "lead generator," "mortgage broker," and "stockholder"; (ii) require renewal of approved office locations each calendar year; (iii) require licensees to maintain a transaction journal; (iv) clarify that licensees will receive a single license instead of a license for each approved location; and (v) replace the annual report and reports of condition filings with quarterly mortgage call reports filed through the Nationwide Mortgage Licensing System and Registry. The only change since publication of the proposed regulation clarifies the date for renewing approved office locations.

AT RICHMOND, MARCH 30, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. BFI-2016-00048

Ex Parte: In re: Rules Governing Mortgage
Lenders and Brokers, and Mortgage Loan
Originators

ORDER ADOPTING REGULATIONS

On November 7, 2016, the State Corporation Commission ("Commission") entered an Order to Take Notice of a proposal by the Bureau of Financial Institutions ("Bureau") to amend the Commission's Rules Governing Mortgage Lenders and Brokers, which are set forth in Chapter 160 of Title 10 of the Virginia Administrative Code, 10 VAC 5-160-10 et seq. and its rules governing Mortgage Loan Originators, which are found in Chapter 161 of Title 10 of the Virginia Administrative Code, 10 VAC 5-161-10 et seq.

The proposed regulations required mortgage lenders and brokers to renew their licenses at the end of each calendar year, file quarterly mortgage call reports through the Nationwide Mortgage Licensing System and Registry ("Registry"), maintain a transaction journal, and renew approved office locations each calendar year. The proposal also defined several terms and clarified that mortgage lender and broker licensees will receive a single license instead of a license for each approved location. The proposed amendments to 10 VAC 5-161-60 replaced the annual report and report of condition filing requirements for mortgage loan originators with a requirement that quarterly mortgage call reports be filed through the Registry.

The Order to Take Notice and proposed regulations were published in the Virginia Register of Regulations on November 28, 2016, posted on the Commission's website, and sent to all licensed mortgage lenders, mortgage brokers, mortgage loan originators and other interested parties. Licensees and other interested parties were afforded the opportunity to file written comments or request a hearing on or before January 31, 2017.

Comments on the proposed regulations were filed by Meghann Akers of ALCOVA Mortgage, LLC and Philip d'Oronzio of Pilot Mortgage, LLC. The Commission did not receive any requests for a hearing.

Ms. Akers commented that 10 VAC 5-160-25 C imposes an additional demand on licensees by requiring that a loan transaction journal be maintained, and that much of the information in the journal is already reported to a federal regulator. Mr. d'Oronzio expressed concern that principals and owners of small, independent mortgage lenders and/or brokers will be prohibited from originating mortgage loans.

The Bureau considered the comments filed and responded to them in its Statements of Position, which the Bureau filed with the Clerk of the Commission on March 8, 2017. The Bureau declined to make changes to the regulations based upon the comments but did change the date for renewing approved office locations based upon information regarding the Registry. The Bureau otherwise recommended that the Commission adopt the proposed regulations as proposed.

NOW THE COMMISSION, having considered the proposed regulations, the comments filed, the Bureau's Statements of Position, the record herein and applicable law, concludes that the proposed regulations should be modified to incorporate the suggestion made by the Bureau. The Commission further concludes that the proposed regulations, as modified, should be adopted with an effective date of May 15, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed regulations, as modified herein and attached hereto, are adopted effective May 15, 2017.

(2) This Order and the attached regulations shall be posted on the Commission's website at: http://www.scc.virginia.gov/case.

(3) The Commission's Division of Information Resources shall provide a copy of this Order, including a copy of the attached regulations, to the Virginia Registrar of Regulations for publication in the Virginia Register of Regulations.

(4) This case is dismissed, and the papers filed herein shall be placed in the Commission's file for ended causes.

AN ATTESTED COPY hereof, together with a copy of the attached regulations, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and the Commissioner of Financial Institutions, who shall forthwith send a copy of this Order, together with a copy of the attached regulations, to all licensed mortgage lenders, mortgage brokers, and mortgage loan originators, and such other interested parties as he may designate.

10VAC5-160-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Advertisement" means a commercial message in any medium that promotes, directly or indirectly, a mortgage loan. The term includes a communication sent to a consumer as part of a solicitation of business, but excludes messages on promotional items such as pens, pencils, notepads, hats, calendars, etc., as well as rate sheets or other information distributed or made available solely to other businesses.

"Affiliate," for purposes of subdivision 3 of § 6.2-1602 of the Code of Virginia, means an entity of which 25% or more of the voting shares or ownership interest is held, directly or indirectly, by a company that also owns a bank, savings institution, or credit union.

"Bona fide employee," for purposes of Chapter 16 and this chapter, means an individual (i) whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person and (ii) whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person. However, the term shall not include an individual who is concurrently employed by two or more persons that are engaged in business as a mortgage lender or mortgage broker.

"Bureau," "commission," and "commissioner" shall have the meanings ascribed to them in § 6.2-100 of the Code of Virginia.

"Chapter 16" means Chapter 16 (§ 6.2-1600 et seq.) of Title 6.2 of the Code of Virginia.

"Chapter 17" means Chapter 17 (§ 6.2-1700 et seq.) of Title 6.2 of the Code of Virginia.

"Commitment" means a written offer to make a mortgage loan signed by a person authorized to sign such offers on behalf of a mortgage lender.

"Commitment agreement" means a commitment accepted by an applicant for a mortgage loan, as evidenced by the applicant's signature thereon.

"Commitment fee" means any fee or charge accepted by a mortgage lender, or by a mortgage broker for transmittal to a mortgage lender, as consideration for binding the mortgage lender to make a mortgage loan in accordance with the terms of a commitment or as a requirement for acceptance by the applicant of a commitment, but the term does not include fees paid to third persons or interest.

"Dwelling" means one-family to four-family residential property located in the Commonwealth.

"Fees paid to third persons" means the bona fide fees or charges paid by the applicant for a mortgage loan to third persons other than the mortgage lender or mortgage broker, or paid by the applicant to, or retained by, the mortgage lender or mortgage broker for transmittal to such third persons in connection with the mortgage loan, including, but not limited to, recording taxes and fees, reconveyance or releasing fees, appraisal fees, credit report fees, attorney fees, fees for title reports and title searches, title insurance premiums, surveys and similar charges.

"Lead generator" means a person who engages in a form of marketing activity in which the person collects and transmits a prospective borrower's contact information and minimal information pertaining to potential mortgage loans. A person shall not be considered a lead generator if the person collects a prospective borrower's social security number or sufficient personal information to enable a mortgage lender or mortgage broker to evaluate, in whole or in part, the prospective borrower's creditworthiness.

"Licensee" means a person licensed under Chapter 16.

"Loan processor or underwriter" means a person who, with respect to the origination of a residential mortgage loan, performs the following duties at the direction of and subject to the supervision and instruction of a licensed or exempt mortgage lender or mortgage broker: (i) receiving, collecting, distributing, or analyzing information common for the processing or underwriting of a residential mortgage loan or (ii) communicating with a consumer to obtain the information necessary for the processing or underwriting of a residential mortgage loan. A loan processor or underwriter does not include a person who (i) communicates with a consumer regarding a prospective residential mortgage loan prior to the consumer submitting a residential mortgage loan application, (ii) takes an application for or offers or negotiates the terms of a residential mortgage loan, or (iii) counsels consumers about residential mortgage loan terms. For purposes of this definition, the phrase "takes an application for or offers or negotiates the terms of a residential mortgage loan" shall be construed in accordance with subdivisions B 1 and B 2 of 10VAC5-161-20.

"Lock-in agreement" means a written agreement between a mortgage lender, or a mortgage broker acting on behalf of a mortgage lender, and an applicant for a mortgage loan that establishes and sets an interest rate and the points to be charged in connection with a mortgage loan that is closed within the time period specified in the agreement. A lock-in agreement can be entered into before mortgage loan approval, subject to the mortgage loan being approved and closed, or after such approval. A commitment agreement that establishes and sets an interest rate and the points to be charged in connection with a mortgage loan that is closed within the time period specified in the agreement is also a lock-in agreement. The interest rate that is established and set by the agreement may be either a fixed rate or an adjustable rate.

"Lock-in fee" means any fee or charge accepted by a mortgage lender, or by a mortgage broker for transmittal to a mortgage lender, as consideration for making a lock-in agreement, but the term does not include fees paid to third persons or interest.

"Mortgage lender," "mortgage broker," and "mortgage loan" and "person" shall have the meanings ascribed to them in § 6.2-1600 of the Code of Virginia. For purposes of Chapter 16 and this chapter, the term "mortgage broker" does not include the following persons, provided that they are not also engaged in any activities for which a mortgage broker license is required: (i) a person engaged in the business of a loan processor or underwriter provided that such person is not engaged in any other activities for which a mortgage broker license is required, (ii) a lead generator, and (iii) a noteholder, or servicer acting on behalf of a noteholder, that negotiates the modification of a mortgage loan in its portfolio. The payee named in a mortgage loan note shall be deemed to be the mortgage lender for purposes of Chapter 16 and this chapter.

"Mortgage loan originator," "Nationwide Mortgage Licensing System and Registry," "Registry," and "residential mortgage loan" shall have the meanings ascribed to them in § 6.2-1700 of the Code of Virginia.

"Personal, family or household purposes," for purposes of § 6.2-1600 of the Code of Virginia, means that the individual obtaining the loan intends to use the proceeds to build or purchase a dwelling that will be occupied by such individual or another individual as their his temporary or permanent residence. The term includes a loan used to build or purchase a dwelling that will be (i) improved or rehabilitated by or on behalf of the purchaser for subsequent sale to one or more other individuals who will reside in the dwelling on a temporary or permanent basis, or (ii) leased by the purchaser to one or more other individuals who will reside in the dwelling on a temporary or permanent basis.

"Points" means any fee or charge retained or received by a mortgage lender or mortgage broker stated or calculated as a percentage or fraction of the principal amount of the loan, other than or in addition to fees paid to third persons or interest.

"Reasonable period of time" means that period of time, determined by a mortgage lender in good faith on the basis of its most recent relevant experience and other facts and circumstances known to it, within which the mortgage loan will be closed.

"Refinancing" for purposes of Chapter 16 and this chapter means an exchange of an old debt for a new debt, as by negotiating a different interest rate or term or by repaying an existing loan with money acquired from a new loan. "Refinancing" includes any loan modification.

"Senior officer," for purposes of §§ 6.2-1605, 6.2-1606, 6.2-1607, and 6.2-1608 of the Code of Virginia, means an individual who has significant management responsibility within an organization or otherwise has the authority to influence or control the conduct of the organization's affairs, including but not limited to its compliance with applicable laws and regulations.

"Stockholder," for purposes of § 6.2-1616 of the Code of Virginia, includes a member of a limited liability company.

"Subsidiary," for purposes of subdivision 3 of § 6.2-1602 of the Code of Virginia, means an entity of which 25% or more of the voting shares or ownership interest is held, directly or indirectly, by a bank, savings institution, or credit union.

10VAC5-160-15. Surety bond; required funds.

A. As required by § 6.2-1604 of the Code of Virginia, a surety bond shall be filed with the commissioner and continuously maintained thereafter in full force by each licensee. The minimum bond amount required for a mortgage broker shall be $25,000, and the minimum amount required for a mortgage lender or for a mortgage company with dual authority as both a mortgage lender and mortgage broker shall be $50,000. The bond amount shall be adjusted annually in accordance with the following scale based upon residential mortgage loans originated during the preceding calendar year:

LOANS

BOND AMOUNT

$0 - $5,000,000

$25,000

$5,000,001 - $20,000,000

$50,000

$20,000,001 - $50,000,000

$75,000

$50,000,001 - $100,000,000

$100,000

over $100,000,000

$150,000

B. If a person has been or is engaged in business as a mortgage lender or mortgage broker and has filed a bond with the commissioner, the bond shall be retained by the commissioner notwithstanding the occurrence of any of the following events:

1. The person's application for a license is withdrawn or denied;

2. The person's license is surrendered, suspended, or revoked; or

3. The person ceases engaging in business as a mortgage lender or mortgage broker.

C. As required by § 6.2-1606 of the Code of Virginia, a mortgage lender shall maintain at least $200,000 in funds available for the operation of its business. To comply with this requirement, a mortgage lender shall maintain documentation of one of the following: (i) ownership of funds on deposit in a bank or other depository institution, (ii) an established line of credit from a bank or other depository institution; or (iii) a combination of clauses (i) and (ii). Neither letters of credit nor lines of credit from sources other than a bank or other depository institution shall satisfy this requirement.

10VAC5-160-20. Operating rules requirements.

A licensee shall conduct its business in accordance with the following rules requirements:

1. No licensee shall (i) misrepresent the qualification requirements for a mortgage loan or any material loan terms; (ii) make false or misleading statements to induce an applicant to apply for a mortgage loan, enter into any commitment agreement or lock-in agreement, or pay any commitment fee or lock-in fee in connection therewith; or (iii) provide any other information to a borrower or prospective borrower that is false, misleading, or deceptive. A "material loan term" means the loan terms required to be disclosed to a consumer pursuant to (i) the Truth in Lending Act (15 USC § 1601 et seq.), and the Real Estate Settlement Procedures Act of 1974 (12 USC § 2601 et seq.), and regulations and official commentary issued thereunder, as amended from time to time, (ii) § 6.2-406 of the Code of Virginia, and (iii) 10VAC5-160-30. A misrepresentation or false or misleading statement resulting directly from incorrect information furnished to a licensee by a third party, or a good-faith misunderstanding of information furnished by a third party, shall not be considered a violation of this section if the licensee has supporting documentation thereof and the licensee's reliance thereon was reasonable.

2. No licensee shall retain any portion of any fees or charges imposed upon consumers for goods or services provided by third parties. All moneys received by a licensee from an applicant for fees paid to third persons shall be accounted for separately, and all disbursements for fees paid to third persons shall be supported by adequate documentation of the services for which such fees were or are to be paid. All such moneys shall be deposited in an escrow account in a bank, savings institution, or credit union segregated from other funds of the licensee.

3. The mortgagor who obtains a mortgage loan shall be entitled to continue to make payments to the transferor of the servicing rights under a mortgage loan until the mortgagor is given written notice of the transfer of the servicing rights by the transferor. The notice shall specify the name and address to which future payments are to be made and shall be mailed or delivered to the mortgagor at least 10 calendar days before the first payment affected by the notice pursuant to the requirements set forth in the Real Estate Settlement Procedures Act of 1974 (12 USC § 2601 et seq.).

4. If a person has been or is engaged in business as a mortgage lender or mortgage broker and has filed a bond with the commissioner, as required by § 6.2-1604 of the Code of Virginia, such bond shall be retained by the commissioner notwithstanding the occurrence of any of the following events:

a. The person's application for a license is withdrawn or denied;

b. The person's license is surrendered, suspended, or revoked; or

c. The person ceases engaging in business as a mortgage lender or mortgage broker.

5. 4. Pursuant to § 6.2-1621 of the Code of Virginia, within 15 days of becoming aware of the occurrence of any of the events enumerated in this subdivision, a licensed mortgage lender or mortgage broker shall file a written report with the commissioner describing such event and its expected impact, if any, on the activities of the licensee in the Commonwealth. If the Registry enables licensees to submit the information required by this subdivision, then submission of this information through the Registry shall satisfy the requirement for a written report:

a. The licensee files for bankruptcy or reorganization.

b. Any governmental authority institutes revocation or suspension proceedings against the licensee, or revokes or suspends a mortgage-related license held or formerly held by the licensee.

c. Any governmental authority takes (i) formal regulatory or enforcement action against the licensee relating to its mortgage business or (ii) any other action against the licensee relating to its mortgage business where the total amount of restitution or other payment from the licensee exceeds $20,000. A licensee shall not be required to provide the commissioner with information about such event to the extent that such disclosure is prohibited by the laws of another state.

d. Based on allegations by any governmental authority that the licensee violated any law or regulation applicable to the conduct of its licensed mortgage business, the licensee enters into, or otherwise agrees to the entry of, a settlement or consent order, decree, or agreement with or by such governmental authority.

e. The licensee surrenders its license to engage in any mortgage-related business in another state in lieu of threatened or pending license revocation, license suspension, or other regulatory or enforcement action.

f. The licensee is denied a license to engage in any mortgage-related business in another state.

g. The licensee or any of its employees, officers, directors, principals, or exclusive agents is indicted for a felony.

h. The licensee or any of its employees, officers, directors, principals, or exclusive agents is convicted of a felony.

i. The licensee or any of its employees, officers, directors, principals, or exclusive agents is convicted of a misdemeanor involving fraud, misrepresentation, or deceit.

6. 5. No licensee shall inform a consumer that such consumer has been or will be "preapproved" or "pre-approved" for a mortgage loan unless the licensee contemporaneously provides the consumer with a separate written disclosure (in at least 10-point type) that (i) explains what preapproved means; (ii) informs the consumer that the consumer's loan application has not yet been approved; (iii) states that a written commitment to make a mortgage loan has not yet been issued; and (iv) advises the consumer what needs to occur before the consumer's loan application can be approved. This provision shall not apply to advertisements subject to 10VAC5-160-60. In the case of a preapproval initially communicated to a consumer by telephone, the licensee shall provide the written disclosure to the consumer within three business days.

7. 6. A licensee shall not permit any individual to take an application for or offer or negotiate the terms of a residential mortgage loan on behalf of the licensee unless: (i) the individual is licensed as a mortgage loan originator pursuant to Chapter 17; (ii) the individual is covered by the licensee's surety bond; (iii) the licensee has submitted a sponsorship request for such individual through the Registry; and (iv) the individual is either (a) a bona fide employee of the licensee, or (b) an exclusive agent of the licensee pursuant to a written agreement with the licensee and the licensee has agreed to such conditions relating to its use of exclusive agents as may be prescribed by the bureau. The phrase "take an application for or offer or negotiate the terms of a residential mortgage loan" shall be construed in accordance with subdivisions B 1 and B 2 of 10VAC5-161-20.

8. 7. Every licensee shall disclose on any application provided to the borrower associated with a Virginia residential mortgage loan: (i) the unique identifier assigned by the Registry to the licensed mortgage lender or mortgage broker that took the initial mortgage loan application; and (ii) the unique identifier assigned by the Registry to the licensed mortgage loan originator who took the initial mortgage loan application.

9. 8. A licensee may outsource its loan processing or underwriting activities to a third party loan processor or underwriter pursuant to a written agreement with the loan processor or underwriter. Prior to entering into an agreement, the licensee shall conduct a due diligence review of the third party loan processor or underwriter. The agreement shall (i) require the loan processor or underwriter to comply with all applicable state and federal laws and regulations; (ii) require the loan processor or underwriter to permit the commission to investigate or examine its business pursuant to § 6.2-1611 of the Code of Virginia; and (iii) prohibit the loan processor or underwriter from subcontracting to another person, other than its bona fide employees, any of the services specified in the agreement to be performed on behalf of the licensee. A copy of the written agreement shall be retained by the licensee for at least three years after the agreement has been terminated by either party. The licensee shall be responsible for implementing and maintaining a reasonable program to monitor any third party loan processor or underwriter performing services on its behalf.

10. If a licensee disposes of records containing a consumer's personal financial information following the expiration of any applicable record retention periods, such records shall be shredded, incinerated, or otherwise disposed of in a secure manner. Licensees may arrange for service from a business record destruction vendor.

11. 9. Every licensee shall comply with Chapter 16, this chapter, and all other state and federal laws and regulations applicable to the conduct of its business.

10. A licensee shall continuously (i) maintain the requirements and standards for licensure prescribed in § 6.2-1606 of the Code of Virginia and (ii) remain authorized to transact business in the Commonwealth pursuant to Title 13.1 of the Code of Virginia.

10VAC5-160-25. Books, accounts, and records.

A. A licensee shall maintain in its licensed offices all books, accounts, and records required by Chapter 16 and this chapter.

B. A licensee may maintain records electronically provided (i) the records are readily available for examination by the bureau and (ii) the licensee complies with the Uniform Electronic Transactions Act (§ 59.1-479 et seq. of the Code of Virginia) and the Electronic Signatures in Global and National Commerce Act (15 USC § 7001 et seq.). However, the written agreement specified in § 6.2-1616 B 4 of the Code of Virginia shall be maintained in the form in which it was originally provided and executed.

C. A licensee shall continuously maintain a mortgage loan transaction journal that includes the following information for each application received:

1. Applicant's name.

2. Application date.

3. Property address.

4. Loan amount.

5. Lien position.

6. Mortgage loan originator (licensed name).

7. Mortgage loan originator (license or Registry number).

8. Address of originating office.

9. Name of lender (if applicable).

10. Application status (e.g., in process, withdrawn, denied, closed).

11. Any other information reasonably required by the commissioner.

D. If a licensee disposes of records containing a consumer's personal or financial information following the expiration of any applicable record retention periods, such records shall be shredded, incinerated, or otherwise disposed of in a secure manner. Licensees may arrange for service from a business record destruction vendor.

10VAC5-160-30. Commitment agreements and lock-in agreements.

A. A If a commitment is issued and accepted, the commitment agreement shall be signed by the applicant and a person authorized to sign such agreement on behalf of a mortgage lender and include the following:

1. The name of the mortgage lender;

1. 2. Identification of the property intended to secure the mortgage loan (this does not require a formal legal description);

2. 3. The principal amount and term of the loan;

3. 4. The interest rate and points for the mortgage loan if the commitment agreement is also a lock-in agreement or a statement that the mortgage loan will be made at the mortgage lender's prevailing rate and points for such loans at the time of closing or a specified number of three days prior to closing settlement;

4. 5. The amount of any commitment fee and the time within which the commitment fee must be paid;

5. 6. Whether or not funds are to be escrowed and for what purpose;

6. 7. Whether or not private mortgage insurance is required;

7. 8. The length of the commitment period;

8. 9. A statement that if the loan is not closed within the commitment period, the mortgage lender is no longer obligated by the commitment agreement and any commitment fee paid by the applicant will be refunded only under the circumstances set forth in subsection C of this section and such other circumstances as are set forth in the commitment agreement; and

9. 10. Any other terms and conditions of the commitment agreement required by the lender.

B. If a lock-in agreement is issued to a consumer by a mortgage lender, or a mortgage broker to a consumer acting on behalf of the mortgage lender, it shall be signed by a representative of the mortgage lender or mortgage broker and include the following:

1. The name of the mortgage lender or mortgage broker issuing the lock-in agreement;

1. 2. The interest rate and points for the mortgage loan, and if the rate is an adjustable rate, the initial interest rate and a brief description of the method of determining the rate (such as the index and the margin);

2. 3. The amount of any lock-in fee and the time within which the lock-in fee must be paid;

3. 4. The length of the lock-in period;

4. 5. A statement that if the loan is not closed within the lock-in period, the mortgage lender is no longer obligated by the lock-in agreement and any lock-in fee paid by the applicant will be refunded only under the circumstances set forth in subsection D of this section and such other circumstances as are set forth in the lock-in agreement;

5. 6. A statement that any terms not locked-in locked in by the lock-in agreement are subject to change until the loan is closed at three days prior to settlement; and

6. 7. Any other terms and conditions of the lock-in agreement required by the mortgage lender or mortgage broker acting on behalf of a mortgage lender.

C. If an applicant has paid any commitment fee, and the mortgage loan is not closed due to any of the following, such commitment fee shall be refunded:

1. The commitment period was not a reasonable period of time given the prevailing market conditions at the time the commitment agreement was entered into;

2. The mortgage loan is turned down because of the applicant's lack of creditworthiness; or

3. The mortgage loan is turned down because of the appraised value of the property intended to secure the mortgage loan.

D. If an applicant has paid any lock-in fee and the loan is not closed because the lock-in period was not a reasonable period of time given the prevailing market conditions at the time the lock-in agreement was entered into, such lock-in fee shall be refunded.

E. A mortgage broker shall not issue a lock-in agreement to a consumer unless the mortgage broker has actually locked in the mortgage loan, including the applicable interest rate, points, and other terms, with a mortgage lender. A mortgage broker shall maintain supporting written documentation from the mortgage lender of all lock-in information for at least three years from the date the lock-in expires.

10VAC5-160-40. Schedule of annual fees for the examination, supervision, and regulation of mortgage lenders and mortgage brokers.

Pursuant to § 6.2-1612 of the Code of Virginia, the Commission commission sets the following schedule of annual fees to be paid by mortgage lenders and mortgage brokers required to be licensed under Chapter 16. Such fees are to defray the costs of examination, supervision, and regulation of such lenders and brokers by the Bureau of Financial Institutions. The fees are related to the actual costs of the Bureau bureau, to the volume of business of the lenders and brokers, and to other factors relating to supervision and regulation.

SCHEDULE

LENDER LICENSEE: Minimum fee -- $800, plus $6.60 per loan

BROKER LICENSEE: Minimum fee -- $400, plus $6.60 per loan

DUAL AUTHORITY (LENDER/BROKER): Minimum fee -- $1,200, plus $6.60 per loan

The annual fee for each mortgage lender shall be computed on the basis of the number of mortgage loans, as defined in § 6.2-1600 of the Code of Virginia, made or originated during the calendar year preceding the year of assessment. The annual fee for each mortgage broker shall be based on the number of such loans brokered. The annual fee for each mortgage lender/broker shall be based on the total number of mortgage loans made or originated and mortgage loans brokered. The annual fee computed using the above schedule shall be rounded down to the nearest whole dollar.

Fees shall be assessed on or before April 25 for the current calendar year. By law the fee must be paid on or before May 25.

The annual report of quarterly mortgage call reports filed through the Registry by each licensee shall be due March 1 of each year and shall provide the basis for licensee assessment, i.e. that is, the number of loans made or brokered. If the annual report required quarterly mortgage call reports of a licensee has have not been filed by the assessment date, a provisional fee, subject to adjustment when the report is filed, shall be assessed. In cases where a license or additional authority has been granted between January 1 and March 31, one of the following fees or additional fee shall be assessed: lender -- $400; broker -- $200; lender/broker -- $600.

Fees prescribed and assessed by this schedule are apart from, and do not include, the reimbursement for expenses permitted by subsection C of § 6.2-1612 of the Code of Virginia.

10VAC5-160-50. Responding to requests from Bureau of Financial Institutions; providing false, misleading, or deceptive information; record retention.

A. If the bureau requests information from an applicant to complete a deficient application filed under §§ § 6.2-1603, 6.2-1607, or 6.2-1608 of the Code of Virginia and the information is not received within 60 days of the request, the application shall be deemed abandoned unless a request for an extension of time is received and approved by the bureau prior to the expiration of the 60-day period.

B. When the bureau requests a written response, books, records, documentation, or other information from a licensee in connection with the bureau's investigation, enforcement, or examination of compliance with applicable laws, the licensee shall deliver a written response as well as any requested books, records, documentation, or information within the time period specified in the bureau's request. If no time period is specified, a written response as well as any requested books, records, documentation, or information shall be delivered by the licensee to the bureau not later than 30 days from the date of such request. In determining the specified time period for responding to the bureau and when considering a request for an extension of time to respond, the bureau shall take into consideration the volume and complexity of the requested written response, books, records, documentation or information and such other factors as the bureau determines to be relevant under the circumstances.

Requests made by the bureau pursuant to this subsection are deemed to be in furtherance of the bureau's investigation and examination authority provided for in § 6.2-1611 of the Code of Virginia.

C. A licensee shall not provide any information to the bureau, either directly or through the Registry, that is false, misleading, or deceptive.

D. A licensee shall maintain in its licensed offices all books, accounts, and records required by Chapter 16 and this chapter.

10VAC5-160-60. Advertising.

A. Every advertisement used by, or published on behalf of, a licensed mortgage lender or mortgage broker shall clearly and conspicuously disclose the following information:

1. The name of the mortgage lender or mortgage broker as set forth in the license issued by the commission.

2. The abbreviation "NMLS ID #" followed immediately by both the unique identifier assigned by the Registry to the mortgage lender or mortgage broker and along with the address for the NMLS Consumer Access website in parenthesis. For example: NMLS ID # 999999 (www.nmlsconsumeraccess.org). In a radio or television advertisement, this disclosure shall be provided after the name of the mortgage lender or mortgage broker.

3. If an advertisement contains a rate of interest, a statement that the stated rate may change or not be available at the time of loan commitment or lock-in.

4. If an advertisement contains specific information about a consumer's existing mortgage loan and such information was not obtained from the consumer, a statement identifying the source of such information (e.g., public court records, credit reporting agency, etc.).

B. No mortgage lender or mortgage broker shall deceptively advertise a mortgage loan, make false or misleading statements or representations, or misrepresent the terms, conditions, or charges incident to obtaining a mortgage loan.

C. No mortgage lender or mortgage broker shall use or cause to be published an advertisement that states or implies the following:

1. The mortgage lender or mortgage broker is affiliated with, or an agent or division of, a governmental agency, depository institution, or other entity with which no such relationship exists; or

2. A consumer has been or will be "preapproved " or "pre-approved" for a mortgage loan, unless the mortgage lender or mortgage broker (i) discloses on the face of the advertisement in at least 14-point bold type that "THIS IS NOT A LOAN APPROVAL" and (ii) clearly and conspicuously discloses the conditions and/or qualifications associated with such preapproval. This provision is intended to supplement the requirements of the Fair Credit Reporting Act, (15 USC § 1681 et seq.,) relating to firm offers of credit.

D. A mortgage lender or mortgage broker shall not use or cause to be published any advertisement that gives a consumer the false impression that the advertisement is being sent by the consumer's current noteholder or lienholder. If an advertisement contains the name of the consumer's current noteholder or lienholder, it shall not be more conspicuous than the name of the mortgage lender or mortgage broker using the advertisement.

E. A mortgage lender or mortgage broker shall not deliver or cause to be delivered to a consumer any envelope or other written material that gives the false impression that the mailing or written material is an official communication from a governmental entity, unless required by the United States Postal Service.

F. If an advertisement states or implies that a consumer can reduce his monthly payment by refinancing his current mortgage loan, but as a result of such refinancing, the consumer's total finance charges may be higher over the life of the loan, a mortgage lender or mortgage broker shall clearly and conspicuously disclose to the consumer that by refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.

G. Every advertisement used by, or published on behalf of, a mortgage lender or mortgage broker shall comply with 12 CFR Part 1014 (Regulation N) and the disclosure requirements for advertisements contained in the Truth in Lending Act and Regulation Z, 12 CFR Part 226 1026 (Regulation Z).

H. For purposes of this section, the term "clearly and conspicuously" means that a required disclosure is reasonably understandable, prominently located, and readily noticeable by a potential borrower of ordinary intelligence.

I. Every mortgage lender and mortgage broker shall retain for at least three years after it is last published, delivered, transmitted, or made available, an example of every advertisement used, including but not limited to solicitation letters, commercial scripts, and recordings of all radio and television broadcasts, but excluding copies of Internet web pages.

10VAC5-160-90. Nationwide Mortgage Licensing System and Registry.

A. Applications for a mortgage lender or mortgage broker license shall be made through the Registry in accordance with instructions provided by the commissioner. The commissioner may provide these instructions through the Registry, on the commission's Internet website, or by any other means the commissioner deems appropriate.

B. The commissioner shall notify all licensees no later than January 1 of each calendar year of the information required to be included in the annual report to be submitted by each licensee pursuant Pursuant to § 6.2-1610 of the Code of Virginia., every licensee shall file quarterly mortgage call reports through the Registry as well as such other information pertaining to the licensee's financial condition as may be required by the Registry. Reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the Registry may require.

C. Entities exempt from the requirement for licensure under Chapter 16 that supervise mortgage loan originators licensed pursuant to Chapter 17 may obtain a unique identifier through the Registry.

D. Every licensee shall maintain current information in its records with the Registry. Except as provided in subsection E of this section, changes to the licensee's address, principal officers, or any other information in the Registry shall be updated by the licensee as soon as is practicable, but in no event later than five business days from when the change takes effect.

E. A licensee shall update its sponsorship information in the Registry within five days after the occurrence of either of the following events: (i) a mortgage loan originator becomes a bona fide employee or exclusive agent of the licensee or (ii) a mortgage loan originator ceases to be a bona fide employee or exclusive agent of the licensee.

F. If (i) any provision of Chapter 16 or this chapter requires a licensee to provide the bureau or commissioner with a written notice and (ii) the Registry enables licensees to submit such notice through the Registry, then a licensee shall be deemed to have complied with the written notice requirement if the licensee timely submits the required notice through the Registry.

G. A mortgage lender or mortgage broker license shall expire at the end of each calendar year unless it is renewed by a licensee on or after November 1 of the same year. However, licenses that are granted between November 1 and December 31 shall not expire until the end of the following calendar year. A license shall be renewed upon the commission finding that the licensee has (i) requested license renewal through the Registry and (ii) complied with any requirements associated with such renewal request that are imposed by the Registry.

H. A licensee's approved office locations shall be subject to renewal each calendar year. However, office locations that are approved by the commission between November 1 and December 31 shall not be subject to renewal until the end of the following calendar year. An approved office location shall be renewed upon the commission finding that the licensee has (i) requested renewal for the location through the Registry and (ii) complied with any requirements associated with such renewal request that are imposed by the Registry.

I. If a licensee fails to timely meet the requirements specified in subsection G or H of this section, but meets such requirements before March 1 of the following calendar year, the license or approved office location shall be reinstated and renewed. If an approved office location is not renewedon or ] before March 1, the office location shall be deemed to be closed as of the preceding January 1 by the licensee.

J. A licensee shall not engage in business as a mortgage lender or mortgage broker from an office location that has not been (i) approved by the commission and (ii) renewed by the licensee as required by subsection H of this section. Any mortgage loan made or brokered by a licensee in violation of this subsection shall constitute a separate violation of Chapter 16.

K. Each licensee shall receive a single license from the commission that states the full legal name of the licensee as well as any fictitious names under which the licensee is conducting business under Chapter 16. The license issued by the commission shall identify the addresses of the offices at which the business is authorized to be conducted under Chapter 16 by referencing the approved office locations of the licensee as set forth in the Registry.

10VAC5-161-60. Required reports and notices; information in registry.

A. Each person for whom an individual described in 10VAC5-161-20 A 1 or A 2 engages in the business of a mortgage loan originator shall file, on or before March 1 of each year, an annual report with the bureau quarterly mortgage call reports through the registry stating the amount of residential mortgage loans made or brokered during the preceding calendar year quarter, identifying all licensees performing services for that person, and providing such additional information as the bureau may require. Call reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require. Timely filing of the annual report reports required by Chapter 16 by a person licensed under that chapter shall constitute compliance with this subsection by that person if the annual report contains reports contain the information specified in this subsection.

B. Each licensee who is an individual described in 10VAC5-161-20 A 3 shall file, on or before March 1 of each year, an annual report with the bureau quarterly mortgage call reports through the registry stating the amount of residential mortgage loans originated during the preceding calendar year quarter and providing such additional information as the bureau may require. Call reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require.

C. Each licensee shall give notice to the bureau through the registry within five days after the occurrence of either of the following events:

1. Termination of, or separation from, employment or exclusive agency as a mortgage loan originator for a person licensed or exempt from licensing under Chapter 16. A licensee who is no longer an employee or exclusive agent of a person licensed or exempt from licensing under Chapter 16 shall not engage in activities requiring licensure under Chapter 16 until such time as (i) the individual obtains a mortgage broker license under Chapter 16 or (ii) the individual becomes a bona fide employee or exclusive agent of a person who is licensed or exempt from licensing under Chapter 16 and the requirements set forth in clauses (i) and (ii) of subdivision 2 of this subsection have been satisfied.

2. Commencement of employment or exclusive agency as a mortgage loan originator for a person licensed or exempt from licensing under Chapter 16. A licensee who becomes an employee or exclusive agent of a person licensed or exempt from licensing under Chapter 16 shall not engage in activities requiring licensure under Chapter 16 until (i) the person licensed or exempt from licensing under Chapter 16 has complied with the surety bond filing requirements of § 6.2-1703 of the Code of Virginia, 10VAC5-161-30 B, and 10VAC5-161-50 and (ii) the bureau has received a sponsorship request through the registry.

D. Pursuant to subsection B of § 6.2-1711 of the Code of Virginia, each licensee shall notify the commissioner through the registry within 10 days of any change of residential or business address. A licensee described in 10VAC5-161-20 A 1 or A 2 shall be deemed to have complied with this requirement if a person licensed or exempt from licensing under Chapter 16 timely submits such notice on behalf of its employee or exclusive agent.

E. Each licensee shall ensure that all residential mortgage loans that close as a result of the licensee engaging in the business of a mortgage loan originator are included in quarterly mortgage call reports of condition submitted to the registry. Reports of condition shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require.

F. The commissioner shall establish a process whereby mortgage loan originators may challenge information entered into the registry by the bureau.

VA.R. Doc. No. R17-4903; Filed April 3, 2017, 2:24 p.m.
TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS
STATE CORPORATION COMMISSION
Final Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Titles of Regulations: 10VAC5-160. Rules Governing Mortgage Lenders and Brokers (amending 10VAC5-160-10 through 10VAC5-160-90; adding 10VAC5-160-15, 10VAC5-160-25).

10VAC5-161. Mortgage Loan Originators (amending 10VAC5-161-60).

Statutory Authority: §§ 6.2-1613 and 12.1-13 of the Code of Virginia (10VAC5-160-10 through 10VAC5-160-90).

§§ 6.2-1720 and 12.1-13 of the Code of Virginia (10VAC5-161-60).

Effective Date: May 15, 2017.

Agency Contact: Susan Hancock, Deputy Commissioner, Bureau of Financial Institutions, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 371-9701, FAX (804) 371-9416, or email susan.hancock@scc.virginia.gov.

Summary:

The amendments (i) define various terms including "bona fide employee," "lead generator," "mortgage broker," and "stockholder"; (ii) require renewal of approved office locations each calendar year; (iii) require licensees to maintain a transaction journal; (iv) clarify that licensees will receive a single license instead of a license for each approved location; and (v) replace the annual report and reports of condition filings with quarterly mortgage call reports filed through the Nationwide Mortgage Licensing System and Registry. The only change since publication of the proposed regulation clarifies the date for renewing approved office locations.

AT RICHMOND, MARCH 30, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. BFI-2016-00048

Ex Parte: In re: Rules Governing Mortgage
Lenders and Brokers, and Mortgage Loan
Originators

ORDER ADOPTING REGULATIONS

On November 7, 2016, the State Corporation Commission ("Commission") entered an Order to Take Notice of a proposal by the Bureau of Financial Institutions ("Bureau") to amend the Commission's Rules Governing Mortgage Lenders and Brokers, which are set forth in Chapter 160 of Title 10 of the Virginia Administrative Code, 10 VAC 5-160-10 et seq. and its rules governing Mortgage Loan Originators, which are found in Chapter 161 of Title 10 of the Virginia Administrative Code, 10 VAC 5-161-10 et seq.

The proposed regulations required mortgage lenders and brokers to renew their licenses at the end of each calendar year, file quarterly mortgage call reports through the Nationwide Mortgage Licensing System and Registry ("Registry"), maintain a transaction journal, and renew approved office locations each calendar year. The proposal also defined several terms and clarified that mortgage lender and broker licensees will receive a single license instead of a license for each approved location. The proposed amendments to 10 VAC 5-161-60 replaced the annual report and report of condition filing requirements for mortgage loan originators with a requirement that quarterly mortgage call reports be filed through the Registry.

The Order to Take Notice and proposed regulations were published in the Virginia Register of Regulations on November 28, 2016, posted on the Commission's website, and sent to all licensed mortgage lenders, mortgage brokers, mortgage loan originators and other interested parties. Licensees and other interested parties were afforded the opportunity to file written comments or request a hearing on or before January 31, 2017.

Comments on the proposed regulations were filed by Meghann Akers of ALCOVA Mortgage, LLC and Philip d'Oronzio of Pilot Mortgage, LLC. The Commission did not receive any requests for a hearing.

Ms. Akers commented that 10 VAC 5-160-25 C imposes an additional demand on licensees by requiring that a loan transaction journal be maintained, and that much of the information in the journal is already reported to a federal regulator. Mr. d'Oronzio expressed concern that principals and owners of small, independent mortgage lenders and/or brokers will be prohibited from originating mortgage loans.

The Bureau considered the comments filed and responded to them in its Statements of Position, which the Bureau filed with the Clerk of the Commission on March 8, 2017. The Bureau declined to make changes to the regulations based upon the comments but did change the date for renewing approved office locations based upon information regarding the Registry. The Bureau otherwise recommended that the Commission adopt the proposed regulations as proposed.

NOW THE COMMISSION, having considered the proposed regulations, the comments filed, the Bureau's Statements of Position, the record herein and applicable law, concludes that the proposed regulations should be modified to incorporate the suggestion made by the Bureau. The Commission further concludes that the proposed regulations, as modified, should be adopted with an effective date of May 15, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed regulations, as modified herein and attached hereto, are adopted effective May 15, 2017.

(2) This Order and the attached regulations shall be posted on the Commission's website at: http://www.scc.virginia.gov/case.

(3) The Commission's Division of Information Resources shall provide a copy of this Order, including a copy of the attached regulations, to the Virginia Registrar of Regulations for publication in the Virginia Register of Regulations.

(4) This case is dismissed, and the papers filed herein shall be placed in the Commission's file for ended causes.

AN ATTESTED COPY hereof, together with a copy of the attached regulations, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and the Commissioner of Financial Institutions, who shall forthwith send a copy of this Order, together with a copy of the attached regulations, to all licensed mortgage lenders, mortgage brokers, and mortgage loan originators, and such other interested parties as he may designate.

10VAC5-160-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Advertisement" means a commercial message in any medium that promotes, directly or indirectly, a mortgage loan. The term includes a communication sent to a consumer as part of a solicitation of business, but excludes messages on promotional items such as pens, pencils, notepads, hats, calendars, etc., as well as rate sheets or other information distributed or made available solely to other businesses.

"Affiliate," for purposes of subdivision 3 of § 6.2-1602 of the Code of Virginia, means an entity of which 25% or more of the voting shares or ownership interest is held, directly or indirectly, by a company that also owns a bank, savings institution, or credit union.

"Bona fide employee," for purposes of Chapter 16 and this chapter, means an individual (i) whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person and (ii) whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person. However, the term shall not include an individual who is concurrently employed by two or more persons that are engaged in business as a mortgage lender or mortgage broker.

"Bureau," "commission," and "commissioner" shall have the meanings ascribed to them in § 6.2-100 of the Code of Virginia.

"Chapter 16" means Chapter 16 (§ 6.2-1600 et seq.) of Title 6.2 of the Code of Virginia.

"Chapter 17" means Chapter 17 (§ 6.2-1700 et seq.) of Title 6.2 of the Code of Virginia.

"Commitment" means a written offer to make a mortgage loan signed by a person authorized to sign such offers on behalf of a mortgage lender.

"Commitment agreement" means a commitment accepted by an applicant for a mortgage loan, as evidenced by the applicant's signature thereon.

"Commitment fee" means any fee or charge accepted by a mortgage lender, or by a mortgage broker for transmittal to a mortgage lender, as consideration for binding the mortgage lender to make a mortgage loan in accordance with the terms of a commitment or as a requirement for acceptance by the applicant of a commitment, but the term does not include fees paid to third persons or interest.

"Dwelling" means one-family to four-family residential property located in the Commonwealth.

"Fees paid to third persons" means the bona fide fees or charges paid by the applicant for a mortgage loan to third persons other than the mortgage lender or mortgage broker, or paid by the applicant to, or retained by, the mortgage lender or mortgage broker for transmittal to such third persons in connection with the mortgage loan, including, but not limited to, recording taxes and fees, reconveyance or releasing fees, appraisal fees, credit report fees, attorney fees, fees for title reports and title searches, title insurance premiums, surveys and similar charges.

"Lead generator" means a person who engages in a form of marketing activity in which the person collects and transmits a prospective borrower's contact information and minimal information pertaining to potential mortgage loans. A person shall not be considered a lead generator if the person collects a prospective borrower's social security number or sufficient personal information to enable a mortgage lender or mortgage broker to evaluate, in whole or in part, the prospective borrower's creditworthiness.

"Licensee" means a person licensed under Chapter 16.

"Loan processor or underwriter" means a person who, with respect to the origination of a residential mortgage loan, performs the following duties at the direction of and subject to the supervision and instruction of a licensed or exempt mortgage lender or mortgage broker: (i) receiving, collecting, distributing, or analyzing information common for the processing or underwriting of a residential mortgage loan or (ii) communicating with a consumer to obtain the information necessary for the processing or underwriting of a residential mortgage loan. A loan processor or underwriter does not include a person who (i) communicates with a consumer regarding a prospective residential mortgage loan prior to the consumer submitting a residential mortgage loan application, (ii) takes an application for or offers or negotiates the terms of a residential mortgage loan, or (iii) counsels consumers about residential mortgage loan terms. For purposes of this definition, the phrase "takes an application for or offers or negotiates the terms of a residential mortgage loan" shall be construed in accordance with subdivisions B 1 and B 2 of 10VAC5-161-20.

"Lock-in agreement" means a written agreement between a mortgage lender, or a mortgage broker acting on behalf of a mortgage lender, and an applicant for a mortgage loan that establishes and sets an interest rate and the points to be charged in connection with a mortgage loan that is closed within the time period specified in the agreement. A lock-in agreement can be entered into before mortgage loan approval, subject to the mortgage loan being approved and closed, or after such approval. A commitment agreement that establishes and sets an interest rate and the points to be charged in connection with a mortgage loan that is closed within the time period specified in the agreement is also a lock-in agreement. The interest rate that is established and set by the agreement may be either a fixed rate or an adjustable rate.

"Lock-in fee" means any fee or charge accepted by a mortgage lender, or by a mortgage broker for transmittal to a mortgage lender, as consideration for making a lock-in agreement, but the term does not include fees paid to third persons or interest.

"Mortgage lender," "mortgage broker," and "mortgage loan" and "person" shall have the meanings ascribed to them in § 6.2-1600 of the Code of Virginia. For purposes of Chapter 16 and this chapter, the term "mortgage broker" does not include the following persons, provided that they are not also engaged in any activities for which a mortgage broker license is required: (i) a person engaged in the business of a loan processor or underwriter provided that such person is not engaged in any other activities for which a mortgage broker license is required, (ii) a lead generator, and (iii) a noteholder, or servicer acting on behalf of a noteholder, that negotiates the modification of a mortgage loan in its portfolio. The payee named in a mortgage loan note shall be deemed to be the mortgage lender for purposes of Chapter 16 and this chapter.

"Mortgage loan originator," "Nationwide Mortgage Licensing System and Registry," "Registry," and "residential mortgage loan" shall have the meanings ascribed to them in § 6.2-1700 of the Code of Virginia.

"Personal, family or household purposes," for purposes of § 6.2-1600 of the Code of Virginia, means that the individual obtaining the loan intends to use the proceeds to build or purchase a dwelling that will be occupied by such individual or another individual as their his temporary or permanent residence. The term includes a loan used to build or purchase a dwelling that will be (i) improved or rehabilitated by or on behalf of the purchaser for subsequent sale to one or more other individuals who will reside in the dwelling on a temporary or permanent basis, or (ii) leased by the purchaser to one or more other individuals who will reside in the dwelling on a temporary or permanent basis.

"Points" means any fee or charge retained or received by a mortgage lender or mortgage broker stated or calculated as a percentage or fraction of the principal amount of the loan, other than or in addition to fees paid to third persons or interest.

"Reasonable period of time" means that period of time, determined by a mortgage lender in good faith on the basis of its most recent relevant experience and other facts and circumstances known to it, within which the mortgage loan will be closed.

"Refinancing" for purposes of Chapter 16 and this chapter means an exchange of an old debt for a new debt, as by negotiating a different interest rate or term or by repaying an existing loan with money acquired from a new loan. "Refinancing" includes any loan modification.

"Senior officer," for purposes of §§ 6.2-1605, 6.2-1606, 6.2-1607, and 6.2-1608 of the Code of Virginia, means an individual who has significant management responsibility within an organization or otherwise has the authority to influence or control the conduct of the organization's affairs, including but not limited to its compliance with applicable laws and regulations.

"Stockholder," for purposes of § 6.2-1616 of the Code of Virginia, includes a member of a limited liability company.

"Subsidiary," for purposes of subdivision 3 of § 6.2-1602 of the Code of Virginia, means an entity of which 25% or more of the voting shares or ownership interest is held, directly or indirectly, by a bank, savings institution, or credit union.

10VAC5-160-15. Surety bond; required funds.

A. As required by § 6.2-1604 of the Code of Virginia, a surety bond shall be filed with the commissioner and continuously maintained thereafter in full force by each licensee. The minimum bond amount required for a mortgage broker shall be $25,000, and the minimum amount required for a mortgage lender or for a mortgage company with dual authority as both a mortgage lender and mortgage broker shall be $50,000. The bond amount shall be adjusted annually in accordance with the following scale based upon residential mortgage loans originated during the preceding calendar year:

LOANS

BOND AMOUNT

$0 - $5,000,000

$25,000

$5,000,001 - $20,000,000

$50,000

$20,000,001 - $50,000,000

$75,000

$50,000,001 - $100,000,000

$100,000

over $100,000,000

$150,000

B. If a person has been or is engaged in business as a mortgage lender or mortgage broker and has filed a bond with the commissioner, the bond shall be retained by the commissioner notwithstanding the occurrence of any of the following events:

1. The person's application for a license is withdrawn or denied;

2. The person's license is surrendered, suspended, or revoked; or

3. The person ceases engaging in business as a mortgage lender or mortgage broker.

C. As required by § 6.2-1606 of the Code of Virginia, a mortgage lender shall maintain at least $200,000 in funds available for the operation of its business. To comply with this requirement, a mortgage lender shall maintain documentation of one of the following: (i) ownership of funds on deposit in a bank or other depository institution, (ii) an established line of credit from a bank or other depository institution; or (iii) a combination of clauses (i) and (ii). Neither letters of credit nor lines of credit from sources other than a bank or other depository institution shall satisfy this requirement.

10VAC5-160-20. Operating rules requirements.

A licensee shall conduct its business in accordance with the following rules requirements:

1. No licensee shall (i) misrepresent the qualification requirements for a mortgage loan or any material loan terms; (ii) make false or misleading statements to induce an applicant to apply for a mortgage loan, enter into any commitment agreement or lock-in agreement, or pay any commitment fee or lock-in fee in connection therewith; or (iii) provide any other information to a borrower or prospective borrower that is false, misleading, or deceptive. A "material loan term" means the loan terms required to be disclosed to a consumer pursuant to (i) the Truth in Lending Act (15 USC § 1601 et seq.), and the Real Estate Settlement Procedures Act of 1974 (12 USC § 2601 et seq.), and regulations and official commentary issued thereunder, as amended from time to time, (ii) § 6.2-406 of the Code of Virginia, and (iii) 10VAC5-160-30. A misrepresentation or false or misleading statement resulting directly from incorrect information furnished to a licensee by a third party, or a good-faith misunderstanding of information furnished by a third party, shall not be considered a violation of this section if the licensee has supporting documentation thereof and the licensee's reliance thereon was reasonable.

2. No licensee shall retain any portion of any fees or charges imposed upon consumers for goods or services provided by third parties. All moneys received by a licensee from an applicant for fees paid to third persons shall be accounted for separately, and all disbursements for fees paid to third persons shall be supported by adequate documentation of the services for which such fees were or are to be paid. All such moneys shall be deposited in an escrow account in a bank, savings institution, or credit union segregated from other funds of the licensee.

3. The mortgagor who obtains a mortgage loan shall be entitled to continue to make payments to the transferor of the servicing rights under a mortgage loan until the mortgagor is given written notice of the transfer of the servicing rights by the transferor. The notice shall specify the name and address to which future payments are to be made and shall be mailed or delivered to the mortgagor at least 10 calendar days before the first payment affected by the notice pursuant to the requirements set forth in the Real Estate Settlement Procedures Act of 1974 (12 USC § 2601 et seq.).

4. If a person has been or is engaged in business as a mortgage lender or mortgage broker and has filed a bond with the commissioner, as required by § 6.2-1604 of the Code of Virginia, such bond shall be retained by the commissioner notwithstanding the occurrence of any of the following events:

a. The person's application for a license is withdrawn or denied;

b. The person's license is surrendered, suspended, or revoked; or

c. The person ceases engaging in business as a mortgage lender or mortgage broker.

5. 4. Pursuant to § 6.2-1621 of the Code of Virginia, within 15 days of becoming aware of the occurrence of any of the events enumerated in this subdivision, a licensed mortgage lender or mortgage broker shall file a written report with the commissioner describing such event and its expected impact, if any, on the activities of the licensee in the Commonwealth. If the Registry enables licensees to submit the information required by this subdivision, then submission of this information through the Registry shall satisfy the requirement for a written report:

a. The licensee files for bankruptcy or reorganization.

b. Any governmental authority institutes revocation or suspension proceedings against the licensee, or revokes or suspends a mortgage-related license held or formerly held by the licensee.

c. Any governmental authority takes (i) formal regulatory or enforcement action against the licensee relating to its mortgage business or (ii) any other action against the licensee relating to its mortgage business where the total amount of restitution or other payment from the licensee exceeds $20,000. A licensee shall not be required to provide the commissioner with information about such event to the extent that such disclosure is prohibited by the laws of another state.

d. Based on allegations by any governmental authority that the licensee violated any law or regulation applicable to the conduct of its licensed mortgage business, the licensee enters into, or otherwise agrees to the entry of, a settlement or consent order, decree, or agreement with or by such governmental authority.

e. The licensee surrenders its license to engage in any mortgage-related business in another state in lieu of threatened or pending license revocation, license suspension, or other regulatory or enforcement action.

f. The licensee is denied a license to engage in any mortgage-related business in another state.

g. The licensee or any of its employees, officers, directors, principals, or exclusive agents is indicted for a felony.

h. The licensee or any of its employees, officers, directors, principals, or exclusive agents is convicted of a felony.

i. The licensee or any of its employees, officers, directors, principals, or exclusive agents is convicted of a misdemeanor involving fraud, misrepresentation, or deceit.

6. 5. No licensee shall inform a consumer that such consumer has been or will be "preapproved" or "pre-approved" for a mortgage loan unless the licensee contemporaneously provides the consumer with a separate written disclosure (in at least 10-point type) that (i) explains what preapproved means; (ii) informs the consumer that the consumer's loan application has not yet been approved; (iii) states that a written commitment to make a mortgage loan has not yet been issued; and (iv) advises the consumer what needs to occur before the consumer's loan application can be approved. This provision shall not apply to advertisements subject to 10VAC5-160-60. In the case of a preapproval initially communicated to a consumer by telephone, the licensee shall provide the written disclosure to the consumer within three business days.

7. 6. A licensee shall not permit any individual to take an application for or offer or negotiate the terms of a residential mortgage loan on behalf of the licensee unless: (i) the individual is licensed as a mortgage loan originator pursuant to Chapter 17; (ii) the individual is covered by the licensee's surety bond; (iii) the licensee has submitted a sponsorship request for such individual through the Registry; and (iv) the individual is either (a) a bona fide employee of the licensee, or (b) an exclusive agent of the licensee pursuant to a written agreement with the licensee and the licensee has agreed to such conditions relating to its use of exclusive agents as may be prescribed by the bureau. The phrase "take an application for or offer or negotiate the terms of a residential mortgage loan" shall be construed in accordance with subdivisions B 1 and B 2 of 10VAC5-161-20.

8. 7. Every licensee shall disclose on any application provided to the borrower associated with a Virginia residential mortgage loan: (i) the unique identifier assigned by the Registry to the licensed mortgage lender or mortgage broker that took the initial mortgage loan application; and (ii) the unique identifier assigned by the Registry to the licensed mortgage loan originator who took the initial mortgage loan application.

9. 8. A licensee may outsource its loan processing or underwriting activities to a third party loan processor or underwriter pursuant to a written agreement with the loan processor or underwriter. Prior to entering into an agreement, the licensee shall conduct a due diligence review of the third party loan processor or underwriter. The agreement shall (i) require the loan processor or underwriter to comply with all applicable state and federal laws and regulations; (ii) require the loan processor or underwriter to permit the commission to investigate or examine its business pursuant to § 6.2-1611 of the Code of Virginia; and (iii) prohibit the loan processor or underwriter from subcontracting to another person, other than its bona fide employees, any of the services specified in the agreement to be performed on behalf of the licensee. A copy of the written agreement shall be retained by the licensee for at least three years after the agreement has been terminated by either party. The licensee shall be responsible for implementing and maintaining a reasonable program to monitor any third party loan processor or underwriter performing services on its behalf.

10. If a licensee disposes of records containing a consumer's personal financial information following the expiration of any applicable record retention periods, such records shall be shredded, incinerated, or otherwise disposed of in a secure manner. Licensees may arrange for service from a business record destruction vendor.

11. 9. Every licensee shall comply with Chapter 16, this chapter, and all other state and federal laws and regulations applicable to the conduct of its business.

10. A licensee shall continuously (i) maintain the requirements and standards for licensure prescribed in § 6.2-1606 of the Code of Virginia and (ii) remain authorized to transact business in the Commonwealth pursuant to Title 13.1 of the Code of Virginia.

10VAC5-160-25. Books, accounts, and records.

A. A licensee shall maintain in its licensed offices all books, accounts, and records required by Chapter 16 and this chapter.

B. A licensee may maintain records electronically provided (i) the records are readily available for examination by the bureau and (ii) the licensee complies with the Uniform Electronic Transactions Act (§ 59.1-479 et seq. of the Code of Virginia) and the Electronic Signatures in Global and National Commerce Act (15 USC § 7001 et seq.). However, the written agreement specified in § 6.2-1616 B 4 of the Code of Virginia shall be maintained in the form in which it was originally provided and executed.

C. A licensee shall continuously maintain a mortgage loan transaction journal that includes the following information for each application received:

1. Applicant's name.

2. Application date.

3. Property address.

4. Loan amount.

5. Lien position.

6. Mortgage loan originator (licensed name).

7. Mortgage loan originator (license or Registry number).

8. Address of originating office.

9. Name of lender (if applicable).

10. Application status (e.g., in process, withdrawn, denied, closed).

11. Any other information reasonably required by the commissioner.

D. If a licensee disposes of records containing a consumer's personal or financial information following the expiration of any applicable record retention periods, such records shall be shredded, incinerated, or otherwise disposed of in a secure manner. Licensees may arrange for service from a business record destruction vendor.

10VAC5-160-30. Commitment agreements and lock-in agreements.

A. A If a commitment is issued and accepted, the commitment agreement shall be signed by the applicant and a person authorized to sign such agreement on behalf of a mortgage lender and include the following:

1. The name of the mortgage lender;

1. 2. Identification of the property intended to secure the mortgage loan (this does not require a formal legal description);

2. 3. The principal amount and term of the loan;

3. 4. The interest rate and points for the mortgage loan if the commitment agreement is also a lock-in agreement or a statement that the mortgage loan will be made at the mortgage lender's prevailing rate and points for such loans at the time of closing or a specified number of three days prior to closing settlement;

4. 5. The amount of any commitment fee and the time within which the commitment fee must be paid;

5. 6. Whether or not funds are to be escrowed and for what purpose;

6. 7. Whether or not private mortgage insurance is required;

7. 8. The length of the commitment period;

8. 9. A statement that if the loan is not closed within the commitment period, the mortgage lender is no longer obligated by the commitment agreement and any commitment fee paid by the applicant will be refunded only under the circumstances set forth in subsection C of this section and such other circumstances as are set forth in the commitment agreement; and

9. 10. Any other terms and conditions of the commitment agreement required by the lender.

B. If a lock-in agreement is issued to a consumer by a mortgage lender, or a mortgage broker to a consumer acting on behalf of the mortgage lender, it shall be signed by a representative of the mortgage lender or mortgage broker and include the following:

1. The name of the mortgage lender or mortgage broker issuing the lock-in agreement;

1. 2. The interest rate and points for the mortgage loan, and if the rate is an adjustable rate, the initial interest rate and a brief description of the method of determining the rate (such as the index and the margin);

2. 3. The amount of any lock-in fee and the time within which the lock-in fee must be paid;

3. 4. The length of the lock-in period;

4. 5. A statement that if the loan is not closed within the lock-in period, the mortgage lender is no longer obligated by the lock-in agreement and any lock-in fee paid by the applicant will be refunded only under the circumstances set forth in subsection D of this section and such other circumstances as are set forth in the lock-in agreement;

5. 6. A statement that any terms not locked-in locked in by the lock-in agreement are subject to change until the loan is closed at three days prior to settlement; and

6. 7. Any other terms and conditions of the lock-in agreement required by the mortgage lender or mortgage broker acting on behalf of a mortgage lender.

C. If an applicant has paid any commitment fee, and the mortgage loan is not closed due to any of the following, such commitment fee shall be refunded:

1. The commitment period was not a reasonable period of time given the prevailing market conditions at the time the commitment agreement was entered into;

2. The mortgage loan is turned down because of the applicant's lack of creditworthiness; or

3. The mortgage loan is turned down because of the appraised value of the property intended to secure the mortgage loan.

D. If an applicant has paid any lock-in fee and the loan is not closed because the lock-in period was not a reasonable period of time given the prevailing market conditions at the time the lock-in agreement was entered into, such lock-in fee shall be refunded.

E. A mortgage broker shall not issue a lock-in agreement to a consumer unless the mortgage broker has actually locked in the mortgage loan, including the applicable interest rate, points, and other terms, with a mortgage lender. A mortgage broker shall maintain supporting written documentation from the mortgage lender of all lock-in information for at least three years from the date the lock-in expires.

10VAC5-160-40. Schedule of annual fees for the examination, supervision, and regulation of mortgage lenders and mortgage brokers.

Pursuant to § 6.2-1612 of the Code of Virginia, the Commission commission sets the following schedule of annual fees to be paid by mortgage lenders and mortgage brokers required to be licensed under Chapter 16. Such fees are to defray the costs of examination, supervision, and regulation of such lenders and brokers by the Bureau of Financial Institutions. The fees are related to the actual costs of the Bureau bureau, to the volume of business of the lenders and brokers, and to other factors relating to supervision and regulation.

SCHEDULE

LENDER LICENSEE: Minimum fee -- $800, plus $6.60 per loan

BROKER LICENSEE: Minimum fee -- $400, plus $6.60 per loan

DUAL AUTHORITY (LENDER/BROKER): Minimum fee -- $1,200, plus $6.60 per loan

The annual fee for each mortgage lender shall be computed on the basis of the number of mortgage loans, as defined in § 6.2-1600 of the Code of Virginia, made or originated during the calendar year preceding the year of assessment. The annual fee for each mortgage broker shall be based on the number of such loans brokered. The annual fee for each mortgage lender/broker shall be based on the total number of mortgage loans made or originated and mortgage loans brokered. The annual fee computed using the above schedule shall be rounded down to the nearest whole dollar.

Fees shall be assessed on or before April 25 for the current calendar year. By law the fee must be paid on or before May 25.

The annual report of quarterly mortgage call reports filed through the Registry by each licensee shall be due March 1 of each year and shall provide the basis for licensee assessment, i.e. that is, the number of loans made or brokered. If the annual report required quarterly mortgage call reports of a licensee has have not been filed by the assessment date, a provisional fee, subject to adjustment when the report is filed, shall be assessed. In cases where a license or additional authority has been granted between January 1 and March 31, one of the following fees or additional fee shall be assessed: lender -- $400; broker -- $200; lender/broker -- $600.

Fees prescribed and assessed by this schedule are apart from, and do not include, the reimbursement for expenses permitted by subsection C of § 6.2-1612 of the Code of Virginia.

10VAC5-160-50. Responding to requests from Bureau of Financial Institutions; providing false, misleading, or deceptive information; record retention.

A. If the bureau requests information from an applicant to complete a deficient application filed under §§ § 6.2-1603, 6.2-1607, or 6.2-1608 of the Code of Virginia and the information is not received within 60 days of the request, the application shall be deemed abandoned unless a request for an extension of time is received and approved by the bureau prior to the expiration of the 60-day period.

B. When the bureau requests a written response, books, records, documentation, or other information from a licensee in connection with the bureau's investigation, enforcement, or examination of compliance with applicable laws, the licensee shall deliver a written response as well as any requested books, records, documentation, or information within the time period specified in the bureau's request. If no time period is specified, a written response as well as any requested books, records, documentation, or information shall be delivered by the licensee to the bureau not later than 30 days from the date of such request. In determining the specified time period for responding to the bureau and when considering a request for an extension of time to respond, the bureau shall take into consideration the volume and complexity of the requested written response, books, records, documentation or information and such other factors as the bureau determines to be relevant under the circumstances.

Requests made by the bureau pursuant to this subsection are deemed to be in furtherance of the bureau's investigation and examination authority provided for in § 6.2-1611 of the Code of Virginia.

C. A licensee shall not provide any information to the bureau, either directly or through the Registry, that is false, misleading, or deceptive.

D. A licensee shall maintain in its licensed offices all books, accounts, and records required by Chapter 16 and this chapter.

10VAC5-160-60. Advertising.

A. Every advertisement used by, or published on behalf of, a licensed mortgage lender or mortgage broker shall clearly and conspicuously disclose the following information:

1. The name of the mortgage lender or mortgage broker as set forth in the license issued by the commission.

2. The abbreviation "NMLS ID #" followed immediately by both the unique identifier assigned by the Registry to the mortgage lender or mortgage broker and along with the address for the NMLS Consumer Access website in parenthesis. For example: NMLS ID # 999999 (www.nmlsconsumeraccess.org). In a radio or television advertisement, this disclosure shall be provided after the name of the mortgage lender or mortgage broker.

3. If an advertisement contains a rate of interest, a statement that the stated rate may change or not be available at the time of loan commitment or lock-in.

4. If an advertisement contains specific information about a consumer's existing mortgage loan and such information was not obtained from the consumer, a statement identifying the source of such information (e.g., public court records, credit reporting agency, etc.).

B. No mortgage lender or mortgage broker shall deceptively advertise a mortgage loan, make false or misleading statements or representations, or misrepresent the terms, conditions, or charges incident to obtaining a mortgage loan.

C. No mortgage lender or mortgage broker shall use or cause to be published an advertisement that states or implies the following:

1. The mortgage lender or mortgage broker is affiliated with, or an agent or division of, a governmental agency, depository institution, or other entity with which no such relationship exists; or

2. A consumer has been or will be "preapproved " or "pre-approved" for a mortgage loan, unless the mortgage lender or mortgage broker (i) discloses on the face of the advertisement in at least 14-point bold type that "THIS IS NOT A LOAN APPROVAL" and (ii) clearly and conspicuously discloses the conditions and/or qualifications associated with such preapproval. This provision is intended to supplement the requirements of the Fair Credit Reporting Act, (15 USC § 1681 et seq.,) relating to firm offers of credit.

D. A mortgage lender or mortgage broker shall not use or cause to be published any advertisement that gives a consumer the false impression that the advertisement is being sent by the consumer's current noteholder or lienholder. If an advertisement contains the name of the consumer's current noteholder or lienholder, it shall not be more conspicuous than the name of the mortgage lender or mortgage broker using the advertisement.

E. A mortgage lender or mortgage broker shall not deliver or cause to be delivered to a consumer any envelope or other written material that gives the false impression that the mailing or written material is an official communication from a governmental entity, unless required by the United States Postal Service.

F. If an advertisement states or implies that a consumer can reduce his monthly payment by refinancing his current mortgage loan, but as a result of such refinancing, the consumer's total finance charges may be higher over the life of the loan, a mortgage lender or mortgage broker shall clearly and conspicuously disclose to the consumer that by refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.

G. Every advertisement used by, or published on behalf of, a mortgage lender or mortgage broker shall comply with 12 CFR Part 1014 (Regulation N) and the disclosure requirements for advertisements contained in the Truth in Lending Act and Regulation Z, 12 CFR Part 226 1026 (Regulation Z).

H. For purposes of this section, the term "clearly and conspicuously" means that a required disclosure is reasonably understandable, prominently located, and readily noticeable by a potential borrower of ordinary intelligence.

I. Every mortgage lender and mortgage broker shall retain for at least three years after it is last published, delivered, transmitted, or made available, an example of every advertisement used, including but not limited to solicitation letters, commercial scripts, and recordings of all radio and television broadcasts, but excluding copies of Internet web pages.

10VAC5-160-90. Nationwide Mortgage Licensing System and Registry.

A. Applications for a mortgage lender or mortgage broker license shall be made through the Registry in accordance with instructions provided by the commissioner. The commissioner may provide these instructions through the Registry, on the commission's Internet website, or by any other means the commissioner deems appropriate.

B. The commissioner shall notify all licensees no later than January 1 of each calendar year of the information required to be included in the annual report to be submitted by each licensee pursuant Pursuant to § 6.2-1610 of the Code of Virginia., every licensee shall file quarterly mortgage call reports through the Registry as well as such other information pertaining to the licensee's financial condition as may be required by the Registry. Reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the Registry may require.

C. Entities exempt from the requirement for licensure under Chapter 16 that supervise mortgage loan originators licensed pursuant to Chapter 17 may obtain a unique identifier through the Registry.

D. Every licensee shall maintain current information in its records with the Registry. Except as provided in subsection E of this section, changes to the licensee's address, principal officers, or any other information in the Registry shall be updated by the licensee as soon as is practicable, but in no event later than five business days from when the change takes effect.

E. A licensee shall update its sponsorship information in the Registry within five days after the occurrence of either of the following events: (i) a mortgage loan originator becomes a bona fide employee or exclusive agent of the licensee or (ii) a mortgage loan originator ceases to be a bona fide employee or exclusive agent of the licensee.

F. If (i) any provision of Chapter 16 or this chapter requires a licensee to provide the bureau or commissioner with a written notice and (ii) the Registry enables licensees to submit such notice through the Registry, then a licensee shall be deemed to have complied with the written notice requirement if the licensee timely submits the required notice through the Registry.

G. A mortgage lender or mortgage broker license shall expire at the end of each calendar year unless it is renewed by a licensee on or after November 1 of the same year. However, licenses that are granted between November 1 and December 31 shall not expire until the end of the following calendar year. A license shall be renewed upon the commission finding that the licensee has (i) requested license renewal through the Registry and (ii) complied with any requirements associated with such renewal request that are imposed by the Registry.

H. A licensee's approved office locations shall be subject to renewal each calendar year. However, office locations that are approved by the commission between November 1 and December 31 shall not be subject to renewal until the end of the following calendar year. An approved office location shall be renewed upon the commission finding that the licensee has (i) requested renewal for the location through the Registry and (ii) complied with any requirements associated with such renewal request that are imposed by the Registry.

I. If a licensee fails to timely meet the requirements specified in subsection G or H of this section, but meets such requirements before March 1 of the following calendar year, the license or approved office location shall be reinstated and renewed. If an approved office location is not renewedon or ] before March 1, the office location shall be deemed to be closed as of the preceding January 1 by the licensee.

J. A licensee shall not engage in business as a mortgage lender or mortgage broker from an office location that has not been (i) approved by the commission and (ii) renewed by the licensee as required by subsection H of this section. Any mortgage loan made or brokered by a licensee in violation of this subsection shall constitute a separate violation of Chapter 16.

K. Each licensee shall receive a single license from the commission that states the full legal name of the licensee as well as any fictitious names under which the licensee is conducting business under Chapter 16. The license issued by the commission shall identify the addresses of the offices at which the business is authorized to be conducted under Chapter 16 by referencing the approved office locations of the licensee as set forth in the Registry.

10VAC5-161-60. Required reports and notices; information in registry.

A. Each person for whom an individual described in 10VAC5-161-20 A 1 or A 2 engages in the business of a mortgage loan originator shall file, on or before March 1 of each year, an annual report with the bureau quarterly mortgage call reports through the registry stating the amount of residential mortgage loans made or brokered during the preceding calendar year quarter, identifying all licensees performing services for that person, and providing such additional information as the bureau may require. Call reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require. Timely filing of the annual report reports required by Chapter 16 by a person licensed under that chapter shall constitute compliance with this subsection by that person if the annual report contains reports contain the information specified in this subsection.

B. Each licensee who is an individual described in 10VAC5-161-20 A 3 shall file, on or before March 1 of each year, an annual report with the bureau quarterly mortgage call reports through the registry stating the amount of residential mortgage loans originated during the preceding calendar year quarter and providing such additional information as the bureau may require. Call reports shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require.

C. Each licensee shall give notice to the bureau through the registry within five days after the occurrence of either of the following events:

1. Termination of, or separation from, employment or exclusive agency as a mortgage loan originator for a person licensed or exempt from licensing under Chapter 16. A licensee who is no longer an employee or exclusive agent of a person licensed or exempt from licensing under Chapter 16 shall not engage in activities requiring licensure under Chapter 16 until such time as (i) the individual obtains a mortgage broker license under Chapter 16 or (ii) the individual becomes a bona fide employee or exclusive agent of a person who is licensed or exempt from licensing under Chapter 16 and the requirements set forth in clauses (i) and (ii) of subdivision 2 of this subsection have been satisfied.

2. Commencement of employment or exclusive agency as a mortgage loan originator for a person licensed or exempt from licensing under Chapter 16. A licensee who becomes an employee or exclusive agent of a person licensed or exempt from licensing under Chapter 16 shall not engage in activities requiring licensure under Chapter 16 until (i) the person licensed or exempt from licensing under Chapter 16 has complied with the surety bond filing requirements of § 6.2-1703 of the Code of Virginia, 10VAC5-161-30 B, and 10VAC5-161-50 and (ii) the bureau has received a sponsorship request through the registry.

D. Pursuant to subsection B of § 6.2-1711 of the Code of Virginia, each licensee shall notify the commissioner through the registry within 10 days of any change of residential or business address. A licensee described in 10VAC5-161-20 A 1 or A 2 shall be deemed to have complied with this requirement if a person licensed or exempt from licensing under Chapter 16 timely submits such notice on behalf of its employee or exclusive agent.

E. Each licensee shall ensure that all residential mortgage loans that close as a result of the licensee engaging in the business of a mortgage loan originator are included in quarterly mortgage call reports of condition submitted to the registry. Reports of condition shall be in such form, contain such information, and be submitted with such frequency and by such dates as the registry may require.

F. The commissioner shall establish a process whereby mortgage loan originators may challenge information entered into the registry by the bureau.

VA.R. Doc. No. R17-4903; Filed April 3, 2017, 2:24 p.m.
TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING
BOARD OF NURSING
Final Regulation

REGISTRAR'S NOTICE: The Board of Nursing is claiming an exemption from Article 2 of the Administrative Process Act in accordance with § 2.2-4006 A 6 of the Code of Virginia, which excludes regulations of the regulatory boards served by the Department of Health Professions pursuant to Title 54.1 of the Code of Virginia that are limited to reducing fees charged to regulants and applicants. The Board of Nursing will receive, consider, and respond to petitions by any interested person at any time with respect to reconsideration or revision.

Title of Regulation: 18VAC90-19. Regulations Governing the Practice of Nursing (amending 18VAC90-19-30).

Statutory Authority: § 54.1-2400 of the Code of Virginia.

Effective Date: May 31, 2017.

Agency Contact: Jay P. Douglas, R.N., Executive Director, Board of Nursing, 9960 Mayland Drive, Suite 300, Richmond, VA 23233, telephone (804) 367-4520, FAX (804) 527-4455, or email jay.douglas@dhp.virginia.gov.

Summary:

The amendments reduce the late fee for renewal of an inactive license after the renewal date by a registered nurse or a practical nurse.

18VAC90-19-30. Fees.

Fees required by the board are:

1. Application for licensure by examination - RN

$190

2. Application for licensure by endorsement - RN

$190

3. Application for licensure by examination - LPN

$170

4. Application for licensure by endorsement - LPN

$170

5. Reapplication for licensure by examination

$50

6. Biennial licensure renewal - RN

$140

7. Biennial inactive licensure renewal - RN

$70

8. Biennial licensure renewal - LPN

$120

9. Biennial inactive licensure renewal - LPN

$60

10. Late renewal - RN

$50

11. Late renewal - RN inactive

$25

12. Late renewal - LPN

$40

13. Late renewal - LPN inactive

$20

12. 14. Reinstatement of lapsed license - RN

$225

13. 15. Reinstatement of lapsed license - LPN

$200

14. 16. Reinstatement of suspended or revoked license

$300

15. 17. Duplicate license

$15

16. 18. Replacement wall certificate

$25

17. 19. Verification of license

$35

18. 20. Transcript of all or part of applicant or licensee records

$35

19. 21. Returned check charge

$35

20. 22. Application for CNS registration

$130

21. 23. Biennial renewal of CNS registration

$80

22. 24. Reinstatement of lapsed CNS registration

$125

23. 25. Verification of CNS registration to another jurisdiction

$35

24. 26. Late renewal of CNS registration

$35

VA.R. Doc. No. R17-5059; Filed March 30, 2017, 3:32 p.m.
TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING
BOARD OF NURSING
Final Regulation

REGISTRAR'S NOTICE: The Board of Nursing is claiming an exemption from Article 2 of the Administrative Process Act in accordance with § 2.2-4006 A 6 of the Code of Virginia, which excludes regulations of the regulatory boards served by the Department of Health Professions pursuant to Title 54.1 of the Code of Virginia that are limited to reducing fees charged to regulants and applicants. The Board of Nursing will receive, consider, and respond to petitions by any interested person at any time with respect to reconsideration or revision.

Titles of Regulations: 18VAC90-30. Regulations Governing the Licensure of Nurse Practitioners (amending 18VAC90-30-50).

18VAC90-40. Regulations for Prescriptive Authority for Nurse Practitioners (amending 18VAC90-40-70).

Statutory Authority: §§ 54.1-2400 and 54.1-3005 of the Code of Virginia.

Effective Date: May 31, 2017.

Agency Contact: Jay P. Douglas, R.N., Executive Director, Board of Nursing, 9960 Mayland Drive, Suite 300, Richmond, VA 23233-1463, telephone (804) 367-4520, FAX (804) 527-4455, or email jay.douglas@dhp.virginia.gov.

Summary:

The amendments reduce the nurse practitioner biennial renewal fees for licensure and prescriptive authority from July 1, 2017, through June 30, 2019.

18VAC90-30-50. Fees.

A. Fees required in connection with the licensure of nurse practitioners are:

1. Application

$125

2. Biennial licensure renewal

$80

3. Late renewal

$25

4. Reinstatement of licensure

$150

5. Verification of licensure to another jurisdiction

$35

6. Duplicate license

$15

7. Duplicate wall certificate

$25

8. Return check charge

$35

9. Reinstatement of suspended or revoked license

$200

B. For renewal of licensure from July 1, 2017, through June 30, 2019, the following fee shall be in effect:

Biennial renewal

$60

18VAC90-40-70. Fees for prescriptive authority.

A. The following fees have been established by the boards:

1. Initial issuance of prescriptive authority

$75

2. Biennial renewal

$35

3. Late renewal

$15

4. Reinstatement of lapsed authorization

$90

5. Reinstatement of suspended or revoked authorization

$85

6. Duplicate of authorization

$15

7. Return check charge

$35

B. For renewal of licensure from July 1, 2017, through June 30, 2019, the following fee shall be in effect:

Biennial renewal

$26

VA.R. Doc. No. R17-5049; Filed April 12, 2017, 8:39 a.m.
TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING
BOARD OF NURSING
Final Regulation

REGISTRAR'S NOTICE: The Board of Nursing is claiming an exemption from Article 2 of the Administrative Process Act in accordance with § 2.2-4006 A 6 of the Code of Virginia, which excludes regulations of the regulatory boards served by the Department of Health Professions pursuant to Title 54.1 of the Code of Virginia that are limited to reducing fees charged to regulants and applicants. The Board of Nursing will receive, consider, and respond to petitions by any interested person at any time with respect to reconsideration or revision.

Titles of Regulations: 18VAC90-30. Regulations Governing the Licensure of Nurse Practitioners (amending 18VAC90-30-50).

18VAC90-40. Regulations for Prescriptive Authority for Nurse Practitioners (amending 18VAC90-40-70).

Statutory Authority: §§ 54.1-2400 and 54.1-3005 of the Code of Virginia.

Effective Date: May 31, 2017.

Agency Contact: Jay P. Douglas, R.N., Executive Director, Board of Nursing, 9960 Mayland Drive, Suite 300, Richmond, VA 23233-1463, telephone (804) 367-4520, FAX (804) 527-4455, or email jay.douglas@dhp.virginia.gov.

Summary:

The amendments reduce the nurse practitioner biennial renewal fees for licensure and prescriptive authority from July 1, 2017, through June 30, 2019.

18VAC90-30-50. Fees.

A. Fees required in connection with the licensure of nurse practitioners are:

1. Application

$125

2. Biennial licensure renewal

$80

3. Late renewal

$25

4. Reinstatement of licensure

$150

5. Verification of licensure to another jurisdiction

$35

6. Duplicate license

$15

7. Duplicate wall certificate

$25

8. Return check charge

$35

9. Reinstatement of suspended or revoked license

$200

B. For renewal of licensure from July 1, 2017, through June 30, 2019, the following fee shall be in effect:

Biennial renewal

$60

18VAC90-40-70. Fees for prescriptive authority.

A. The following fees have been established by the boards:

1. Initial issuance of prescriptive authority

$75

2. Biennial renewal

$35

3. Late renewal

$15

4. Reinstatement of lapsed authorization

$90

5. Reinstatement of suspended or revoked authorization

$85

6. Duplicate of authorization

$15

7. Return check charge

$35

B. For renewal of licensure from July 1, 2017, through June 30, 2019, the following fee shall be in effect:

Biennial renewal

$26

VA.R. Doc. No. R17-5049; Filed April 12, 2017, 8:39 a.m.

GENERAL NOTICES/ERRATA
Vol. 33 Iss. 18 - May 01, 2017

STATE CORPORATION COMMISSION

Bureau of Insurance

April 4, 2017

Administrative Letter 2017-01

TO: All Companies Licensed to Sell Annuities or Variable Annuities under Title 38.2 of the Code of Virginia

RE: Revisions to the Rules Governing Suitability in Annuity Transactions (14VAC5-45 of the Virginia Administrative Code)

The Virginia Bureau of Insurance has revised the Rules Governing Suitability in Annuity Transactions, incorporating provisions contained in the National Association of Insurance Commissioners' Suitability in Annuity Transactions Model Regulation. The revised Rules can be accessed at http://law.lis.virginia.gov/admincode/title14/agency5/chapter45/.

Among other changes, the revised Rules require agents to complete a one-time four-credit continuing education (C.E.) course on annuity products. The deadline for compliance with this C.E. requirement is January 1, 2018, for agents currently holding a life insurance line of authority and who desire to sell annuities in Virginia. Agents who obtain a life insurance line of authority on or after January 1, 2018, must complete the C.E. requirement prior to engaging in the sale of annuities in Virginia. Virginia resident agents are required to complete a Virginia approved one-time four-credit C.E. course designated for annuity suitability on or after April 1, 2017. Therefore, courses taken by resident agents prior to April 1, 2017, will not be counted towards compliance. Non-resident agents are exempt if they have already completed a "substantially similar" course in their home state. Insurers are responsible for verifying that any agent selling annuity products in Virginia on their behalf has completed the four-credit C.E. course. (See 14VAC5-45-45 B 10 of the Virginia Administrative Code.)

Questions concerning this administrative letter may be addressed to: Life and Health Division, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone (804) 371-9741, or email bureauofinsurance@scc.virginia.gov.

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

DEPARTMENT OF ENVIRONMENTAL QUALITY

Volkswagen Consent Decree Environmental Mitigation Trust Project Ideas

The Commonwealth of Virginia expects to receive $93,600,000 from the Volkswagen (VW) environmental mitigation trust (EMT) between 2017 and 2027. These funds represent a significant opportunity to mitigate the environmental harm caused by the offending VW vehicles and to achieve substantial reductions in air pollution in Virginia. The Virginia Department of Environmental Quality (DEQ) will administer these funds through a state mitigation plan (SMP). The objective of this request for information (RFI) is to gather information to help DEQ gain a better understanding of the best use of VW EMT funds for Virginia.

DEQ is seeking early input from governmental and nongovernmental entities on the type and scope of projects that they may later submit to compete for VW EMT funds, funding and project evaluation priorities, and methods DEQ could employ to increase participation in future requests for VW mitigation projects. This RFI is not a solicitation for projects. Information obtained from this RFI will be used solely for planning purposes, including the development of requirements upon which a solicitation for projects may be based.

How to respond to the RFI: Please follow the detailed instructions provided in the RFI, which is located on DEQ's VW webpage at http://deq.virginia.gov/Programs/Air/VWMitigation.aspx.

Federal information: Additional information is available from the U.S. Environmental Protection Agency (EPA) at http://www.epa.gov/enforcement/volkswagen-clean-air-act-partial-settlement.

Virginia information: DEQ has established a webpage with information about Virginia's actions for meeting the requirements of the VW settlement and the EMT at http://www.deq.virginia.gov/Programs/Air/vwmitigation.aspx. This page will be updated periodically as new information and opportunities for public comment become available.

Contact Information: Angela Conroy, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4130, or email vwmitigation@deq.virginia.gov.

JOINT COMMISSION ON ADMINISTRATIVE RULES

Notice to State Agencies - Reporting Requirements of Chapter 678 of the 2017 Acts of Assembly

Pursuant to enactment clause 2 of Chapter 678 (HB 1731) of the 2017 Acts of Assembly, the Joint Commission on Administrative Rules (JCAR) is publishing this notice to inform agencies of obligations under the provisions of the act.

The act amends § 2.2-4005 of the Code of Virginia and requires agencies having an exemption authorized by the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) (APA) to report the following information to JCAR:

1. The exemption and the date the exemption became law. Section 2.2-4002 A 9 of the Code of Virginia provides an exemption for agencies "expressly exempted by any other provision" of the Code of Virginia. Therefore, an agency must also report exemptions from the APA contained in the agency's basic law.

2. A summary of the necessity for the exemption (i.e., why the agency needs the particular exemption).

3. Any regulation adopted by the agency under each exemption in the immediately preceding two fiscal years and a summary of each regulation.  

A web form is in development for agencies to report the required information electronically. JCAR will send an email with instructions and the URL for the web form to agency regulatory coordinators in the near future.

The first report is due August 1, 2017, and covers the period July 1, 2015, through June 30, 2017. Subsequent reports are due every two years thereafter and need only provide the exemption and any regulation adopted pursuant to the exemption in the immediately preceding two fiscal years, if any.

The following agencies are exempt from this reporting requirement: (i) the courts, (ii) any agency of the Supreme Court, and (iii) any agency that by the Constitution of Virginia is expressly granted any of the powers of a court of record.

If an agency fails to submit the required report, JCAR is required to recommend to the Governor and the General Assembly that the agency's exemption be discontinued.

Contact information: Karen W. Perrine, Joint Commission on Administrative Rules, 201 North Ninth Street, Richmond, VA 23229, telephone (804) 786-3591, ext. 261.

VIRGINIA LOTTERY

Director's Orders

The following Director's Orders of the Virginia Lottery were filed with the Virginia Registrar of Regulations on April 12, 2017. The orders may be viewed at the Virginia Lottery, 600 East Main Street, Richmond, Virginia, or at the office of the Registrar of Regulations, 201 North 9th Street, 2nd Floor, Richmond, Virginia.

Director's Order Number Forty (17)

Virginia Lottery's "3-4-5 Play Promotion" Final Rules for Operation (effective May 1, 2017)

Director's Order Number Forty-Five (17)

Virginia's Computer-Generated Lottery Game Mega Millions Final Rules for Game Operation (this Director's Order becomes effective on March 30, 2017, fully replaces any and all prior Virginia Lottery "Mega Millions" game rules, and shall remain in full force and effect unless amended or rescinded by further Director's Order)

Director's Order Number Fifty-One (17)

Virginia Lottery's Scratch Game 1768 "Game of Riches" Final Rules for Game Operation (effective April 7, 2017)

Director's Order Number Fifty-Two (17)

Virginia Lottery's Scratch Game 1789 "$" Final Rules for Game Operation (effective April 7, 2017)

Director's Order Number Fifty-Three (17)

Virginia Lottery's Scratch Game 1793 "Quick Cash" Final Rules for Game Operation (effective April 7, 2017)

BOARD OF MEDICAL ASSISTANCE SERVICES

Payments under the Disproportionate Share Hospital Program to Piedmont and Catawba Hospitals - Notice of Intent to Amend the Virginia State Plan for Medical Assistance (pursuant to § 1902(a)(13) of the Social Security Act (42 USC § 1396a(a)(13)))

The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia State Plan for Medical Assistance to provide for changes to the Methods and Standards for Establishing Payment Rates-Inpatient Hospital Services (12VAC30-70).

This notice is intended to satisfy the requirements of 42 CFR 447.205 and of § 1902(a)(13) of the Social Security Act, 42 USC § 1396a(a)(13). A copy of this notice is available for public review from William Lessard, Provider Reimbursement Division, DMAS, 600 Broad Street, Suite 1300, Richmond, VA 23219, or via email at william.lessard@dmas.virginia.gov.

DMAS is specifically soliciting input from stakeholders, providers, and beneficiaries on the potential impact of the proposed change in methodology for setting disproportionate share hospital (DSH) payment rates for Piedmont and Catawba hospitals. Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Mr. Lessard and such comments are available for review at the same address. Comments may also be submitted, in writing, on the Virginia Regulatory Town Hall public comment forum attached to this notice and is available for public review on the Town Hall at http://townhall.virginia.gov, on the General Notices page, found at https://townhall.virginia.gov/L/generalnotice.cfm.

DMAS is making these changes in its methods and standards for setting payment rates for services in order to comply with a request from the Centers for Medicare and Medicaid Services (CMS) to modify the method for making payments under the DSH program for two facilities operated by the Department of Behavioral Health and Development Services. The change would even out the payments to Piedmont and Catawba hospitals so that neither payment would exceed the amount allowed under Medicaid, but the total amount paid to the two hospitals would not change.

This change is necessary because under the current methodology, the DSH payments to Piedmont Hospital often exceed the amount that can be paid to that hospital. The current method allows for the extra payments to be paid to Catawba Hospital (up to the Medicaid limits) at the time of cost settlement. With this change, DMAS could avoid making excess DSH payments to Piedmont Hospital.

The expected increase in annual aggregate expenditures is $0.

Contact Information: Emily McClellan, Regulatory Manager, Division of Policy and Research, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-4300, FAX (804) 786-1680, TDD (800) 343-0634, or email emily.mcclellan@dmas.virginia.gov.

STATE WATER CONTROL BOARD

Proposed Consent Order for The Four Winds Club, Inc.

An enforcement action has been proposed for The Four Winds Club, Inc. for violations of the State Water Control Law and applicable regulations at the Four Winds Campground Sewage Treatment Plant located in Caroline County, Virginia.  The State Water Control Board proposes to issue a consent order to resolve violations associated with the Four Winds Campground Sewage Treatment Plant. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Stephanie Bellotti will accept comments by email at stephanie.bellotti@deq.virginia.gov or postal mail at Department of Environmental Quality, Northern Regional Office, 13901 Crown Court, Woodbridge, VA 22193, from May 2, 2017, through June 1, 2017.

Proposed Enforcement Action for Larry T. Waltrip

An enforcement action has been proposed for Larry T. Waltrip for violations of the State Water Control Law in Williamsburg, Virginia. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Jennifer Coleman, Esq. will accept comments by email at jennifer.coleman@deq.virginia.gov, FAX at (757) 518-2009, or postal mail at Department of Environmental Quality, Tidewater Regional Office, 5636 Southern Boulevard, Virginia Beach, VA 23462, from May 1, 2017, to May 31, 2017.

VIRGINIA WORKERS' COMPENSATION COMMISSION

Public Comment on Proposed Medical Fee Schedules and Ground Rules

The Virginia Workers' Compensation Commission is accepting public comment on the proposed Medical Fee Schedules and Ground Rules, which establish the maximum fees for fee scheduled medical services rendered to injured workers pursuant to the Virginia Workers' Compensation Act (Title 65.2 of the Code of Virginia).

The proposed Fee Schedules may be accessed at http://www.workcomp.virginia.gov/content/virginia-medical-fee-schedules. The Proposed Ground Rules may be accessed at http://www.workcomp.virginia.gov/content
/virginia-medical-fee-schedules-ground-rules
.

Persons wishing to provide written comment are encouraged to do so electronically using the following link: http://www.workcomp.virginia.gov/content/Medical-Fee-Schedule-Special-Notice.

Written comments may also be submitted via email to drema.thompson@workcom.virginia.gov or by postal mail to Drema Thompson, using the contact information at the end of this notice. Written comments will be accepted through May 10, 2017.

In addition, the Commission will hold a public hearing on the proposed Fee Schedules and Ground Rules on May 23, 2017, at 8:30 a.m. in Courtroom A at the Virginia Workers' Compensation Commission, Main Headquarters, 1000 DMV Drive, Richmond, VA 23220. All visitors to the commission may be required to present photo identification to enter commission facilities.

Contact Information: Drema Thompson, Medical Fee Services Manager, Virginia Workers' Compensation Commission, 1000 DMV Drive, Richmond, VA 23220, telephone (804) 774-4165, FAX (804) 823-6932, or email drema.thompson@workcomp.virginia.gov.

VIRGINIA CODE COMMISSION

Notice to State Agencies

Contact Information through Thursday, June 15, 2017: Mailing Address: Virginia Code Commission, General Assembly Building, 201 North 9th Street, 2nd Floor, Richmond, VA 23219; Telephone: Voice (804) 786-3591; Email: varegs@dls.virginia.gov.

New Contact Information beginning Monday, June 19, 2017: Mailing Address: Virginia Code Commission, Pocahontas Building, 900 East Main Street, 11th Floor, Richmond, VA 23219, Telephone: Voice will be available at a later date.

Meeting Notices: Section 2.2-3707 C of the Code of Virginia requires state agencies to post meeting notices on their websites and on the Commonwealth Calendar at https://commonwealthcalendar.virginia.gov.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed: A table listing regulation sections that have been amended, added, or repealed in the Virginia Register of Regulations since the regulations were originally published or last supplemented in the print version of the Virginia Administrative Code is available at http://register.dls.virginia.gov/documents/cumultab.pdf.

Filing Material for Publication in the Virginia Register of Regulations: Agencies use the Regulation Information System (RIS) to file regulations and related items for publication in the Virginia Register of Regulations. The Registrar's office works closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.

ERRATA

DEPARTMENT OF LAW

Title of Regulation: 1VAC45-20. Regulations Regarding the Virginia Human Rights Act.

Publication: 33:15 VA.R. 1871-1875 March 20, 2017.

Correction to Fast-Track Regulation:

Page 1873, in 1VAC45-20-60 B 3, after "Management;" insert "and"

in 1VAC45-20-60 B 4, after "Disabilities" delete "Virginia Office of Protection and Advocacy" and strike "; and"

in 1VAC45-20-60 B 5, strike "5."

VA.R. Doc. No. R17-3944; Filed April 13, 2017, 2:22 p.m.