TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS
STATE CORPORATION COMMISSION
Final Regulation
REGISTRAR'S NOTICE: The State Corporation
Commission is exempt 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.
Title of Regulation:
10VAC5-161. Mortgage Loan Originators (adding 10VAC5-161-10 through
10VAC5-161-60).
Statutory Authority: §§ 6.1-431.21 and
12.1-13 of the Code of Virginia.
Effective Date: August 17, 2009.
Agency Contact: Nicholas C. Kyrus, Deputy
Commissioner, State Corporation Commission, Bureau of Insurance, P. O. Box
1197, Richmond, VA 23218, telephone (804) 371-9690, FAX (804) 371-9416, or
email nick.kyrus@scc.virginia.gov.
Summary:
The regulations implement
the provisions of Chapters 273 and 453 of the 2009 Acts of Assembly relating to
licensure of individual mortgage loan originators. The regulations specify the
individuals subject to licensure; prescribe the conditions, fees, and procedure
for licensing; prescribe the conditions, fees, and procedure for annual license
renewal; establish the amount of surety bond necessary for licensing; and
specify the reports and notices required in connection with licensing.
Modifications to the regulations
since initial publication of the proposed regulations include (i) making
amendments to 10VAC5-161-20 A 3 to conform to other parts of the regulations,
(ii) increasing the time period under 10VAC5-161-60 C within which certain
notices must be given, and (iii) other clarifying and technical changes.
AT RICHMOND, JULY 17, 2009
Ex Parte: In re: Proposed Rules Governing
Licensing of Mortgage Loan Originators
CASE
NO. BFI-2009-00290
ORDER ADOPTING A REGULATION
By Order entered
herein on May 6, 2009, the State Corporation Commission
("Commission") directed that notice be given of proposed adoption of
a regulation pursuant to § 6.1-431.20 of the Code of Virginia. Notice of
the proposed regulation was published in the Virginia Register of Regulations
on May 25, 2009, and the proposed regulation was posted on the
Commission's website. Interested parties were afforded the opportunity to
file written or electronic comments in favor of or against the proposal on or
before June 22, 2009. The Commissioner of Financial Institutions
("Commissioner") mailed copies of the aforesaid Order and the
proposed regulation to all licensees under Chapter 16 of Title 6.1 of
the Code of Virginia and other interested persons. Four written or electronic
comments were filed including written comments filed by counsel for the
Virginia Mortgage Lenders Association ("VMLA") and by counsel for the
Virginia Housing Development Authority ("VHDA").
A hearing in
this case was convened before the Commission in its courtroom at 10:00 a.m.
on July 9, 2009. Counsel for the Commissioner appeared, presented argument
in support of the proposed regulation, and presented a revised version of the
proposed regulation to the Commission which included certain revisions
suggested by comments filed in the case. Counsel for the VMLA appeared and
presented argument, and a representative of Republic Mortgage Insurance Company
also commented, in support of written comments filed by VMLA.
THE COMMISSION,
having considered the record, the proposed regulation with modifications
submitted by counsel for the Commissioner, and argument and testimony heard in
the case, concludes that the proposed regulation, with modifications, will
promote the efficient administration of Chapter 16.1 of Title 6.1 of
the Code of Virginia and should be adopted. The modifications include
(1) substitution of new subdivision 10 VAC 5‑161‑20 A 3
for that subsection as originally proposed, with conforming changes to other
parts of the regulation, (2) increasing the time period under
10 VAC 5‑161‑60 C within which certain notices must
be given, and (3) other clarifying and technical changes.
THEREFORE IT IS
ORDERED THAT:
(1) The
proposed regulation, as modified, attached hereto is adopted effective
August 17, 2009.
(2) The
Commission's Division of Information Resources shall send a copy of this Order,
including a copy of the attached regulation, to the Virginia Registrar of
Regulations for publication in the Virginia Register of Regulations.
(3) This
Order and the attached regulation shall be posted on the Commission's website
at http://www.scc.virginia.gov/case.
(4) This
case is dismissed from the Commission's docket of active cases.
AN ATTESTED COPY
hereof shall be sent by the Clerk of the Commission to the Commissioner of
Financial Institutions, who shall forthwith mail a copy of this Order and the
attached regulation to all licensed mortgage lenders and brokers and such other
interested persons as he may designate.
CHAPTER 161
MORTGAGE LOAN ORIGINATORS
10VAC5-161-10. Definitions.
The following
words and terms when used in this chapter shall have the following meanings
unless the context clearly indicates otherwise:
"Bureau"
means the State Corporation Commission's Bureau of Financial Institutions.
"Licensee,"
"mortgage loan originator," "person," "registered
mortgage loan originator," "registry," "residential
mortgage loan," and "unique identifier" shall have the meanings
ascribed to them in § 6.1-431.1 of the Code of Virginia.
10VAC5-161-20. Individuals subject to licensure.
A. [ In order to
act as a mortgage loan originator on On ] or after July
1, 2010, the following individuals must obtain a license:
1. Individuals acting as
mortgage loan originators who are employees or exclusive agents of persons
licensed under Chapter 16 (§ 6.1-408 et seq.) of Title 6.1 of the Code of
Virginia;
2. Individuals, other than
registered mortgage loan originators, acting as mortgage loan originators who
are employees or exclusive agents of persons exempt from licensure under Chapter
16 (§ 6.1-408 et seq.) of Title 6.1 of the Code of Virginia; and
3. Individuals acting as [ independent
contractors performing residential mortgage loan processing and underwriting
activities mortgage loan originators who are not employees or
exclusive agents of either persons licensed under Chapter 16 (§ 6.1-408 et
seq.) of Title 6.1 of the Code of Virginia or exempt from such licensure ].
B.
Individuals who are coemployees of professional employer organizations or
staffing services shall be deemed to be employees of the client company.
10VAC5-161-30. License application procedure.
A.
Applications for a mortgage loan originator license shall be made through the
registry in accordance with instructions from the registry and the bureau. In
connection with such applications, the individual seeking a license shall
furnish the registry all required information concerning his identity, personal
history and experience, and fingerprints, and shall pay or cause to be paid
through the registry required registry fees and an application fee of $150.
B. Within
five days after [ registration submitting an application for a
mortgage loan originator license ] with the registry, a bond with
corporate surety on a commission-approved form and in an amount conforming to 10VAC5-161-50
shall be filed with the bureau, together with such further information as the
bureau may require concerning the applicant's qualifications for licensure. In
the case of individuals described in 10VAC5-161-20 A 1 and 2, the bond shall be
filed [ (or documentation shall be filed indicating that the
applicant is covered by a bond previously filed) ] by the person
for whom the applicant will perform mortgage loan origination services. Filing
of a bond under this subsection by a person licensed under Chapter 16
(§ 6.1-408 et seq.) of Title 6.1 of the Code of Virginia shall constitute
compliance with § 6.1-413 of the Code of Virginia if the bond is in the
amount required under § 6.1-413 of the Code of Virginia. In the case of
individuals described in 10VAC5-161-20 A 3, the bond shall be filed by the
individual applicant. In either case the person filing the bond shall, unless
such information is contained in a prior filing under Chapter 16 of Title 6.1
of the Code of Virginia, simultaneously provide information to the bureau
concerning his or its dollar volume of residential mortgage loans originated
[ , processed, or underwritten ] during the
immediately preceding calendar year.
C. If the
bureau requests information to complete a deficient application and the
information is not received within 60 days of the bureau's 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.
10VAC5-161-40. Conditions of licensure and renewals.
A. A mortgage
loan originator license will be granted only if the individual meets the
following conditions:
1. Application is made in
accordance with 10VAC5-161-30;
2. The individual has
obtained a unique identifier from the registry;
3. [ The individual
has never had a mortgage loan originator license revoked by any governmental
authority;
3. 4. ] The individual's
criminal history record contains no disqualifying convictions under § 6.1-431.8
of the Code of Virginia;
[ 4.
5. ] The individual has completed the prelicensing education
prescribed by § 6.1-431.9 of the Code of Virginia [ . ; ]
[ 5.
6. ] The individual has achieved an acceptable score on the
qualified written test prescribed by § 6.1-431.10 of the Code of Virginia; and
[ 6.
7. ] The individual possesses the financial responsibility,
character, and general fitness required for licensure [ by §
6.1-431.7 of the Code of Virginia ].
B. Licenses shall
be subject to renewal each calendar year unless granted within 90 days before
the end of the preceding calendar year. In order to renew a license, a licensee
must
[ apply for renewal renew ] through the
registry on or before the end of the current license year in accordance with
instructions from the registry and the bureau. The licensee shall furnish the
registry and the bureau all required information and documentation and shall
pay or cause to be paid through the registry all required registry fees and a
license renewal fee of $100.
C. A mortgage
loan originator license will be renewed only if the licensee meets the
following conditions:
1. License renewal
application is made in accordance with subsection B of this section;
2. The licensee continues to
meet the conditions for initial licensure; and
3. The licensee has obtained
the continuing education prescribed in § 6.1-431.11 of the Code of Virginia.
D. If a
licensee fails to timely meet the conditions specified in subsection C of this section,
but meets such conditions before March 1 of a renewal year and pays a
reinstatement fee of $30, his license will be reinstated.
10VAC5-161-50. Surety bond amount.
The surety
bond amount required to be filed and maintained by or on behalf of the licensee
shall be set and adjusted as necessary annually by the bureau in accordance
with the following scale [ , ] based upon residential mortgage loans
originated [ , processed or underwritten, as the case may be, ]
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 |
10VAC5-161-60. Required reports and notices.
A. On or
before March 1 of each year, each person for whom an individual described in
10VAC5-161-20 A 1 or 2 performs services shall file an annual report with the
bureau stating the amount of residential mortgage loans made or brokered during
the preceding calendar year, identifying all licensees performing services for
that person, and providing such additional information as the bureau may
require. Timely filing of the annual report required by Chapter 16 (§ 6.1-408
et seq.) of Title 6.1 of the Code of Virginia by a person licensed under that
chapter shall constitute compliance with this subsection by that person if the
annual report contains the information specified in this subsection.
B. On or
before March 1 of each year, each licensee who is an individual described in
10VAC5-161-20 A 3 shall file an annual report with the bureau stating the
amount of residential mortgage loans [ processed or underwritten
originated during the preceding calendar year ] and providing such
additional information as the bureau may require.
C. Each
licensee shall give notice to the bureau, either directly for a notice under
subdivision 1 of this subsection or through the registry for other notices
required by this section, within [ five 15 ] days after
the occurrence of any of the following events:
1. Cessation of activities
for which a license is required, upon receipt of which notice the individual's
license will be placed in inactive status and the individual shall not engage
in activities requiring licensure under this chapter until such time as the
individual meets the description in 10VAC5-161-20 A 1, 2, or 3 and other
provisions of this chapter;
2. Termination of employment
or exclusive agency as a mortgage loan originator for a person licensed or
exempt from licensing under Chapter 16 of Title 6.1 of the Code of Virginia,
upon receipt of which notice the individual's license will be placed in
inactive status and the individual shall not engage in activities requiring
licensure under this chapter until such time as the individual meets the
description in 10VAC5-161-20 A 1, 2, or 3 and other provisions of this chapter;
3. Commencement of
employment or exclusive agency as a mortgage loan originator for a new person
licensed or exempt from licensing under Chapter 16 of Title 6.1 of the Code of
Virginia, in which event the new person shall comply with the surety bond
filing requirements of 10VAC5-161-30 B and 10VAC5-161-50; or
4. Surrender of a license,
in which case the licensee shall mail his license to the bureau immediately
upon giving notice of surrender of the license.
VA.R. Doc. No. R09-1904;
Filed July 20, 2009, 9:16 a.m.