File No. 34907

This rule was published in the July 1, 2011, issue (Vol. 2011, No. 13) of the Utah State Bulletin.

Commerce, Real Estate

Rule R162-2c

Utah Residential Mortgage Practices and Licensing Rules

Notice of Proposed Rule


DAR File No.: 34907
Filed: 06/08/2011 08:57:43 AM


Purpose of the rule or reason for the change:

The purpose of this amendment is to implement new statutory requirement regarding the duty of a mortgage professional to safeguard personal information of consumers.

Summary of the rule or change:

In Section R162-2c-102, definitions are provided for the terms "personal information" and "safeguard". In Section R162-2c-301, language is added to clarify that a mortgage entity must safeguard records that it is required to keep, and must destroy all personal information at the end of the retention period.

State statutory or constitutional authorization for this rule:

  • Subsection 61-2c-302(2)
  • Subsection 61-2c-103(3)

Anticipated cost or savings to:

the state budget:

These amendments are for clarification. They do not require the state to implement or enforce anything new. Therefore, no impact to the state budget is anticipated.

local governments:

Local government is required neither to comply with, nor to enforce, these mortgage rules. No fiscal impact to local government is anticipated.

small businesses:

Small businesses that are licensed as mortgage entities will incur costs to ensure that retained records are not subject to unauthorized access, use, disclosure, or dissemination. They will also incur costs to ensure that personal information is shredded, erased, or otherwise made indecipherable at the end of the retention period. These costs were considered by the Legislature in passing H.B. 91 (2011 General Session), where the requirement for mortgage entities to safeguard records was imposed. (DAR NOTE: H.B. 91 (2011) was effective 05/10/2011.)

persons other than small businesses, businesses, or local governmental entities:

These amendments apply strictly to businesses that are licensed as mortgage entities. No other persons will be affected, financially or otherwise.

Compliance costs for affected persons:

To comply, affected persons will pay the costs to secure mortgage records and to destroy personal information. These costs will vary depending on the method of security and destruction that is chosen.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule filing implements new statutory requirements for safeguarding records in the possession of licensees. No fiscal impact to businesses is anticipated beyond those already addressed by the Legislature in passing the statutory amendments.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Real Estate
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

  • Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, or by Internet E-mail at

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:


This rule may become effective on:


Authorized by:

Deanna Sabey, Director


R162. Commerce, Real Estate.

R162-2c. Utah Residential Mortgage Practices and Licensing Rules.

R162-2c-102. Definitions.

(1) The acronym "ALM" stands for associate lending manager.

(2) "Branch lending manager" means the person assigned to oversee a branch office. As of November 1, 2010:

(a) a branch office registering in the nationwide database or renewing its registration shall identify an ALM to serve as the branch lending manager; and

(b) the individual identified by the branch office must be qualified for licensure as a PLM.

(3) The acronym "BLM" stands for branch lending manager.

(4) "Certification" means authorization from the division to:

(a) establish and operate a school that provides courses for Utah-specific prelicensing education or continuing education; or

(b) function as an instructor for courses approved for Utah-specific prelicensing education or continuing education.

(5) "Credit hour" means 50 minutes of instruction within a 60-minute time period, allowing for a ten-minute break.

(6) "Control person" means any individual identified by an entity within the nationwide database as being primarily responsible for directing the management or policies of a company and may be:

(a) a manager;

(b) a managing partner;

(c) a director;

(d) an executive officer; or

(e) an individual who performs a function similar to an individual listed in this Subsection (6).

(7) "Individual applicant" means any individual who applies to obtain or renew a license to practice as a mortgage loan originator, principal lending manager, branch lending manager, or associate lending manager.

(8) "Instruction method" means the forum through which the instructor and student interact and may be:

(a) classroom: traditional instruction where instructors and students are located in the same physical location;

(b) classroom equivalent: an instructor-led course where the instructor and students may be in two or more physical locations; or

(c) online: instructor and student interact through an online classroom.

(9) "Instructor applicant" means any individual who applies to obtain or renew certification as an instructor of Utah-specific pre-licensing or continuing education courses.

(10) "Mortgage entity" means any entity that:

(a) engages in the business of residential mortgage lending;

(b) is required to be licensed under Section 61-2c-201; and

(c) operates under a business name or other trade name that is registered with the Division of Corporations and Commercial Code.

(11) "Nationwide database" means the Nationwide Mortgage Licensing System and Registry.

(12) "Other trade name" means any assumed business name under which an entity does business.

(13) "Personal information" means a person's first name or first initial and last name, combined with any one or more of the following data elements relating to that person when either the name or data element is unencrypted or not protected by another method that renders the data unreadable or unusable:

(a) Social Security number;

(b) financial account number, or credit or debit card number; or

(c) driver license number or state identification card number.

[(13)](14) The acronym "PLM" stands for principal lending manager.

[(14)](15) "Qualifying individual" means the PLM, managing principal, or qualified person who is identified on the MU1 form in the nationwide database as the person in charge of an entity.

[(15)](16) As used in Subsection R162-2c-201, "relevant information" includes:

(a) court dockets;

(b) charging documents;

(c) orders;

(d) consent agreements; and

(e) any other information the division may require.

[(16)](17) "Restricted license" means any license that is issued subject to a definite period of suspension or terms of probation.

(18) "Safeguard" means to prevent unauthorized access, use, disclosure, or dissemination.

[(17)](19) "School" means

(a) any college or university accredited by a regional accrediting agency that is recognized by the United States Department of Education;

(b) any community college;

(c) any vocational-technical school;

(d) any state or federal agency or commission;

(e) any nationally recognized mortgage organization that has been approved by the commission;

(f) any Utah mortgage organization that has been approved by the commission;

(g) any local mortgage organization that has been approved by the commission; or

(h) any proprietary mortgage education school that has been approved by the commission.

[(18)](20) "School applicant" means a director or owner of a school who applies to obtain or renew a school's certification.


R162-2c-302. Requirements for Record Retention and Disposal.

(1) Record Retention.

(a) An entity licensed under the Utah Residential Mortgage Practices Act shall maintain and safeguard for the period set forth in Section 61-2c-302 the following records:

(i) application forms;

(ii) disclosure forms;

(iii) truth-in-lending forms;

(iv) credit reports and the explanations therefor;

(v) conversation logs;

(vi) verifications of employment, paycheck stubs, and tax returns;

(vii) proof of legal residency, if applicable;

(viii) appraisals, appraisal addenda, and records of communications between the appraiser and the registrant, licensee, and lender;

(ix) underwriter denials;

(x) notices of adverse action;

(xi) loan approval; and

(xii) all other records required by underwriters involved with the transaction or provided to a lender.

(b) Records may be maintained electronically if the storage system complies with Title 46 Chapter 04, Utah Uniform Electronic Transactions Act.

(c) A licensed entity shall make all records available to the division pursuant to Section 61-2c-302(3).

(d) An individual who terminates sponsorship with an entity shall turn over to the entity any records in the individual's possession at the time of termination.

(2) Record Disposal. A person who disposes of records at the end of the retention period shall [take reasonable measures to safeguard personal information as that term is defined in Section 13-44-102]destroy personal information by shredding, erasing, or otherwise making the information indecipherable.

(3) Responsible Party.

(a) If a licensed entity is actively engaged in the business of residential mortgage loans, the PLM is responsible for proper retention, maintenance, safeguarding, and disposal of records.

(b) If a licensed entity ceases doing business in Utah, the control person(s) as of its last day of operation are responsible for proper retention, maintenance, safeguarding, and disposal of records.


KEY: residential mortgage, loan origination, licensing, enforcement

Date of Enactment or Last Substantive Amendment: [January 8, ]2011

Authorizing, and Implemented or Interpreted Law: 61-2c-103(3); 61-2c-302(2)



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For questions regarding the content or application of this rule, please contact Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, or by Internet E-mail at