Commerce, Real Estate

Section R162-2c-204

License Renewal

Notice of Proposed Rule

(Amendment)

DAR File No.: 35134
Filed: 08/11/2011 11:58:30 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to clarify the procedures and requirements for renewing and reinstating a license, and for reapplying after a license has been terminated due to failure to renew or reinstate.

Summary of the rule or change:

The deadlines for license renewal and reinstatement are clarified. An exemption is provided under which a person who obtains a new license after November 1 of the calendar year is not required to renew it within the same calendar year. The educational requirements for license renewal, reinstatement, and reapplication are delineated. The procedures for license renewal, reinstatement, and reapplication are amended to comport with recent decisions and policies from the Nationwide Mortgage Licensing System (NMLS).

State statutory or constitutional authorization for this rule:

• Subsection 61-2c-103(3)

Anticipated cost or savings to:

the state budget:

The Division already has the staff and processes in place to process requests for license renewal, reinstatement, and reapplication. While this amendment clarifies the associated deadlines, educational requirements, and procedures, it does not create any new policies that the Division must administer or enforce. Therefore, no impact to the state budget is anticipated.

local governments:

Local governments are neither required to comply with nor enforce the mortgage licensing rules. Therefore, no fiscal impact to local government is anticipated.

small businesses:

Small mortgage businesses are already required to license with the Division on a yearly basis. This filing clarifies the procedures and requirements for renewal, reinstatement, and reapplication, but does not impose any new requirements--such as creating reports or providing additional records--that would result in a cost to small businesses. Therefore, no fiscal impact to small businesses is anticipated.

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

Licensed mortgage originators are already required to license with the Division on a yearly basis. This filing clarifies the procedures and requirements for renewal, reinstatement, and reapplication, but does not impose any new requirements--such as taking additional education--that would result in a cost to an affected person. Therefore, no fiscal impact to small businesses is anticipated.

Compliance costs for affected persons:

To comply, an affected person must follow the procedures and meet the requirements outlined, none of which involves a new fee to the Division or incidental costs, such as paying for additional education. Therefore, no compliance costs to affected persons are anticipated.

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

This rule filing clarifies deadlines, education requirements and procedures for license renewal, reinstatement and reapplication and continues to bring the Division's procedures in line with the national standards. No fiscal impact to businesses is anticipated.

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:

Commerce
Real Estate
HEBER M WELLS BLDG
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 jjonsson@utah.gov

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:

10/03/2011

This rule may become effective on:

10/10/2011

Authorized by:

Thad LeVar, Deputy Director

R162. Commerce, Real Estate.

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

R162-2c-204. License Renewal, Reinstatement, and Reapplication .

(1) [Renewal period]Deadlines.

(a) License renewal.

(i) To renew on time, a[Any] person who holds an active license as of October 31 shall renew by December 31 of the same calendar year.

[(b)](ii)(A) [Any]A person who obtains a license on or after November 1 shall renew by December 31 of the following calendar year.

(B) A person who is not required to renew in the first year of licensure pursuant to this Subsection (a)(ii)(A) shall nevertheless complete, prior to December 31 of the first year of licensure, continuing education as required for renewal pursuant to Subsection R162-2c-204(3)(a) if the individual did not complete the mortgage loan originator national pre-licensing education during the calendar year.

(b) Reinstatement. The deadline to reinstate a license that expires on December 31 is February 28 of the year following the date of expiration.

(c) After the reinstatement deadline passes, a person shall reapply for licensure pursuant to Subsection R162-2c-204(3)(c).

(2) Qualification for renewal.

(a) Character.

(i) Individuals [and control persons] applying [for a renewed]to renew or reinstate a license shall evidence that they maintain good moral character, honesty, integrity, and truthfulness as required for initial licensure.

(ii) An individual applying for a renewed license may not have:

(A) a felony that resulted in a conviction or plea agreement during the renewal period; or

(B) a finding of fraud, misrepresentation, or deceit entered against the applicant by a court of competent jurisdiction or a government agency and occurring within the renewal period.

(iii) The division may deny an individual applicant a renewed license upon evidence, as outlined in Subsection R162-2c-202(1)(b), of circumstances that reflect negatively on the applicant's character, honesty, integrity, or truthfulness and that:

(A) occurred during the renewal period; or

(B) were not disclosed and considered in a previous application or renewal.

(iv) The division may deny an entity applicant a renewed license upon evidence that a control person fails to meet the standards for character, honesty, integrity, and truthfulness required of individual applicants.

(b) Competency.

(i) Individual applicants and control persons shall evidence that they maintain the competency required for initial licensure.

(ii) The division may deny an individual applicant a renewed license upon evidence, as outlined in Subsection R162-2c-202(2), of circumstances that reflect negatively on the applicant's competency and that:

(A) occurred during the renewal period; or

(B) were not disclosed and considered in a previous application or renewal.

(iii) The division may deny an entity applicant a renewed license upon evidence that a control person fails to meet the standard for competency required of individual applicants.

[(c)](3) [Continuing education]Education requirements for renewal, reinstatement, and reapplication.

[(i)](a) [Beginning January 1, 2011,]License renewal.

(i) Except as provided in this Subsection (a)(ii), an individual who holds an active license as of January 1 of the calendar year shall complete , within the calendar year in which the individual's license is scheduled to expire, eight hours of [non-duplicative] continuing education:

(A) approved through the nationwide database;[ and]

(B) consisting of:

(I) three hours federal laws and regulations;

(II) two hours ethics (fraud, consumer protection, fair lending issues);

(III) two hours training related to lending standards for non-traditional mortgage products; and

(IV) one hour [elective]undefined instruction on mortgage origination; and[.]

(C) non-duplicative of courses taken in the same or preceding renewal period.

(ii) An individual who completes the mortgage loan originator national pre-licensing education [and obtains the associated license] between January 1 and December 31 of the calendar year is exempt from continuing education for the renewal period ending December 31 of the same calendar year.

[ (iii) Continuing education courses shall be completed within the renewal period.

(iv) Continuing education courses shall be non-duplicative of courses taken in the preceding renewal period.

] (b) Reinstatement. To reinstate an expired mortgage loan originator or lending manager license, an individual shall, by February 28 of the calendar year following the date on which the license expired, complete eight hours of continuing education:

(i) in topics listed in this Subsection (a)(i); and

(ii)(A) approved by the nationwide database as "continuing education" if completed prior to the date of expiration; or

(B) approved by the nationwide database as "late continuing education" if completed between the date of expiration and the deadline for reinstatement.

(c) Reapplication.

(i) To reapply for licensure after the reinstatement deadline passes and by or before December 31 of the calendar year following the date on which the license expired, an individual shall complete the continuing education requirement outlined in this Subsection (b).

(ii) To reapply for licensure after the deadline described in this Subsection (c)(i) passes, an individual shall:

(A) complete eight hours of continuing education:

(I) in topics listed in this Subsection (a)(i); and

(II) approved by the nationwide database as "late continuing education"; and

(B) within the 12-month period preceding the date of reapplication, take and pass:

(I) the 40-hour Utah-specific mortgage loan originator pre-licensing education, if the terminated license was a mortgage loan originator license; or

(II) the 40-hour Utah-specific principal lending manager pre-licensing education and associated examination, if the terminated license was a lending manager license.

[ (3) Renewal procedures for the renewal period ending December 31, 2010. In order to renew by December 31, 2010:

(a) an individual licensee shall:

(i) evidence having completed a minimum of:

(A) 20 hours of prelicensing education as approved by:

(I) the division; or

(II) the nationwide database; or

(B) 28 hours of division-approved continuing education in the two previous renewal cycles;

(ii) evidence having taken and passed a Utah licensing examination as approved by the commission;

(iii) register in the nationwide database by May 31, 2010;

(iv)(A) evidence having completed, since the date of last renewal, continuing education approved by either the division or the nationwide database, non-duplicative of any hours required to satisfy the registration education requirement under this Subsection (3)(a)(i), and:

(I) totaling 14 hours if licensed as of October 1, 2009; or

(II) totaling eight hours if licensed on or after October 1, 2009; or

(B) if licensed as a mortgage loan originator, evidence having completed, since January 1, 2010, all requirements to obtain an ALM or a PLM license, pursuant to Subsection R162-2c-201;

(v) take and pass the national component of the licensing examination as approved by the nationwide database;

(vi) submit to the division the jurisdiction-specific documents and information required by the nationwide database; and

(vii) submit through the nationwide database:

(A) a request for renewal; and

(B) all fees as required by the division and by the nationwide database.

(b) an entity licensee shall:

(i) register in the nationwide database by May 31, 2010;

(ii) submit to the division the jurisdiction-specific documents and information required by the nationwide database;

(iii) submit through the nationwide database a request for renewal;

(iv) renew the registration of any branch office or other trade name registered under the license of the entity; and

(v) pay through the nationwide database all renewal fees required by the division and by the nationwide database.

] (4) Renewal , reinstatement, and reapplication procedures .[ for the renewal period ending December 31, 2011. In order to renew by December 31, 2011,]

(a) [an]An individual licensee shall:

(i) evidence having completed[, since the date of last renewal, continuing] education[:

(A)] as required by Subsection [(2)(c)]R162-2c-204(3);

[ (B) non-duplicative of any continuing education hours taken in the previous renewal cycle; and

(C) approved by the nationwide database;

] (ii) submit to the division the jurisdiction-specific documents and information required by the nationwide database; and

(iii) submit through the nationwide database:

(A) a request for renewal , if renewing or reinstating a license;[ and]or

(B) a request for a new license, if reapplying; and

[(B)](iv) pay all fees as required by the division and by the nationwide database , including all applicable late fees.

(b) [an]An entity licensee shall:

(i) submit through the nationwide database a request for renewal;

(ii) submit to the division the jurisdiction-specific documents and information required by the nationwide database;

(iii) renew the registration of any branch office or other trade name registered under the entity license; and

(iv) pay through the nationwide database all [renewal] fees , including all applicable late fees, required by the division and by the nationwide database.

[ (5) Reinstatement.

(a) To reinstate an expired license, a person shall, by February 28 of the calendar year following the date on which the license expired:

(i) comply with all requirements for an on-time renewal; and

(ii) pay through the nationwide database all late fees and other fees as required by the division and the nationwide database.

(b) A person may not reinstate a license after February 28. To obtain a license after the reinstatement period described in Subsection (5)(a) expires, a person shall reapply as a new applicant.

]

KEY: residential mortgage, loan origination, license, enforcement

Date of Enactment or Last Substantive Amendment: [May 10, ]2011

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