Commerce, Real Estate

Section R162-2c-102

Definitions

Notice of Proposed Rule

(Amendment)

DAR File No.: 35137
Filed: 08/11/2011 12:02:29 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to provide definitions of certain terms related to license renewal, reinstatement, and reapplication.

Summary of the rule or change:

Definitions are provided for the following terms: "expired license", "lending manager" and "lending manager license", "NMLS", "reapplication" or "reapply", "reinstatement" or "reinstate", and "terminated license".

State statutory or constitutional authorization for this rule:

• Subsection 61-2c-103(3)

Anticipated cost or savings to:

the state budget:

Defining these terms does not create a new program for the Division to administer or a new policy for the Division to 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:

Defining these terms does not impose any new requirements on small mortgage businesses, which are already required to license with the Division on a yearly basis. Therefore, no fiscal impact to small businesses is anticipated.

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

Defining these terms does not impose any new requirements on licensed mortgage originators, who are already required to license with the Division on a yearly basis. Therefore, no fiscal impact to small businesses is anticipated.

Compliance costs for affected persons:

This rule amendment is for definitional purposes only. No compliance is required. Therefore, there are no associated compliance costs for affected persons.

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

This rule filing provides relevant definitions with respect to procedures for license renewal, reinstatement and reapplication. 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 [email protected]

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-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) "Expired license" means a license that is not renewed according to applicable deadlines, but is eligible to be reinstated.

[(7)](8) "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)](9) "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)](10) "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)](11) "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.

(12)(a) "Lending manager" means a person who holds a license as a principal lending manager, associate lending manager, or branch lending manager.

(b) "Lending manager license" includes:

(i) a principal lending manager license;

(ii) an associate lending manager license; and

(iii) a branch lending manager license.

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

(14) The acronym "NMLS" stands for Nationwide Mortgage Licensing System.

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

[(13)](16) "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.

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

[(15)](18) "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.

(19) "Reapplication" or "reapply" refers to a request for licensure that is submitted after the deadline for reinstatement expires and the license has become terminated.

(20) "Reinstatement" or "reinstate" refers to a request for a licensure that is submitted after the applicable December 31 license expiration date passes and by or before February 28 of the following calendar year.

[(16)](21) 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.

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

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

[(19)](24) "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.

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

(26) "Terminated license" means a license that was not renewed or reinstated according to applicable deadlines.

 

KEY: residential mortgage, loan origination, licensing, enforcement

Date of Enactment or Last Substantive Amendment: 2011

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