DAR File No. 37949

Commerce, Real Estate

Section R162-2c-204

License Renewal, Reinstatement, and Reapplication

Notice of Proposed Rule

(Amendment)

DAR File No.: 37949
Filed: 08/30/2013 12:12:42 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to require fingerprint background reports and credit reports as a condition of renewal beginning 11/01/2015 and every five years thereafter.

Summary of the rule or change:

In accordance with national licensing standards, mortgage licensees will be required to provide a fingerprint background report and a credit report in order to apply for renewal during the renewal period beginning 11/01/2015 and every fifth year following that renewal period.

State statutory or constitutional authorization for this rule:

• Subsection 61-2c-103(3)
• Section 61-2c-205
• Section 61-2c-203

Anticipated cost or savings to:

the state budget:

The state has the budget and staff to process license renewal applications. In the years where background reports and credit reports are generated, processing times are likely to increase, and the Division might find it necessary to bring disciplinary action against any licensee who is found to have violated ongoing criminal and financial disclosure requirements. However, it is not anticipated that additional staff or resources will be required.

local governments:

Local government is not required to comply with or enforce the mortgage license renewal rules. No fiscal impact to local government is anticipated.

small businesses:

A small business that chooses to pay the license renewal fees for its sponsored mortgage licensees in affected years will have increased costs associated with the fingerprinting fee and the credit report fee. Currently, the total of both fees is $51.25. These fees are set and collected by the Nationwide Mortgage Licensing System. They are outside the control of the Division.

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

An individual who renews a license in affected years will have increased costs associated with the fingerprinting fee and the credit report fee. Currently, the total of both fees is $51.25. These fees are set and collected by the Nationwide Mortgage Licensing System. They are outside the control of the Division.

Compliance costs for affected persons:

To comply in affected years, an affected person will pay $51.25 more in renewal fees than would be required in an unaffected year.

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

As stated in the rule analysis, the proposed amendment will not have any impact to a business unless the business chooses to pay license renewal fees for its sponsored mortgage licensees. A business that chooses to do so will, beginning in 2015 and every fifth year thereafter, pay an additional amount for each license renewal. Currently, the additional amount totals $51.25.

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:

• Justin Barney at the above address, by phone at 801-530-6603, by FAX at , or by Internet E-mail at justinbarney@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:

10/15/2013

This rule may become effective on:

10/22/2013

Authorized by:

Jonathan Stewart, Director

R162. Commerce, Real Estate.

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

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

(1) Deadlines.

(a) License renewal.

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

(ii)(A) 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 (1)(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 applying to renew or reinstate a license shall evidence that they maintain good moral character, honesty, integrity, and truthfulness as required for initial licensure.

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

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

[(B)](II) 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.

(B) A licensee shall submit a fingerprint background report in order to renew a license:

(A) in the renewal period beginning November 1, 2015; and

(B) every fifth year following the renewal period beginning November 1, 2015.

(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.

(c) Financial responsibility. A licensee shall submit a credit report in order to renew a license:

(i) in the renewal period beginning November 1, 2015; and

(ii) every fifth year following the renewal period beginning November 1, 2015.

(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.

(3) Education requirements for renewal, reinstatement, and reapplication.

(a) License renewal.

(i) Except as provided in this Subsection (3)(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, the following courses, none of which may be duplicative of courses taken in the same or preceding renewal period:

(A) beginning with the 2014 renewal, a division-approved course on Utah law, completed annually; and

(B) eight hours of continuing education approved through the nationwide database, as follows:

(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 undefined instruction on mortgage origination.

(ii) An individual who completes the mortgage loan originator national pre-licensing education between January 1 and December 31 of the calendar year is exempt from continuing education, including the division-approved course on Utah law specified in Subsection (3)(a)(i)(A), for the renewal period ending December 31 of the same calendar year.

(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:

(i) the division-approved course on Utah law specified in Subsection (3)(a)(i)(A); and

(ii) eight hours of continuing education:

(A) in topics listed in this Subsection (3)(a)(i)(B); and

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

(II) 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 division-approved course on Utah law and continuing education requirement outlined in this Subsection (3)(b).

(ii) To reapply for licensure after the deadline described in this Subsection (3)(c)(i) passes, an individual shall:

(A) complete eight hours of continuing education:

(I) in topics listed in this Subsection (3)(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 15-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 lending manager pre-licensing education and associated examination, if the terminated license was a lending manager license; and

(C) complete the division-approved course on Utah law specified in Subsection (3)(a)(i)(A).

(4) Renewal, reinstatement, and reapplication procedures.

(a) An individual licensee shall:

(i) evidence having completed education as required by Subsection R162-2c-204(3);

(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; or

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

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

(b) 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 fees, including all applicable late fees, required by the division and by the nationwide database.

 

KEY: loan origination, licensing, enforcement, residential mortgage

Date of Enactment or Last Substantive Amendment: [August 7, ]2013

Authorizing, and Implemented or Interpreted Law: 61-2c-103(3); 61-2c-402(4)(a)