DAR File No. 44011

Commerce, Real Estate

Section R162-2c-204

License Renewal, Reinstatement, and Reapplication

Notice of Proposed Rule

(Amendment)

DAR File No.: 44011
Filed: 08/22/2019 04:12:27 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The first purpose of these proposed rule amendments is to adjust the timing of the required continuing education (CE) course for mortgage loan originators. Adjusting the timing will allow the nationwide licensing system to automatically track each new loan originator relative to the requirement for the CE course. The second purpose of these proposed rule amendments is to require an applicant for reinstatement of a mortgage loan originator license obtained after May 6, 2017, to complete the required CE course for new loan originators prior to reinstatement, consistent with the requirement already in place for mortgage loan originators renewing their license.

Summary of the rule or change:

A mortgage loan originator licensed after May 6, 2017, is required by the current rule to take a Division of Real Estate (Division)-approved CE course for new loan originators prior to renewing their license. These proposed rule amendments would adjust the timing of the required CE course to allow the nationwide licensing system to automatically track each new loan originator relative to the requirement for the CE course. If no adjustment is made to the timing for the CE course, Division staff must manually track each new loan originator for completion of the CE course. Manually tracking the new loan originators is a time consuming process with the possibility of errors occurring. Only the timing for completion of the CE course is affected by this part of the proposed rule amendment. There is no new obligation created for loan originators. In Subsection R162-2c-204(3)(b), these proposed rule amendments would require an applicant for reinstatement of an expired mortgage loan originator license obtained after May 6, 2017, to complete the required CE course for new loan originators prior to reinstatement, consistent with the requirement already in place for mortgage loan originators renewing their license.

Statutory or constitutional authorization for this rule:

• Subsection 61-2c-103(3)
• Section 61-2c-204.1
• Section 61-2c-203
• Section 61-2c-205

Anticipated cost or savings to:

the state budget:

The Division has the staff and budget in place to administer these proposed amendments. After conducting a thorough analysis, it was determined that these proposed rule amendments will not result in a fiscal impact affect those resources or result in any additional cost or savings to the state budget.

local governments:

Local governments are not required to comply with or enforce the Utah Residential Mortgage Practices and Licensing rules. After conducting a thorough analysis, it was determined that these proposed rule amendments will not result in a fiscal impact to local governments.

small businesses:

These proposed amendments do not create new obligations for small businesses nor does it increase the cost associated with any existing obligation. After conducting a thorough analysis, it was determined that these proposed rule amendments will not result in a fiscal impact to small businesses.

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

These proposed amendments do not create new obligations for persons other than small businesses, businesses, or local government entities nor does it increase the cost associated with any existing obligation. After conducting a thorough analysis, it was determined that these proposed rule amendments will not result in a fiscal impact to persons other than small businesses, businesses, or local government entities.

Compliance costs for affected persons:

The proposed rule amendments will adjust the timing of the required CE course. There is no new obligation created for loan originators renewing their license and therefore, renewing licensees will not incur a fiscal impact or compliance cost from these proposed rule amendments. In Subsection R162-2c-204(3)(b), these proposed rule amendments will require an applicant for reinstatement of an expired mortgage loan originator license obtained after May 6, 2017, to complete the required CE course for new loan originators prior to reinstatement. This new requirement is consistent with the requirement already in place for mortgage loan originators renewing their license. These proposed rule amendments will have no fiscal impact on a licensee if the licensee completes the renewal process on time prior to expiration of the license.

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

No fiscal impact to small businesses is expected because the first purpose of these amendments only impact the timing of when the CE course is taken, in order to ease the tracking burden to the Division. No new or additional CE course is required. No fiscal impact is expected by reason of the second purpose of these amendments because a small business that timely renews its license will not be required to take the CE course as a prerequisite to restatement. It is not possible to determine how many mortgage loan originators will let their licenses lapse. Compliant licensees will incur no additional expense.

Francine A. Giani, Executive Director, Commerce

The full text of this rule may be inspected, during regular business hours, at the Office 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:

10/15/2019

This rule may become effective on:

10/22/2019

Authorized by:

Jonathan Stewart, Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non-Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

For the reasons that no fiscal impact is occasioned by small businesses, the Division estimates that non-small businesses will likewise not experience any fiscal impact.

 

Francine A. Giani, Executive Director of the Commerce Department has reviewed and approved this fiscal analysis.

 

 

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:

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

(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 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.

(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) Financial responsibility. A licensee shall submit a credit report in order to renew a license every fifth year following the renewal period beginning November 1, 2015.

(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) 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.

(C) In addition to other required continuing education, a mortgage loan originator licensed with the State of Utah on or after May 8, 2017, shall, beginning January 1, 2020, complete a division-approved continuing education course for new loan originators prior to their first renewal.[renewing at the end of the first full calendar year of licensure.]

(ii) An individual who completes the mortgage loan originator nationwide pre-licensing education between January 1 and December 31 in their initial license renewal for the renewal period ending December 31 is exempt from the nationwide database continuing education requirements and the division-approved course on Utah law.[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 courses for new loan originators and on Utah law specified in Subsections (3)(a)(i)(A) and (3)(a)(i)(C), 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; and[.]

(iii) if the new mortgage loan originator continuing education course was required for renewal prior to the expiration of their license, in addition to other required continuing education, a mortgage loan originator licensed with the State of Utah shall complete the division-approved continuing education course for new loan originators prior to 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: residential mortgage, loan origination, licensing, enforcement

Date of Enactment or Last Substantive Amendment: [July 13, 2018]2019

Notice of Continuation: March 31, 2015

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