SB-1554, As Passed Senate, November 13, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1554

     A bill to amend 1987 PA 173, entitled

"Mortgage brokers, lenders, and servicers licensing act,"

by amending section 2a (MCL 445.1652a), as added by 2008 PA 60.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2a. (1) Beginning January April 1, 2009, an employee or

agent of a licensee or registrant shall not perform services of a

loan officer unless he or she registers or otherwise complies with

this section.

     (2) Beginning January 1, 2009, a A licensee or registrant that

employs or offers to employ, or engages or offers to engage as an

agent, an individual as a loan officer to originate mortgage loans

after March 31, 2009 shall conduct a criminal records check of that

individual and submit the results of the criminal records check to

the commissioner. A criminal records check under this subsection

shall include a check of the individual’s fingerprints, taken by a

law enforcement agency or other person determined by the

commissioner to be qualified to take fingerprints. history check of

that individual. All of the following apply to the criminal history

check of an individual required under this subsection:

     (a) The department of state police and the federal bureau of

investigation shall perform the criminal history check required

under this subsection.

     (b) The individual who is the subject of the criminal history

check shall have his or her fingerprints taken by a law enforcement

agency or by another person that the commissioner determines is

qualified to take fingerprints; pay the agency or person the fees

required by the department of state police under section 3 of 1935

PA 120, MCL 28.273, and by the federal bureau of investigation, for

processing fingerprints and completing a criminal history check;

and request that the agency or person forward the fingerprints, a

request for a criminal history check of the individual in the

format and as prescribed by the department of state police, and the

fees to the department of state police.

     (c) The department of state police shall forward the

fingerprints and appropriate fee to the federal bureau of

investigation for a national criminal history check.

     (d) After receiving a proper request and the required fees

under this subsection, the department of state police shall conduct

the criminal history check and provide the licensee or registrant

with the results of the criminal history check. The results shall

contain any criminal history record information concerning the

individual maintained by the department of state police and the

results of the federal bureau of investigation's criminal history

check.

     (e) The licensee or registrant shall submit the results of the

criminal history check described in subdivision (d) to the

commissioner with the application for loan officer registration

described in subsection (4) or for purposes of subsection (5).

     (f) A criminal history check required under this subsection

may be conducted by the licensee or registrant, requested of and

performed by the department of state police and the federal bureau

of investigation, and submitted to the commissioner at any time on

or after January 1, 2009.

     (g) If a criminal arrest fingerprint card is subsequently

submitted to the department of state police and matches against a

fingerprint that was submitted under this subsection and stored by

the department of state police in its automated fingerprint

identification system (AFIS) database, the department of state

police shall notify the commissioner.

     (3) Beginning January April 1, 2009, if an individual is

employed or engaged as an agent to originate mortgage loans by a

licensee or registrant, that individual shall apply for loan

officer registration under this section within 90 days after he or

she begins providing services as an employee or agent of the

licensee or registrant, by submitting the application described in

subsection (4), in writing, and including with the application the

annual operating fee established under section 8(3).

     (4) The commissioner shall prescribe the form of application

for registration as a loan officer. Subject to subsection (9) (8),

the application form shall require that an applicant provide at

least all of the following to the commissioner:

     (a) The name and home address of the applicant.

     (b) A statement as to whether the applicant has ever been

convicted of, or pled no contest to, any of the following:

     (i) A misdemeanor involving embezzlement, forgery, fraud, a

financial transaction, or securities.

     (ii) A felony.

     (c) A statement as to whether the applicant has had an

application denied, or a license, registration, or similar

authority revoked or suspended, to practice any profession or

occupation in any jurisdiction, including, but not limited to,

licensure or registration as a mortgage broker, mortgage lender, or

mortgage servicer in which the applicant held more than 25% of the

ownership interest or as a loan officer.

     (d) Except for an application described in subsection (7),

proof in the form of a certificate of completion or other evidence

acceptable to the commissioner that the applicant has completed at

least 24 hours of live professional classroom instruction in this

state in an introductory course in residential mortgage lending

that is sponsored or provided by a person, and taught by an

instructor, approved by the commissioner. The 24 hours of

instruction shall include at least 3 hours of live classroom

instruction concerning state and federal laws and regulations

governing residential mortgage lending, the content of which has

been approved by the commissioner.

     (e) Evidence acceptable to the commissioner that the applicant

correctly answered at least 75% of the questions on an examination

approved by the commissioner that tests an applicant’s knowledge of

the contents of the introductory course in residential mortgage

lending described in subdivision (d).

     (f) A copy of the The results of the criminal records history

check described in subsection (2).

     (g) The signature of the applicant and his or her declaration

that the information and statements made in or included with the

application are true, accurate, and complete.

     (h) The signature of an executive officer on behalf of the

licensee or registrant that employs or offers to employ, or engages

or offers to engage as an agent, the applicant, and the executive

officer's certification on behalf of the licensee or registrant

that the information and statements in or included with the

application are true, accurate, and complete to the best of his or

her knowledge and belief.

(i) (g) Any other information required by the commissioner.

     (5) Beginning January April 1, 2009, an applicant for loan

officer registration may perform services as a loan officer while

his or her application is pending if all of the following are met:

     (a) The licensee or registrant that is the employer or

principal of the applicant has completed the criminal records

history check of the applicant described in subsection (2) and

submitted the results of that criminal records history check to the

commissioner.

     (b) The criminal records history check described in

subdivision (a) does not disclose that the applicant has been

convicted of, or pled no contest to, any of the following:

     (i) A felony or misdemeanor involving embezzlement, forgery,

fraud, a financial transaction, or securities.

     (ii) Within the 10-year period preceding the date of the

application, a felony other than a felony described in subparagraph

(i).

     (c) The licensee or registrant that is the employer or

principal of the applicant has provided the commissioner with

written notice that the applicant is beginning to provide services

as a loan officer for the licensee or registrant.

     (6) The commissioner shall not issue a registration to any of

the following:

     (a) An applicant who has been convicted of, or pled no contest

to, any of the following:

     (i) A felony or misdemeanor involving embezzlement, forgery,

fraud, a financial transaction, or securities.

     (ii) Within the 10-year period preceding the date of the

application, a felony other than a felony described in subparagraph

(i).

     (b) An applicant against whom the commissioner has issued a

prohibition order under section 18a.

     (c) An applicant for whom the commissioner has not received

the results of the criminal records history check described in

subsection (2).

     (7) The commissioner must register a loan officer who meets

all of the following:

     (a) For the 5-year period immediately preceding the effective

date of the amendatory act that added this section, he or she was

employed or engaged as a loan officer for at least 4-1/2 years by 1

or more licensees, registrants, or persons exempt from this act

under section 25.

     (b) He or she was not the subject of any prohibition orders

issued by the commissioner under section 18a in the 5-year period

immediately preceding the effective date of the amendatory act that

added this section.

     (c) Within 8 months after the effective date of the amendatory

act that added this section Before April 1, 2009, he or she takes

the examination described in subsection (4)(e) and correctly

answers at least 75% of the questions on the examination.

     (d) Within 8 months after the effective date of the amendatory

act that added this section Before April 1, 2009, he or she submits

an application under subsection (4). However, the applicant is not

required to complete or submit proof of completion of the

instruction described in subsection (4)(d).

     (e) He or she is not an applicant described in subsection (6).

     (8) An employee or agent of a mortgage broker, mortgage

lender, or mortgage servicer that is exempt from licensing or

registration under this act may apply to be a loan officer

registrant under this section.

(8) (9) The commissioner may waive any of the requirements of

this section for loan officer registration if the applicant has a

valid, similar license or registration from another state that has

a reciprocal agreement with the commissioner, except subsection

(6)(a) and (c).

(9) (10) The commissioner may disclose, provide, or make

available to the public the names, business addresses, and business

telephone numbers of loan officer registrants. The commissioner

shall not disclose, provide, or make available to the public any

other personal identifying information about loan officer

registrants or applicants for loan officer registration.

(10) (11) Beginning January April 1, 2009, an individual

employed or engaged as an agent by a licensee or registrant as a

loan officer shall not use the title or designation "loan officer",

"loan originator", "mortgage loan officer", or "mortgage loan

originator" if he or she is not a loan officer registrant. A loan

officer registrant and the employer or principal of a loan officer

registrant shall not use the word "registered", "certified", or any

word of similar import in his or her title or designation to

identify him or her as an individual who has met the registration

requirements of this act unless use of that word is approved by the

office of financial and insurance services.

     Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

     (a) Senate Bill No. 1552.

     (b) Senate Bill No. 1553.

     (c) Senate Bill No. 1555.

     (d) House Bill No. 6562.