SB-1555, As Passed Senate, November 13, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1555

A bill to amend 1987 PA 173, entitled

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

by amending section 2 (MCL 445.1652), as amended by 2008 PA 59.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. (1) A person shall not act as a mortgage broker,

mortgage lender, or mortgage servicer without first obtaining a

license ~~or registering~~ under this act or registering under section

6, unless 1 or more of the following apply:

(a) The person is ~~solely performing~~ providing loan officer

services as an employee or agent of only 1 mortgage broker,

mortgage lender, or mortgage servicer ~~. This subdivision does not~~

~~apply after~~ ~~December 31, 2008~~. and is registered as a loan officer

registrant if that registration is required under this act.

(b) The person is exempted from the act under section 25.

consumer financial services act, 1988 PA 161, MCL 487.2051 to

487.2072.

(d) The individual is an employee of a professional employer

organization, as that term is defined in section 113 of the

Michigan business tax act, 2007 PA 36, MCL 208.1113, solely acting

as a residential mortgage originator of only 1 mortgage broker or

mortgage lender. The mortgage broker or mortgage lender shall do

all of the following:

(i) Direct and control the activities of the individual under

this act.

(ii) Be responsible for all activities of the individual and

assume responsibility for the individual’s actions that are covered

by the proof of financial responsibility deposit required under

section 4.

(2) A person that is licensed to make regulatory loans under

the regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24, or is

licensed to make secondary mortgage loans under the secondary

mortgage loan act, 1981 PA 125, MCL 493.51 to 493.81, and is

registered with the commissioner shall file with the commissioner

an application for a license under section 3(1) or shall

discontinue all activities that are subject to this act.

(3) Unless a residential mortgage originator is otherwise

licensed or registered under this act, a residential mortgage

originator shall not receive directly or indirectly any

compensation, commission, fee, points, or other remuneration or

benefits from a mortgage broker, mortgage lender, or mortgage

servicer other than the employer of the residential mortgage

originator. This subsection does not apply after ~~December 31, 2008~~

March 31, 2009.

(4) Beginning ~~January~~ April 1, 2009, a loan officer shall not

directly or indirectly receive any compensation, commission, fee,

points, or other remuneration or benefits for originating a

mortgage loan unless both of the following are met:

(a) The loan officer is a loan officer registrant.

(b) The compensation, commission, fee, points, or other

remuneration or benefits are paid by the licensee or registrant for

which the loan officer originated that mortgage loan.

(5) Unless a residential mortgage originator is otherwise

licensed or registered under this act, a mortgage broker, mortgage

lender, or mortgage servicer shall not pay directly or indirectly

any compensation, commission, fee, points, or other remuneration or

benefits to a residential mortgage originator other than an

employee of the mortgage broker, mortgage lender, or mortgage

servicer. As used in this subsection and subsection (3),

"residential mortgage originator" means a person who assists

another person in obtaining a mortgage loan. This subsection does

not apply after ~~December 31, 2008~~ March 31, 2009.

(6) Beginning ~~January~~ April 1, 2009, a mortgage broker,

mortgage lender, or mortgage servicer shall not directly or

indirectly pay any compensation, commission, fee, points, or other

remuneration or benefits to any of the following:

(a) A loan officer who is not a loan officer registrant.

(b) A loan officer registrant who is not an employee or agent

of that mortgage broker, mortgage lender, or mortgage servicer.

(7) A mortgage broker, mortgage lender, or mortgage servicer

that is exempt from regulation under this act and is a subsidiary

or affiliate of a depository financial institution or a depository

financial institution holding company that does not maintain a main

office or branch office in this state, shall register under section

6 or shall discontinue all activities subject to this act.

(8) Except for a state or nationally chartered bank, savings

bank, or an affiliate of a bank or savings bank, the person subject

to this act shall not include in its name or assumed name, the

words "bank", "banker", "banking", "banc", "bankcorp", "bancorp",

or any other words or phrases that would imply that the person is a

bank, is engaged in the business of banking, or is affiliated with

a bank or savings bank. It is not a violation of this subsection

for a licensee or registrant to use the term "mortgage banker" or

"mortgage banking" in its name or assumed name. A person subject to

this act whose name or assumed name on January 1, 1995 contained a

word prohibited by this section may continue to use the name or

assumed name.

(9) As used in this section, "employee" means that term as

defined in section 3401 of the internal revenue code, 26 USC 3401.

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.