October 11, 2007, Introduced by Reps. Jackson, Young, Kathleen Law, Hopgood, Brown, Valentine, Hammel, Tobocman, Robert Jones, Vagnozzi, Mayes, Gonzales, Donigan and Dean and referred to the Committee on Banking and Financial Services.
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 2005 PA 113.
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, unless 1 or more of the
following apply:
(a)
The person is solely performing services as an employee of
only
1 mortgage broker, mortgage lender, or mortgage servicer.
(a) (b)
The person is exempted from the act
under section 25.
(b) (c)
The person is licensed as a class I
licensee under the
consumer financial services act, 1988 PA 161, MCL 487.2051 to
487.2072.
(c) (d)
The individual is an employee of a
professional
employer
organization, as that term is defined in section 4 113 of
the
single Michigan business tax act, 1975 PA 228, MCL 208.4 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
A loan officer 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.
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 employer of the loan
officer and the employer is a licensee or registrant.
(4)
Unless a residential mortgage originator is otherwise
licensed
or registered under this act, a 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 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 of that
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.
(5) A mortgage broker, mortgage lender, or mortgage servicer
that
was 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.
(6) 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.
(7) As used in this section, "employee" means that term as
defined in section 3401 of the internal revenue code, 26 USC 3401.
There is a rebuttable presumption that an individual for whom a
person reports compensation for federal income tax purposes on form
W-2 is an employee. There is a rebuttable presumption that an
individual for whom a person reports payments for federal income
tax purposes on form 1099-MISC is not an employee.
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.____ or House Bill No.____ (request no.
03068'07).
(b) Senate Bill No.____ or House Bill No.____ (request no.
03157'07).
(c) Senate Bill No.____ or House Bill No. 5288(request no.
05191'07).
(d) Senate Bill No.____ or House Bill No.____ (request no.
05192'07).
(e) Senate Bill No.____ or House Bill No. 5289(request no.
05193'07).
(f) Senate Bill No.____ or House Bill No.____ (request no.
05194'07).
(g) Senate Bill No.____ or House Bill No.____ (request no.
05195'07).
(h) Senate Bill No.____ or House Bill No. 5290(request no.
05197'07).
(i) Senate Bill No.____ or House Bill No. 5291(request no.
05198'07).
(j) Senate Bill No.____ or House Bill No.____ (request no.
05199'07).
(k) Senate Bill No.____ or House Bill No.____ (request no.
05200'07).