As Introduced

127th General Assembly
Regular Session
2007-2008
H. B. No. 20


Representative Carano 

Cosponsors: Representatives McGregor, J., Healy, Dodd, Okey, Seitz, Collier, Yuko, Koziura, Brown 


A BILL
To amend sections 1322.04 and 1322.041 of the Revised 1
Code to require the Superintendent of Financial 2
Institutions to prorate the renewal fee for a new 3
certificate of registration or license for a 4
mortgage broker or loan officer.5


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 1322.04 and 1322.041 of the Revised 6
Code be amended to read as follows:7

       Sec. 1322.04.  (A) Upon the conclusion of the investigation8
required under division (B) of section 1322.03 of the Revised9
Code, the superintendent of financial institutions shall issue a10
certificate of registration to the applicant if the superintendent11
finds that the following conditions are met:12

       (1) Except as otherwise provided in division (A) of section13
1322.03 of the Revised Code, the application is accompanied by the14
application fee. If a check or other draft instrument is returned15
to the superintendent for insufficient funds, the superintendent16
shall notify the registrant by certified mail, return receipt17
requested, that the certificate of registration issued in reliance18
on the check or other draft instrument will be canceled unless the19
registrant, within thirty days after receipt of the notice,20
submits the application fee and a one-hundred-dollar penalty to21
the superintendent. If the registrant does not submit the22
application fee and penalty within that time period, or if any23
check or other draft instrument used to pay the fee or penalty is24
returned to the superintendent for insufficient funds, the25
certificate of registration shall be canceled immediately without26
a hearing, and the registrant shall cease activity as a mortgage27
broker.28

       (2) If the application is for a location that is a residence,29
that the applicant has obtained a valid zoning permit authorizing 30
the use of the residence for commercial purposes, or has obtained31
a valid written opinion or other document issued by the county or 32
political subdivision where the residence is located certifying 33
that the use of the residence to transact business as a mortgage 34
broker is not prohibited by the county or political subdivision. 35
The application also is accompanied by a photograph of each36
location at which the mortgage broker's business will be37
transacted.38

       (3) The sole proprietor or the person designated on the39
application pursuant to division (A)(3) of section 1322.03 of the40
Revised Code, as applicable, meets the experience requirements41
provided in division (A)(4) of section 1322.03 of the Revised Code 42
and the education requirements set forth in division (A)(5) of 43
section 1322.03 of the Revised Code.44

       (4) The applicant maintains all licenses and registrations45
required by the secretary of state.46

       (5) The applicant complies with the surety bond requirements47
of section 1322.05 of the Revised Code.48

       (6) The applicant complies with sections 1322.01 to 1322.1249
of the Revised Code.50

       (7) Neither the applicant nor any shareholder, member,51
partner, operations manager, or employee of the applicant has 52
pleaded guilty to or been convicted of any criminal offense53
described in division (A)(8) of section 1322.03 of the Revised54
Code or any violation of an existing or former law of this state, 55
any other state, or the United States that substantially is 56
equivalent to a criminal offense described in that division. 57
However, if the applicant or any of those other persons has58
pleaded guilty to or been convicted of any such offense other than 59
theft, the superintendent shall not consider the offense if the60
applicant has proven to the superintendent, by a preponderance of61
the evidence, that the applicant's or other person's activities62
and employment record since the conviction show that the applicant63
or other person is honest, truthful, and of good reputation, and64
there is no basis in fact for believing that the applicant or65
other person will commit such an offense again.66

       (8) Neither the applicant nor any shareholder, member,67
partner, operations manager, or employee of the applicant has been68
subject to any adverse judgment for conversion, embezzlement,69
misappropriation of funds, fraud, misfeasance or malfeasance, or70
breach of fiduciary duty, or, if the applicant or any of those71
other persons has been subject to such a judgment, the applicant72
has proven to the superintendent, by a preponderance of the73
evidence, that the applicant's or other person's activities and74
employment record since the judgment show that the applicant or75
other person is honest, truthful, and of good reputation, and76
there is no basis in fact for believing that the applicant or77
other person will be subject to such a judgment again.78

       (9) The applicant's operations manager successfully completed79
the examination required under division (A) of section 1322.051 of80
the Revised Code.81

       (10) The applicant's financial responsibility, experience,82
character, and general fitness command the confidence of the83
public and warrant the belief that the business will be operated84
honestly and fairly in compliance with the purposes of sections85
1322.01 to 1322.12 of the Revised Code.86

       For purposes of determining whether an applicant that is a87
partnership, corporation, or other business entity or association88
has met the conditions set forth in divisions (A)(7), (A)(8), and89
(A)(10) of this section, the superintendent shall determine which90
partners, shareholders, or persons named in the application91
pursuant to division (A)(2) of section 1322.03 of the Revised Code92
must meet the conditions set forth in divisions (A)(7), (A)(8),93
and (A)(10) of this section. This determination shall be based on94
the extent and nature of the partner's, shareholder's, or person's95
ownership interest in the partnership, corporation, or other96
business entity or association that is the applicant.97

       (B) The certificate of registration issued pursuant to98
division (A) of this section may be renewed annually on or before99
the thirtieth day of April if the superintendent finds that all of 100
the following conditions are met:101

       (1) The renewal application is accompanied by a nonrefundable 102
renewal fee of three hundred fifty dollars for each location of an 103
office to be maintained by the applicant in accordance with 104
division (A) of section 1322.02 of the Revised Code; however, an105
or the prorated renewal fee for each location pursuant to division 106
(D) of this section. An applicant that is registered under 107
sections 1321.51 to 1321.60 of the Revised Code shall not be 108
required to pay a renewal fee. If a check or other draft 109
instrument is returned to the superintendent for insufficient 110
funds, the superintendent shall notify the registrant by certified 111
mail, return receipt requested, that the certificate of112
registration renewed in reliance on the check or other draft113
instrument will be canceled unless the registrant, within thirty114
days after receipt of the notice, submits the renewal fee and a115
one-hundred-dollar penalty to the superintendent. If the116
registrant does not submit the renewal fee and penalty within that117
time period, or if any check or other draft instrument used to pay118
the fee or penalty is returned to the superintendent for119
insufficient funds, the certificate of registration shall be120
canceled immediately without a hearing and the registrant shall121
cease activity as a mortgage broker.122

       (2) On and after January 1, 2003, the operations manager123
designated under division (A)(3) of section 1322.03 of the Revised124
Code has completed, during the immediately preceding calendar125
year, at least six hours of continuing education as required under126
section 1322.052 of the Revised Code.127

       (3) The applicant meets the conditions set forth in divisions 128
(A)(2) to (10) of this section.129

       (4) The applicant's certificate of registration is not130
subject to an order of suspension or revocation by the131
superintendent.132

       (C)(1) Subject to division (C)(2) of this section, if a133
renewal fee is received by the superintendent after the thirtieth134
day of April, the certificate of registration shall not be135
considered renewed, and the applicant shall cease activity as a136
mortgage broker and apply for a certificate of registration as a137
mortgage broker.138

       (2) Division (C)(1) of this section shall not apply if the139
applicant, no later than the thirty-first day of May, submits the140
renewal fee and a one-hundred-dollar penalty to the141
superintendent.142

       (D) The superintendent shall adopt rules to prorate the first 143
renewal fee for a new certificate of registration based upon the 144
number of months the initial certificate of registration has been 145
in effect prior to the renewal. An applicant is eligible to pay 146
the prorated renewal fee only for the first renewal of the 147
applicant's initial certificate of registration.148

       (E) If the person designated as the operations manager149
pursuant to division (A)(3) of section 1322.03 of the Revised Code150
is no longer the operations manager, the registrant shall do all151
of the following:152

       (1) Designate another person as the operations manager;153

       (2) Within ten days after the designation described in154
division (D)(1) of this section, notify the superintendent in155
writing of the designation;156

       (3) Submit any additional information that the superintendent 157
requires to establish that the newly designated operations manager158
complies with the experience requirements set forth in division159
(A)(4) of section 1322.03 of the Revised Code.160

       Sec. 1322.041. (A) Upon the conclusion of the investigation161
required under division (B) of section 1322.031 of the Revised162
Code, the superintendent of financial institutions shall issue a163
loan officer license to the applicant if the superintendent finds164
that the following conditions are met:165

       (1) The application is accompanied by the application fee. If 166
a check or other draft instrument is returned to the167
superintendent for insufficient funds, the superintendent shall168
notify the licensee by certified mail, return receipt requested,169
that the license issued in reliance on the check or other draft170
instrument will be canceled unless the licensee, within thirty171
days after receipt of the notice, submits the application fee and172
a one-hundred-dollar penalty to the superintendent. If the173
licensee does not submit the application fee and penalty within174
that time period, or if any check or other draft instrument used175
to pay the fee or penalty is returned to the superintendent for176
insufficient funds, the license shall be canceled immediately177
without a hearing, and the licensee shall cease activity as a loan178
officer.179

       (2) The applicant complies with sections 1322.01 to 1322.12180
of the Revised Code.181

       (3) The applicant has not been convicted of or pleaded guilty 182
to any criminal offense described in division (A)(2) of section 183
1322.031 of the Revised Code and the applicant has not pleaded 184
guilty to or been convicted of a violation of an existing or 185
former law of this state, any other state, or the United States 186
that substantially is equivalent to a criminal offense described 187
in that division. However, if the applicant has been convicted of 188
or pleaded guilty to any such offense other than theft, the 189
superintendent shall not consider the offense if the applicant has 190
proven to the superintendent, by a preponderance of the evidence, 191
that the applicant's activities and employment record since the 192
conviction show that the applicant is honest, truthful, and of 193
good reputation, and there is no basis in fact for believing that 194
the applicant will commit such an offense again.195

       (4) The applicant has not been subject to an adverse judgment196
for conversion, embezzlement, misappropriation of funds, fraud,197
misfeasance or malfeasance, or breach of fiduciary duty, or, if198
the applicant has been subject to such a judgment, the applicant199
has proven to the superintendent, by a preponderance of the200
evidence, that the applicant's activities and employment record201
since the judgment show that the applicant is honest, truthful,202
and of good reputation, and there is no basis in fact for203
believing that the applicant will be subject to such a judgment204
again.205

       (5) The applicant successfully completed the examination 206
required under division (B) of section 1322.051 of the Revised 207
Code and the education requirements set forth in division (A)(4) 208
of section 1322.031 of the Revised Code.209

       (6) The applicant's character and general fitness command the210
confidence of the public and warrant the belief that the business211
will be operated honestly and fairly in compliance with the212
purposes of sections 1322.01 to 1322.12 of the Revised Code.213

       (B) The license issued under division (A) of this section may 214
be renewed annually on or before the thirtieth day of April if the 215
superintendent finds that all of the following conditions are met:216

       (1) The renewal application is accompanied by a nonrefundable 217
renewal fee of one hundred dollars or the prorated renewal fee 218
pursuant to division (D) of this section. If a check or other 219
draft instrument is returned to the superintendent for220
insufficient funds, the superintendent shall notify the licensee221
by certified mail, return receipt requested, that the license222
renewed in reliance on the check or other draft instrument will be223
canceled unless the licensee, within thirty days after receipt of224
the notice, submits the renewal fee and a one-hundred-dollar225
penalty to the superintendent. If the licensee does not submit the 226
renewal fee and penalty within that time period, or if any check 227
or other draft instrument used to pay the fee or penalty is228
returned to the superintendent for insufficient funds, the license229
shall be canceled immediately without a hearing, and the licensee230
shall cease activity as a loan officer.231

       (2) On and after January 1, 2003, the loan officer has232
completed, during the immediately preceding calendar year, at233
least six hours of continuing education as required under section234
1322.052 of the Revised Code.235

       (3) The applicant meets the conditions set forth in divisions 236
(A)(2) to (6) of this section.237

       (4) The applicant's license is not subject to an order of238
suspension or revocation by the superintendent.239

       (C)(1) Subject to division (C)(2) of this section, if a240
license renewal application or renewal fee is received by the241
superintendent after the thirtieth day of April, the license shall242
not be considered renewed, and the applicant shall cease activity243
as a loan officer.244

       (2) Division (C)(1) of this section shall not apply if the245
applicant, no later than the thirty-first day of May, submits the246
renewal application and fee and a one-hundred-dollar penalty to247
the superintendent.248

       (D) The superintendent shall adopt rules to prorate the first 249
renewal fee for a new license based upon the number of months the 250
initial license has been in effect prior to the renewal. An 251
applicant is eligible to pay the prorated renewal fee only for the 252
first renewal of the applicant's initial license.253

       Section 2. That existing sections 1322.04 and 1322.041 of the 254
Revised Code are hereby repealed.255