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To amend sections 1321.52 and 1322.02 and to enact | 1 |
sections 1321.537, 1321.538, 1322.042, and | 2 |
1322.043 of the Revised Code to authorize the | 3 |
Superintendent of Financial Institutions to issue | 4 |
a temporary mortgage loan originator license or | 5 |
temporary loan originator license to an | 6 |
out-of-state applicant who meets certain criteria. | 7 |
Section 1. That sections 1321.52 and 1322.02 be amended and | 8 |
sections 1321.537, 1321.538, 1322.042, and 1322.043 of the Revised | 9 |
Code be enacted to read as follows: | 10 |
Sec. 1321.52. (A)(1) No person, on that person's own behalf | 11 |
or on behalf of any other person, shall do any of the following | 12 |
without having first obtained a certificate of registration from | 13 |
the division of financial institutions: | 14 |
(a) Advertise, solicit, or hold out that the person is | 15 |
engaged in the business of making residential mortgage loans | 16 |
secured by a mortgage on a borrower's real estate which is other | 17 |
than a first lien on the real estate; | 18 |
(b) Engage in the business of lending or collecting the | 19 |
person's own or another person's money, credit, or choses in | 20 |
action for non-first lien residential mortgage loans; | 21 |
(c) Employ or compensate mortgage loan originators licensed | 22 |
or who should be licensed under sections 1321.51 to 1321.60 of the | 23 |
Revised Code to conduct the business of making residential | 24 |
mortgage loans; | 25 |
(d) Make loans in this state of the type set forth in | 26 |
division (C) of this section that are unsecured or are secured by | 27 |
other than real property, which loans are for more than five | 28 |
thousand dollars at a rate of interest greater than permitted by | 29 |
section 1343.01 or other specific provisions of the Revised Code. | 30 |
(2) Each person issued a certificate of registration or | 31 |
license is subject to all the rules prescribed under sections | 32 |
1321.51 to 1321.60 of the Revised Code. | 33 |
(B)(1) All loans made to persons who at the time are | 34 |
residents of this state are considered as made within this state | 35 |
and subject to the laws of this state, regardless of any statement | 36 |
in the contract or note to the contrary, except as follows: | 37 |
(a) If the loan is primarily secured by a lien on real | 38 |
property in another state and is arranged by a mortgage loan | 39 |
originator licensed by that state, the borrower may by choice of | 40 |
law designate that the transaction be governed by the law where | 41 |
the real property is located if the other state has consumer | 42 |
protection laws covering the borrower that are applicable to the | 43 |
transaction. | 44 |
(b) If the loan is for the purpose of purchasing goods | 45 |
acquired by the borrower when the borrower is outside of this | 46 |
state, the loan may be governed by the laws of the other state. | 47 |
(2) Nothing in division (B)(1) of this section prevents a | 48 |
choice of law or requires registration or licensure of persons | 49 |
outside of this state in a transaction involving the solicitation | 50 |
of residents of this state to obtain non-real estate secured loans | 51 |
that require the borrowers to physically visit a lender's | 52 |
out-of-state office to apply for and obtain the disbursement of | 53 |
loan funds. | 54 |
(C) A registrant may make unsecured loans, loans secured by a | 55 |
mortgage on a borrower's real estate which is a first lien or | 56 |
other than a first lien on the real estate, loans secured by other | 57 |
than real estate, and loans secured by any combination of | 58 |
mortgages and security interests, on terms and conditions provided | 59 |
by sections 1321.51 to 1321.60 of the Revised Code. | 60 |
(D)(1) If a lender that is subject to sections 1321.51 to | 61 |
1321.60 of the Revised Code makes a loan in violation of division | 62 |
(A)(1) of this section, the lender has no right to collect, | 63 |
receive, or retain any interest or charges on that loan. | 64 |
(2) If a registrant applies to the division for a renewal of | 65 |
the registrant's certificate after the date required by division | 66 |
(A)(7) of section 1321.53 of the Revised Code, but prior to the | 67 |
first day of February of that year, and the division approves the | 68 |
application, division (D)(1) of this section does not apply with | 69 |
respect to any loan made by the registrant while the registrant's | 70 |
certificate was expired. | 71 |
(3) If a person's registration under sections 1321.51 to | 72 |
1321.60 of the Revised Code terminates due to nonrenewal or | 73 |
otherwise but the person continues to engage in the business of | 74 |
collecting or servicing non-first lien residential mortgage loans | 75 |
in violation of division (A)(1) of this section, the | 76 |
superintendent of financial institutions may take administrative | 77 |
action, including action on any subsequent application for a | 78 |
certificate of registration. In addition, no late fee, bad check | 79 |
charge except as incurred, charge related to default or cost to | 80 |
realize on its security interest, or prepayment penalty on | 81 |
non-first lien residential mortgage loans shall be collected or | 82 |
retained by a person who is in violation of division (A)(1)(b) of | 83 |
this section for the period of time in which the person was in | 84 |
violation. Nothing in division (D)(3) of this section prevents or | 85 |
otherwise precludes any other actions or penalties provided by law | 86 |
or modifies a defense of holder in due course that a subsequent | 87 |
purchaser servicing the residential mortgage loan may raise. | 88 |
(E)(1) No individual shall engage in the business of a | 89 |
mortgage loan originator without first obtaining and maintaining | 90 |
annually a license pursuant to section 1321.532 of the Revised | 91 |
Code from the division of financial institutions. A mortgage loan | 92 |
originator shall be employed or associated with a registrant or | 93 |
entity exempt from registration under sections 1321.51 to 1321.60 | 94 |
of the Revised Code, but shall not be employed by or associated | 95 |
with more than one registrant or exempt entity at any one time. | 96 |
(2) An individual acting under the individual's authority as | 97 |
a registered mortgage loan originator shall not be required to be | 98 |
licensed under division (E)(1) of this section. | 99 |
(3) An individual who holds a valid temporary mortgage loan | 100 |
originator license issued pursuant to section 1321.537 of the | 101 |
Revised Code may engage in the business of a mortgage loan | 102 |
originator in accordance with sections 1321.51 to 1321.60 of the | 103 |
Revised Code during the term of the temporary license. | 104 |
(F)(1) Each licensee shall register with, and maintain a | 105 |
valid unique identifier issued by, the nationwide mortgage | 106 |
licensing system and registry. | 107 |
(2) No person shall use a licensee's unique identifier for | 108 |
any purpose other than as set forth in the "Secure and Fair | 109 |
Enforcement for Mortgage Licensing Act of 2008," 122 Stat. 2810, | 110 |
12 U.S.C. 5101. | 111 |
(G)(1) If a person that is subject to sections 1321.51 to | 112 |
1321.60 of the Revised Code makes a loan in violation of division | 113 |
(A)(1)(d) of this section and subsequently sells or assigns that | 114 |
loan, the person is liable to the borrower for any interest paid | 115 |
on that loan to the holder or assignee in excess of the rate that | 116 |
would be applicable in the absence of sections 1321.51 to 1321.60 | 117 |
of the Revised Code, in addition to any interest or charges paid | 118 |
on that loan to the unauthorized lender as provided by division | 119 |
(D)(1) of this section. | 120 |
(2) If a person that is subject to sections 1321.51 to | 121 |
1321.60 of the Revised Code makes a residential mortgage loan in | 122 |
violation of division (A)(1)(b) or (c) of this section and | 123 |
subsequently sells or assigns that loan, the lender is liable to | 124 |
the borrower for any interest paid on that loan to the holder or | 125 |
assignee in excess of the rate set forth in division (B)(4) of | 126 |
section 1343.01 of the Revised Code, in addition to any interest | 127 |
or charges paid on that loan to the unauthorized lender as | 128 |
provided by division (D)(1) of this section. | 129 |
Sec. 1321.537. (A) As used in this section: | 130 |
(1) "Out-of-state mortgage loan originator" means an | 131 |
individual to whom both of the following apply: | 132 |
(a) The individual holds a valid mortgage loan originator | 133 |
license, or comparable authority, issued pursuant to the law of | 134 |
any other state of the United States. | 135 |
(b) The individual is registered, fingerprinted, and | 136 |
maintains a unique identifier through the nationwide mortgage | 137 |
licensing system and registry. | 138 |
(2) "Sponsor" means a registrant or entity described in | 139 |
division (D) of section 1321.53 of the Revised Code that employs | 140 |
or is associated with an applicant for a temporary mortgage loan | 141 |
originator license and, during the term of the applicant's | 142 |
temporary license, covers the applicant under its corporate surety | 143 |
bond or requires the applicant to obtain and maintain a corporate | 144 |
surety bond. | 145 |
(B) The superintendent of financial institutions may, in | 146 |
accordance with this section, issue to an out-of-state mortgage | 147 |
loan originator a temporary mortgage loan originator license that | 148 |
enables the licensee to engage in the business of a mortgage loan | 149 |
originator while the individual completes the requirements | 150 |
necessary to meet the conditions set forth in section 1321.532 of | 151 |
the Revised Code for a mortgage loan originator license. A | 152 |
temporary mortgage loan originator license shall be valid for a | 153 |
term of not more than one hundred twenty days from the date of | 154 |
issuance. A temporary mortgage loan originator license may not be | 155 |
renewed. | 156 |
(C) An application for a temporary mortgage loan originator | 157 |
license shall be in writing, under oath, and in a form that meets | 158 |
the requirements of the nationwide mortgage licensing system and | 159 |
registry. The application shall be accompanied by a nonrefundable | 160 |
application fee, the amount of which shall be determined by the | 161 |
superintendent in rule, and a certification that, as of the date | 162 |
of application, the applicant meets the following conditions: | 163 |
(1) The applicant has at least two years of experience in the | 164 |
field of residential mortgage lending in the five years | 165 |
immediately preceding the date of application for the temporary | 166 |
mortgage loan originator license. | 167 |
(2) The applicant has not previously applied for a temporary | 168 |
mortgage loan originator license in this state. | 169 |
(3) The applicant has not had a mortgage loan originator | 170 |
license, or comparable authority, revoked in any governmental | 171 |
jurisdiction. For purposes of division (C)(3) of this section, a | 172 |
subsequent formal vacation of such a revocation shall not be | 173 |
considered a revocation. | 174 |
(4) The applicant has not been convicted of, or pleaded | 175 |
guilty or nolo contendere to, any of the following in a domestic, | 176 |
foreign, or military court: | 177 |
(a) During the seven-year period immediately preceding the | 178 |
date of application, a misdemeanor involving theft or any felony; | 179 |
(b) At any time prior to the date of application, a felony | 180 |
involving an act of fraud, dishonesty, a breach of trust, theft, | 181 |
or money laundering. | 182 |
For purposes of division (C)(4) of this section, any | 183 |
conviction for which the applicant has received a pardon shall not | 184 |
be considered a conviction. | 185 |
(D) The superintendent shall issue a temporary mortgage loan | 186 |
originator license to the applicant if the superintendent finds | 187 |
that all of the following conditions are met: | 188 |
(1) The application is accompanied by the application fee and | 189 |
the certification described in division (C) of this section. | 190 |
(2) The applicant is registered, fingerprinted, and has a | 191 |
valid unique identifier through the nationwide mortgage licensing | 192 |
system and registry as of the date of application. | 193 |
(3) The applicant has authorized the nationwide mortgage | 194 |
licensing system and registry to obtain a credit report for | 195 |
submission to the superintendent. | 196 |
(4) The applicant has a sponsor that certifies employment of, | 197 |
or association with, the applicant and has signed the application. | 198 |
(E) The sponsor of a temporary licensee shall have an | 199 |
affirmative duty to supervise the conduct of each temporary | 200 |
mortgage loan originator in the same manner as is required of its | 201 |
other licensees. If the temporary licensee's employment or | 202 |
association with the sponsor is terminated, the sponsor shall | 203 |
notify the division of financial institutions of the termination | 204 |
through the nationwide mortgage licensing system and registry. | 205 |
Upon the division's receipt of the notice, the sponsor shall no | 206 |
longer be held responsible for the conduct of the temporary | 207 |
licensee. | 208 |
(F) The superintendent may, in accordance with Chapter 119. | 209 |
of the Revised Code, adopt rules necessary for the implementation | 210 |
and operation of this section. | 211 |
Sec. 1321.538. If the "Secure and Fair Enforcement for | 212 |
Mortgage Licensing Act of 2008," 122 Stat. 2810, 12 U.S.C. 5101, | 213 |
as amended, is modified after the effective date of this section, | 214 |
or any regulation, statement, or position is adopted under that | 215 |
act, to permit states to issue a temporary mortgage loan | 216 |
originator license to a registered mortgage loan originator, the | 217 |
superintendent shall, in accordance with section 111.15 of the | 218 |
Revised Code, adopt rules the superintendent considers necessary | 219 |
and appropriate to issue a temporary license to a registered | 220 |
mortgage loan originator. | 221 |
Sec. 1322.02. (A)(1) No person, on the person's own behalf | 222 |
or on behalf of any other person, shall act as a mortgage broker | 223 |
without first having obtained a certificate of registration from | 224 |
the superintendent of financial institutions for every office to | 225 |
be maintained by the person for the transaction of business as a | 226 |
mortgage broker in this state. A registrant shall maintain an | 227 |
office location in this state for the transaction of business as a | 228 |
mortgage broker in this state. | 229 |
(2) No person shall act or hold that person's self out as a | 230 |
mortgage broker under the authority or name of a registrant or | 231 |
person exempt from sections 1322.01 to 1322.12 of the Revised Code | 232 |
without first having obtained a certificate of registration from | 233 |
the superintendent for every office to be maintained by the person | 234 |
for the transaction of business as a mortgage broker in this | 235 |
state. | 236 |
(B)(1) No individual shall act as a loan originator without | 237 |
first having obtained a license from the superintendent. A loan | 238 |
originator shall be employed by or associated with a mortgage | 239 |
broker or any person or entity listed in division (G)(2) of | 240 |
section 1322.01 of the Revised Code, but shall not be employed by | 241 |
or associated with more than one mortgage broker or person or | 242 |
entity at any one time. | 243 |
(2) An individual acting under the individual's authority as | 244 |
a registered loan originator shall not be required to be licensed | 245 |
under division (B)(1) of this section. | 246 |
(3) An individual who holds a valid temporary loan originator | 247 |
license issued pursuant to section 1322.042 of the Revised Code | 248 |
may engage in the business of a loan originator in accordance with | 249 |
sections 1322.01 to 1322.12 of the Revised Code during the term of | 250 |
the temporary license. | 251 |
(C)(1) No person acting as a mortgage broker or loan | 252 |
originator shall fail to register with, and maintain a valid | 253 |
unique identifier issued by, the nationwide mortgage licensing | 254 |
system and registry. | 255 |
(2) No person shall use a mortgage broker's or loan | 256 |
originator's unique identifier for any purpose other than as set | 257 |
forth in the "Secure and Fair Enforcement for Mortgage Licensing | 258 |
Act of 2008," 122 Stat. 2810, 12 U.S.C. 5101. | 259 |
Sec. 1322.042. (A) As used in this section: | 260 |
(1) "Out-of-state loan originator" means an individual to | 261 |
whom both of the following apply: | 262 |
(a) The individual holds a valid loan originator license, or | 263 |
comparable authority, issued pursuant to the law of any other | 264 |
state of the United States. | 265 |
(b) The individual is registered, fingerprinted, and | 266 |
maintains a unique identifier through the nationwide mortgage | 267 |
licensing system and registry. | 268 |
(2) "Sponsor" means a registrant or entity described in | 269 |
division (G)(2) of section 1322.01 of the Revised Code that | 270 |
employs or is associated with an applicant for a temporary loan | 271 |
originator license and, during the term of the applicant's | 272 |
temporary license, covers the applicant under its corporate surety | 273 |
bond or requires the applicant to obtain and maintain a corporate | 274 |
surety bond. | 275 |
(B) The superintendent of financial institutions may, in | 276 |
accordance with this section, issue to an out-of-state loan | 277 |
originator a temporary loan originator license that enables the | 278 |
licensee to engage in the business of a loan originator while the | 279 |
individual completes the requirements necessary to meet the | 280 |
conditions set forth in section 1322.041 of the Revised Code for a | 281 |
loan originator license. A temporary loan originator license shall | 282 |
be valid for a term of not more than one hundred twenty days from | 283 |
the date of issuance. A temporary loan originator license may not | 284 |
be renewed. | 285 |
(C) An application for a temporary loan originator license | 286 |
shall be in writing, under oath, and in a form that meets the | 287 |
requirements of the nationwide mortgage licensing system and | 288 |
registry. The application shall be accompanied by a nonrefundable | 289 |
application fee, the amount of which shall be determined by the | 290 |
superintendent in rule, and a certification that, as of the date | 291 |
of application, the applicant meets the following conditions: | 292 |
(1) The applicant has at least two years of experience in the | 293 |
field of residential mortgage lending in the five years | 294 |
immediately preceding the date of application for the temporary | 295 |
loan originator license. | 296 |
(2) The applicant has not previously applied for a temporary | 297 |
loan originator license in this state. | 298 |
(3) The applicant has not had a loan originator license, or | 299 |
comparable authority, revoked in any governmental jurisdiction. | 300 |
For purposes of division (C)(3) of this section, a subsequent | 301 |
formal vacation of such a revocation shall not be considered a | 302 |
revocation. | 303 |
(4) The applicant has not been convicted of, or pleaded | 304 |
guilty or nolo contendere to, any of the following in a domestic, | 305 |
foreign, or military court: | 306 |
(a) During the seven-year period immediately preceding the | 307 |
date of application, a misdemeanor involving theft or any felony; | 308 |
(b) At any time prior to the date of application, a felony | 309 |
involving an act of fraud, dishonesty, a breach of trust, theft, | 310 |
or money laundering. | 311 |
For purposes of division (C)(4) of this section, any | 312 |
conviction for which the applicant has received a pardon shall not | 313 |
be considered a conviction. | 314 |
(D) The superintendent shall issue a temporary loan | 315 |
originator license to the applicant if the superintendent finds | 316 |
that all of the following conditions are met: | 317 |
(1) The application is accompanied by the application fee and | 318 |
the certification described in division (C) of this section. | 319 |
(2) The applicant is registered, fingerprinted, and has a | 320 |
valid unique identifier through the nationwide mortgage licensing | 321 |
system and registry as of the date of application. | 322 |
(3) The applicant has authorized the nationwide mortgage | 323 |
licensing system and registry to obtain a credit report for | 324 |
submission to the superintendent. | 325 |
(4) The applicant has a sponsor that certifies employment of, | 326 |
or association with, the applicant and has signed the application. | 327 |
(E) The sponsor of a temporary licensee shall have an | 328 |
affirmative duty to supervise the conduct of each temporary loan | 329 |
originator in the same manner as is required of its other | 330 |
licensees. If the temporary licensee's employment or association | 331 |
with the sponsor is terminated, the sponsor shall notify the | 332 |
division of financial institutions of the termination through the | 333 |
nationwide mortgage licensing system and registry. Upon the | 334 |
division's receipt of the notice, the sponsor shall no longer be | 335 |
held responsible for the conduct of the temporary licensee. | 336 |
(F) The superintendent may, in accordance with Chapter 119. | 337 |
of the Revised Code, adopt rules necessary for the implementation | 338 |
and operation of this section. | 339 |
Sec. 1322.043. If the "Secure and Fair Enforcement for | 340 |
Mortgage Licensing Act of 2008," 122 Stat. 2810, 12 U.S.C. 5101, | 341 |
as amended, is modified after the effective date of this section, | 342 |
or any regulation, statement, or position is adopted under that | 343 |
act, to permit states to issue a temporary loan originator license | 344 |
to a registered loan originator, the superintendent shall, in | 345 |
accordance with section 111.15 of the Revised Code, adopt rules | 346 |
the superintendent considers necessary and appropriate to issue a | 347 |
temporary license to a registered loan originator. | 348 |
Section 2. That existing sections 1321.52 and 1322.02 of the | 349 |
Revised Code are hereby repealed. | 350 |