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Am. Sub. S. B. No. 76As Passed by the HouseAs Passed by the House
124th General Assembly | Regular Session | 2001-2002 |
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SENATORS Harris, White, Prentiss, Spada, Carnes, Robert Gardner, Hottinger, Fingerhut, Hagan, Johnson, Jacobson
REPRESENTATIVES Salerno, Blasdel, Beatty, Coates, Collier, Evans, Hoops, Husted, Kilbane, R. Miller, Ogg, Otterman, Reidelbach, Reinhard, Schmidt, Setzer, G. Smith, Sulzer, Webster, Wilson, Lendrum, Grendell, Widowfield, Hughes, Flowers, Clancy, Goodman, Jones, Rhine, Carmichael, Manning, Williams, Barnes, Cates, Key, Woodard, DeWine, Faber, Niehaus, Carey, Barrett, Britton, Cirelli, Core, Hollister, Allen, Womer Benjamin, Young, Roman, Strahorn, Latell
A BILL
To amend sections 1322.01, 1322.02, 1322.03, 1322.04,
1322.05, 1322.06, 1322.07, 1322.08, 1322.09,
1322.10, 1322.101, 1322.11, 1322.99, and
4712.01
and to enact sections 1322.021, 1322.031,
1322.041, 1322.051, 1322.052, 1322.061, 1322.062,
1322.071, 1322.072, and 1322.073 of the
Revised
Code to revise the laws
governing mortgage
brokers
and loan officers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1322.01, 1322.02, 1322.03, 1322.04,
1322.05, 1322.06, 1322.07, 1322.08, 1322.09, 1322.10, 1322.101,
1322.11, 1322.99, and 4712.01 be amended and sections
1322.021,
1322.031, 1322.041, 1322.051, 1322.052, 1322.061,
1322.062,
1322.071, 1322.072, and 1322.073 of the
Revised
Code be enacted to
read as follows:
Sec. 1322.01. As used in sections 1322.01 to 1322.12 of the
Revised Code: (A) "Buyer" means an individual who is solicited to
purchase
or who purchases the services of a mortgage broker for
purposes
other than obtaining a business loan as described in
division
(B)(6) of section 1343.01 of the Revised Code. (B) "Consumer reporting agency" has the same meaning as in
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A.
1681a,
as amended. (C)
"Employee" means an individual for whom a mortgage
broker, in addition to providing a wage or salary, pays social
security and unemployment taxes, provides workers' compensation
coverage, and withholds local, state, and federal income taxes.
"Employee" also includes any shareholder, member, or partner of a
registrant who acts as a loan officer or operations manager of the
registrant, but for whom the registrant is prevented by law from
making income tax withholdings.
(D) "Licensee" means any person that has been issued a loan
officer license under sections 1322.01 to 1322.12 of the Revised
Code.
(E) "Loan officer" means an employee who originates
mortgage loans in consideration of direct or indirect gain,
profit, fees, or charges. "Loan officer" also includes an
employee who solicits financial and mortgage information from the
public for sale to another mortgage broker.
(F) "Mortgage" means any indebtedness secured by a deed of
trust, security deed, or other lien on real property. (D) "Mortgage banker" means any person that makes,
services,
or buys and sells mortgage loans, and is
required to submit
audited financial statements to, and is
subject to a possible
audit
by, the
United States department of housing and urban
development, the
United States department of veterans affairs, the
federal
national mortgage association, the federal home loan
mortgage
corporation, or the government national mortgage
association.
(E)(G) "Mortgage broker" means
a
any of the following:
(1) A person that, in the regular
course of business, holds
that
person out
as being able to assist a buyer in obtaining a
mortgage and charges or
receives
from either the buyer or lender
money or
other valuable consideration readily convertible into
money for
providing this assistance. "Mortgage broker" does not
include
any of the following: (1) A person that makes or collects loans, to the extent
these activities are subject to licensure or registration by this
state;
(2) A
lender approved by the United States secretary of
housing and urban development for participation in a mortgage
insurance program under the "National Housing Act," 48 Stat. 1246
(1934), 12 U.S.C.A. 1701, as amended
person that solicits
financial and mortgage information from the public, provides that
information to a mortgage broker, and charges or receives from the
mortgage broker money or
other valuable consideration readily
convertible into money for
providing the information; (3) A
bank, savings bank, savings and loan association,
or
subsidiary or affiliate of a bank, savings bank, or
savings and
loan association. For purposes of division
(E)(3) of
this
section, "affiliate" has the same meaning as in division (A)
of
section 1101.01 of the Revised Code, and "bank," as used in
division (A) of section 1101.01 of the Revised Code, is deemed to
include a savings bank or savings and loan association. (4) A credit union organized and qualified under Chapter
1733. of the Revised Code or the "Federal Credit Union Act," 84
Stat. 994 (1970), 12 U.S.C.A. 1751, as amended;
(5) A budget and debt counseling service, as defined in
division (D) of section 2716.03 of the Revised Code, provided
that
the service is a nonprofit organization exempt from taxation
under
section 501(c)(3) of the "Internal Revenue Code of 1986,"
100
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service
is
in compliance with Chapter 4710. of the Revised Code;
(6) A consumer reporting agency that is in substantial
compliance with the "Fair Credit Reporting Act," 84 Stat. 1128,
15
U.S.C.A. 1681a, as amended;
(8) Any political subdivision, or any governmental or
other
public entity, corporation, or agency, in or of the United
States
or any state of the United States;
(9) A college or university, or controlled entity of a
college or university, as defined in section 1713.05 of the
Revised Code.
(F)
person engaged in table-funding or warehouse-lending
mortgage loans that are first lien mortgage loans.
(H) "Operations manager" means the individual responsible
for the everyday operations, compliance requirements, and
management of a mortgage broker business.
(I) "Originate" means to do any of the following:
(1) Negotiate or arrange, or offer to negotiate or arrange,
a mortgage loan between a person that makes or funds mortgage
loans and a buyer;
(2) Issue a commitment for a mortgage loan to a buyer; (3) Place, assist in placement, or find a mortgage loan for
a buyer.
(J)
"Registrant" means any person that
has been issued a
mortgage broker certificate of registration under sections 1322.01
to 1322.12 of
the Revised Code. (G)(K) "Superintendent of financial institutions" includes
the deputy superintendent for consumer finance as provided in
section 1181.21
of the Revised Code.
(L) "Table-funding mortgage loan" means a mortgage loan
transaction in which the mortgage is initially payable to the
mortgage broker, the mortgage broker does not use the mortgage
broker's own funds to fund the transaction, and, by the terms of
the mortgage or other agreement, the mortgage is simultaneously
assigned to another person.
(M) "Warehouse-lending mortgage loan" means a mortgage loan
transaction in which the mortgage is initially payable to the
mortgage broker, the mortgage broker uses the mortgage broker's
own funds to fund the transaction, and the mortgage is sold or
assigned before the mortgage broker receives a scheduled
payment
on
the mortgage.
Sec. 1322.02. (A)(1) No person, on the person's own behalf
or
on
behalf of any other person, shall act
as a mortgage broker
without first having obtained a certificate of
registration from
the superintendent of financial
institutions for every
office to
be
maintained by the person for the transaction of business as a
mortgage broker
in this state.
A registrant
shall maintain an
office location in this state for the transaction of
business as a
mortgage broker in this state.
(2) No person shall act or hold that person's self out as a
mortgage broker under the authority or name of a registrant or
person exempt from sections 1322.01 to 1322.12 of the Revised Code
without first having obtained a certificate of registration from
the superintendent for every office to be maintained by the person
for the transaction of business as a mortgage broker in this
state.
(B) No person, on the person's own behalf or on behalf of
any other person, shall
originate mortgage loans for a registrant,
unless that person is an employee
of the registrant
act as a loan
officer without first having obtained a license from the
superintendent. A loan officer shall not be employed by more than
one mortgage broker at any one time. (C)
As used in this section: (1)
Employee means a person who may be required or directed
by a
registrant to originate mortgage loans in consideration of
direct or indirect
gain or profit. Employee does not include an
independent contractor or
any person who has a similar employment
relationship with a
mortgage broker
The following persons are
exempt from sections 1322.01 to
1322.12 of the Revised Code only
with respect
to business engaged
in or authorized by their
charter, license,
authority, approval,
or certificate, or as
otherwise authorized by division (C)(1)(g) of this section:
(a) A bank, savings bank, savings and loan association, or
credit union organized under the laws of this state, another
state, or the United States, or a subsidiary or affiliate of a
bank, savings bank, savings and loan association, or credit union;
(b) A budget and debt counseling service, as defined in
division (D) of section 2716.03 of the Revised Code, provided that
the service is a nonprofit organization exempt from taxation under
section 501(c)(3) of the "Internal Revenue Code of 1986," 100
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service is
in compliance with Chapter 4710. of the Revised Code;
(c) A consumer reporting agency that is in substantial
compliance with the "Fair Credit Reporting Act," 84 Stat. 1128, 15
U.S.C.A. 1681a, as amended;
(d) Any political subdivision, or any governmental or other
public entity, corporation, or agency, in or of the United States
or any state of the United States;
(e) A college or university, or controlled entity of a
college or university, as defined in section 1713.05 of the
Revised Code;
(f) A person registered under sections 1321.51 to 1321.60 of
the Revised Code, provided that not more than five per cent of the
person's mortgage loans constitute table-funding mortgage loans or
warehouse-lending mortgage loans. Division (C)(1)(f) of this
section does not include any person that is also registered or
licensed under sections 1322.01 to 1322.12 of the Revised Code.
(g) A mortgage banker. For purposes of division (C)(1)(g)
of this section, "mortgage banker" means any person that makes,
services, buys, or sells mortgage loans, that underwrites the
loans, and that meets at least
one of the following criteria: (i) The person has been directly approved by the United
States department of housing and urban development as a
nonsupervised mortgagee with participation in the direct
endorsement program. Division (C) (1) (g) (i) of this section
includes a person that has been directly approved by the United
States department of housing and urban development as a
nonsupervised mortgagee with participation in the direct
endorsement program and that makes loans in excess of the
applicable loan limit set by the federal national mortgage
association, provided that the loans in all respects, except loan
amounts, comply with the underwriting and documentation
requirements of the United States department of housing and urban
development. Division (C)(1)(g)(i) of this section does
not
include
a mortgagee approved as a loan correspondent. (ii) The person has been directly approved by the federal
national mortgage association as a seller/servicer. Division (C)
(1) (g) (ii) of this section includes a person that has been
directly approved by the federal national mortgage association as
a seller/servicer and that makes loans in excess of the applicable
loan limit set by the federal national mortgage association,
provided that the loans in all respects, except loan amounts,
comply with the underwriting and documentation requirements of the
federal national mortgage association. (iii) The person has been directly approved by the federal
home loan mortgage corporation as a seller/servicer. Division (C)
(1) (g) (iii) of this section includes a person that has been
directly approved by the federal home loan mortgage corporation as
a seller/servicer and that makes loans in excess of the applicable
loan limit set by the federal home loan mortgage corporation,
provided that the loans in all respects, except loan amounts,
comply with the underwriting and documentation requirements of the
federal home loan mortgage corporation. (iv) The person has been directly approved by the United
States department of veterans affairs as a nonsupervised automatic
lender. Division (C)(1)(g)(iv) of this section does not include a
person directly approved by the United States department of
veterans affairs as a nonsupervised lender, an agent of a
nonsupervised automatic lender, or an agent of a nonsupervised
lender. (h) A person created solely for the purpose of securitizing
loans secured by an interest in real estate, provided the person
does not service the loans. For purposes of division (C)(1)(h) of
this section, "securitizing" means the packaging and sale of
mortgage loans as a unit for sale as investment securities, but
only to the extent of those activities. (2) Originate means any of the following: (a) To negotiate or arrange, or to offer to negotiate
or
arrange, a mortgage loan between a person that makes or funds
mortgage loans and a buyer;
(b) To issue a commitment for a mortgage loan to a
buyer;
(c) To place, assist in placement, or find a mortgage
loan
for a buyer
Any individual who is employed by a person exempt from
sections 1322.01 to 1322.12 of the Revised Code is also exempt
from those sections to the extent the individual is acting within
the scope of the individual's employment and within the scope of
the exempt person's charter, license, authority, approval, or
certificate.
Sec. 1322.021. (A) A registrant that is a corporation,
limited liability company, partnership, trust, or other business
entity or association shall notify the division of financial
institutions of every sale, transfer, or hypothecation of any
stock, security, membership, partnership, or other equitable,
beneficial, or ownership interest in the entity or association, if
the interest represents at least a five per cent membership,
partnership, or other equitable, beneficial, or ownership interest
in the entity or association.
(B) Every person that acquires or otherwise receives an
interest described in division (A) of this section is subject to
sections 1322.01 to 1322.12 of the Revised Code. The division may
make any investigation necessary to determine whether any fact or
condition exists that, if it had existed at the time of the
original application for a certificate of registration, the fact
or condition would have warranted the division to deny the
application under section 1322.04 of the Revised Code. If such a
fact or condition is found, the division may, in accordance with
Chapter 119. of the Revised Code, revoke the registrant's
certificate.
Sec. 1322.03. (A) An application for a certificate of
registration as a mortgage broker shall be in writing, under
oath,
and in the form prescribed by the superintendent of
financial
institutions. The application shall
be accompanied by
an
a
nonrefundable application fee of three hundred fifty dollars for
each
location
of an office to be maintained by the applicant in
accordance with
division (A) of section 1322.02 of the Revised
Code
and; however, an applicant that is registered under sections
1321.51 to 1321.60 of the Revised Code shall not be required to
pay an application fee. The application shall
provide all
of the
following: (1) The location or locations where the business is to be
transacted
and whether any location is a residence. If any
location
where the business is to be transacted is a residence,
the
application shall be accompanied by a certified copy of a
zoning
permit authorizing the use of the residence for commercial
purposes, or shall be accompanied by a written opinion or other
document issued by the county or political subdivision where the
residence is located certifying that the use of the residence to
transact business as a mortgage broker is not prohibited by the
county or political subdivision. The application also
shall be
accompanied by a photograph of
each location at which the business
will be transacted. (2)(a) In the case of a sole proprietor, the name and
address of the sole
proprietor; (b) In the case of a partnership, the name and
address of
each partner; (c) In the case of a corporation, the name and
address of
each shareholder owning five per cent or more of the
corporation; (d) In the case of any other entity, the name
and address of
any person that owns five per cent or more of the
entity that will
transact business as a mortgage broker. (3)(a) If the applicant is a partnership,
the applicant
shall designate one
of the partners
named in the
application
pursuant to division (A)(2)(b) of this
section as responsible for
managing the operations
of the location or locations where the
business is to be transacted. (b) If the applicant is a corporation, the
applicant shall
designate one of the shareholders
named in the
application
pursuant to division (A)(2)(c) of this
section as responsible for
managing the operations
of the location or locations where the
business is to be transacted.
(c) If the applicant is
corporation, limited liability
company, or any other
business entity
or association, the
applicant
shall designate
a natural person that owns five per
cent
or more
of the entity that will transact business as a
mortgage
broker as
responsible for managing the
an employee or owner of the
applicant as the applicant's operations
of
the location or
locations where the business is to be
transacted
manager. While
acting as the operations manager, the employee or owner shall not
be employed by any other mortgage broker.
(4) Evidence that
at least one of the following applies to
the sole proprietor, partner, shareholder, or
natural
the person
designated on
the application pursuant to division (A)(3) of this
section, as
responsible for managing the operations of
the
location
or locations where the business is to be
transacted: (a) Except as provided in division (D)(2) of this
section,
the sole proprietor, partner, shareholder, or
natural person has
earned at
least an associate degree in an area
relating to
finance, banking, or business administration, and
the degree was
earned at an accredited college or university, including an
accredited community or technical college.
(b) The sole proprietor, partner, shareholder, or natural
person
applicable, possesses at
least three years of experience in
the
mortgage and
lending field, which experience may include
employment with or as a mortgage
broker or with a
financial
institution, mortgage lending institution, or other
lending
institution, or possesses at least three years of other experience
related specifically to the business of mortgage loans
that the
superintendent determines meets the requirements of
division
(A)(4)(b) of this section.;
(5) Evidence of compliance with the surety bond
requirements
of section 1322.05 of the Revised Code and with sections 1322.01
to 1322.12 of the Revised Code; (6) In the case of a foreign
corporation
business entity,
evidence that it
maintains a license
or registration pursuant to
Chapter 1703., 1705., 1775., 1777., 1782., or 1783. of the Revised
Code
to transact business in this state; (7) A statement
that
as to whether the applicant
or, to the
best of the applicant's knowledge, any
shareholder, member,
partner, operations manager, or
employee of the applicant has
not
been convicted
of
or pleaded
guilty to
a
any criminal offense, the
violation of
which is
a
felony
involving theft, receiving stolen
property, embezzlement,
forgery, fraud, passing bad checks, money
laundering, or drug
trafficking, or any criminal offense involving
fraud
money or
securities; (8)
A statement as to whether the applicant or, to the best
of the applicant's knowledge, any
shareholder, member, partner,
operations manager, or
employee of the applicant has been subject
to any adverse judgment
for conversion, embezzlement,
misappropriation of funds, fraud,
misfeasance or malfeasance, or
breach of fiduciary duty;
(9) Evidence that the applicant's operations manager has
successfully completed the examination required under division (A)
of section 1322.051 of the Revised Code;
(10) Any further information that the superintendent
requires. (B) Upon the filing of the application and payment of the
application fee, the superintendent shall investigate the
applicant.
The investigation shall include a criminal records
check based on the fingerprints of the applicant and a civil
records check. If, in order to issue a certificate of
registration
to
an applicant, investigation by the
superintendent
outside this
state is necessary, the superintendent may require
the applicant
to advance sufficient funds to pay the actual
expenses of the
investigation, if it appears that these expenses
will exceed three
hundred
fifty dollars. The superintendent shall
provide the
applicant
with an itemized statement of the actual
expenses that
the
applicant is required to pay. (C) All funds advanced and application and renewal fees
and
penalties paid
to the superintendent under this section and
section
1322.04
of
the Revised Code shall be paid by the
superintendent to the
treasurer of state to the credit of the
consumer
finance fund
created in section 1321.21 of the Revised
Code. (D)(1) Division (A)(4) of this section does not
apply to any
registrant that, on March 4, 1996, is
registered as a
mortgage
broker under sections 1322.01 to 1322.12
of
the Revised Code under
a certificate of
registration issued pursuant to those sections
prior to March 4, 1996,
provided that the certificate
of
registration is not surrendered by the registrant or
revoked
or
refused renewal by the superintendent of
financial institutions at
any time after
March 4, 1996. (2) Except as provided in division (D)(3) of this
section,
on and after
the effective date of this
amendment,
evidence of
education
provided in division
(A)(4)(a)
of this
section shall not
be
accepted on an application of a person
applying as a new
applicant for a certificate of registration as a
mortgage
broker.
However, on and after
the effective date of this
amendment, a
person who, prior to
that date,
submitted evidence
of education as
provided for in division
(A)(4)(a)
of this section may renew a
certificate of registration
as a
mortgage broker, provided that
the person is registered on
that
date as a mortgage broker
pursuant to section 1322.04 of the
Revised
Code, and a certificate
of
registration as a mortgage
broker is not surrendered by the
person or revoked or refused
renewal by the superintendent at
any
time after that date.
(3) For a period ending three years after
the effective date
of this
amendment, evidence that the
person
designated as
responsible for managing the
operation of a location
or locations
where business is or will be transacted
meets the
educational
requirements specified in division
(A)(4)(a) of this
section
shall
be acceptable on an application for a certificate of
registration
as a
mortgage broker, if the superintendent
determines that both
of the following
apply:
(a) Prior to
the effective date of this amendment,
the
person was designated pursuant to division
(A)(3) of
this section
as responsible for
managing the operations of a
location or
locations where a registrant's
business was
transacted, having met
the educational requirements provided in
division (A)(4)(a) of
this
section;
(b) The person is designated as responsible for
managing the
operations of an entity described in division
(A)(2) of this
section where the mortgage
broker business is or will be
transacted
If an application for a certificate of registration
does not contain all of the information required under division
(A) of this section, and if that information is not submitted to
the superintendent within ninety days after the superintendent
requests the information in writing, the superintendent may
consider the application withdrawn.
(E) A certificate of registration, or the authority granted
under such a certificate, is not transferable or assignable and
cannot be franchised by contract or any other means.
Sec. 1322.031. (A) An application for a license as a loan
officer shall be in writing, under oath, and in the form
prescribed by the superintendent of financial institutions. The
application shall be accompanied by a nonrefundable application
fee of one hundred dollars and shall provide all of the following:
(1) The name and address of the applicant;
(2) A statement as to whether the applicant has been
convicted of
or pleaded guilty to any criminal offense involving
theft,
receiving stolen property, embezzlement, forgery, fraud,
passing
bad checks, money laundering, or drug trafficking, or any
criminal
offense involving money or securities;
(3) A statement as to whether the applicant has been subject
to
an adverse judgment for conversion, embezzlement,
misappropriation
of funds, fraud, misfeasance or malfeasance, or
breach of
fiduciary duty;
(4) Any further information that the superintendent
requires.
(B) Upon the filing of the application and payment of the
application fee, the superintendent shall investigate the
applicant. The investigation shall include a criminal records
check based on the fingerprints of the applicant and a civil
records check. If, in order to issue a license to an applicant,
investigation by the superintendent outside this state is
necessary, the superintendent may require the applicant to advance
sufficient funds to pay the actual expenses of the investigation,
if it appears that these expenses will exceed one hundred dollars.
The superintendent shall provide the applicant with an
itemized
statement of the actual expenses that the applicant is
required to
pay.
(C) All funds advanced and application and renewal fees and
penalties paid
to the superintendent under this section and
section 1322.041 of
the Revised Code shall be paid by the
superintendent to the
treasurer of state to the credit of the
consumer finance fund
created in section 1321.21 of the Revised
Code.
(D) If an application for a license does not contain all of
the information required under division (A) of this section, and
if that information is not submitted to the superintendent within
ninety days after the superintendent requests the information in
writing, the superintendent may consider the application
withdrawn.
(E)(1) The business of a loan officer shall principally be
transacted at an office of the employing mortgage broker, which
office is
registered in accordance with division (A) of section
1322.02
of the Revised Code. Each original license shall be
deposited
with and maintained by the employing mortgage broker at
the
mortgage broker's main office. A copy of the license shall be
maintained and displayed at the office where the loan officer
principally
transacts business.
(2) If a loan officer's employment is terminated, the
mortgage
broker shall return the original license to the
superintendent
within five business days after the termination.
The licensee may
request the transfer of the license to another
mortgage broker by
submitting a relocation application, along with
a fifteen dollar
fee, to the superintendent or may request the
superintendent in
writing to hold the license in escrow for a
period not to exceed
one year. Any licensee whose license is held
in escrow shall
cease activity as a loan officer.
A mortgage broker may employ a loan officer on a temporary
basis pending the transfer of the loan officer's license to the
mortgage broker, if the mortgage broker receives written
confirmation from the superintendent that the loan officer is
licensed under sections 1322.01 to 1322.12 of the Revised Code. (F)
A license, or the authority granted under such a license,
is
not assignable and cannot be franchised by
contract or any
other means.
Sec. 1322.04. (A) Upon the conclusion of the
investigation
required under division (B) of section 1322.03 of
the Revised
Code, the superintendent of financial
institutions shall issue a
certificate of registration
to the applicant if
the
superintendent
finds that the following conditions are met: (1)
The
Except as otherwise provided in division (A) of
section 1322.03 of the Revise Code, the application is accompanied
by the application fee
of three hundred fifty dollars for each
location of an office to be
maintained by the applicant in
accordance with division (A) of
section 1322.02 of the Revised
Code and complies with division (A) of
section 1322.03 of the
Revised Code. If a check or other draft instrument is returned to
the superintendent for insufficient funds, the
superintendent
shall notify the registrant by certified mail,
return receipt
requested, that the certificate of registration
issued in reliance
on the check or other draft instrument will be
canceled unless the
registrant, within thirty days after receipt
of the notice,
submits the application fee and a
one-hundred-dollar penalty to
the superintendent. If the
registrant does not submit the
application fee and penalty within
that time period, or if any
check or other draft instrument used
to pay the fee or penalty is
returned to the superintendent for
insufficient funds, the
certificate of registration shall be
canceled immediately without
a hearing and the registrant shall
cease activity as a mortgage
broker. (2) If the application is for a location that is a
residence,
that the applicant has obtained a valid zoning permit
authorizing the use of the residence for commercial purposes, or
has obtained
a valid written opinion or other document
issued by
the county or political subdivision where the
residence is located
certifying that the use of the residence to
transact business as a
mortgage broker is not prohibited by the
county or political
subdivision. The
application also is accompanied by a photograph
of each
location at which the mortgage broker's business will be
transacted. (3)(a) The sole proprietor, partner, shareholder,
or
natural
the person designated on
the
application, pursuant to division
(A)(3) of section 1322.03 of the Revised
Code, as
responsible for
managing the
operation of the location or locations where the
business is to be
transacted
applicable, meets the
educational or
experience requirements
provided in division
(A)(4) of section
1322.03 of the Revised Code. (b) If a partner,
shareholder, or natural person designated
pursuant to division
(A)(3)
of section 1322.03 of the
Revised
Code
ceases to be
responsible for managing the operation of the
location or
locations where the business is to be transacted,
the
applicant shall comply with the requirements that apply to a
registrant
under division (E) of this section.
(4)
In the case of a foreign corporation, the
The applicant
maintains
a license pursuant to Chapter 1703. of the Revised Code
to transact business in this
all licenses and registrations
required by the secretary of state. (5) The applicant complies with the surety bond
requirements
of section 1322.05 of the Revised Code. (6) The applicant complies with sections 1322.01 to
1322.12
of the Revised Code. (7)
The
Neither the applicant
nor any shareholder, member,
partner, operations manager, or employee of the
applicant has
not
pleaded guilty to or been
convicted of
a
any
criminal offense, the
violation of which is a
felony, or any
criminal offense involving
fraud
described in division (A)(7) of
section 1322.03 of the
Revised Code, or, if the applicant or any of those other persons
has pleaded guilty to or been convicted of such an offense, the
applicant has proven to the superintendent, by a preponderance of
the evidence, that the applicant's or other person's activities
and employment record since the conviction show that the applicant
or other person is honest, truthful, and of good reputation, and
there is no basis in fact for believing that the applicant or
other person will commit such an offense again. (8)
Neither the applicant nor any shareholder, member,
partner, operations manager, or employee of the
applicant has been
subject to any adverse judgment for conversion,
embezzlement,
misappropriation of funds, fraud, misfeasance or
malfeasance, or
breach of fiduciary duty, or, if the applicant or any of those
other persons has been subject to such a judgment, the applicant
has proven to the superintendent, by a preponderance of the
evidence, that the applicant's or other person's activities and
employment record since the judgment show that the applicant or
other person is honest, truthful, and of good reputation, and
there is no basis in fact for believing that the applicant or
other person will be subject to such a judgment again.
(9) The applicant's operations manager successfully completed
the examination required under division (A) of section 1322.051 of
the Revised Code.
(10) The applicant's financial responsibility, experience,
character, and general fitness command the confidence of the
public and warrant the belief that the business will be operated
honestly and fairly in compliance with the purposes of sections
1322.01 to 1322.12 of the Revised Code. For purposes of determining whether an applicant that is a
partnership, corporation, or other
business entity
or association
has
met the conditions set forth in
division
divisions (A)(7),
(A)(8), and (A)(10) of this
section, the superintendent shall
determine which partners,
shareholders, or persons named in the
application pursuant to
division
(A)(2) of section 1322.03 of
the
Revised
Code must meet the conditions set forth in
division
divisions (A)(7), (A)(8), and (A)(10) of
this section. This
determination shall be based on the extent
and nature of the
partner's, shareholder's, or
person's ownership interest
in the
partnership, corporation, or
other business entity
or association
that
is the applicant. (B) The certificate of registration issued pursuant to
division (A) of this section may be renewed annually on or before
the thirtieth day of April
upon payment of a
if the superintendent
finds that all of the following conditions are met:
(1) The renewal application is accompanied by a
nonrefundable
renewal fee of three hundred
fifty dollars for
each location of an office to be maintained
by the applicant in
accordance with division (A) of section
1322.02 of the Revised
Code
and a finding by the superintendent that the; however, an
applicant that is registered under sections 1321.51 to 1321.60 of
the Revised Code shall not be required to pay a renewal fee. If a
check or other draft instrument is returned to the superintendent
for insufficient funds, the superintendent shall notify the
registrant by
certified mail, return receipt requested, that the
certificate of
registration renewed in reliance on the check or
other draft
instrument will be canceled unless the registrant,
within thirty
days after receipt of the notice, submits the
renewal fee and a
one-hundred-dollar penalty to the
superintendent. If the
registrant does not submit the renewal fee
and penalty within that
time period, or if any check or other
draft instrument used to pay
the fee or penalty is returned to the
superintendent for
insufficient funds, the certificate of
registration shall be
canceled immediately without a hearing and
the registrant shall
cease activity as a mortgage broker.
(2) On and after January 1, 2003, the operations manager
designated under division (A)(3) of section 1322.03 of the Revised
Code has completed, during the immediately preceding calendar
year, at least six hours of continuing education as required under
section 1322.052 of the Revised Code.
(3) The applicant meets the conditions set forth in
divisions (A)(2) to
(8)(10) of this section
and that the.
(4) The applicant's certificate of
registration is not
subject to an order of suspension or
revocation by the
superintendent.
If
(C)(1) Subject to division (C)(2) of this section, if a
renewal fee is
received by the
superintendent after
the thirtieth
day of April, the certificate of
registration shall
not be
considered renewed, and the applicant shall cease activity
as a
mortgage broker and apply for a certificate of registration
as a
mortgage broker. (C) No application or renewal fee
required by division (A)
or (B) of this section shall be returned after a certificate of
registration has been issued or renewed by the superintendent.
(D) Division (A)(3) of this section does not
apply to any
registrant that, on March 4, 1996, is
registered as a
mortgage
broker under sections 1322.01 to 1322.12 of
the Revised Code under
a certificate of
registration issued pursuant to those sections
prior to March 4, 1996,
provided that the certificate
of
registration is not surrendered by the registrant or
revoked
or
refused renewal by the superintendent of
financial institutions at
any time after
March 4, 1996.
(E)(2) Division (C)(1) of
this section shall not apply if
the
applicant, no later than the
thirty-first day of May, submits
the
renewal fee and a
one-hundred-dollar penalty to the
superintendent.
(D) If
a partner, shareholder, or natural
the person
designated
as the operations manager pursuant to division (A)(3)
of
section 1322.03 of the Revised
Code is no longer
responsible
for managing the operation of the location or locations where
business is to be transacted
the operations manager, the
registrant
shall do all of the
following:
(1) Designate another
partner,
shareholder, or natural
person as
responsible for managing the operation of
the
location
or locations where business is to be transacted
the operations
manager; (2) Within ten days after the
designation described in
division
(E)(D)(1)
of this section, notify the superintendent in
writing of
the designation; (3) Submit any additional
information that the
superintendent requires to establish that
the newly designated
partner, shareholder, or natural person
operations manager
complies with the
experience requirements set forth in division
(A)(4)(b) of section 1322.03 of
the Revised
Code.
Sec. 1322.041. (A) Upon the conclusion of the investigation
required under division (B) of section 1322.031 of the Revised
Code, the superintendent of financial institutions shall issue a
loan officer license to the applicant if the superintendent finds
that the following conditions are met:
(1) The application is accompanied by the application fee.
If a check or other draft instrument is returned to the
superintendent for insufficient funds, the
superintendent shall
notify the licensee by certified mail, return
receipt requested,
that the license issued in reliance on the
check or other draft
instrument will be canceled unless the
licensee, within thirty
days after receipt of the notice, submits
the application fee and
a one-hundred-dollar penalty to the
superintendent. If the
licensee does not submit the application
fee and penalty within
that time period, or if any check or other
draft instrument used
to pay the fee or penalty is returned to the
superintendent for
insufficient funds, the license shall be
canceled immediately
without a hearing and the licensee shall
cease activity as a loan
officer.
(2) The applicant complies with sections 1322.01 to 1322.12
of the Revised Code.
(3) The applicant has not been convicted of or pleaded
guilty to any criminal offense described in division (A)(2) of
section 1322.031 of the Revised Code, or, if the applicant has
been convicted of or pleaded guilty to such an offense, the
applicant has proven to the superintendent, by a preponderance of
the evidence, that the applicant's activities and employment
record since the conviction show that the applicant is honest,
truthful, and of good reputation, and there is no basis in fact
for believing that the applicant will commit such an offense
again.
(4) The applicant has not been subject to an adverse judgment
for conversion, embezzlement, misappropriation of funds, fraud,
misfeasance or malfeasance, or breach of fiduciary duty, or, if
the applicant has been subject to such a judgment, the applicant
has proven to the superintendent, by a preponderance of the
evidence, that the applicant's activities and employment record
since the judgment show that the applicant is honest, truthful,
and of good reputation, and there is no basis in fact for
believing that the applicant will be subject to such a judgment
again.
(5) The applicant's character and general fitness command the
confidence of the public and warrant the belief that the business
will be operated honestly and fairly in compliance with the
purposes of sections 1322.01 to 1322.12 of the Revised Code.
(B) The license issued under division (A) of this
section
may be renewed annually on or before the thirtieth day of
April if
the superintendent finds that all of the following
conditions are
met:
(1) The renewal application is accompanied by a
nonrefundable renewal fee of one hundred dollars. If a check or
other draft instrument is returned to the superintendent for
insufficient funds, the superintendent shall notify
the licensee
by certified mail, return receipt requested, that the
license
renewed in reliance on the check or other draft instrument
will be
canceled unless the licensee, within thirty days after
receipt of
the notice, submits the renewal fee and a
one-hundred-dollar
penalty to the superintendent. If the licensee
does not submit
the renewal fee and penalty within that time
period, or if any
check or other draft instrument used to pay the
fee or penalty is
returned to the superintendent for insufficient
funds, the license
shall be canceled immediately without a hearing
and the licensee
shall cease activity as a loan officer.
(2) On and after January 1, 2003, the loan officer has
completed, during the immediately preceding calendar year, at
least six hours of continuing education as required under section
1322.052 of the Revised Code.
(3) The applicant meets the conditions set forth in
divisions (A)(2) to (5) of this section.
(4) The applicant's license is not subject to an order of
suspension or revocation by the superintendent.
(C)(1) Subject to division (C)(2) of this section, if a
license renewal application or renewal fee is
received by the
superintendent after the thirtieth day of April,
the license shall
not be considered renewed, and the applicant
shall cease activity
as a loan officer.
(2) Division (C)(1) of this section shall not apply if the
applicant, no later than the thirty-first day of May, submits the
renewal application and fee and a one-hundred-dollar penalty to
the superintendent.
Sec. 1322.05. (A) No registrant
shall conduct business in
this state, unless the registrant has obtained
and maintains in
effect at all times a corporate
surety bond issued by a bonding
company or insurance company
authorized to do business in this
state. The bond shall be in
favor of the superintendent of
financial institutions and in the
penal sum of at least
twenty-five
fifty thousand dollars and an
additional penal sum of
five
ten thousand dollars for each
location, in excess of one, at
which the registrant
conducts business.
The term of the bond shall
coincide with the term of registration. A copy of the bond shall
be filed with the
superintendent. The bond shall be
for the
exclusive benefit of any
person
buyer injured by a violation
by an
employee, licensee, or registrant of
any provision of sections
1322.01 to
1322.12 of the Revised
Code.
The aggregate liability
of the corporate
surety for any and all
breaches of the conditions
of the bond shall not exceed
the penal
sum of the bond. (B)(1) The registrant
shall give notice to the
superintendent by certified mail
of any action that is brought
by
a buyer against the registrant
or loan officer of the registrant
alleging injury by a violation of any provision of sections
1322.01 to 1322.12 of the Revised Code, and of
any judgment that
is entered against the registrant
or loan officer of the
registrant by a
person
buyer injured by a violation of any
provision of sections
1322.01 to 1322.12 of the
Revised
Code. The
notice shall provide
details sufficient to identify the action or
judgment, and shall be
filed with the superintendent within ten
days after the
commencement of the action or notice to the
registrant of
entry of a judgment.
The
(2) A corporate surety, within ten days
after it pays any
claim or judgment, shall give notice to the
superintendent by
certified mail of the payment, with details
sufficient to identify
the person and the claim or judgment
paid. (C) Whenever the
penal sum of the corporate surety bond is
reduced by one or
more recoveries or payments, the registrant
shall
furnish a new or additional bond under this section, so that
the
total or aggregate penal sum of the bond or bonds equals the
sum required by this section, or shall furnish an endorsement
executed by the corporate surety reinstating the bond to the
required penal sum of it. (D) The liability of
the corporate surety on the bond to the
superintendent and to
any
person
buyer injured by a violation of
any provision of sections
1322.01 to 1322.12 of the
Revised
Code
shall not be affected in
any way by any misrepresentation, breach
of warranty, or failure
to pay the premium, by any act or omission
upon the part of the
registrant, by the insolvency or bankruptcy
of the
registrant, or by the insolvency of the registrant's
estate. The liability for any act or omission that occurs during
the term of
the corporate surety bond shall be maintained and in
effect for at least two
years after the date on which the
corporate surety bond is terminated or
canceled. (E) The corporate
surety bond shall not be canceled by the
registrant or the
corporate surety except upon notice to the
superintendent by
certified mail, return receipt requested. The
cancellation
shall not be effective prior to thirty days after the
superintendent receives the notice. (F) No registrant
shall fail to comply with
this section.
Any registrant that fails to comply with this section shall cease
all mortgage broker activity in this state until the registrant
complies with this section.
Sec. 1322.051.
(A) Each person designated under division
(A)(3) of section 1322.03 of the Revised Code to act as operations
manager for a mortgage broker business shall submit to an
examination approved by the superintendent of financial
institutions.
(B) Each licensee, within ninety days after the original
issuance of the loan officer license, shall successfully complete
an examination approved by the superintendent. Failure to comply
with this division results in the termination of the license by
operation of law.
Sec. 1322.052. On and after January 1, 2002, each licensee
and each person designated under division (A)(3) of section
1322.03 of the Revised Code to act as operations manager for a
mortgage broker business shall complete at least six hours of
continuing education every calendar year. To fulfill this
requirement, the six hours of continuing education must be offered
in a course or program of study approved by the superintendent of
financial institutions.
Sec. 1322.06. (A) As often as the superintendent of
financial institutions considers it necessary, the superintendent
may
examine the registrant's
records pertaining to business
transacted pursuant to sections 1322.01 to
1322.12 of the Revised
Code. (B) A registrant shall maintain records pertaining to
business transacted
pursuant to sections 1322.01 to 1322.12 of the
Revised Code for
two
four years
or
more after the final entry on
such records. No registrant shall fail to
comply with this
division. (C) All information obtained by the superintendent or the
superintendent's deputies, examiners, assistants, agents, or
clerks by reason
of their official position, including information
obtained by such persons in
the course of examining a registrant
or investigating an applicant for a
certificate of registration,
is privileged and confidential. All such
information shall remain
privileged and confidential for all purposes except
when it is
necessary for the superintendent and the superintendent's
deputies,
examiners, assistants, agents, or clerks to take
official action regarding the
affairs of the registrant or in
connection with criminal proceedings.
Sec. 1322.061. (A)(1) The following information is
privileged and confidential:
(a) Examination information, and any information leading to
or arising from an examination;
(b) Investigation information, and any information arising
from or leading to an investigation.
(2) The information described in division (A)(1) of this
section shall remain privileged and confidential for all purposes
except when it is necessary for the superintendent of financial
institutions to take official action regarding the affairs of a
registrant, or in connection with civil or criminal investigations
or proceedings conducted by the attorney general or a county
prosecutor. The superintendent may share examination and
investigation information with any law enforcement agency or any
other state or federal regulatory agency. Any information shared
with the attorney general, a county prosecutor, or a law
enforcement agency or other state or federal regulatory agency
shall remain privileged and confidential and shall only be used in
connection with an official investigation, proceeding, or action.
(B) All application information, except social security
numbers, employer identification numbers, financial account
numbers, the identity of the institution where financial accounts
are maintained, personal financial information, fingerprint cards
and the information contained on such cards, and criminal
background information, is a public record as defined in section
149.43 of the Revised Code.
Sec. 1322.062. (A) Within three business days after taking
an
application for a loan from a buyer, a registrant shall deliver
to the
buyer a mortgage loan origination disclosure statement that
contains all of
the following:
(1) The name, address, and telephone number of the buyer;
(2) The typewritten name of the loan officer and the number
designated on the loan officer's license; (3) The street address, telephone number, and facsimile
number of
the registrant and the number designated on the
registrant's
certificate of registration;
(4)
The signature of the loan officer or
registrant;
(5) A statement indicating whether the buyer is to pay for
the services of a bona fide third party if the registrant is
unable to assist the buyer in obtaining a mortgage;
(6) A statement that describes the method by which the fee
to be paid by the buyer to the registrant will be calculated;
(7) A statement that the lender may pay compensation to the
registrant;
(8) A description of all the services the registrant has
agreed to perform for the buyer;
(9) A statement that the buyer has not entered into an
exclusive agreement for brokerage services. (B) If there is any change in the information provided under
division (A)(6) or (8) of this section, the registrant shall
provide the buyer with the revised mortgage loan origination
disclosure statement no later than three days after the change
occurs, or the date the loan is closed, whichever is earlier.
(C) No registrant shall fail to comply with
this section.
Sec. 1322.07. No
mortgage broker, registrant, licensee, or
applicant for
a certificate
of registration
or license under
sections 1322.01 to
1322.12 of the Revised
Code shall do any of
the following: (A) Obtain a certificate of registration
or license
through
any false
or fraudulent representation
of a material fact or any
omission of a material fact required by state law,
or make any
substantial
misrepresentation in any registration
or license
application; (B) Make false
or misleading statements of a material fact,
omissions of statements required by state law, or false promises
regarding a material fact, through advertising or other
means,
or
engage in a continued course
of misrepresentations; (C) Engage in conduct that constitutes improper,
fraudulent,
or dishonest dealings; (D) Fail to notify the division of financial
institutions
if
within thirty days after the registrant, licensee, or applicant,
in a court of competent
jurisdiction of this state or any other
state, is convicted of or
pleads
guilty to
a
any criminal offense,
the violation of which is
a felony
involving theft, receiving
stolen property, embezzlement,
forgery, fraud, passing bad checks,
money laundering, or drug
trafficking, or any
criminal offense
involving
fraud
money or
securities;
(E) Knowingly make, propose, or solicit fraudulent, false,
or
misleading
statements on any mortgage document or on any
document
related to
a mortgage, including a mortgage application,
real
estate
appraisal, or real estate settlement or closing
document.
For purposes of this division, "fraudulent, false, or
misleading
statements" does not include mathematical errors,
inadvertent
transposition of numbers, typographical errors, or any
other bona
fide error.
(F) Knowingly instruct, solicit, propose, or otherwise cause
a buyer
to sign in blank a mortgage related document.
Sec. 1322.071. (A) As used in this section, "bona fide third
party" has the same meaning as in section 1322.08 of the Revised
Code.
(B) No mortgage broker, registrant, or licensee shall do any
of the following:
(1) Retain original documents provided to the mortgage
broker, registrant, or
licensee by the buyer in connection with
the loan application,
including income tax returns, account
statements, or other
financial related documents;
(2) Receive, directly or indirectly, a premium on the fees
charged for services performed by a bona fide third party;
(3) Pay or receive, directly or indirectly, a referral fee
or kickback of any kind to or from a bona fide third party or
other party with a related interest in the transaction, such as a
home improvement builder, real estate developer, or real estate
broker or agent, for the referral of business.
Sec. 1322.072. No person, in connection with any examination
or investigation conducted by the superintendent of financial
institutions under sections 1322.01 to 1322.12 of the Revised
Code, shall knowingly do either of the following:
(A) Circumvent, interfere with, obstruct, or fail to
cooperate, including making a false or misleading statement,
failing to produce records, or intimidating or suborning any
witness;
(B) Tamper with, alter, or manufacture any evidence.
Sec. 1322.073. No person shall acquire, sell, transfer, or
hypothecate any interest in a registrant or an applicant for a
certificate of registration in order to obfuscate or conceal the
true ownership or control of the registrant or applicant.
Sec. 1322.08. (A)No
registrant shall fail to do any of the
following: (1) Maintain a special account; (2) Deposit into the registrant's special account any bona
fide third-party fee the registrant receives; (3) Pay bona fide third-party fees to a bona fide third
party from the registrant's special account.
(B) Except as otherwise provided in this
division, no
registrant shall charge or receive, directly or
indirectly, fees
for assisting a buyer in obtaining a mortgage,
until all of the
services that the registrant has agreed to
perform for the buyer
are completed, and the proceeds of the
mortgage loan have been
disbursed to or on behalf of the buyer. However,
prior to
completion of such services the following fees may be paid for
services performed by a bona fide third party in assisting the
buyer to obtain a mortgage if the fees are either paid directly
by
the buyer to the bona fide third party or, except as provided in
division
(A)(6)(B)(5) of this section, the fees are
deposited by
the registrant into the registrant's special account
for services
performed by the bona fide third party: (1) Fees to obtain a report from a credit reporting agency; (2) Fees for notary services; (3)
Fees authorized by law to record, file, or release a
security interest or mortgage; (4) Fees for the performance of a title search, appraisal
of
the real estate, or survey of the real estate;
(5)(4) Fees charged by a lender for locking in an interest
rate in connection
with obtaining or refinancing a mortgage,
provided that the fees
do not exceed an amount equal to one and
one-half per cent of
the mortgage loan amount;
(6)(5) Fees not exceeding five hundred dollars paid directly
by the buyer to
a state or federal
government agency or
instrumentality for purposes of processing a mortgage
application
relating to a government sponsored or guaranteed mortgage program.
(B)(C) If fees are paid by a buyer for the performance of
any
of the services described in division
(A)(4)
(B)(3) of this
section and
the registrant is unable to assist in obtaining a
mortgage for
the buyer, the registrant shall return to the buyer
the original
documents prepared by the bona fide third party at
the time that
the request for the mortgage is refused or denied.
With respect to any appraisal, however, the registrant may return
either the original or a copy.
No registrant
shall fail to comply
with
this division.
(C)(D) For purposes of this section:
(1) "Bona fide third party" means a person that is not an
employee of, related to, or affiliated with, the registrant, and
that is not used for the purpose of circumvention or evasion of
this section. (2) "Special account" means a depository account with a
financial institution, the deposits of which are insured by the
federal deposit insurance corporation, that is separate and
distinct from any personal or other account of the registrant,
and
that is maintained solely for the holding and payment of fees
described in
division (A) of this section for services performed
by bona fide third parties and received by the registrant from
buyers that the registrant assists in obtaining mortgages.
Sec. 1322.09. A mortgage broker shall disclose in any
printed, televised, broadcast, electronically transmitted, or
published
advertisement relating to the mortgage broker's
services,
including on any electronic site accessible through the
internet, the name and street address of the mortgage broker and
the number
designated on the certificate of registration that is
issued to the mortgage
broker by the superintendent of financial
institutions under sections 1322.01 to 1322.12 of the Revised
Code.
No
No mortgage broker shall fail to comply with this section.
Sec. 1322.10. (A) After notice and opportunity for a
hearing conducted in accordance with Chapter 119. of the Revised
Code, the superintendent of financial
institutions may do the
following: (1) Suspend, revoke, or refuse to issue or renew a
certificate of registration
or license if the
superintendent finds
a
either of the following:
(a) A violation of
division (B) of section
1322.06 or
section 1322.05, 1322.07, 1322.08, or 1322.09
or failure to comply
with any provision of sections 1322.01 to 1322.12 of the
Revised
Code or the rules adopted under those sections
or any other law
applicable to the business conducted under a certificate of
registration;
(b) A conviction of or guilty plea to any criminal offense
involving theft, receiving stolen property, embezzlement, forgery,
fraud, passing bad checks, money laundering, or drug trafficking,
or any criminal offense involving money or securities.
(2) Impose a fine of not more than
one thousand dollars, for
each day a violation of a
law or rule is committed, repeated, or
continued. If the
registrant
or licensee engages in a pattern of
repeated violations of
a law or rule, the superintendent may
impose a fine of not more than
two thousand dollars for each day
the violation is committed, repeated, or
continued. All fines
collected
pursuant to this division shall be paid to the treasurer
of
state to the credit of the consumer finance fund created in
section 1321.21 of the Revised
Code. In determining the amount of
a fine to be imposed
pursuant
to this division, the superintendent
shall consider all of the
following: (a) The seriousness of the violation; (b) The registrant's
or licensee's good faith efforts to
prevent the violation; (c) The registrant's
or licensee's history
regarding
violations and compliance with division orders; (d) The registrant's
or licensee's financial resources; (e) Any other matters the
superintendent considers
appropriate in enforcing sections 1322.01 to 1322.12
of the
Revised Code. (B) The superintendent may investigate alleged violations
of
section
sections 1322.01 to 1322.12 of the Revised Code or
the
rules
adopted under those sections or complaints
concerning any
such violation.
The superintendent may make application to the
court of common pleas for an
order enjoining any such violation,
and, upon a
showing by the superintendent that a person has
committed or is
about to commit such a violation, the court shall
grant an
injunction, restraining order, or other appropriate
relief. (C) In conducting any investigation pursuant to this
section, the superintendent may compel, by subpoena, witnesses
to
testify in relation to any matter over which the
superintendent
has jurisdiction and may require the production
of any book,
record, or other document pertaining to that
matter. If a person
fails to file any statement or report, obey any
subpoena, give
testimony, produce any book, record, or other
document as required
by a subpoena, or permit photocopying
of any book, record, or
other document subpoenaed, the court of
common pleas of any county
in this state, upon application made
to it by the superintendent,
shall compel obedience by attachment
proceedings for contempt, as
in the case of disobedience of the
requirements of a subpoena
issued from the court or a refusal to
testify therein. (D) If the superintendent determines that a person is
engaged in or is believed to be engaged in activities that may
constitute a violation of sections 1322.01 to 1322.12 of the
Revised Code, the superintendent, after notice and a hearing
conducted in accordance with Chapter 119. of the Revised Code, may
issue a cease and desist order. Such an order shall be
enforceable in the court of common pleas.
(E) If the superintendent revokes the certificate of
registration or license of a registrant or licensee who is
convicted of or pleads guilty to a criminal violation of any
provision of sections 1322.01 to 1322.12 of the Revised Code or
any criminal offense described in division (A)(1)(b) of this
section, the revocation shall be permanent.
Sec. 1322.101. On receipt of a notice pursuant to
section
3123.43 of the Revised Code, the division of
financial
institutions shall comply with sections 3123.41 to 3123.50 of the
Revised Code and any applicable rules adopted under
section
3123.63 of the Revised Code
with respect to a certificate
or
license issued pursuant to this chapter.
Sec. 1322.11. (A)(1) A buyer injured by a violation of
section 1322.02
or, 1322.062, 1322.07,
division (B) of section
1322.06, or
division (A) or (B) of section
1322.071,
1322.08, or
1322.09 of the Revised Code may
bring an action for
recovery of
damages. (2) Damages awarded under division (A)(1) of this section
shall not be less than the amount paid by the buyer to the
mortgage broker, plus reasonable attorney's fees and court costs. (3) The buyer may be awarded punitive damages. (B)(1) The superintendent of financial
institutions, the
attorney general, or a buyer may bring an action to
enjoin a
violation of sections 1322.01 to 1322.12 of the Revised Code. (2) The superintendent may initiate
criminate
criminal
proceedings
under sections 1322.01 to 1322.12 of the Revised Code
by
presenting any evidence of criminal violation to the
prosecuting
attorney of the county in which the offense may be
prosecuted.
If
the prosecuting attorney does not prosecute the
violations, or
at
the request of the prosecuting attorney, the
superintendent
shall
present any evidence of criminal violations
to the attorney
general, who may proceed in the prosecution with
all the rights,
privileges, and powers conferred by law on
prosecuting attorneys,
including the power to appear before grand
juries and to
interrogate witnesses before such grand juries.
These powers of
the attorney general shall be in addition to any
other applicable
powers of the attorney general. (C) The remedies provided by this section are in addition
to
any other remedy provided by law. (D) In any proceeding or action brought under sections
1322.01 to 1322.12 of the Revised Code, the burden of proving an
exemption under those sections is on the person claiming the
benefit of the exemption. (E) No person shall be deemed to violate sections 1322.01
to
1322.12 of the Revised Code with respect to any act taken or
omission made in reliance on a written notice, written
interpretation, or written report from the superintendent, unless
there is a subsequent amendment to those sections, or rules
promulgated thereunder, that affects the superintendent's notice,
interpretation, or report. (F) Upon disbursement of mortgage loan proceeds to or on
behalf of the buyer, the registrant that assisted the buyer to
obtain the mortgage loan is deemed to have completed the
performance of the registrant's services for the buyer and owes
no
additional duties or obligations to the buyer with respect to
the
mortgage loan. However, nothing in this division shall be
construed to limit or preclude the civil or criminal liability of
a registrant
for failing to comply with sections 1322.01 to
1322.12 of the Revised Code or
any rule adopted under those
sections, for failing to comply with any
provision of or
duty
arising under an agreement with a buyer or lender under sections
1322.01
to 1322.12 of the Revised Code, or for violating any other
provision of
state or federal law.
Sec. 1322.99. (A) Whoever violates
division (A)(1) or (2) of
section 1322.02, division (E) or
(F) of section 1322.07
or,
division
(A)(B)(1) or
(B)(2) of section
1322.071, or section
1322.08 of the Revised Code is
guilty of a felony of the
fifth
degree.
(B) Whoever violates division (B)(3) of section 1322.071 of
the Revised Code is guilty of a felony of the fourth degree. (C) Whoever violates division (B) of section 1322.02 of the
Revised Code is guilty of a misdemeanor of the first degree.
Sec. 4712.01. As used in sections 4712.01 to 4712.14 of
the
Revised Code: (A)
"Buyer" means an individual who is solicited to
purchase
or who purchases the services of a credit services
organization
for purposes other than obtaining a business loan as
described in
division (B)(6) of section 1343.01 of the Revised
Code. (B)
"Consumer reporting agency" has the same meaning as in
the
"Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A.
1681a,
as amended. (C)(1)
"Credit services organization" means any person
that,
in return for the
payment of money or other
valuable consideration
readily convertible into money for the following
services,
sells,
provides, or performs, or represents that the person can
or will
sell, provide, or perform, one or more of the
following services: (a) Improving a buyer's credit record, history, or rating; (b) Obtaining an extension of credit by others for a buyer; (c) Providing advice or assistance to a buyer in
connection
with division (C)(1)(a) or (b) of this section; (d) Removing adverse credit information that is accurate
and
not obsolete from the buyer's credit record, history, or
rating; (e) Altering the buyer's identification to prevent the
display of the buyer's credit record, history, or rating. (2)
"Credit services organization" does not include any of
the following: (a) A person that makes or collects loans, to the extent
these activities are subject to licensure or registration by this
state; (b) A mortgage broker, as defined in
division (E) of
section
1322.01 of the Revised Code, that holds a valid
certificate of
registration under sections 1322.01 to 1322.12 of
the Revised
Code; (c) A lender approved by the United States secretary of
housing and urban development for participation in a mortgage
insurance program under the
"National Housing Act," 48 Stat. 1246
(1934), 12 U.S.C.A. 1701, as amended; (d) A bank, savings bank, or savings and loan association,
or a subsidiary or an affiliate of a bank, savings bank, or
savings and loan association. For purposes of division (C)(2)(d)
of this section,
"affiliate" has the same meaning as in division
(A) of section 1101.01 of the Revised Code and
"bank," as used in
division (A) of section 1101.01 of the Revised Code, is deemed to
include a savings bank or savings and loan association. (e) A credit union organized and qualified under Chapter
1733. of the Revised Code or the
"Federal Credit Union Act," 84
Stat. 994 (1970), 12 U.S.C.A. 1751, as amended; (f) A budget and debt counseling service, as defined
in
division (D) of section 2716.03 of the Revised Code, provided
that
the service is a nonprofit organization exempt from taxation
under
section 501(c)(3) of the
"Internal Revenue Code of 1986,"
100
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service
is
in compliance with Chapter 4710. of the Revised Code; (g) A consumer reporting agency that is in substantial
compliance with the
"Fair Credit Reporting Act," 84 Stat. 1128,
15
U.S.C.A. 1681a, as amended. (i) Any political subdivision, or any governmental or
other
public entity, corporation, or agency, in or of the United
States
or any state of the United States; (j) A college or university, or controlled entity of a
college or university, as defined in section 1713.05 of the
Revised Code; (k) A motor vehicle dealer licensed pursuant to Chapter
4517. of the Revised Code acting within the scope and authority of
that license or a motor
vehicle auction owner licensed pursuant to
Chapters 4517. and 4707. of the Revised Code acting within the
scope and authority
of that license. (D)
"Extension of credit" means the right to defer payment
of
debt, or to incur debt and defer its payment, offered or
granted
primarily for personal, family, or household purposes.
"Extension
of credit" does not include a mortgage. (E)
"Mortgage" means any indebtedness secured by a deed of
trust, security deed, or other lien on real property. (F)
"Mortgage banker" means any person that makes,
services,
or buys and sells mortgage loans and is approved by the
United
States department of housing and urban development, the
United
States department of veterans affairs, the federal
national
mortgage association, or the federal home loan mortgage
corporation. (G)
"Superintendent of financial institutions" includes
the
deputy superintendent for consumer finance as provided in section
1181.21
of the Revised Code.
Section 2. That existing sections 1322.01, 1322.02, 1322.03,
1322.04, 1322.05, 1322.06, 1322.07, 1322.08, 1322.09, 1322.10,
1322.101, 1322.11, 1322.99, and 4712.01 of the Revised
Code are
hereby repealed.
Section 3. Sections 1 and 2 of this act shall take effect six
months after the effective date of this act.
Section 4. It is the intent of the General Assembly that the
Superintendent of Financial Institutions take any action necessary
to provide for an orderly transition for those persons who, on the
effective date of this act, perform the functions, duties, or
powers prescribed for registrants and licensees under this act.
Consequently, the Division of Financial Institutions shall accept
registration and license applications submitted by such persons
beginning on the effective date of this act and shall make every
effort possible to act upon such applications within the six-month
period immediately following that date.
Section 5. The prior operation of section 1322.03 of the
Revised Code, which permitted evidence on an application for a
certificate of registration as a mortgage broker that the person
designated as responsible for managing the operations of a
mortgage broker business meets the educational requirements then
in effect if, prior to March 18, 1999, that person was designated
as being responsible for managing the operations of the
registrant's business, shall continue and not be affected by the
enactment of this act until March 18, 2002; except that, all
requirements, except the experience requirements, applicable to
operations managers under this act apply to that person on the
date this act takes effect. On and after March 18, 2002, a person
not meeting the experience requirements provided in division
(A)(4) of section 1322.03 of the Revised Code, as amended by this
act, or any other requirement applicable to an operations manager
under this act shall not be designated as an operations manager on
an application for a certificate of registration as a mortgage
broker.
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