Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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CONTENTS: |
Requires the Superintendent of Financial Institutions to prorate
the renewal fee for a new certificate or registration or license for a
mortgage broker or loan officer |
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STATE FUND |
FY 2008 |
FY 2009 |
FUTURE YEARS |
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Consumer Finance Fund (Fund
553) – Department of Commerce |
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Revenues |
Likely loss in the tens of
thousands of dollars from prorated renewals |
Likely loss in the tens of
thousands of dollars from prorated renewals |
Likely loss in the tens of
thousands of dollars from |
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Expenditures |
Minimal increase in |
- 0 - |
- 0 - |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2007 is July 1, 2006 – June 30, 2007.
·
The
bill establishes a prorated renewal fee for the first renewal of an applicant's
initial mortgage broker certificate or loan officer license. Given recent statutory changes that have
significantly reduced the number of loan officer applications in recent months,
it is estimated that the Division of Financial Institutions (DFI) could lose
several tens of thousands of dollars in annual revenue to the Consumer Finance
Fund (Fund 553) as a result of the bill.
·
If
loan officer license applications were to return to historical levels, DFI
reports that the Consumer Finance Fund (Fund 553) could lose approximately
$250,000 per fiscal year due to the prorated first renewal fees. There would be
a one-time increase in rule-making costs in FY 2008 if the bill were enacted.
·
No
direct fiscal effect on political subdivisions.
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This bill requires the
Superintendent of Financial Institutions to adopt rules that would provide for
a prorating of the renewal fee for a new certificate of registration or license
for a mortgage broker or loan officer.
Specifically, the first renewal of a new certificate or license would be
based upon the number of months the initial certificate or license was in
effect. However, the bill limits the prorated renewal fee to the first renewal
of the applicant's initial certificate or license.
Mortgage broker certificates
($350 per location) and loan officer licenses ($100) expire annually on April
30. Therefore, a new mortgage broker
registration taking effect in January, for example, would pay a reduced amount
for the first renewal. The Division of
Financial Institutions (DFI) reported that, historically, there have been
approximately 150 new mortgage broker applications and approximately 5,200 new
loan officer applications per fiscal year (the Department of Commerce noted
that the loan officer profession is especially transient, which explains the
high number of new applications per year).
Mortgage broker registrations and loan officer licenses are granted
steadily throughout the year.
However, according to DFI,
loan officer license applications have dropped by approximately 90% since the
enactment of Am. Sub. S.B. 185 of the 126th General Assembly, which contained
new continuing education and criminal and civil records checks of mortgage
broker and loan officer application requirements in an effort to reduce
predatory lending. While DFI is not
certain whether the decreased number of applications will continue, the amount
of revenue loss specifically attributed to the bill would likely be only in the
tens of thousands of dollars if the decreased number of new applications
persists.
If loan officer license
applications were to return to historical levels, DFI, by taking a monthly
average of the number of new mortgage broker and loan officer applications,
reports that the Consumer Finance Fund (Fund 553) could lose approximately
$250,000 per fiscal year due to the prorated first renewal fees. For FY 2006, DFI reported $754,250 in
initial and renewal fee revenue from mortgage broker registrations and $790,200
in initial and renewal fee revenue from loan officer licenses.
LSC fiscal staff: Jason Phillips, Budget Analyst