00 CS FOR HOUSE BILL NO. 104(L&C) am S 01 "An Act relating to exemptions from mortgage lender, mortgage broker, and mortgage 02 loan originator licensing requirements; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04  * Section 1. AS 06.60.015(a) is amended to read: 05 (a) The following persons are exempt from the mortgage lender or mortgage 06 broker licensing requirements of this chapter: 07 (1) a depository institution; 08 (2) a subsidiary that is 09 (A) owned and controlled by a depository institution; and 10 (B) regulated by a federal banking agency; 11 (3) an institution regulated by the Farm Credit Administration; [OR] 12 (4) a federal, state, or local government agency, including an agency 13 that arranges or provides financing for mortgage loans; or  14 (5) a bona fide nonprofit organization. 01  * Sec. 2. AS 06.60.015(b) is amended to read: 02 (b) The following [INDIVIDUALS] are exempt from the mortgage loan 03 originator licensing requirements of this chapter: 04 (1) an individual who is a registered mortgage loan originator, when 05 acting for an entity described in (a)(1), (2), or (3) of this section; 06 (2) an individual who offers or negotiates terms of a residential 07 mortgage loan with or on behalf of an immediate family member of the individual; in 08 this paragraph, "immediate family member" means a spouse, child, stepchild, sibling, 09 stepsibling, parent, stepparent, grandparent, or grandchild; 10 (3) an individual seller who offers or negotiates terms of a residential 11 mortgage loan secured by a dwelling that serves as the individual's residence; 12 (4) a seller, including a natural person, estate, trust, corporation,  13 or another entity, that offers or negotiates the terms of a residential mortgage  14 loan for the sale of residential property owned by the seller, if  15 (A) the loan is secured by a dwelling on the property;  16 (B) the seller self-finances the loan;  17 (C) during any 12-month period, the seller finances five or  18 fewer sales under this paragraph;  19 (D) in the ordinary course of a business of the seller, the  20 seller has not  21 (i) constructed the dwelling that secures the loan on  22 the property; or  23 (ii) acted as a contractor for the construction of the  24 dwelling that secures the loan on the property;  25 (E) the loan has an interest rate that is fixed for the full  26 term of the loan;  27 (F) the loan does not  28 (i) have a payment schedule that results in negative  29 amortization; or  30 (ii) allow or impose a prepayment penalty; and  31  (G) the seller determines that the purchaser or potential  01  purchaser has a reasonable ability to repay the loan; the seller shall keep  02  confidential and may not disclose to another person at any time credit  03  scores, salary information, tax records, and other financial information of  04  the purchaser or potential purchaser obtained by the seller under this  05  subparagraph for the purpose of determining whether the purchaser or  06  potential purchaser has a reasonable ability to repay the loan; however,  07  the seller may disclose the financial information when, and only to the  08  extent that,  09 (i) the purchaser or potential purchaser authorizes  10 the disclosure in writing;  11 (ii) the seller makes the disclosure to obtain  12 professional advice relating to a dispute with the purchaser or  13 potential purchaser;  14 (iii) federal or state law requires the disclosure; or  15  (iv) a court orders the disclosure;  16 (5) an individual who is a licensed attorney who negotiates the terms 17 of a residential mortgage loan on behalf of a client as an ancillary matter to the 18 attorney's representation of the client, unless the attorney is compensated by a lender, 19 a mortgage broker, or another mortgage loan originator or by an agent of a lender, a 20 mortgage broker, or another mortgage loan originator; 21 (6) an employee of a federal, state, or local government agency that  22 is exempt under (a)(4) of this section from the mortgage lender or mortgage  23 broker licensing requirements of this chapter. 24  * Sec. 3. AS 06.60.015(b), as amended by sec. 2 of this Act, is amended to read: 25 (b) The following are exempt from the mortgage loan originator licensing 26 requirements of this chapter: 27 (1) an individual who is a registered mortgage loan originator, when 28 acting for an entity described in (a)(1), (2), or (3) of this section; 29 (2) an individual who offers or negotiates terms of a residential 30 mortgage loan with or on behalf of an immediate family member of the individual; in 31 this paragraph, "immediate family member" means a spouse, child, stepchild, sibling, 01 stepsibling, parent, stepparent, grandparent, or grandchild; 02 (3) an individual seller who offers or negotiates terms of a residential 03 mortgage loan secured by a dwelling that serves as the individual's residence; 04 (4) a seller, including a natural person, estate, trust, corporation, or 05 another entity, that offers or negotiates the terms of a residential mortgage loan for the 06 sale of residential property owned by the seller, if 07 (A) the loan is secured by a dwelling on the property; 08 (B) the seller self-finances the loan; 09 (C) during any 12-month period, the seller finances five or 10 fewer sales under this paragraph; 11 (D) in the ordinary course of a business of the seller, the seller 12 has not 13 (i) constructed the dwelling that secures the loan on the 14 property; or 15 (ii) acted as a contractor for the construction of the 16 dwelling that secures the loan on the property; 17 (E) the loan has an interest rate that is fixed for the full term of 18 the loan; 19 (F) the loan does not 20 (i) have a payment schedule that results in negative 21 amortization; or 22 (ii) allow or impose a prepayment penalty; and 23 (G) the seller determines that the purchaser has a reasonable 24 ability to repay the loan; 25 (5) an individual who is a licensed attorney who negotiates the terms 26 of a residential mortgage loan on behalf of a client as an ancillary matter to the 27 attorney's representation of the client, unless the attorney is compensated by a lender, 28 a mortgage broker, or another mortgage loan originator or by an agent of a lender, a 29 mortgage broker, or another mortgage loan originator; 30 (6) an employee of a federal, state, or local government agency that is 31 exempt under (a)(4) of this section from the mortgage lender or mortgage broker 01 licensing requirements of this chapter;  02 (7) an employee of a bona fide nonprofit organization if the  03 employee acts as a mortgage loan originator only with respect to  04 (A) the employee's duties to the bona fide nonprofit  05 organization; and  06 (B) residential mortgage loans that have terms that are  07 favorable to the borrower by being consistent with mortgage loan  08 origination for a public or charitable purpose rather than in a commercial  09 context. 10  * Sec. 4. AS 06.60.015 is amended by adding new subsections to read: 11 (c) For a nonprofit organization to qualify as a bona fide nonprofit 12 organization under (a)(5) of this section, the department shall determine that the 13 nonprofit organization 14 (1) has and maintains the status of a tax-exempt organization under 26 15 U.S.C. 501(c)(3) (Internal Revenue Code); 16 (2) promotes affordable housing or provides home ownership 17 education or similar services; 18 (3) conducts its activities in a manner that serves a public or charitable 19 purpose, rather than a commercial purpose, by offering mortgages that are not readily 20 available from other lenders; 21 (4) receives funding, receives revenue, and charges fees in a manner 22 that does not provide an incentive for the organization or its employees to act other 23 than in the best interests of its clients; 24 (5) compensates its employees in a manner that does not provide an 25 incentive to its employees to act other than in the best interests of its clients; 26 (6) provides or identifies for a borrower residential mortgage loans 27 with terms favorable to the borrower and comparable to mortgage loans and housing 28 assistance provided under government housing assistance programs; for residential 29 mortgage loans to have terms that are favorable to the borrower, the terms must be 30 consistent with mortgage loan origination for a public or charitable purpose, rather 31 than in a commercial context, and provide for interest rates that are less than the 01 current market rate; and 02 (7) meets other standards that the department determines are 03 appropriate. 04 (d) The department may establish by regulation the information that an 05 organization must provide to qualify as a bona fide nonprofit organization under (c) of 06 this section. 07 (e) The department shall establish by regulation 08 (1) the procedure for determining that an organization meets the 09 criteria identified under (c) of this section; 10 (2) the period for which the determination made under (c) of this 11 section remains in effect and the fee to be paid by the organization; 12 (3) how often and under what circumstances the department will 13 examine the books and activities of the organization to determine that the organization 14 continues to meet the criteria identified under (c) of this section; and 15 (4) the procedure for denying an organization the status of a bona fide 16 nonprofit organization, for suspending or revoking an organization's status as a bona 17 fide nonprofit organization if the organization does not continue to meet the criteria 18 identified under (c) of this section, and for taking disciplinary action against an 19 organization arising out of a violation of (c) - (e) of this section; the provisions of 20 AS 44.62 (Administrative Procedure Act) apply to an action of the department under 21 this paragraph. 22  * Sec. 5. AS 06.60.990 is amended by adding a new paragraph to read: 23 (36) "bona fide nonprofit organization" means an organization that the 24 department has determined qualifies as a bona fide nonprofit organization under 25 AS 06.60.015(c). 26  * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 29 Economic Development may adopt regulations necessary to implement the changes made by 30 AS 06.60.015(a)(5), added by sec. 1 of this Act, AS 06.60.015(b)(7), added by sec. 3 of this 31 Act, AS 06.60.015(c) - (e), added by sec. 4 of this Act, and AS 06.60.990(36), added by sec. 5 01 of this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but 02 not before the effective date of the section being implemented. 03  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 RETROACTIVITY. AS 06.60.015(b)(4), added by sec. 2 of this Act, is retroactive to 06 July 1, 2008. 07  * Sec. 8. Sections 2, 6, and 7 of this Act take effect immediately under AS 01.10.070(c). 08  * Sec. 9. Except as provided by sec. 8 of this Act, this Act takes effect January 1, 2020.