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CSHB 162(L&C): "An Act relating to mortgage lenders, mortgage brokers, mortgage originators, state agents who collect program administration fees, and other persons who engage in activities relating to mortgage lending; relating to mortgage loan activities; relating to an originator fund; relating to fees for mortgage loan transactions; making certain violations unfair trade practices; relating to persons who are licensed under the Alaska Small Loans Act; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 162(L&C)                                                                    
01 "An Act relating to mortgage lenders, mortgage brokers, mortgage originators, state                                     
02 agents who collect program administration fees, and other persons who engage in                                         
03 activities relating to mortgage lending; relating to mortgage loan activities; relating to                              
04 an originator fund; relating to fees for mortgage loan transactions; making certain                                     
05 violations unfair trade practices; relating to persons who are licensed under the Alaska                                
06 Small Loans Act; and providing for an effective date."                                                                  
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. AS 06.01.050(3) is amended to read:                                                                   
09                 (3)  "financial institution" means an institution subject to the regulation                             
10       of the department under this title; in this paragraph, "institution" includes a                                   
11       commercial bank, savings bank, credit union, premium finance company, small loan                                  
12       company, bank holding company, financial holding company, trust company, savings                                  
13       and loan association, [AND] deferred deposit advance licensee under AS 06.50, and                             
01       licensee under AS 06.60; in this paragraph, "licensee under AS 06.60" has the                                 
02       meaning given to "licensee" in AS 06.60.990;                                                                  
03    * Sec. 2. AS 06 is amended by adding a new chapter to read:                                                        
04                 Chapter 60. Mortgage Lending Regulation Act.                                                          
05                           Article 1. Licensing.                                                                       
06            Sec. 06.60.010. License required. (a) Except as provided under AS 06.60.015,                               
07       a person, including a person doing business from outside this state, may not operate as                           
08       a mortgage lender or mortgage broker in this state unless the person is licensed under                            
09       this chapter.                                                                                                     
10            (b)  A person may not operate as an originator in this state unless the person is                            
11       a natural person who is                                                                                           
12                 (1)  licensed as an originator under this chapter; and                                                  
13                 (2)  works under exclusive contract for, or as an employee of, a                                        
14       mortgage licensee.                                                                                                
15            (c)  A mortgage license may cover more than one location of a mortgage                                       
16       licensee.                                                                                                         
17            (d)  A person who operates as both a mortgage lender and a mortgage broker is                                
18       only required to obtain one mortgage license.                                                                     
19            Sec. 06.60.015. Exemptions; requirements of registration. (a) Except as                                    
20       provided by AS 06.60.370(c) and by (b) and (c) of this section, this chapter does not                             
21       apply to a person who operates as a mortgage lender or mortgage broker if the person                              
22       is                                                                                                                
23                 (1)  a person who is authorized to engage in business as a bank, bank                                   
24       holding company, savings institution, savings and loan association, trust company                                 
25       with banking powers, or credit union under the laws of this state, another state, the                             
26       United States, a territory of the United States, or the District of Columbia, and whose                           
27       mortgage loan activity is subject to the general supervision, regulation, and                                     
28       examination of a regulatory body of this state, another state, the United States, a                               
29       territory of the United States, or the District of Columbia;                                                      
30                 (2)  a subsidiary or an operating subsidiary of a person who is identified                              
31       by (1) of this subsection, or of a bank holding company or savings and loan holding                               
01       company, if the subsidiary or operating subsidiary certifies to the department on a                               
02       form provided by the department that the subsidiary or operating subsidiary is exempt                             
03       from this chapter because of applicable federal statute or regulation;                                            
04                 (3)  an employee of a person identified in (1) or (2) of this subsection;                               
05                 (4)  a nonprofit corporation that makes mortgage loans to promote                                       
06       home ownership or home improvements; in this paragraph, "nonprofit corporation"                                   
07       means a corporation that qualifies under 26 U.S.C. 501(c)(3) or (4) (Internal Revenue                             
08       Code) for an exemption from federal income taxation;                                                              
09                 (5)  an agency of the federal government, a state government, a                                         
10       municipality, or a quasi-governmental agency making or brokering mortgage loans                                   
11       under the specific authority of the laws of a state or the United States;                                         
12                 (6)  a person who acts as a fiduciary for an employee pension benefit                                   
13       plan qualified under 26 U.S.C. (Internal Revenue Code) and who makes mortgage                                     
14       loans solely to participants of the plan from assets of the plan;                                                 
15                 (7)  a person who acts in a fiduciary capacity conferred by the authority                               
16       of a court; or                                                                                                    
17                 (8)  a person who is licensed by the United States Small Business                                       
18       Administration as a small business investment company under 15 U.S.C. 661 - 697g                                  
19       (Small Business Investment Act of 1958).                                                                          
20            (b)  A person who is listed in (a)(1) - (8) of this section shall file a registration                        
21       form to obtain an exemption under (a) of this section. The department shall determine                             
22       the form and content of the registration form.                                                                    
23            (c)  A person who is licensed under AS 06.20 is exempt from the requirements                                 
24       of this chapter, except that the person is subject to AS 06.60.320 - 06.60.380.                                   
25            (d)  In this section, "bank holding company" has the meaning given in 12                                     
26       U.S.C. 1841 (Bank Holding Company Act).                                                                           
27            Sec. 06.60.020. Application for mortgage license. An application for a                                     
28       mortgage license must                                                                                             
29                 (1)  be in writing;                                                                                     
30                 (2)  be signed by the applicant and notarized;                                                          
31                 (3)  be on the form prescribed by the department;                                                       
01                 (4)  contain the name of the applicant, including the name of the                                       
02       business, and of the natural person who is designated to obtain the originator license                            
03       under AS 06.60.025;                                                                                               
04                 (5)  if the applicant is a partnership or an association not covered by (6)                             
05       or (7) of this section, contain the name and both the residence and business addresses                            
06       of each partner of the partnership or member of the association;                                                  
07                 (6)  if the applicant is a corporation, contain the name and both the                                   
08       residence and business addresses of each officer and director of the corporation, and a                           
09       shareholder holding                                                                                               
10                      (A)  10 percent or more of the total outstanding voting shares, if                                 
11            the corporation has fewer than 75 shareholders; or                                                           
12                      (B)  more than 51 percent of the outstanding voting shares in                                      
13            the corporation, if the corporation has 75 or more shareholders;                                             
14                 (7)  if the applicant is a limited liability company, contain the name and                              
15       both the residence and business addresses of each member of the company, and any                                  
16       manager of the company who individually owns more than 51 percent of the limited                                  
17       liability company;                                                                                                
18                 (8)  contain the mailing address of the applicant, the street address and                               
19       city, if any, for each business location that will be covered by the license, and an                              
20       identification of the applicant's principal office;                                                               
21                 (9)  provide the applicant's written consent to an investigation of the                                 
22       applicant under AS 06.60.030;                                                                                     
23                 (10)  contain other information that the department may require                                         
24       concerning the organization and operations of the applicant and the financial                                     
25       responsibility, background, experience, and activities of the applicant and its directors,                        
26       officers, members, owners, and other principals.                                                                  
27            Sec. 06.60.025. Application for originator license. An application for an                                  
28       originator license must                                                                                           
29                 (1)  be in writing;                                                                                     
30                 (2)  be signed by the applicant and notarized;                                                          
31                 (3)  be on a form prescribed by the department;                                                         
01                 (4)  contain the name and residence address of the applicant;                                           
02                 (5)  include a complete set of fingerprints of the applicant; and                                       
03                 (6)  contain other information or supporting material that the                                          
04       department may require concerning the applicant, including other forms of                                         
05       identification of the applicant.                                                                                  
06            Sec. 06.60.030. Investigation. The department shall investigate an applicant                               
07       for a license to determine if the applicant satisfies the requirements of this chapter for                        
08       the license.                                                                                                    
09            Sec. 06.60.035. Fees and expenses. (a) Except as provided by (c) of this                                   
10       section, when an applicant submits an application for a license under this chapter to                             
11       the department, the applicant shall pay to the department                                                         
12                 (1)  a nonrefundable application fee of $250 in partial payment of those                                
13       investigation expenses incurred by the department; and                                                            
14                 (2)  a biennial license fee of $500 for the period that terminates two                                  
15       years after the date the license is issued; after this payment, the biennial license fee is                       
16       due every two years on the anniversary date of the original issuance of the license.                              
17            (b)  An applicant shall pay all investigative fees incurred by the department                                
18       before the department issues a license.                                                                           
19            (c)  An applicant is not required to pay the application fee or the biennial                                 
20       license fee under (a) of this section if the applicant is applying for a mortgage license                         
21       and an originator license, is the principal owner or legally authorized manager of the                            
22       mortgage license applicant, and is designated in the application under AS 06.60.020(4)                            
23       as the individual to receive an originator license for the mortgage licensee.                                     
24            Sec. 06.60.040. Competency testing. (a) A person who applies for an                                        
25       originator license shall pass a competency test conducted and graded by the                                       
26       department. The department shall establish the scope, content, and minimum passing                                
27       score of the test by regulation.                                                                                  
28            (b)  If an individual fails the competency test, the individual may take the                                 
29       competency test again. The department may charge an additional $150 fee for each                                  
30       additional competency test that the department provides to the person.                                            
31            Sec. 06.60.045. Bonding. (a) An applicant for a mortgage license shall file                                
01       with the application submitted to the department under AS 06.60.020 a bond with one                               
02       or more sureties in the amount of $25,000 under which the applicant is the obligor.                               
03       The bond must be satisfactory to the department.                                                                  
04            (b)  The bond required by (a) of this section shall be for the use of the                                    
05       department, the Department of Law, or another person to recover for a claim for relief                            
06       against the obligor under this chapter. The bond must state that the obligor will                                 
07       faithfully conform to and abide by the provisions of this chapter and all regulations                             
08       adopted under this chapter and will pay the department, the Department of Law, or                                 
09       another person all money that may become due or owing to the department, the                                      
10       Department of Law, or the other person from the obligor under this chapter.                                       
11            (c)  An applicant for a mortgage license that covers more than one location is                               
12       not required to file more than one bond.                                                                          
13            (d)  The bond required under (a) of this section may be continuous until the                                 
14       department revokes or otherwise terminates the license.                                                           
15            (e)  If the department determines at any time that the bond required under (a)                               
16       of this section is unsatisfactory for any reason, the department may require the                                  
17       mortgage licensee to file with the department, within 10 days after the receipt of a                              
18       written demand from the department, an additional bond that complies with the                                     
19       provisions of this section.                                                                                       
20            Sec. 06.60.050. Decision on application. (a) Within 30 days after the date the                             
21       department has determined that it has received a complete application, the required                               
22       bond if the application is for a mortgage license, and any required fees and                                      
23       investigative costs are received by the department, the department shall either grant or                          
24       deny the license.                                                                                                 
25            (b)  If the department denies the license, the department shall promptly notify                              
26       the applicant. The notification must indicate the reason for the denial and that the                              
27       applicant is entitled to a hearing on the denial.                                                                 
28            Sec. 06.60.060. Determinations for mortgage licensing. Before granting a                                   
29       mortgage license, the department shall determine that                                                             
30                 (1)  the applicant has complied with the requirements of this chapter for                               
31       obtaining the license;                                                                                            
01                 (2)  the financial responsibility, experience, character, and general                                   
02       fitness of the applicant, and of the applicant's directors, officers, members, owners,                            
03       and other principals, and the organization and operation of the applicant indicate that                           
04       the business will be operated efficiently and fairly, in the public interest, and under the                       
05       law; and                                                                                                          
06                 (3)  the department has not found grounds for denial of a license under                                 
07       AS 06.60.065.                                                                                                     
08            Sec. 06.60.065. Determinations for originator licensing. Before granting an                                
09       originator license to a person, the department shall determine that the applicant has                             
10                 (1)  complied with the requirements of this chapter and paid all fees for                               
11       obtaining the originator license;                                                                                 
12                 (2)  not been enjoined by a court of competent jurisdiction from                                        
13       engaging in an aspect of the business of providing financial services to the public; and                          
14                 (3)  not, within the previous seven years,                                                              
15                      (A)  been prohibited by a federal or state regulatory agency                                       
16            from engaging in, participating in, or controlling a finance-related activity that                           
17            involves providing financial services to the public;                                                         
18                      (B)  been convicted, including a conviction based on a guilty                                      
19            plea or a plea of nolo contendere, of a felony or a misdemeanor involving                                    
20            fraud, misrepresentation, or dishonesty;                                                                     
21                      (C)  committed an act, made an omission, or engaged in a                                           
22            practice that constitutes a breach of a fiduciary duty;                                                      
23                      (D)  made a false material statement of an application submitted                                   
24            under this chapter; or                                                                                       
25                      (E)  violated a provision of this chapter, a regulation adopted                                    
26            under this chapter, or an order of the department under this chapter.                                        
27            Sec. 06.60.070. Form and contents of license. A license must be in a form                                  
28       established by the department and must state the full name of the licensee. A mortgage                            
29       license must state the address for each office of the business where the business of the                          
30       licensee is to be conducted. If a mortgage licensee conducts business on the Internet,                            
31       the mortgage license must also state the registered domain address through which the                              
01       mortgage licensee conducts the mortgage licensee's business and the physical location                             
02       of the mortgage licensee's main business office.                                                                  
03            Sec. 06.60.075. License availability. A licensee shall provide a copy of the                               
04       license to a person who requests a copy.                                                                          
05           Article 2. License Duration, Renewal, Inactivity, and Surrender.                                            
06            Sec. 06.60.080. Duration and renewal of license. A license issued under this                               
07       chapter remains in effect for two years after the license is issued unless revoked,                               
08       suspended, surrendered, or made inactive under this chapter.                                                      
09            Sec. 06.60.085. Renewal of license. (a) If a licensee intends to renew a license,                          
10       the licensee shall submit to the department 30 days before the expiration of the                                  
11       licensee's license                                                                                                
12                 (1)  a renewal application in the form and manner established by the                                    
13       department;                                                                                                       
14                 (2)  the biennial license fee required by AS 06.60.105;                                                 
15                 (3)  if the renewal is for a mortgage license, a report identifying any                                 
16       changes in the information provided under AS 06.60.020(4) - (8);                                                  
17                 (4)  if the renewal is for an originator license, certificates or other                                 
18       documents that show that the continuing education requirements of AS 06.60.160 have                               
19       been satisfied; and                                                                                               
20                 (5)  if the renewal is for an originator license, the fund fee required by                              
21       AS 06.60.550.                                                                                                     
22            (b)  A renewal under (a) of this section is considered granted unless, within 30                             
23       days after the department determines it has received a completed renewal application                              
24       containing the items in (a) of this section, the department notifies the licensee that the                        
25       department has denied the renewal application because of the licensee's                                           
26       noncompliance with this chapter or another provision of AS 06.                                                    
27            Sec. 06.60.090. Inactive license. (a) A license may be made inactive under this                            
28       section.                                                                                                          
29            (b)  To be eligible to have a mortgage license be made inactive, all mortgage                                
30       loans of a licensee must have been paid in full or sold.                                                          
31            (c)  To make a license inactive, a licensee shall provide the department with a                              
01       written request that the license be made inactive and return the license certificate to                           
02       the department. The request must include the licensee's name, address, and other                                  
03       information that the department requires that is necessary for the department to                                  
04       process the request and a statement by the licensee that all mortgage loans of the                                
05       licensee have been paid in full or sold.                                                                          
06            (d)  The department shall issue an inactive license certificate to a person whose                            
07       license becomes inactive under this section.                                                                      
08            (e)  If a person holds a license that becomes inactive under this section, the                               
09       person may not operate as a mortgage lender, mortgage broker, or originator under the                             
10       license in this state until the license is reactivated.                                                           
11            (f)  If a license is made inactive under this section, the license remains inactive                          
12       until the person who holds the inactive license provides the department with a written                            
13       request that the license be reactivated. The request must include the information that                            
14       the department requires is necessary to process the request.                                                      
15            (g)  While a license is inactive, the person holding the inactive license shall                              
16       pay the biennial license fee as required by AS 06.60.105 and inform the department of                             
17       any change that occurs in the name and address of the person, the location of the                                 
18       person's business, or in the business operations or control of the person, but the person                         
19       is not required to maintain the bond required by AS 06.60.045 or to file the annual                               
20       report required by AS 06.60.100.                                                                                  
21            (h)  Notwithstanding AS 06.60.120, while a license is inactive under this                                    
22       section, the person who holds the license may not transfer the license to another                                 
23       person.                                                                                                           
24            (i)  While a license is inactive under this section, the person is not required to                           
25       surrender the license under AS 06.60.097(b) for not having engaged in mortgage loan                               
26       activity for 12 months.                                                                                           
27            (j)  While a license is inactive under this section, the person holding the                                  
28       inactive license shall continue to maintain records as required by AS 06.60.135 for the                           
29       business transactions of the person that occurred before the license became inactive.                             
30            (k)  While a license is inactive under this section, the department may take                                 
31       action against the license, the person holding the inactive license, or both for                                  
01       noncompliance with this chapter before the license became inactive or for                                         
02       noncompliance with this section while the license is inactive.                                                    
03            (l)  A licensee whose license lapses under this chapter is not eligible for an                               
04       inactive license under this section unless the license is reactivated under                                       
05       AS 06.60.095.                                                                                                     
06            (m)  A person holding a license that is inactive under this section may not                                  
07       engage in activities for which the license is required, but may receive commissions or                            
08       other payments from a person who contracted with or employed the licensee for                                     
09       services, if the services were performed while the licensee was actively licensed.                                
10            (n)  Except as otherwise provided in this section and by regulations adopted by                              
11       the department, the provisions of this chapter do not apply to a person holding an                                
12       inactive license under this section.                                                                              
13            Sec. 06.60.095. Reactivation of inactive license. (a) Except as provided in (b)                            
14       and (c) of this section, a person who has an inactive license certificate under                                   
15       AS 06.60.090 may apply to the department for an active license and pay the required                               
16       fees.                                                                                                             
17            (b)  A person is eligible for reactivation of an inactive license if the person has                          
18       been in an inactive status for less than 24 months from the anniversary date of the                               
19       issuance of the initial inactive license. If the person has been in an inactive status for                        
20       24 months or longer, the person may obtain a license only by satisfying the                                       
21       qualifications applicable to initial licensure.                                                                   
22            (c)  The department may issue an active license that has been converted from                                 
23       inactive status under this section for the term remaining on the license before it was                            
24       made inactive.                                                                                                    
25            Sec. 06.60.097. Surrender of license. (a) A licensee may surrender a license                               
26       issued to the licensee by delivering written notice to the department that the licensee                           
27       intends to surrender the license, except that a mortgage licensee may not surrender a                             
28       license until all loans of that mortgage licensee have either been paid in full or sold.                          
29            (b)  A licensee shall surrender a license issued to the licensee if the licensee                             
30       has not engaged in mortgage loan activity for 12 consecutive months.                                              
31            (c)  Surrender of a license under this section does not affect the licensee's civil                          
01       or criminal liability for acts committed before surrender of the license.                                         
02                       Article 3. Licensee Obligations.                                                                
03            Sec. 06.60.100. Annual report. (a) On or before March 15, or on another date                               
04       established by the department by regulation, of each year a mortgage licensee shall file                          
05       a report with the department giving relevant information that the department requires                             
06       concerning the business and operations of each location in this state where business                              
07       was conducted by the mortgage licensee in this state during the preceding calendar                                
08       year. The mortgage licensee shall make the report under oath or on affirmation. The                               
09       content and form of the report shall be established by the department by regulation.                              
10            (b)  A mortgage licensee who fails to file a report as required by (a) of this                               
11       section is subject to a civil penalty of $25 for each day's failure to file the report.                           
12            Sec. 06.60.105. Biennial license fee. (a) Except as provided by (d) of this                                
13       section, a licensee shall pay the department a biennial license fee of $500.                                      
14            (b)  After the payment of the initial biennial license fee under AS 06.60.035, a                             
15       licensee shall pay the biennial license fee every two years on or before the anniversary                          
16       date of the original issuance of the license, subject to renewal by the department.                               
17            (c)  A mortgage licensee who is licensed to act as both a mortgage broker and a                              
18       mortgage lender is not required to pay more than one biennial license fee.                                        
19            (d)  An originator licensee is not required to pay a biennial license fee if the                             
20       licensee holds a mortgage license and an originator license, is the principal owner or                            
21       legally authorized manager of the mortgage licensee, and was designated in the                                    
22       application under AS 06.60.020(4) as the individual to receive an originator license for                          
23       the mortgage licensee.                                                                                            
24            (e)  The license fee imposed by (a) of this section is in addition to the fee                                
25       imposed under AS 43.70 (Alaska Business License Act).                                                             
26            Sec. 06.60.110. Location of business. A mortgage licensee may not maintain                                 
27       the mortgage licensee's principal place of business or a branch office within an office,                          
28       suite, room, or place of business in which any other business is solicited or engaged in,                         
29       or in association or conjunction with another business, unless the name, ownership,                               
30       and business purpose of the other business is disclosed in the mortgage licensee's                                
31       application for a mortgage license.                                                                               
01            Sec. 06.60.115. Change of place of business. If a mortgage licensee wishes to                              
02       change the mortgage licensee's place of business to another location, the mortgage                                
03       licensee shall submit a written notice to the department at least 10 days before                                  
04       relocating the business. If the mortgage licensee is otherwise in compliance with this                            
05       chapter, the department shall issue a new mortgage license to the mortgage licensee to                            
06       reflect the new location.                                                                                         
07            Sec. 06.60.120. Transfer of business. (a) Except as provided by (b) of this                                
08       section, a mortgage licensee may only transfer or assign the licensee's business if                               
09                 (1)  an application is made to the department to transfer or assign the                                 
10       business to another mortgage licensee with the same type of mortgage license as the                               
11       transferring or assigning mortgage licensee;                                                                      
12                 (2)  at least 30 days before the effective date of the proposed transfer or                             
13       assignment, the department determines it has received a complete application; and                                 
14                 (3)  the department determines that the proposed transfer or assignment                                 
15       complies with AS 06.60.060.                                                                                       
16            (b)  A person who holds an originator license may not transfer or assign the                                 
17       originator license.                                                                                               
18            Sec. 06.60.130. Change in business control or business operations. (a) The                                 
19       prior written approval of the department is required for the continued operation of a                             
20       mortgage licensee's business when a change in control of the mortgage licensee is                                 
21       proposed. The department may require the information it considers necessary to                                    
22       determine whether a new application is required. The mortgage licensee requesting                                 
23       approval of the change in control shall pay all reasonable expenses incurred by the                               
24       department to investigate and approve or deny the change in control.                                              
25            (b)  If there is a significant change in the business operations of a mortgage                               
26       licensee not covered by AS 06.60.120, the mortgage licensee shall provide written                                 
27       notice to the department at least 30 days before the effective date of the change in                              
28       business operations.                                                                                              
29            Sec. 06.60.135. Records of mortgage licensee. (a) The requirements of this                                 
30       section apply to the business transactions of a mortgage licensee that occur entirely or                          
31       partially in this state.                                                                                          
01            (b)  A mortgage licensee shall keep and use in the mortgage licensee's business                              
02       the accounting records that are in accord with generally accepted accounting                                      
03       principles.                                                                                                       
04            (c)  A mortgage licensee shall maintain a record, by electronic record or                                    
05       photocopying, for the account of each borrower and for each mortgage loan or                                      
06       mortgage loan application that is related to the purchase or refinancing of an existing                           
07       mortgage loan. This record must contain all documents, notes, electronic                                          
08       correspondence, and forms that are produced or prepared for the mortgage loan by the                              
09       mortgage licensee, and the mortgage licensee shall retain each document, note,                                    
10       electronic correspondence, and form for 36 months from the date they were created.                                
11            (d)  A mortgage licensee shall retain for at least three years after final payment                           
12       is made on a mortgage loan, or three years after a mortgage loan is sold, whichever                               
13       occurs first, the original contract for the mortgage licensee's compensation, copies of                           
14       the note, settlement statement, and truth-in-lending disclosure, an account of fees                               
15       received in connection with the loan, and other papers or records relating to the loan                            
16       that may be required by department order or regulation.                                                           
17            (e)  If a mortgage licensee conducts business as a mortgage loan servicing                                   
18       agent for mortgage loans that the mortgage licensee owns, or as an agent for other                                
19       mortgage lenders or investors, the mortgage licensee shall, in addition to complying                              
20       with (b) and (c) of this section, maintain a record for each mortgage loan. The record                            
21       for each mortgage loan must include, either in electronic or printed format, as well as                           
22       other papers required by law, department order, or regulation, the amount of the                                  
23       mortgage loan, the total amount of interest and finance charges on the mortgage loan,                             
24       the interest rate on the mortgage loan, the amount of each payment to be made on the                              
25       mortgage loan, a description of the collateral taken for the mortgage loan, a history of                          
26       all payments received by the mortgage licensee on the mortgage loan, a detailed                                   
27       history of the amount of each payment that is applied to the reduction of the mortgage                            
28       loan principal, the interest that accrues on the mortgage loan, and any other fees and                            
29       charges that are related to the mortgage loan. The mortgage licensee shall retain the                             
30       record required by this subsection for three years after the loan is sold to another                              
31       mortgage loan servicing agent or after the mortgage loan is satisfied, whichever occurs                           
01       first.                                                                                                            
02            (f)  In this section, "mortgage loan servicing agent" means a person who acts                                
03       on behalf of the owner of a mortgage loan to collect payments on the mortgage loan                                
04       and enforce the terms of the mortgage loan.                                                                       
05            Sec. 06.60.140. Availability of out-of-state records. A mortgage licensee                                  
06       who operates an office or other place of business outside this state that is licensed                             
07       under this chapter shall, at the request of the department,                                                       
08                 (1)  make the records of the office or place of business available to the                               
09       department at a location within this state; or                                                                    
10                 (2)  reimburse the department its reasonable costs, as provided in                                      
11       AS 06.60.250(f), that are incurred by the department during an investigation or                                   
12       examination conducted at the office or place of business.                                                         
13            Sec. 06.60.145. Disqualified persons. (a) A disqualified person may not be an                              
14       officer, a director, a partner, a member, a sole proprietor, a trustee, an employee of a                          
15       mortgage licensee, or in another position with similar responsibilities. In this                                  
16       subsection, "employee" means an individual who negotiates an agreement with a                                     
17       member of the public for the mortgage licensee or who has access to, or responsibility                            
18       for, escrow accounts or escrow money held by the mortgage licensee.                                               
19            (b)  A mortgage licensee may not permit a disqualified person to obtain an                                   
20       ownership interest in a mortgage licensee's business without the prior written approval                           
21       of the department.                                                                                                
22            (c)  Before a person may obtain an ownership interest in a mortgage licensee's                               
23       business, the person shall authorize the department to access the person's criminal                               
24       history information in any state or federal court to determine whether the person is a                            
25       disqualified person.                                                                                              
26            (d)  In this section,                                                                                        
27                 (1)  "disqualified person" means a person who is not a licensee;                                        
28                 (2)  "ownership interest" means an ownership interest of                                                
29                      (A)  10 percent or more, if the mortgage licensee is a                                             
30            corporation with fewer than 75 shareholders;                                                                 
31                      (B)  51 percent or more, if the mortgage licensee is a                                             
01            corporation with 75 or more shareholders or a limited liability company.                                     
02            Sec. 06.60.150. Posting of license. A mortgage licensee shall conspicuously                                
03       post the mortgage license in each place of business of the mortgage licensee.                                     
04            Sec. 06.60.155. Restriction on originator licensee work. An originator                                     
05       licensee may only work as an originator licensee under contract for, or as an employee                            
06       of, one mortgage licensee.                                                                                        
07            Sec. 06.60.157. Mortgage licensee restrictions on performance of                                           
08       originator activities. A mortgage licensee may not perform originator activities                                
09       except through a licensed originator who is an employee of or under exclusive contract                            
10       with a mortgage licensee.                                                                                         
11            Sec. 06.60.159. Mortgage licensee employment of, contract with, and                                        
12       liability for originator. (a) A mortgage licensee may not employ, or enter into a                               
13       contract with a person who acts as an originator for the mortgage licensee unless the                             
14       person has an originator license.                                                                                 
15            (b)  A mortgage licensee is liable for the conduct of a person acting as an                                  
16       originator if the mortgage licensee knows, or should have known, that the person's                                
17       conduct violates this chapter and the person is employed by or is under contract with                             
18       the mortgage licensee to act as an originator.                                                                    
19            Sec. 06.60.160. Continuing education requirements. (a) An originator                                       
20       licensee shall complete and submit to the department evidence of at least 24 hours of                             
21       continuing education for each biennial license period. The originator licensee or                                 
22       mortgage licensee shall submit the evidence when the originator licensee or mortgage                              
23       licensee submits a license renewal application. The 24 hours of continuing education                              
24       must be in a training program approved by the department.                                                         
25            (b)  The department shall establish an education committee consisting of seven                               
26       members. The commissioner of commerce, community, and economic development                                        
27       shall appoint two persons employed by the department and five licensees to serve on                               
28       the committee. A licensee may apply to the department to serve on the education                                   
29       committee established under this subsection by submitting an application in the form                              
30       and with the content established by the department.                                                               
31            (c)  The department may consider the recommendations of the education                                        
01       committee when determining which training program to approve for the continuing                                   
02       education requirements.                                                                                           
03            (d)  The department shall publish on a regular basis a listing of classes,                                   
04       seminars, or other training programs that may be used to satisfy the continuing                                   
05       education requirements of this section.                                                                           
06                    Article 4. Discipline and Investigation.                                                           
07            Sec. 06.60.200. Disciplinary action. (a) In addition to any other disciplinary                             
08       action allowed under this chapter, the department may suspend or revoke a license or                              
09       take other disciplinary action against a licensee, including action that is or may be                             
10       authorized under AS 06.01 or under a regulation adopted under this chapter or                                     
11       AS 06.01, if the department finds that                                                                            
12                 (1)  the licensee has failed to                                                                         
13                      (A)  make a payment required by this chapter;                                                      
14                      (B)  maintain a bond required under AS 06.60.045, if the                                           
15            licensee is a mortgage licensee;                                                                             
16                      (C)  satisfy the continuing education requirements, if the                                         
17            licensee is an originator licensee;                                                                          
18                      (D)  comply with an applicable provision of this title, with an                                    
19            applicable regulation adopted under this title, with a lawful demand, ruling,                                
20            order, or requirement of the department, or with another statute or regulation                               
21            applicable to the conduct of the licensee's business;                                                        
22                 (2)  the licensee has, with respect to a mortgage loan transaction,                                     
23                      (A)  made a material misrepresentation;                                                            
24                      (B)  made a false promise likely to influence, persuade, or                                        
25            induce another person to take action;                                                                        
26                      (C)  engaged in a serious course of misrepresentation or made a                                    
27            false promise through another licensee;                                                                      
28                      (D)  engaged in conduct that is fraudulent or dishonest;                                           
29                      (E)  procured, or helped another person to procure, a license by                                   
30            deceiving the department;                                                                                    
31                      (F)  engaged in conduct of which the department did not have                                       
01            knowledge when the department issued the license, if the conduct demonstrates                                
02            that the licensee is not fit to engage in the activities for which the licensee was                          
03            licensed;                                                                                                    
04                      (G)  authorized, directed, planned, or aided in the publishing,                                    
05            distribution, or circulation of a materially false statement or a material                                   
06            misrepresentation concerning the licensee's business or concerning mortgage                                  
07            loans originated in the course of the licensee's business in this or another state;                          
08            or                                                                                                           
09                 (3)  a fact or condition exists that would have constituted grounds for                                 
10       denial of the initial issuance or the renewal of the license.                                                     
11            (b)  In addition to the bases for disciplinary action under (a) of this section, the                         
12       department may revoke the license of a licensee who is convicted, including                                       
13       conviction by a plea of not guilty or a plea of nolo contendere, of a felony or                                   
14       misdemeanor involving fraud, misrepresentation, or dishonesty committed while                                     
15       licensed under this chapter. A person whose license is revoked under this subsection is                           
16       not qualified to be issued another license until the person provides proof acceptable to                          
17       the department that the person has been unconditionally discharged from the                                       
18       conviction. In this subsection, "unconditional discharge" has the meaning given in                                
19       AS 12.55.185.                                                                                                     
20            (c)  A disciplinary action allowed under this section may be taken by itself or                              
21       in conjunction with one or more other disciplinary actions allowed under this chapter.                            
22            Sec. 06.60.210. Suspension or revocation related to fund. (a) When an                                      
23       award is made from the fund, the department may suspend or revoke the license of the                              
24       originator licensee whose actions formed the basis of the award.                                                  
25            (b)  The department shall lift a suspension made under (a) of this section if the                            
26       originator licensee reaches an agreement with the department on terms and conditions                              
27       for the repayment to the fund of the money awarded to the claimant and the costs of                               
28       hearing the fund claim. The department may reimpose the suspension if the originator                              
29       licensee violates the terms of a repayment agreement entered into under this                                      
30       subsection.                                                                                                       
31            Sec. 06.60.230. Divestment. If the department has revoked a mortgage license,                              
01       the mortgage licensee shall divest itself of all outstanding loans that were issued under                         
02       this chapter by selling or assigning them to another mortgage licensee, except that the                           
03       divestment must be approved by the department.                                                                    
04            Sec. 06.60.240. Reinstatement of revoked license. The department may                                       
05       reinstate a revoked license if the licensee complies with this chapter or with a demand,                          
06       ruling, or requirement made by the department under this chapter. Before                                          
07       reinstatement of a license, the licensee shall pay any fees, restitution, and civil                               
08       penalties owing under this chapter.                                                                               
09            Sec. 06.60.250. Investigation and examination. (a) The department may                                      
10       investigate and examine the affairs, business premises, and records of a person                                   
11       required to be licensed under this chapter to determine compliance with this chapter,                             
12       regulations adopted under this chapter, AS 06.01, and applicable regulations adopted                              
13       under AS 06.01. Notwithstanding AS 06.01.015, the department may conduct an                                       
14       examination at least once every 36 months, or sooner, if the examination is part of the                           
15       review of a complaint or other information received by the department against the                                 
16       licensee.                                                                                                         
17            (b)  For the purposes of conducting an examination under this section, the                                   
18       department                                                                                                        
19                 (1)  shall have free access to the place of business, books, accounts,                                  
20       safes, and vaults of the licensee to examine and make copies as necessary;                                        
21                 (2)  may conduct the examination without prior notice to the licensee;                                  
22       and                                                                                                               
23                 (3)  may examine, under oath or affirmation, all persons whose                                          
24       testimony the department may require to conduct the examination.                                                  
25            (c)  For the purpose of hearings, investigations, or other proceedings under this                            
26       chapter and except as otherwise provided in this chapter, the department or an officer                            
27       designated by the department may administer oaths and affirmations, subpoena                                      
28       witnesses, compel the attendance of witnesses, take evidence, and require the                                     
29       production of books, papers, correspondence, memoranda, agreements, or other                                      
30       documents or records that the department considers relevant or material to the inquiry.                           
31            (d)  If a person refuses to comply with a subpoena, the superior court, on                                   
01       application by the department, may issue to the person an order requiring the person to                           
02       appear before the department to produce documentary evidence or to give evidence                                  
03       touching the matter under investigation or in question. Failure to obey the order of the                          
04       court may be punished by the court as a contempt order.                                                           
05            (e)  The department may share information received or collected during an                                    
06       examination, investigation, or other proceeding with other law enforcement agencies.                              
07            (f)  A person shall reimburse the department reasonable costs incurred by the                                
08       department to conduct an examination under this section. The reimbursement under                                  
09       this subsection may not exceed the rate of $75 an hour for the examination, plus travel                           
10       costs, including a per diem allowance that does not exceed the per diem allowance for                             
11       employees of the state under AS 39.20.110.                                                                        
12            Sec. 06.60.260. Revocation, removal, or suspension of originator licensee.                                 
13       If the department finds that an originator licensee is dishonest, reckless, or                                    
14       incompetent when operating as an originator, or fails to comply with applicable law,                              
15       with regulations or orders of the department, or with written requirements or                                     
16       instructions of the department relating to the originator license, the department may                             
17       revoke or suspend the originator licensee, remove the originator licensee from                                    
18       operating as an originator in the state, or order a person licensed under this title to                           
19       remove the originator licensee from operating as an originator for the person.                                    
20            Sec. 06.60.270. Removal by entity. A mortgage licensee shall remove an                                     
21       originator licensee from operating as an originator for the mortgage licensee if the                              
22       department directs the mortgage licensee to remove the originator licensee under                                  
23       AS 06.60.260.                                                                                                     
24            Sec. 06.60.280. Department list. The department shall make available to the                                
25       public a list of all licensees who have been censured, barred, or had their licenses                              
26       suspended or revoked under this chapter. The department shall publish the list on a                               
27       monthly basis.                                                                                                    
28                  Article 5. Business Duties and Restrictions.                                                         
29            Sec. 06.60.320. False, misleading, or deceptive advertising prohibited. A                                  
30       person may not advertise, print, display, publish, distribute, broadcast, or cause or                             
31       permit to be advertised, printed, displayed, published, distributed, or broadcast, in any                         
01       manner a statement or representation with regard to the rates, terms, or conditions for                           
02       a mortgage loan that is false, misleading, or deceptive.                                                          
03            Sec. 06.60.330. Compliance with federal requirements. If the regulations                                   
04       apply to the person under federal law, a person shall conduct the person's mortgage                             
05       loan activities in compliance with 12 CFR Part 226 and other regulations adopted by                               
06       the federal government under                                                                                      
07                 (1)  12 U.S.C. 2601 - 2617 (Real Estate Settlement Procedures Act of                                    
08       1974);                                                                                                            
09                 (2)  12 U.S.C. 2801 - 2810 (Home Mortgage Disclosure Act of 1975);                                      
10                 (3)  12 U.S.C. 2901 - 2908 (Community Reinvestment Act of 1977);                                        
11                 (4)  15 U.S.C. 1601 - 1666j and 1671 - 1693r (Consumer Credit                                           
12       Protection Act);                                                                                                  
13                 (5)  42 U.S.C. 3601 - 3631 (Fair Housing Act of 1968); and                                              
14                 (6)  any other federal law or regulation.                                                               
15            Sec. 06.60.340. Prohibited activities. In addition to activities prohibited                                
16       elsewhere in this chapter or by another law, a person who is a licensee, a person who                             
17       is required to be licensed under this chapter, and a person who is licensed under                                 
18       AS 06.20 may not, in the course of a mortgage loan transaction,                                                   
19                 (1)  misrepresent or conceal material facts or make false promises                                      
20       likely to influence, persuade, or induce an applicant for a mortgage loan or a borrower                           
21       to enter into a mortgage loan transaction;                                                                        
22                 (2)  pursue a course of misrepresentation through an agent;                                             
23                 (3)  improperly refuse to issue a satisfaction of a mortgage loan;                                      
24                 (4)  fail to account for or deliver to a person money, a document, or                                   
25       another thing of value obtained in connection with a mortgage loan, including money                               
26       provided for a real estate appraisal or a credit report if the person is not entitled to                          
27       retain the money under the circumstances;                                                                         
28                 (5)  pay, receive, or collect, in whole or in part, a commission, fee, or                               
29       other compensation for brokering a mortgage loan in violation of this chapter,                                    
30       including a mortgage loan brokered by an unlicensed person other than an exempt                                   
31       person;                                                                                                           
01                 (6)  fail to disburse money in accordance with a written commitment or                                  
02       agreement to make a mortgage loan;                                                                                
03                 (7)  engage in a transaction, practice, or course of business that is not                               
04       engaged in by the person in good faith or fair dealing or that constitutes a fraud on a                           
05       person in connection with the brokering, making, purchase, or sale of a mortgage loan;                            
06                 (8)  influence or attempt to influence through coercion, extortion, or                                  
07       bribery the development, reporting, result, or review of a real estate appraisal sought                           
08       in connection with a mortgage loan; this paragraph does not prohibit a person from                                
09       asking an appraiser to                                                                                            
10                      (A)  consider additional appropriate property information;                                         
11                      (B)  provide further detail, substantiation, or explanation for the                                
12            appraiser's value determination; or                                                                          
13                      (C)  correct errors in the appraisal report;                                                       
14                 (9)  in a loan commitment or prequalification letter, make a false or                                   
15       misleading statement, or omit relevant information or conditions that the person knew                             
16       or reasonably should have known from a preliminary examination of the borrower's                                  
17       loan application, credit report, assets, and income, except that this paragraph does not                          
18       apply if                                                                                                          
19                      (A)  the borrower made a false or misleading statement or                                          
20            omitted relevant information in the loan application that the person relied on                               
21            when issuing the loan commitment or prequalification letter; or                                              
22                      (B)  the person funds the loan at the rate, terms, and costs stated                                
23            in the good faith estimate provided to the borrower at the time the                                          
24            prequalification letter was issued or the loan commitment was made;                                          
25                 (10)  engage in a practice or course of business in which the ultimate                                  
26       rates, terms, or costs of mortgage loans are materially worse for the borrowers than                              
27       they are represented to be in the first good faith estimates the person provides to the                           
28       borrowers; this paragraph does not apply if                                                                       
29                      (A)  the person's generally published or advertised rates, terms,                                  
30            or costs, if any, change for a borrower's loan program; or                                                   
31                      (B)  new or changed information from the borrower makes it                                         
01            necessary to change the loan program offered to the borrower;                                                
02                 (11)  represent that the person has a license, title, certification,                                    
03       sponsorship, approval, status, affiliation or connection that the person does not have;                           
04                 (12)  engage in unfair, deceptive, or fraudulent mortgage loan practices                                
05       or advertising established by the department in regulation.                                                       
06            Sec. 06.60.350. Certain refinancing prohibited. (a) A covered person may                                   
07       not refinance a mortgage loan within 12 months after the date the mortgage loan is                                
08       closed, unless the refinancing is beneficial to the borrower.                                                     
09            (b)  The factors to be considered when determining if refinancing is beneficial                              
10       to the borrower under (a) of this section may include                                                             
11                 (1)  the borrower's new monthly payment is lower than the total of all                                  
12       monthly obligations being refinanced, after taking into account the costs and fees of                             
13       the refinancing;                                                                                                  
14                 (2)  the amortization period of the new mortgage loan is different from                                 
15       the amortization period of the mortgage loan being refinanced;                                                    
16                 (3)  the borrower receives cash in excess of the costs and fees of the                                  
17       refinancing;                                                                                                      
18                 (4)  the rate of interest of the borrower's promissory note is reduced;                                 
19                 (5)  the mortgage loan changes from an adjustable rate loan to a fixed                                  
20       rate loan after taking into account costs and fees;                                                               
21                 (6)  the refinancing is necessary to respond to a bona fide personal need                               
22       or an order of a court of competent jurisdiction;                                                                 
23                 (7)  the original term of the mortgage loan being refinanced is two                                     
24       years or less; and                                                                                                
25                 (8)  the refinancing is being made to prevent a foreclosure on an                                       
26       existing mortgage loan.                                                                                           
27            Sec. 06.60.360. Escrow accounts. (a) A covered person and a borrower may                                   
28       agree that the covered person will keep in an escrow account all money that the                                   
29       borrower is required to pay to defray future taxes or insurance premiums or for other                             
30       lawful purposes. The escrow account must be segregated from the other accounts of                                 
31       the covered person. The covered person may not commingle the borrower's money                                     
01       with the general funds of the covered person. Money deposited in an escrow account                                
02       under this subsection shall be maintained in the account until it is disbursed in                                 
03       accordance with a written escrow agreement.                                                                       
04            (b)  A covered person may not require a borrower to pay money into escrow to                                 
05       defray future taxes, to defray insurance premiums, or for another purpose, in                                     
06       connection with a subordinate mortgage loan, unless an escrow account for that                                    
07       purpose is not being maintained for the mortgage loan that is superior to the                                     
08       subordinate mortgage loan.                                                                                        
09            (c)  If the billing address of a covered person who is holding money in escrow                               
10       for insurance premiums changes, the covered person shall notify the insurer in writing                            
11       about the changed billing address within 30 days after the change, or 60 days before                              
12       the renewal date of the insurance policy, whichever is later.                                                     
13            (d)  A covered person who accepts money belonging to a borrower in                                           
14       connection with a mortgage loan shall deposit all of the money into an escrow account                             
15       maintained by the covered person in a bank or another recognized depository                                       
16       institution. In this subsection, "recognized depository institution" means a person who                           
17       is organized as a financial institution under the laws of a state or the federal                                  
18       government and whose deposits are insured by a federal agency.                                                    
19            (e) Money held in an escrow account under this section is exempt from                                        
20       execution, attachment, or garnishment under AS 09.38 and is not subject to a claim                                
21       under AS 09.38.065.                                                                                               
22            Sec. 06.60.370. Criminal liability of licensee. (a) In addition to the authority                           
23       provided in AS 06.60.880, the department may report the violations of (b) - (e) of this                           
24       section to the attorney general, who may institute the proper proceedings to enforce                              
25       the criminal penalties provided in (b) - (e) of this section.                                                     
26            (b)  A person who knowingly provides false or misleading information to the                                  
27       department that is material under this chapter is guilty of a class A misdemeanor.                                
28            (c)  A licensee or person who is exempt under AS 06.60.015 who knowingly                                     
29       fails to account for or deliver to a person money, deposits, or checks or other forms of                          
30       negotiable instruments in violation of the provisions of this chapter is guilty of a class                        
31       A misdemeanor.                                                                                                    
01            (d)  A licensee who knowingly fails to disburse without just cause money                                     
02       belonging to the borrower is guilty of a class A misdemeanor.                                                     
03            (e)  A mortgage lender, mortgage broker, or originator who knowingly                                         
04       operates without a license or is not exempt under AS 06.60.015 is guilty of a class A                             
05       misdemeanor.                                                                                                      
06            Sec. 06.60.380. Definition of "covered person." In AS 06.60.320 -                                          
07       06.60.380, "covered person" means a mortgage licensee or a person who is licensed                                 
08       under AS 06.20.                                                                                                   
09                         Article 6. Enforcement.                                                                       
10            Sec. 06.60.400. Cease and desist orders. The department may issue, under                                   
11       AS 06.01.030, an order directing a person to cease and desist. The department shall                               
12       determine the form and content of the order.                                                                      
13            Sec. 06.60.410. Censure, suspension, or bar. (a) In addition to any other                                  
14       remedy provided under this chapter, the department may, by order after appropriate                                
15       notice and opportunity for a hearing, censure a person, suspend the license of a person                           
16       for a period not to exceed 12 months, or bar a person from a position of employment,                              
17       management, or control of a licensee, if the department finds that                                                
18                 (1)  the censure, suspension, or bar is in the public interest;                                         
19                 (2)  the person has knowingly committed or caused a violation of this                                   
20       chapter or a regulation adopted under this chapter; and                                                           
21                 (3)  the violation has caused material damage to the licensee or to the                                 
22       public.                                                                                                           
23            (b)  When the person who is the subject of a proposed order under this section                               
24       receives a notice of the department's intention to issue an order under this section, the                         
25       person is immediately prohibited from engaging in any activities for which a license is                           
26       required under this chapter.                                                                                      
27            (c)  A person who is suspended or barred under this section is prohibited from                               
28       participating in a business activity of a licensee and from engaging in a business                                
29       activity on the premises where a licensee is conducting the licensee's business. This                             
30       subsection may not be construed to prohibit a suspended or barred person from having                              
31       the person's personal transactions processed by a licensee.                                                       
01            Sec. 06.60.420. Civil penalty for violations. (a) A person who violates a                                  
02       provision of this chapter or a regulation adopted under this chapter is liable for a civil                        
03       penalty not to exceed $10,000 for each violation.                                                                 
04            (b)  The remedies provided by this section and by other sections of this chapter                             
05       are not exclusive and may be used in combination with other remedies allowed under                                
06       law to enforce the provisions of this chapter.                                                                    
07            Sec. 06.60.430. Additional enforcement provisions, actions, and rights. (a)                                
08       The department may treat a licensee as a financial institution under AS 06.01 when                                
09       applying the enforcement provisions of AS 06.01.                                                                  
10            (b)  This chapter may not be interpreted to prevent the attorney general or any                              
11       other person from exercising the rights provided under AS 45.50.471 - 45.50.561.                                  
12            (c)  If the department determines that a licensee or a person acting on the                                  
13       behalf of the licensee is in violation of, or has violated, a provision of this chapter, the                      
14       department may refer the information to the attorney general and request that the                                 
15       attorney general investigate the violation under AS 45.50.495. The attorney general                               
16       may enjoin a violation of this chapter and may seek restitution, rescission, and other                            
17       relief as allowed by law.                                                                                         
18            (d)  In addition to another investigation allowed under this chapter, the                                    
19       department may conduct other examinations, periodic audits, special audits,                                       
20       investigations, and hearings as may be necessary and proper for the efficient                                     
21       administration of this chapter.                                                                                   
22                     Article 7. Originator Surety Fund.                                                                
23            Sec. 06.60.500. Originator surety fund. The originator surety fund is                                      
24       established as a separate account in the general fund.                                                            
25            Sec. 06.60.510. Composition of fund. The fund consists of payments made by                                 
26       originator licensees under AS 06.60.550, filing fees retained under AS 06.60.620,                                 
27       income earned on the investment of the money in the fund, and money deposited in                                  
28       the fund by the department under AS 06.60.740.                                                                    
29            Sec. 06.60.520. Use of fund. The legislature may appropriate the money                                     
30       collected in the fund under AS 06.60.510 to the department to implement                                           
31       AS 06.60.500 - 06.60.750, including paying claims, holding hearings, and incurring                                
01       legal expenses and other expenses directly related to fund claims and the operations of                           
02       the fund or for any other public purpose. Nothing in AS 06.60.500 - 06.60.750 creates                             
03       a dedicated fund.                                                                                                 
04            Sec. 06.60.530. Fund report. Every six months the department shall make a                                  
05       written report on the activities of the fund, the balances in the fund, interest earned on                        
06       the fund, and interest returned to the fund.                                                                      
07            Sec. 06.60.540. Approval required. (a) The department must approve a fund                                  
08       expenditure that is used to prepare, print, manufacture, sponsor, produce, or otherwise                           
09       provide an item or a service to a member of the public, to a licensee, to a potential                             
10       licensee, or to another person.                                                                                   
11            (b)  In (a) of this section, "an item or a service" includes an information                                  
12       pamphlet, an examination preparation packet, an educational course, the certification                             
13       of a continuing education course, and an instructor for a continuing education course.                            
14            Sec. 06.60.550. Required fund fees. (a) A person who applies for or renews                                 
15       an originator license shall pay to the department, in addition to the fees required by                            
16       AS 06.60.035, a fund fee not to exceed $150.                                                                      
17            (b)  Every two years, if the department determines that the average balance in                               
18       the fund during the previous two years was less than $250,000 or more than $500,000,                              
19       the department shall, unless the department waives the adjustment, adjust the fund fee                            
20       so that the average balance of the fund during the next two years is anticipated to be an                         
21       amount that is not less than $250,000 or more than $500,000. In this subsection,                                  
22       "average balance" means the average balance in the fund after the department deducts                              
23       anticipated expenditures for claims against the fund and for hearing and legal expenses                           
24       directly related to fund operations and claims.                                                                   
25            (c)  At least once a month, the department shall pay the fees collected under                                
26       this section into the general fund. These payments shall be credited to the fund.                                 
27            (d)  Notwithstanding (a) of this section, an originator licensee who obtains an                              
28       initial originator license when the department has reduced the fund fee to nothing shall                          
29       nonetheless pay a fund fee of $150 to the department each of the first two years of the                           
30       originator license or, for a mortgage licensee, of operating as an originator.                                    
31            Sec. 06.60.560. Claim for reimbursement. In addition to any other remedies                                 
01       available to the person, a person may seek reimbursement for a loss suffered in a                                 
02       mortgage loan transaction as a result of fraud, misrepresentation, deceit, or the                                 
03       wrongful conversion of money by an originator licensee and is eligible to be                                      
04       reimbursed under AS 06.60.500 - 06.60.750 for the loss from money appropriated for                                
05       that purpose.                                                                                                     
06            Sec. 06.60.570. Submission of fund claim. To seek reimbursement under                                      
07       AS 06.60.560, a person shall submit a fund claim to the department for the                                        
08       reimbursement on a form furnished by the department. The person must file the fund                                
09       claim within two years after the occurrence of the fraud, misrepresentation, deceit, or                           
10       conversion that is claimed as the basis for the reimbursement.                                                    
11            Sec. 06.60.580. Form and contents of fund claim. The form for a fund claim                                 
12       shall be executed under penalty of unsworn falsification and must include                                         
13                 (1)  the name and address of each originator licensee involved;                                         
14                 (2)  the amount of the alleged loss;                                                                    
15                 (3)  the date or period of time during which the alleged loss occurred;                                 
16                 (4)  the date when the alleged loss was discovered;                                                     
17                 (5)  the name and address of the claimant; and                                                          
18                 (6)  a general statement of the facts related to the fund claim.                                        
19            Sec. 06.60.590. Claim hearing. Except as otherwise provided by                                             
20       AS 06.60.610, a hearing on a fund claim shall be handled by the office of                                         
21       administrative hearings (AS 44.64.010).                                                                           
22            Sec. 06.60.600. Filing and distribution of claim. At least 20 days before a                                
23       hearing is held on the fund claim by the office of administrative hearings                                        
24       (AS 44.64.010), the department shall send a copy of the claim filed with the                                      
25       department to                                                                                                     
26                 (1)  each originator licensee alleged to have committed the misconduct                                  
27       resulting in the alleged loss;                                                                                    
28                 (2)  the employer of the originator licensee alleged to have committed                                  
29       the conduct resulting in the alleged loss; and                                                                    
30                 (3)  any other parties involved in the mortgage loan transaction that is                                
31       the subject of the fund claim.                                                                                    
01            Sec. 06.60.610. Election to use small claims court. (a) Within seven days                                  
02       after receiving a copy of a fund claim under AS 06.60.600, each originator licensee                               
03       against whom the claim is made may elect to defend the fund claim as a small claims                               
04       action in district court under District Court Rules of Civil Procedure if the claim does                          
05       not exceed the small claims jurisdictional limit.                                                                 
06            (b)  An originator licensee who elects under (a) of this section to defend a fund                            
07       claim in district court under the small claims rules may not revoke the election without                          
08       the consent of the person who filed the fund claim.                                                               
09            (c)  On receipt of a valid written election under (a) of this section, the                                   
10       department shall dismiss the fund claim filed with the department and notify the                                  
11       person who filed the fund claim that the person who filed the fund claim must bring a                             
12       small claims action in the appropriate district court.                                                            
13            Sec. 06.60.620. Filing fee. (a) A person who files a fund claim under                                      
14       AS 06.60.570 shall pay the department a filing fee of $250 when the person files the                              
15       fund claim.                                                                                                       
16            (b)  The department shall refund the filing fee required by (a) of this section if                           
17       the                                                                                                               
18                 (1)  department makes an award to the claimant;                                                         
19                 (2)  fund claim is dismissed under AS 06.60.610; or                                                     
20                 (3)  fund claim is withdrawn by the claimant before the office of                                       
21       administrative hearings (AS 44.64.010) holds a hearing on the fund claim.                                         
22            Sec. 06.60.630. Department contracts. When the department receives a fund                                  
23       claim, the department may contract under AS 36.30 (State Procurement Code) with an                                
24       investigator, an accountant, an attorney, or another person necessary for the                                     
25       department to process the fund claim. A contract may cover more than one fund claim.                              
26            Sec. 06.60.640. Defense of claim. When the department receives a fund claim,                               
27       the department shall allow each originator licensee against whom the claim is made an                             
28       opportunity to file with the department, within seven days after receipt of notification                          
29       of the fund claim under AS 06.60.600, a written statement in opposition to the fund                               
30       claim and a request for a hearing.                                                                                
31            Sec. 06.60.650. Standards of proof. A person who submits a fund claim under                                
01       AS 06.60.570 bears the burden of establishing by a preponderance of the evidence that                             
02       the person who filed the fund claim suffered a loss in a mortgage loan transaction as a                           
03       result of fraud, misrepresentation, deceit, or the conversion of trust funds by an                                
04       originator licensee and the extent of those losses.                                                               
05            Sec. 06.60.660. Postponement. The department may postpone its                                              
06       consideration of a fund claim until after a hearing under AS 06.60.200 or 06.60.590 or                            
07       until the completion of a pending or contemplated court proceeding.                                               
08            Sec. 06.60.670. Nonapplication. AS 06.60.630 - 06.60.660 do not apply to a                                 
09       fund claim that is dismissed under AS 06.60.610.                                                                  
10            Sec. 06.60.680. Findings and payment. (a) At the conclusion of the                                         
11       department's consideration of a claim made under AS 06.60.570, the department shall                               
12       issue a written report that provides the department's findings of fact and conclusions of                         
13       law.                                                                                                              
14            (b)  If the department determines that the claimant has suffered a loss in a                                 
15       mortgage loan transaction as a result of fraud, misrepresentation, deceit, or the                                 
16       wrongful conversion of money by an originator licensee, the department may award                                  
17       the person who filed the fund claim reimbursement from money appropriated to the                                  
18       fund for the claimant's loss.                                                                                     
19            Sec. 06.60.690. Fund operations. The department may charge fund operation                                  
20       hearing and legal expenses from money appropriated to the department for the                                      
21       purpose. The department shall deposit into the fund money that the department                                     
22       recovers for these expenses from the originator licensee under AS 06.60.745. The                                  
23       department may not consider amounts paid from the fund for hearing or legal expenses                              
24       when determining the maximum reimbursement to be awarded under AS 06.60.710 or                                    
25       the maximum liability for fund claims under AS 06.60.710.                                                         
26            Sec. 06.60.700. Payment of small claims judgment. (a) If a fund claim                                      
27       originally filed with the department is dismissed and heard as a small claims action                              
28       under AS 06.60.610 and the person who filed the fund claim is awarded money in the                                
29       small claims action against an originator licensee, the department may pay, subject to                            
30       AS 06.60.710 and 06.60.720, any outstanding portion of the small claims judgment                                  
31       from money appropriated to the department for the purpose.                                                        
01            (b)  Before making payment under (a) of this section, the person who received                                
02       the award shall file with the department a copy of the final judgment and an affidavit                            
03       stating that more than 30 days have elapsed since the judgment became final and that                              
04       the judgment has not yet been satisfied by the originator licensee against whom the                               
05       award was made.                                                                                                   
06            (c)  After the department pays a small claims judgment under this section, the                               
07       department is subrogated to the rights of the person to whom the money was awarded                                
08       under the judgment.                                                                                               
09            Sec. 06.60.710. Maximum liability. (a) Payment of a fund claim may not                                     
10       exceed $15,000 for each claimant, except that the payment may not exceed a total of                               
11       $15,000 for each mortgage loan transaction regardless of the number of persons                                    
12       injured or the number of pieces of residential property involved in the mortgage loan                             
13       transaction.                                                                                                      
14            (b)  The maximum liability for fund claims against one originator licensee may                               
15       not exceed $50,000.                                                                                               
16            (c)  If the $50,000 liability under (b) of this section is insufficient to pay in full                       
17       the valid fund claims of all persons who have filed fund claims against one originator                            
18       licensee, the $50,000 shall be distributed among the claimants in the ratio that their                            
19       individual fund claims bear to the aggregate of valid fund claims, or in another manner                           
20       that the department considers equitable. The department shall distribute the money                                
21       among the persons entitled to share in the recovery without regard to the order in                                
22       which their fund claims were filed.                                                                               
23            Sec. 06.60.720. Order of fund claim payment. If the money appropriated to                                  
24       the department for the purpose is insufficient at a given time to satisfy an award under                          
25       AS 06.60.680 for a fund claim, the department shall, when sufficient money has been                               
26       appropriated to the department for the purpose, satisfy unpaid fund claims in the order                           
27       that the fund claims were originally filed, plus accumulated interest at the rate allowed                         
28       under AS 45.45.010(a).                                                                                            
29            Sec. 06.60.730. False claims or documents. A person who files with the                                     
30       department a notice, statement, or other document required under AS 06.60.500 -                                   
31       06.60.750 that contains a wilful material misstatement of fact is guilty of a class A                             
01       misdemeanor.                                                                                                      
02            Sec. 06.60.740. Right to subrogation. When the department has paid to a                                    
03       claimant the sum awarded by the department, the department shall be subrogated to all                             
04       of the rights of the claimant to the amount paid, and the claimant shall assign all right,                        
05       title, and interest in that portion of the claim to the department. Money collected by the                        
06       department on the claim shall be deposited in the fund.                                                           
07            Sec. 06.60.745. Reimbursement for expenses. If the department pays all or a                                
08       portion of a fund claim against an originator licensee under AS 06.60.680 or                                      
09       06.60.700, the department may recover from the originator licensee, in addition to the                            
10       payment of the fund claim, the expenses incurred by the department to process and                                 
11       otherwise handle the fund claim.                                                                                  
12            Sec. 06.60.750. Disciplinary action against an originator licensee.                                        
13       Repayment in full of all obligations to the fund does not nullify or modify the effect of                         
14       disciplinary proceedings brought against an originator licensee under this chapter.                               
15                    Article 8. Program Administration Fee.                                                             
16            Sec. 06.60.800. Authorization of program administration fee. (a) The                                       
17       department may collect a program administration fee of $10 for each mortgage loan                                 
18       transaction to reimburse the state for the cost of administering this chapter.                                    
19            (b)  The program administration fee shall be paid by the borrower who is                                     
20       providing real property as security for the mortgage loan, except that, if the regulations                        
21       of a federal or state loan program that insures the loan and that applies to the mortgage                         
22       loan transaction prohibits the borrower from paying the program administration fee,                               
23       another party to the mortgage loan transaction shall pay the program administration                               
24       fee.                                                                                                              
25            (c)  If there are multiple mortgage loan instruments recorded for a single                                   
26       mortgage loan transaction, the department shall collect only one program                                          
27       administration fee.                                                                                               
28            (d)  In this section, "mortgage loan instrument" means a deed of trust,                                      
29       mortgage, or another loan instrument recorded to encumber residential real property in                            
30       the state.                                                                                                        
31            Sec. 06.60.810. Payment and use of fees. (a) The department shall coordinate                               
01       with the Department of Natural Resources to collect the program authorization fee.                                
02            (b)  The program authorization fee shall be charged when payment is made to                                  
03       the Department of Natural Resources for recording a document under AS 44.37.025.                                  
04            (c)  The program authorization fees collected under (b) of this section shall be                             
05       separately accounted for and may be appropriated by the legislature to the department                             
06       for the operation of this chapter.                                                                                
07                 Article 9. Duties and Powers of the Department.                                                       
08            Sec. 06.60.850. Publication of disciplinary action. The department may                                     
09       release for publication in a newspaper of general circulation in the locale of a                                  
10       licensee's principal office notice of disciplinary action taken by the department against                         
11       the licensee.                                                                                                     
12            Sec. 06.60.860. Fingerprinting. The department may forward fingerprints                                    
13       provided under this chapter to the Department of Public Safety for submission to the                              
14       Federal Bureau of Investigation for a report by the Federal Bureau of Investigation.                              
15            Sec. 06.60.870. Authority of department. The department may make a ruling,                                 
16       demand, or finding that the department determines is necessary for the proper conduct                             
17       of a licensee's business regulated by this chapter or for the enforcement of this chapter.                        
18       The ruling, demand, or finding must be consistent with this chapter.                                              
19            Sec. 06.60.880. Peace officer powers. (a) A person employed by the                                       
20       department for the administration and enforcement of this chapter may, with the                                   
21       concurrence of the commissioner of public safety, exercise the powers of a peace                                  
22       officer when those powers are specifically granted to the person by the department.                               
23            (b)  A person may exercise a power granted by the department under (a) of this                               
24       section only when necessary for the enforcement of the criminally punishable                                      
25       provisions of this chapter, regulations adopted under this chapter, and other criminally                          
26       punishable laws and regulations, including the investigation of violations of laws                                
27       against theft under AS 11.46.100 - 11.46.150, fraud under AS 11.46.600,                                           
28       misapplication of property under AS 11.46.620, and deceptive business practices                                   
29       under AS 11.46.710.                                                                                               
30                     Article 10. Miscellaneous Provisions.                                                             
31            Sec. 06.60.890. Application to Internet activities. This chapter applies to a                              
01       person even if the person is engaging in the activities regulated by this chapter by                              
02       using an Internet website from within or outside the state.                                                     
03            Sec. 06.60.895. Effect of revocation, suspension, or surrender of license.                                 
04       The revocation, suspension, or surrender of a license does not impair or otherwise                                
05       affect the rights or obligations of a preexisting lawful contract between the licensee                            
06       and a borrower.                                                                                                   
07            Sec. 06.60.900. Applicability of administrative procedures. The provisions                                 
08       of AS 44.62 (Administrative Procedure Act) apply to an action of the department to                                
09       deny, revoke, or suspend a license under this chapter, to censure, suspend, or bar a                              
10       person under AS 06.60.410, to take other disciplinary action under this chapter, to                               
11       hold hearings, and to issue orders.                                                                               
12            Sec. 06.60.905. Untrue, misleading, or false statements. A person may not,                                 
13       in a document filed with the department or in an examination, an investigation, a                                 
14       hearing, or another proceeding under this chapter, make or cause to be made, an untrue                            
15       statement of a material fact, or omit to state a material fact necessary in order to make                         
16       the statement made, in the light of the circumstances under which it is made, not                                 
17       misleading or false.                                                                                            
18            Sec. 06.60.910. Regulations. The department may adopt regulations under                                    
19       AS 44.62 (Administrative Procedure Act) to implement this chapter.                                                
20            Sec. 06.60.920. Relationship to federal and other state law. (a) If a                                      
21       provision of this chapter is preempted by or conflicts with federal law in a particular                           
22       situation, the provision does not apply to the extent of the preemption or conflict.                              
23            (b)  If a provision of this chapter conflicts with another state law in a particular                         
24       situation, the provision in this chapter governs to the extent of the conflict.                                   
25                       Article 11. General Provisions.                                                                 
26            Sec. 06.60.990. Definitions. In this chapter, unless the context otherwise                                 
27       requires,                                                                                                         
28                 (1)  "agent" does not include a person who is a state employee when                                     
29       acting in the capacity of a state employee;                                                                       
30                 (2)  "borrower" means an individual who receives a mortgage loan;                                       
31                 (3)  "broker" means to operate as a mortgage broker;                                                    
01                 (4)  "department" means the Department of Commerce, Community,                                          
02       and Economic Development;                                                                                         
03                 (5)  "escrow account" means an account                                                                  
04                      (A)  to which a borrower makes payments for obligations                                            
05            related to the real property that is the subject of a mortgage loan of the                                   
06            borrower;                                                                                                    
07                      (B)  held by a third person; and                                                                   
08                      (C)  from which the third person identified in (B) of this                                         
09            paragraph disburses money in accordance with a written agreement to pay                                      
10            obligations related to the real property that is the subject of a mortgage loan of                           
11            the borrower.                                                                                                
12                 (6)  "fund" means the originator surety fund established by                                             
13       AS 06.60.500;                                                                                                     
14                 (7)  "fund claim" means a claim authorized under AS 06.60.560;                                          
15                 (8)  "fund fee" means the fee that is required to be paid by                                            
16       AS 06.60.550;                                                                                                     
17                 (9)  "knowingly" has the meaning given in AS 11.81.900;                                                 
18                 (10)  "license" means a license issued under this chapter;                                              
19                 (11)  "licensee" means a person who holds a license issued under this                                   
20       chapter;                                                                                                          
21                 (12)  "mortgage broker" means a person who, for compensation or gain,                                   
22       or in the expectation of compensation or gain, directly or indirectly, by telephone, by                           
23       electronic means, by mail, through the Internet, in person, or by the person itself or an                         
24       originator who is an employee or under exclusive contract to the person,                                          
25                      (A)  arranges with a variety of lending sources, who may be                                        
26            private lenders, institutional investors, or wholesale lenders, to provide                                   
27            financing for mortgage loans; or                                                                             
28                      (B)  assists or offers to assist a borrower or potential borrower                                  
29            to obtain financing for mortgage loans;                                                                      
30                 (13)  "mortgage lender" means a person who consummates and funds a                                      
31       mortgage loan and who is named as the payee in the promissory note and as the                                     
01       beneficiary of the deed of trust; "mortgage lender" does not include a subsequent                                 
02       purchaser of a mortgage loan or an interest in a mortgage loan that is originated by a                            
03       licensee under this chapter;                                                                                      
04                 (14)  "mortgage lender license" means a license issued under this                                       
05       chapter to operate as a mortgage lender;                                                                          
06                 (15)  "mortgage lender licensee" means a person who holds a mortgage                                    
07       lender license;                                                                                                   
08                 (16)  "mortgage license" means a mortgage lender license or a                                           
09       mortgage broker license;                                                                                          
10                 (17)  "mortgage licensee" means a mortgage lender licensee or a                                         
11       mortgage broker licensee;                                                                                         
12                 (18)  "mortgage loan"                                                                                   
13                      (A)  means a loan made to an individual if the proceeds are to                                     
14            be used primarily for personal, family, or household purposes and if the loan is                             
15            secured by a mortgage or deed of trust on an interest in a residential owner-                                
16            occupied property for one to four family units located in the state and                                      
17            regardless of where the loan is made;                                                                        
18                      (B)  includes the renewal or refinancing of a loan;                                                
19                      (C)  does not include loans                                                                        
20                           (i)  or extensions of credit to buyers of real property for                                   
21                 a part of the purchase price of the property by persons selling the                                     
22                 property owned by them;                                                                                 
23                           (ii)  to persons related to the lender by blood or                                            
24                 marriage;                                                                                               
25                           (iii)  to persons who are employees of the lender; or                                         
26                           (iv)  made primarily for a business, commercial, or                                           
27                 agricultural purpose of the borrower or for construction of residential                                 
28                 property;                                                                                               
29                 (19)  "operate" means do business, offer to provide, or provide;                                        
30                 (20)  "originator"                                                                                      
31                      (A)  means a natural person who, for compensation or gain, or                                      
01            in the expectation of compensation or gain, directly or indirectly, by telephone,                            
02            by electronic means, by mail, or in person                                                                   
03                           (i)  interviews the consumer in connection with the                                           
04                 consumer's application for a mortgage loan;                                                             
05                           (ii)  accepts or offers to accept an application for a                                        
06                 mortgage loan from a potential borrower;                                                                
07                           (iii)  solicits or offers to solicit a mortgage loan for a                                    
08                 potential borrower;                                                                                     
09                           (iv)  negotiates or offers to negotiate the terms or                                          
10                 conditions the terms or conditions of a mortgage loan with or for a                                     
11                 borrower or potential borrower; or                                                                      
12                           (v)  issues or offers to issue to borrowers, potential                                        
13                 borrowers, or the representatives of borrowers or potential borrowers,                                  
14                 mortgage loan commitments, interest rate agreements, interest rate                                      
15                 guarantees, prequalification letters, or commitments to finance up to a                                 
16                 stated amount of the value of real property, or 90-percent letters to                                   
17                 finance up to a stated amount of the value of real property;                                            
18                      (B)  does not include employees of a mortgage licensee, or                                         
19            employees of a person who is exempt from licensure under AS 06.60.015, who                                   
20            perform clerical duties in connection with mortgage loan transactions, collect                               
21            financial information and other related documents that are part of the                                       
22            application process, order verifications of employment, verifications of                                     
23            deposits, requests for mortgage payoffs, and other loan verifications,                                       
24            appraisals, inspections, or engineering reports, or perform the functions of a                               
25            mortgage loan processor, at the direction of and subject to the supervision of                               
26            the mortgage licensee, a mortgage originator, or the person exempt from                                      
27            licensure.                                                                                                   
28                 (21)  "originator license" means a license issued to a person to operate                                
29       as an originator;                                                                                                 
30                 (22)  "originator licensee" means a person who holds an originator                                      
31       license;                                                                                                          
01                 (23)  "program administration fee" means the fee described under                                        
02       AS 06.60.800(a);                                                                                                  
03                 (24)  "records" includes books, accounts, papers, files, and other                                      
04       records;                                                                                                          
05                 (25)  "residential property" means improved real property used or                                       
06       occupied, or intended to be used or occupied, for residential purposes.                                           
07            Sec. 06.60.995. Short title. This chapter may be known as the Mortgage                                     
08       Lending Regulation Act.                                                                                           
09    * Sec. 3. AS 09.38.015 is amended by adding a new subsection to read:                                              
10            (e)  Money held in an escrow account under AS 06.60.360 is exempt.                                           
11    * Sec. 4. AS 09.38.065(a) is amended to read:                                                                      
12            (a)     Subject  to  AS 06.60.360(e), and notwithstanding                                                
13       [NOTWITHSTANDING] other provisions of this chapter,                                                               
14                 (1)  a creditor may make a levy against exempt property of any kind to                                  
15       enforce a claim for                                                                                               
16                      (A)  child support;                                                                                
17                      (B)  unpaid earnings of up to one month's compensation or the                                      
18            full-time equivalent of one month's compensation for personal services of an                                 
19            employee; or                                                                                                 
20                      (C)  state or local taxes;                                                                         
21                 (2)  a creditor may make a levy against exempt property to enforce a                                    
22       claim for                                                                                                         
23                      (A)  the purchase price of the property or a loan made for the                                     
24            express purpose of enabling an individual to purchase the property and used                                  
25            for that purpose;                                                                                            
26                      (B)  labor or materials furnished to make, repair, improve,                                        
27            preserve, store, or transport the property; and                                                              
28                      (C)  a special assessment imposed to defray costs of a public                                      
29            improvement benefiting the property; and                                                                     
30                 (3)  a creditor may make a levy against exempt property of any kind to                                  
31       enforce the claim of a victim, including a judgment of restitution on behalf of a victim                          
01       of a crime or a delinquent act, if the claim arises from conduct of the debtor that                               
02       results in a conviction of a crime or an adjudication of delinquency, except that the                             
03       debtor is entitled to an exemption in property                                                                    
04                      (A)  not to exceed an aggregate value of $3,000 chosen by the                                      
05            debtor from the following categories of property:                                                            
06                           (i)  household goods and wearing apparel reasonably                                           
07                 necessary for one household;                                                                            
08                           (ii)  books and musical instruments, if reasonably held                                       
09                 for the personal use of the debtor or a dependent of the debtor; and                                    
10                           (iii)  family portraits and heirlooms of particular                                           
11                 sentimental value to the debtor; and                                                                    
12                      (B)  not to exceed an aggregate value of $2,800 of the debtor's                                    
13            implements, professional books, and tools of the trade.                                                      
14    * Sec. 5. AS 44.62.330(a) is amended by adding a new paragraph to read:                                            
15                 (47)  Department of Commerce, Community, and Economic                                                   
16       Development relating to mortgage lending under AS 06.60.                                                          
17    * Sec. 6. AS 44.64.030(a)(5) is amended to read:                                                                   
18                 (5)  AS 06 (banks, [AND] financial institutions, and fund claims),                          
19       except as provided otherwise by AS 06.60.590;                                                                 
20    * Sec. 7. AS 45.50.471(b) is amended by adding a new paragraph to read:                                            
21                 (52)  violating AS 06.60.010 - 06.60.380 (mortgage lending                                              
22       regulation);                                                                                                      
23    * Sec. 8. AS 45.50.481 is amended by adding a new subsection to read:                                              
24            (c)  The exemption in (a)(1) of this section does not apply to an act or                                     
25       transaction regulated under AS 06.60.                                                                             
26    * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to                          
27 read:                                                                                                                   
28       TRANSITION: LICENSING OF CURRENT MORTGAGE LENDERS AND                                                             
29 MORTGAGE BROKERS. Notwithstanding AS 06.60.010, enacted by sec. 2 of this Act, a                                        
30 person who is engaging in activities for which a license is required under AS 06.60, enacted                            
31 by sec. 2 of this Act, immediately before the effective date of AS 06.60 is not required to                             
01 comply with the licensing requirements of AS 06.60 until March 1, 2009. In this section,                                
02 "license" has the meaning given in AS 06.60.990, enacted by sec. 2 of this Act.                                         
03    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
04 read:                                                                                                                   
05       TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                               
06 Economic Development may proceed to adopt regulations necessary to implement the                                        
07 changes made by this Act. The regulations take effect under AS 44.62 (Administrative                                    
08 Procedure Act), but not before July 1, 2008.                                                                            
09    * Sec. 11. Section 10 of this Act takes effect immediately under AS 01.10.070(c).                                  
10    * Sec. 12. Except as provided in sec. 11 of this Act, this Act takes effect July 1, 2008.