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Enrolled HB 12: Relating to mortgage lending, mortgage loan originators, and depository institutions; and providing for an effective date.

00 Enrolled HB 12                                                                                                          
01 Relating to mortgage lending, mortgage loan originators, and depository institutions; and                               
02 providing for an effective date.                                                                                        
03                           _______________                                                                               
04    * Section 1. AS 06.60.012(b) is amended to read:                                                                   
05            (b)  An individual required to be licensed as a mortgage loan originator shall                               
06                 (1)  register with the registry and maintain a valid unique identifier                                  
07       issued by the registry;                                                                                           
08                 (2)  work under                                                                                         
09                      (A)  an exclusive contract for, or as an employee of, a mortgage                               
10            licensee; or                                                                                             
11                      (B)  an exclusive contract for a registered depository                                         
12            institution; and                                                                                         
13                 (3)  be sponsored in the registry by a mortgage licensee under a                                        
14       sponsorship approved in the registry by the department or be sponsored by a                                   
01       registered depository institution under AS 06.60.014; in this paragraph,                                      
02       "sponsored" means authorized to conduct business as a mortgage loan originator under                              
03       the supervision of a mortgage licensee or a registered depository institution.                                
04    * Sec. 2. AS 06.60 is amended by adding a new section to read:                                                     
05            Sec. 06.60.014. Registered depository institutions. (a) A depository                                       
06       institution may sponsor a mortgage loan originator under AS 06.60.012(b) if the                                   
07       depository institution is registered with the department under this section, has an                               
08       exclusive written contract to sponsor a mortgage loan originator licensed under this                              
09       chapter, is otherwise in compliance with this chapter, and satisfies the other                                    
10       requirements of this section. Registration under this section does not affect the                                 
11       exemption of the depository institution under AS 06.60.015(a).                                                    
12            (b)  To register under (a) of this section, a depository institution shall                                   
13                 (1)  complete a registration form established by the department; the                                    
14       form must identify the mortgage loan originator to be sponsored by the depository                                 
15       institution and each mortgage lending location of the registered depository institution;                          
16       and                                                                                                               
17                 (2)  pay a registration fee established by the department.                                              
18            (c)  Registration under (b) of this section expires after one year. To renew a                               
19       registration, the depository institution shall file a renewal application with the                                
20       department and pay a renewal fee established by the department.                                                   
21            (d)  The department may deny an initial or renewal registration under this                                   
22       section or may suspend or revoke the registration of a depository institution that is                             
23       registered under (b) of this section if the department determines that the depository                             
24       institution                                                                                                       
25                 (1)  failed to satisfy a requirement of this section;                                                   
26                 (2)  failed to supervise its sponsored mortgage loan originator                                         
27       adequately; or                                                                                                    
28                 (3)  made a material misstatement or withheld information on the                                        
29       application for registration, on an application for the renewal of the registration, or on                        
30       another document required to be filed with the department.                                                        
31    * Sec. 3. AS 06.60.015(a) is amended to read:                                                                      
01            (a)  The following persons are exempt from the mortgage lender or mortgage                                   
02       broker licensing requirements of this chapter:                                                                    
03                 (1)  a depository institution;                                                                          
04                 (2)  a subsidiary that is                                                                               
05                      (A)  owned and controlled by a depository institution; and                                         
06                      (B)  regulated by a federal banking agency; [OR]                                                   
07                 (3)  an institution regulated by the Farm Credit Administration; or                                 
08                 (4)  a federal, state, or local government agency, including an                                     
09       agency that arranges or provides financing for mortgage loans.                                              
10    * Sec. 4. AS 06.60.045(a) is amended to read:                                                                      
11            (a)  An applicant for a mortgage license shall file with the application                                     
12       submitted to the department under AS 06.60.020, and an applicant for registration                             
13       under AS 06.60.014 shall file with the application filed under AS 06.60.014, a                                
14       bond with one or more sureties. The department shall establish by regulation the                                  
15       amount of the required bond and the standards and procedures for recovery on the                                  
16       bond. The bond must be satisfactory to the department.                                                            
17    * Sec. 5. AS 06.60.045(c) is amended to read:                                                                      
18            (c)  An applicant for a mortgage license that covers more than one location or                           
19       an applicant for registration that covers more than one location is not required to                           
20       file more than one bond.                                                                                          
21    * Sec. 6. AS 06.60.045(d) is amended to read:                                                                      
22            (d)  The bond required under (a) of this section must be continuous until three                              
23       years after the department revokes or otherwise terminates the license or registration.                       
24    * Sec. 7. AS 06.60.045(e) is amended to read:                                                                      
25            (e)  If the department determines that the bond required under (a) of this                                   
26       section is unsatisfactory for any reason, the department may require the mortgage                                 
27       licensee or the registered depository institution to file with the department, within                         
28       10 days after the receipt of a written demand from the department, an additional bond                             
29       that complies with the provisions of this section.                                                                
30    * Sec. 8. AS 06.60.100 is amended to read:                                                                         
31            Sec. 06.60.100. Annual report. (a) Annually, on or before a date established                               
01       by the department by regulation, a mortgage licensee and a registered depository                              
02       institution shall file a report with the department providing relevant information that                       
03       the department requires concerning the business and operations of the mortgage                                    
04       licensee or registered depository institution. The mortgage licensee and the                              
05       registered depository institution shall make the report under oath or on affirmation.                         
06       The content and form of the report shall be established by the department by                                      
07       regulation.                                                                                                       
08            (b)  A mortgage licensee who or registered depository institution that fails                             
09       to file a report as required by this section is subject to a civil penalty of $25 for each                        
10       day's failure to file the report.                                                                                 
11            (c)  A mortgage licensee and a registered depository institution shall submit                            
12       to the registry, as required by the registry, reports of the condition of the licensee or                     
13       registered depository institution, which must be in the form and contain the                                  
14       information that the registry may require.                                                                        
15    * Sec. 9. AS 06.60.135(a) is amended to read:                                                                      
16            (a)  The requirements of this section apply to the business transactions of a                                
17       mortgage licensee or registered depository institution that occur entirely or partially                       
18       in this state.                                                                                                    
19    * Sec. 10. AS 06.60.135(b) is amended to read:                                                                     
20            (b)  A mortgage licensee or registered depository institution shall keep and                             
21       use in the [MORTGAGE LICENSEE'S] business of the mortgage licensee or                                         
22       registered depository institution the accounting records that are in accord with                              
23       generally accepted accounting principles.                                                                         
24    * Sec. 11. AS 06.60.135(c) is amended to read:                                                                     
25            (c)  A mortgage licensee and a registered depository institution shall                                   
26       maintain a record of the account of each borrower and for each mortgage loan or                                   
27       mortgage loan application that is related to the purchase or refinancing of an existing                           
28       mortgage loan. This record must contain all documents, work papers, electronic                                    
29       correspondence, and forms that are produced or prepared for the mortgage loan by the                              
30       mortgage licensee or registered depository institution, and the mortgage licensee                             
31       and registered depository institution shall retain each document, work paper,                                 
01       electronic correspondence, and form for 36 months from the date they were created.                                
02    * Sec. 12. AS 06.60.135(d) is amended to read:                                                                     
03            (d)  A mortgage licensee and a registered depository institution shall retain,                       
04       for at least three years after final payment is made on a mortgage loan, or three years                           
05       after a mortgage loan is sold, whichever occurs first, the original contract for the                              
06       [MORTGAGE LICENSEE'S] compensation of the mortgage licensee or registered                                     
07       depository institution, copies of the note, settlement statement, and truth-in-lending                        
08       disclosure, an account of fees received in connection with the loan, and other papers or                          
09       records relating to the loan that may be required by department order or regulation.                              
10    * Sec. 13. AS 06.60.135(e) is amended to read:                                                                     
11            (e)  If a mortgage licensee or registered depository institution conducts                                
12       business as a mortgage loan servicing agent for mortgage loans that the mortgage                                  
13       licensee or registered depository institution owns, or as an agent for other mortgage                         
14       lenders or investors, the mortgage licensee or registered depository institution shall,                       
15       in addition to complying with (b) and (c) of this section, maintain a record for each                             
16       mortgage loan. The record of each mortgage loan must include the amount of the                                    
17       mortgage loan, the total amount of interest and finance charges on the mortgage loan,                             
18       the interest rate on the mortgage loan, the amount of each payment to be made on the                              
19       mortgage loan, a description of the collateral taken for the mortgage loan, a history of                          
20       all payments received by the mortgage licensee or registered depository institution                           
21       on the mortgage loan, a detailed history of the amount of each payment that is applied                            
22       to the reduction of the mortgage loan principal, the interest that accrues on the                                 
23       mortgage loan, and any other fees and charges that are related to the mortgage loan, as                           
24       well as other papers required by law, department order, or regulation. The mortgage                               
25       licensee or registered depository institution shall retain the record required by this                        
26       subsection for three years after the loan is sold to another mortgage loan servicing                              
27       agent or after the mortgage loan is satisfied, whichever occurs first.                                            
28    * Sec. 14. AS 06.60.140 is amended to read:                                                                        
29            Sec. 06.60.140. Availability of out-of-state records. A mortgage licensee                                  
30       who or registered depository institution that operates an office or other place of                            
31       business outside this state shall, at the request of the department,                                              
01                 (1)  make the records of the office or place of business available to the                               
02       department at a location within this state; or                                                                    
03                 (2)  reimburse the department its reasonable costs, as provided in                                      
04       AS 06.60.250(k), that are incurred by the department in conjunction with an                                       
05       investigation or examination conducted at the office or place of business.                                        
06    * Sec. 15. AS 06.60.250(a) is amended to read:                                                                     
07            (a)  For the purpose of initial licensing, license renewal, license suspension,                              
08       license conditioning, license revocation, license termination, or general or specific                             
09       inquiry or investigation to determine compliance with this chapter, including                                 
10       compliance by a registered depository institution, the department may access,                                 
11       receive, use, and copy any books, accounts, records, files, documents, information, or                            
12       evidence, including                                                                                               
13                 (1)  criminal, civil, and administrative history information, including                                 
14       nonconviction information; in this paragraph, "nonconviction information" has the                                 
15       meaning given in AS 12.62.900;                                                                                    
16                 (2)  personal history and experience information, including independent                                 
17       credit reports obtained from a consumer reporting agency; and                                                     
18                 (3)  other documents, information, and evidence the department                                          
19       considers relevant to the inquiry or investigation, regardless of the location,                                   
20       possession, or custody of the documents, information, or evidence.                                                
21    * Sec. 16. AS 06.60.250 is amended by adding a new subsection to read:                                             
22            (l)  In this section, "person" and "person subject to this chapter" include a                                
23       registered depository institution.                                                                                
24    * Sec. 17. AS 06.60.410 is amended to read:                                                                        
25            Sec. 06.60.410. Censure, suspension, or bar. (a) In addition to any other                                  
26       remedy provided under this chapter, the department may, by order after appropriate                                
27       notice and opportunity for a hearing, censure a person, suspend the license of a person                           
28       for a period not to exceed 12 months, or bar a person from a position of employment,                              
29       management, or control of a licensee or registered depository institution if the                              
30       department finds that                                                                                             
31                 (1)  the censure, suspension, or bar is in the public interest;                                         
01                 (2)  the person has knowingly committed or caused a violation of this                                   
02       chapter or a regulation adopted under this chapter; and                                                           
03                 (3)  the violation has caused material damage to the licensee, to the                               
04       registered depository institution, or to the public.                                                          
05            (b)  When a person who is the subject of a proposed order under this section                                 
06       receives a notice of the department's intention to issue an order under this section, the                         
07       person is immediately prohibited from engaging in any activities for which a license is                           
08       required under this chapter or for which registration is required under                                       
09       AS 06.60.014.                                                                                                 
10            (c)  A person who is suspended or barred under this section is prohibited from                               
11       participating in a business activity of a licensee or registered depository institution                       
12       and from engaging in a business activity on the premises where a licensee or                                  
13       registered depository institution is conducting the [LICENSEE'S] business of a                            
14       licensee or registered depository institution. This subsection may not be construed                           
15       to prohibit a suspended or barred person from having the person's personal                                        
16       transactions processed by a licensee or registered depository institution.                                    
17    * Sec. 18. AS 06.60.900 is amended to read:                                                                        
18            Sec. 06.60.900. Applicability of administrative procedures. Notwithstanding                                
19       AS 06.01.030(f), the provisions of AS 44.62 (Administrative Procedure Act) apply to                               
20       an action of the department to deny, revoke, or suspend a license or registration                             
21       under this chapter, to censure, suspend, or bar a person under AS 06.60.410, to take                              
22       other disciplinary action under this chapter, to hold disciplinary hearings, and to issue                         
23       disciplinary orders. In this section, "registration" means the registration of a                              
24       depository institution under AS 06.60.014.                                                                    
25    * Sec. 19. AS 06.60.990 is amended by adding a new paragraph to read:                                              
26                 (35)  "registered depository institution" means a depository institution                                
27       that is registered under AS 06.60.014.                                                                            
28    * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to                         
29 read:                                                                                                                   
30       TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                               
31 Economic Development may proceed under AS 06.60.910 to adopt regulations necessary to                                   
01 implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure                                
02 Act), but not before January 1, 2017.                                                                                   
03    * Sec. 21. Section 20 of this Act takes effect immediately under AS 01.10.070(c).                                  
04    * Sec. 22. Except as provided in sec. 21 of this Act, this Act takes effect January 1, 2017.