txt

CSHB 104(L&C): "An Act relating to exemptions from mortgage lender, mortgage broker, and mortgage loan originator licensing requirements; and providing for an effective date."

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