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