SENATE BILL NO. 279 "An Act relating to regulation of residential mortgage lending, including the licensing of mortgage lenders, mortgage brokers, and mortgage loan originators, and compliance with certain federal laws relating to residential mortgage lending; and providing for an effective date." 9:54:26 AM Co-Chair Hoffman MOVED to ADOPT CSSB 279, labeled 26- LS1295\S, Bannister, 3/19/10. Co-Chair Stedman OBJECTED. DARWIN PETERSON, STAFF, CO-CHAIR STEDMAN, SPONSOR, listed the four changes in Version S, which were suggested by the Conference of State Bank Supervisors and were shared with the Department of Law and with the bill's sponsor, Senator Paskvan. The first change has to do with the approval authority for education courses. Under the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008, courses required for pre-licensing and continuing education courses have to be approved by the registry. The previous version of the bill had the Department of Law as the authority that approved those courses. The change is on page 7, lines 10 and 11, and lines 18 and 19. In the previous version of the bill there was a subsection (e) that would have followed line 19, but now has been deleted. Mr. Peterson turned to the second change which deals with approval authority for licensing tests. It is found on page 7, lines 23 - 25. The SAFE Act provides that the licensing test will be developed by SAFE and that the test will cover both federal and state law. The previous version had references to two different tests. Mr. Peterson related that the third change has to do with disqualifying felony convictions and is found on page 9, line 20. The previous version of the bill said that if a person was convicted of a felony that involved an act of fraud, dishonesty, a breach of trust, or money laundering, within seven years, the person was disqualified from licensing for life. Now, a person convicted of any felony within seven years cannot qualify for a license, and a person convicted of any felony that involves an act of fraud, dishonesty, a breach of trust, or money laundering is disqualified from obtaining a license for life. Mr. Peterson reported that the fourth change is found in the definition section of the bill on page 37 and page 40. The previous version of the bill had two different definitions for mortgage loan and residential mortgage loan, which was inconsistent with the SAFE Act. 9:59:21 AM Senator Thomas asked how the department would establish by regulation the amount of the required bond as referenced in Section 14, page 8. SENATOR JOE PASKVAN, SPONSOR, deferred to his staff. PATRICE WALSH, DIVISION OF BANKING AND SECURITIES, DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT, (DCCED), spoke of a planned increase in the bond amount to about $75,000. Co-Chair Stedman WITHDREW his OBJECTION to adopting the new CS. There being NO OBJECTION, it was so ordered. 10:01:46 AM Senator Egan moved to adopt Amendment 1: Page 3, line 15, following "of": Insert "the Internet," Page 4, line 3, following "individual": Insert "seller" Page 11, line 6: Delete "suspended, or" Insert "is suspended, is" Page 12, following line 1: Insert a new subsection to read: "(c) The department shall approve or deny the application for renewal of a license not later than 60 days after the renewal application is filed." Page 12, line 22: Delete "and [,]address[,]" Insert ",the licensee's address," Page 14, line 14, following "department": Insert "that is made in a record" Page 20, line 6: Delete "section" Insert "chapter" Page 30, line 19: Delete "a" Co-Chair Stedman OBJECTED. JESSE KIEHL, STAFF, SENATOR EGAN, explained that the amendment cleans up a few errors and minor technical issues, clarifies some language, and makes several substantive changes to the bill. The first change begins on page 3, line 15, where internet sites are added to the list of communications that would count as advertising mortgage loan services. The second change is in Section 20, which begins on page 11. This change gives the department a 60- day deadline to act on a renewal application, significantly longer than the current 30-day deadline. The longer time frame is appropriate because the new federal law shortens licenses to one year, instead of two. The third change appears in Section 30, which is on page 14 of Version S. It requires the department's approval of a change in control be provided in a record. That avoids a potential unintended consequence of verbal approvals being acceptable. The bill defines "record" very broadly, but it has to be traceable. Co-Chair Stedman WITHDREW his OBJECTION to Amendment 1. There being NO OBJECTION, it was so ordered. 10:04:07 AM Co-Chair Stedman noted one fiscal note from the Department of Commerce, Community, and Economic Development for $131,000 to cover the cost of one additional occupational licensing position. 10:04:33 AM Co-Chair Hoffman MOVED to report CSSB 279 (FIN) out of Committee, as amended, with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSSB 279 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with FN 1 (CED). SB 305 was SCHEDULED but not HEARD.