House File 737 - Introduced
HOUSE FILE
BY COMMITTEE ON COMMERCE,
REGULATION AND LABOR
(SUCCESSOR TO HF 115)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the registration and licensing of mortgage
2 bankers and brokers, providing for fees, and providing an
3 effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1524HV 81
6 av/pj/5
PAG LIN
1 1 Section 1. Section 535B.1, Code 2005, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 2A. "Individual registrant" means a
1 4 natural person who is registered or who is required to be
1 5 registered under section 535B.4A.
1 6 Sec. 2. Section 535B.1, subsection 4, Code 2005, is
1 7 amended to read as follows:
1 8 4. "Mortgage banker" means a person who does one or more
1 9 of the following:
1 10 a. Makes at least four first mortgage loans on residential
1 11 real property located in this state in a calendar year.
1 12 b. Originates at least four first mortgage loans on
1 13 residential real property located in this state in a calendar
1 14 year and sells four or more such loans in the secondary
1 15 market.
1 16 c. Services at least four first mortgage loans on
1 17 residential real property located in this state. However, a
1 18 natural person, who services less than fifteen first mortgage
1 19 loans on residential real estate within the state and who does
1 20 not sell or transfer first mortgage loans, is exempt from this
1 21 paragraph if that person is otherwise exempt from the
1 22 provisions of this chapter.
1 23 "Mortgage banker" does not include a person whose job
1 24 responsibilities on behalf of a licensee or individual
1 25 registrant are to process mortgage loans or are solely
1 26 clerical in nature.
1 27 Sec. 3. Section 535B.1, subsection 5, Code 2005, is
1 28 amended to read as follows:
1 29 5. "Mortgage broker" means a person who arranges or
1 30 negotiates, or attempts to arrange or negotiate, at least four
1 31 first mortgage loans or commitments for four or more such
1 32 loans on residential real property located in this state in a
1 33 calendar year. "Mortgage broker" does not include a person
1 34 whose job responsibilities on behalf of a licensee or
1 35 individual registrant are to process mortgage loans or are
2 1 solely clerical in nature.
2 2 Sec. 4. NEW SECTION. 535B.4A INDIVIDUAL REGISTRATION
2 3 REQUIREMENTS == FEES.
2 4 1. A natural person who is a mortgage banker or mortgage
2 5 broker and who is employed by, under contract with, or is an
2 6 agent of a licensee under section 535B.4 shall register
2 7 annually with the administrator. The administrator shall
2 8 collect registration fees necessary to cover the costs
2 9 associated with the annual registrations made pursuant to this
2 10 section.
2 11 2. An individual registrant who registers pursuant to this
2 12 section for the first time shall submit to a criminal
2 13 background check prior to being registered. The administrator
2 14 shall collect fees necessary to cover the costs associated
2 15 with criminal background checks conducted pursuant to this
2 16 section.
2 17 3. A person shall not be eligible for licensing pursuant
2 18 to section 535B.4 unless all individual registrants employed
2 19 by, under contract with, or who are agents of the person have
2 20 successfully completed the registration and criminal
2 21 background check required by this section.
2 22 4. The registration of an individual registrant pursuant
2 23 to this section is not assignable.
2 24 5. The registration of an individual registrant pursuant
2 25 to this section expires on June 30 following the date of
2 26 registration.
2 27 6. An individual registrant who fails to comply with the
2 28 requirements of section 535B.9A shall not be registered or the
2 29 registration of the individual registrant may be suspended or
2 30 revoked by the administrator.
2 31 Sec. 5. Section 535B.9, subsection 1, Code 2005, is
2 32 amended to read as follows:
2 33 1. An applicant for a license shall file with the
2 34 administrator a bond furnished by a surety company authorized
2 35 to do business in this state. The bond shall be in the amount
3 1 of fifteen twenty=five thousand dollars for an applicant
3 2 seeking to transact business solely as a mortgage broker, or
3 3 thirty fifty thousand dollars for an applicant seeking to
3 4 transact business as a mortgage banker. The bond shall be
3 5 continuous in nature until canceled by the surety with not
3 6 less than thirty days' notice in writing to the mortgage
3 7 broker or mortgage banker and to the administrator indicating
3 8 the surety's intention to cancel the bond on a specific date.
3 9 The bond shall be for the use of the state and any persons who
3 10 may have causes of action against the applicant. The bond
3 11 shall be conditioned upon the applicant's faithfully
3 12 conforming to and abiding by this chapter and any rules
3 13 adopted under this chapter and shall require that the surety
3 14 pay to the state and to any persons all moneys that become due
3 15 or owing to the state and to the persons from the applicant by
3 16 virtue of this chapter.
3 17 Sec. 6. NEW SECTION. 535B.9A CONTINUING EDUCATION
3 18 REQUIREMENTS.
3 19 1. All individual registrants shall complete twelve hours
3 20 of continuing education or training each year. The
3 21 administrator shall establish an annual deadline for the
3 22 completion of such continuing education or training.
3 23 2. Continuing education or training shall not be offered
3 24 to individual registrants until the curriculum of the
3 25 continuing education or training has been approved by the
3 26 administrator.
3 27 3. Each individual registrant shall annually provide the
3 28 administrator with proof of the individual registrant's
3 29 compliance with the requirements of this section.
3 30 Sec. 7. EFFECTIVE DATE. The provisions of this Act take
3 31 effect July 1, 2006.
3 32 EXPLANATION
3 33 This bill requires registration by a natural person who is
3 34 a mortgage banker or mortgage broker and who is employed by,
3 35 under contract with, or is an agent of a person or business
4 1 entity that is required to be licensed as a mortgage broker or
4 2 mortgage banker under Code chapter 535B. The bill requires
4 3 such an individual to register annually with the
4 4 administrator, who is the superintendent of the division of
4 5 banking of the department of commerce, pay a registration fee,
4 6 and successfully complete a criminal background check. The
4 7 bill also requires such registrants to complete 12 hours of
4 8 continuing education or training each year, the curriculum of
4 9 which has been approved by the administrator.
4 10 The bill provides that a "mortgage broker" or "mortgage
4 11 banker" does not include a person whose job responsibilities
4 12 on behalf of a licensee or individual registrant are to
4 13 process mortgage loans or are solely clerical in nature.
4 14 The bill requires an applicant for a license as a mortgage
4 15 broker to furnish a surety bond in the amount of $25,000
4 16 instead of $15,000. The bill also requires an applicant for a
4 17 license as a mortgage banker to furnish a surety bond in the
4 18 amount of $50,000 instead of $30,000.
4 19 LSB 1524HV 81
4 20 av:nh/pj/5