§ 23-39-505 - Qualifications for licensure -- Issuance.
23-39-505. Qualifications for licensure -- Issuance.
(a) (1) Any person desiring to obtain a license as a loan officer, mortgage banker, mortgage broker, or mortgage servicer shall make written application for licensure to the Securities Commissioner in the form prescribed by the commissioner.
(2) The application may require that the information be submitted in an electronic format.
(3) In addition to any other information required under this subchapter or any rules adopted by the commissioner, the application shall contain any information the commissioner deems necessary and shall include the following:
(A) The applicant's name, address, and social security number;
(B) The applicant's form of business and place of organization, if applicable;
(C) (i) The applicant's proposed method of and locations for doing business, if applicable.
(ii) The applicant's proposed method of doing business shall include whether the applicant is proposing to be licensed as a mortgage broker, mortgage banker, or mortgage servicer;
(D) (i) The qualifications, business history, and financial condition of the applicant and any partner, officer, director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant.
(ii) The qualifications and business history of persons under subdivision (a)(3)(D)(i) of this section shall include:
(a) A description of any injunction or administrative order, including any denial to engage in a regulated activity by any state or federal authority to which the person is, has been, or has sought to be subject;
(b) Any conviction of a misdemeanor involving fraudulent dealings or moral turpitude or relating to any aspect of the mortgage industry, the securities industry, the insurance industry, or any other activity pertaining to financial services; and
(c) Any felony convictions; and
(E) A disclosure of any beneficial interest in an affiliated industry business held by the applicant or by a principal, officer, director, or employee of the applicant.
(b) In addition to meeting the requirements imposed by the commissioner under subsection (a) of this section, each individual applicant for licensure as a loan officer shall:
(1) Be at least eighteen (18) years of age;
(2) (A) Have received a high school diploma or a general educational development certificate.
(B) Subdivision (b)(2)(A) of this section does not apply to an individual who is licensed as a loan officer on July 1, 2007;
(3) Have satisfactorily completed any educational and testing requirements as the commissioner may by rule or order impose; and
(4) Furnish to the commissioner or through an automated licensing system, information concerning the applicant's identity and background, including:
(A) Fingerprints for submission to the Federal Bureau of Investigation and any governmental agency or entity authorized to receive fingerprints for a state, national, and international criminal background check; and
(B) Personal history and experience in a form prescribed by the automated licensing system and the commissioner, including the submission of authorization for the automated licensing system and the commissioner to obtain:
(i) An independent credit report from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq., as it existed on January 1, 2009; and
(ii) Information related to any administrative, civil, or criminal proceeding by a governmental jurisdiction.
(c) In addition to the requirements under subsections (a) and (b) of this section, each applicant for licensure as a mortgage broker, mortgage banker, or mortgage servicer shall comply with the following requirements at the time of application and at all times thereafter:
(1) If the applicant is a sole proprietor, the applicant shall have at least three (3) years of experience in mortgage lending or other experience or competency requirements as the commissioner may adopt by rule or order;
(2) If the applicant is a general or limited partnership, at least one (1) of its general partners shall have the experience as described in subdivision (c)(1) of this section;
(3) If the applicant is a corporation, at least one (1) of its principal officers shall have the experience as described in subdivision (c)(1) of this section; and
(4) If the applicant is a limited liability company, at least one (1) of its managers shall have the experience as described under subdivision (c)(1) of this section.
(d) Each applicant shall identify in its application one (1) person meeting the requirements of subsection (c) of this section to serve as the applicant's managing principal.
(e) Each applicant for initial licensure shall pay a filing fee of:
(1) Seven hundred fifty dollars ($750) for the principal place of business of a mortgage broker, mortgage banker, or mortgage servicer;
(2) One hundred dollars ($100) for each branch office of a mortgage broker, mortgage banker, or mortgage servicer; and
(3) Fifty dollars ($50.00) for each loan officer.
(f) (1) (A) Each mortgage broker, mortgage banker, and mortgage servicer shall post a surety bond in the amount prescribed by rule or order of the commissioner.
(B) The amount of the surety bond prescribed by the commissioner under subdivision (f)(1)(A) of this section shall be:
(i) Based upon loan activity during the previous year; and
(ii) Not less than one hundred thousand dollars ($100,000).
(2) The surety bond shall be in the form prescribed by the commissioner and shall run to the state for the benefit of any claimants against the licensee and loan officers employed by the licensee to secure the faithful performance of the obligations of the licensee and loan officers employed by the licensee under this subchapter.
(3) The aggregate liability of the surety shall not exceed the principal sum of the bond.
(4) A party having a claim against the licensee may bring suit directly on the surety bond, or the commissioner may bring suit on behalf of any claimants, either in one (1) action or in successive actions.
(5) Consumer claims shall be given priority in recovering from the bond.
(6) [Repealed.]
(g) Each applicant filing for licensure as a mortgage banker or mortgage servicer shall file with the commissioner as part of his or her application audited financial statements that reflect that the applicant has a net worth of at least twenty-five thousand dollars ($25,000) and are:
(1) Prepared by an independent certified public accountant;
(2) Prepared in accordance with generally accepted accounting principles as promulgated by the Financial Accounting Standards Board;
(3) Accompanied by an opinion acceptable to the commissioner; and
(4) Dated within fifteen (15) months preceding the date on which the application is filed.
(h) Any general partner, manager of a limited liability company, or officer of a corporation who individually meets the requirements under subsection (b) of this section shall be deemed to have met the qualifications for licensure as a loan officer upon filing a written application with the commissioner in the form prescribed by the commissioner and payment of the applicable fee.
(i) Each principal place of business and each branch office of a mortgage broker, mortgage banker, or mortgage servicer licensed under this subchapter shall obtain a separate license.
(j) Except as set forth in 23-39-503(d), each license issued by the commissioner under this subchapter expires at the close of business on December 31 of the calendar year unless the license is:
(1) Previously surrendered by the licensee and the surrender is accepted by the commissioner;
(2) Abandoned by the licensee as provided in 23-39-506; or
(3) Suspended or revoked by the commissioner.
(k) Licenses issued under this subchapter are not transferable.
(l) (1) Control of a licensee shall not be acquired through a stock or equity purchase, transfer of interest, or other device without the prior written consent of the commissioner.
(2) Any person seeking to acquire control of a licensee, at least thirty (30) days before the proposed change of control, shall:
(A) Pay the commissioner a fee of one hundred dollars ($100);
(B) Submit to the commissioner the information required under subdivision (a)(3)(D) of this section and any other information deemed relevant by the commissioner; and
(C) Certify that the licensee shall continue to meet the qualifications under this section.
(3) The commissioner may refuse to give written consent if he or she finds that any of the grounds for denial, revocation, or suspension of a license under 23-39-514 are applicable to the person seeking to acquire control of a license.
(4) (A) Failure to notify the commissioner at least thirty (30) days before the proposed change of control shall result in a late fee of one hundred dollars ($100).
(B) All or part of the late fee may be waived by the commissioner for good cause.
(m) (1) An application filed with the commissioner may be withdrawn upon written request of the applicant delivered to the commissioner at any time before the granting of the license.
(2) However, if a notice of intent to deny the application has been sent to the applicant, the applicant shall not withdraw the application except upon the written direction of the commissioner.
(n) (1) Unless a proceeding has been commenced to suspend or revoke the license, a license may be surrendered by a licensee by filing a written request to surrender the license in a form acceptable to the commissioner.
(2) The surrender of the license becomes effective upon acceptance by the commissioner.
(3) Notwithstanding a surrender or termination of a license and acceptance of the surrender or termination by the commissioner, if a licensee or any person acting on behalf of the licensee has knowingly violated any provision of this subchapter or any rule or order promulgated or issued under this subchapter:
(A) A proceeding may be commenced at any time within one (1) year following the effective date of the surrender or termination of the license; and
(B) An order may be entered revoking the license as of a date before the acceptance of the surrender or termination of the license.
(o) The commissioner shall not issue a loan officer license unless the commissioner finds that:
(1) The applicant has:
(A) Never had a loan officer license revoked in any governmental jurisdiction;
(B) Not been found guilty of or pleaded guilty or nolo contendere to any offense described in 23-39-514(a)(2)(C);
(C) Demonstrated sufficient financial responsibility, character, and general fitness to command the confidence of the community and to warrant a determination that the loan officer will operate honestly, fairly, and efficiently within the purposes of this subchapter; and
(D) Complied with the prelicensing education and testing requirements of subdivision (b)(3) of this section; and
(2) The applicant's employer has met the surety bond requirement of subdivision (f)(1) of this section.