Bill Text: IA SSB3111 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to mortgage administration and mortgage servicers.(See SF 2298.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-02-08 - Committee report approving bill, renumbered as SF 2298. [SSB3111 Detail]
Download: Iowa-2023-SSB3111-Introduced.html
Senate
Study
Bill
3111
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
INSURANCE
AND
FINANCIAL
SERVICES
BILL)
A
BILL
FOR
An
Act
relating
to
mortgage
administration
and
mortgage
1
servicers.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
535B.1,
Code
2024,
is
amended
by
adding
1
the
following
new
subsections:
2
NEW
SUBSECTION
.
1A.
“Branch
office”
means
any
location,
3
other
than
a
licensee’s
principal
place
of
business
or
a
remote
4
location,
where
the
licensee,
the
licensee’s
employees,
or
the
5
licensee’s
independent
contractors
maintain
a
physical
presence
6
to
engage
in
business
as
a
mortgage
banker
or
a
mortgage
7
broker.
8
NEW
SUBSECTION
.
8A.
“Principal
place
of
business”
means
9
a
licensee’s
primary
business
office
as
designated
on
the
10
licensee’s
application
for
licensure.
11
NEW
SUBSECTION
.
11A.
“Remote
location”
means
a
physical
12
location
in
the
United
States,
other
than
a
licensee’s
13
principal
place
of
business
or
a
branch
office,
where
a
14
licensee’s
employee
or
an
independent
contractor
of
the
15
licensee
is
authorized
by
the
licensee
to
engage
in
business
as
16
a
mortgage
banker
or
mortgage
broker.
17
Sec.
2.
Section
535B.4,
subsection
2,
paragraph
a,
Code
18
2024,
is
amended
to
read
as
follows:
19
a.
License
applicants
shall
submit
to
the
administrator
20
an
application
on
forms
provided
by
the
administrator.
The
21
forms
shall
include,
at
a
minimum,
all
addresses
the
address
of
22
the
principal
place
of
business
and
of
all
branch
offices
at
23
which
business
is
to
be
conducted,
the
names
and
titles
of
each
24
director
and
principal
officers
officer
of
the
business,
and
a
25
description
of
the
activities
of
the
applicant
in
such
detail
26
as
the
administrator
may
require.
27
Sec.
3.
Section
535B.4,
subsections
9
and
10,
Code
2024,
are
28
amended
to
read
as
follows:
29
9.
A
licensee
may
shall
not
establish
a
branch
locations
30
office
outside
of
the
United
States.
31
10.
In
addition
to
the
application
and
renewal
fees
provided
32
for
in
subsections
4
and
7
,
the
administrator
may
assess
33
application
and
renewal
fees
for
each
branch
location
office
of
34
the
licensee,
sponsor
fees,
and
change
of
sponsor
fees.
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Sec.
4.
Section
535B.11,
subsection
3,
paragraph
a,
Code
1
2024,
is
amended
by
striking
the
paragraph
and
inserting
in
2
lieu
thereof
the
following:
3
a.
Perform
an
annual
escrow
analysis
for
each
escrow
4
account.
A
clear
and
legible
copy
of
the
annual
escrow
5
analysis
shall
be
delivered
to
the
mortgagor
within
thirty
6
calendar
days
of
the
end
of
the
escrow
account
computation
7
year,
as
defined
in
12
C.F.R.
§1024.17,
to
which
disclosure
8
relates,
and
shall
include
the
information
required
for
annual
9
escrow
account
statements
under
12
C.F.R.
§1024.17.
10
Sec.
5.
Section
535B.11,
subsection
4,
Code
2024,
is
amended
11
to
read
as
follows:
12
4.
Answer
As
required
by
12
C.F.R.
§1026.36,
answer
in
13
writing
,
within
ten
business
days
of
receipt,
any
written
14
request
for
payoff
information
received
from
a
mortgagor
or
the
15
mortgagor’s
designated
representative.
16
Sec.
6.
Section
535B.16,
Code
2024,
is
amended
to
read
as
17
follows:
18
535B.16
Notice
to
administrator.
19
A
licensee
or
registrant
maintaining
an
a
branch
office
in
20
the
state
shall
notify
the
administrator
in
writing
at
least
21
thirty
days
before
closing
or
otherwise
ceasing
operations
at
22
any
branch
office
in
the
state.
23
Sec.
7.
NEW
SECTION
.
535B.21
Remote
work.
24
A
licensee
may
authorize
work
at
a
remote
location
provided
25
all
of
the
following
requirements
are
met:
26
1.
In-person
customer
interaction
does
not
occur
at
the
27
residence
of
an
employee
or
an
independent
contractor.
28
2.
The
licensee’s
physical
records
are
not
maintained
at
a
29
remote
location.
30
3.
The
licensee
establishes,
supervises,
and
enforces
31
written
policies
and
procedures
to
ensure
that
all
employees
32
and
independent
contractors
working
from
a
remote
location
33
comply
with
all
applicable
state
and
federal
laws
and
rules.
34
4.
The
licensee
maintains
the
computer
system
used
to
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enable
employees
and
independent
contractors
to
work
from
a
1
remote
location,
and
all
customer
information
is
maintained
in
2
accordance
with
the
licensee’s
written
information
technology
3
security
plan
and
all
applicable
state
and
federal
laws
and
4
rules.
5
5.
Employees
and
independent
contractors
who
work
from
6
a
remote
location
only
access
the
licensee’s
secure
systems
7
directly
from
an
out-of-office
device
using
a
virtual
private
8
network
or
comparable
system
that
requires
a
password
or
9
other
form
of
authentication
to
access,
and
ensures
a
secure
10
connection.
11
6.
The
licensee
has
the
ability
to
remotely
lock
or
erase
12
the
licensee-related
contents
of
any
out-of-office
device,
13
or
otherwise
remotely
limit
access
to
the
licensee’s
secure
14
systems.
15
7.
The
licensee
ensures
the
installation
and
maintenance
of
16
all
appropriate
security
updates,
patches,
or
other
alterations
17
to
the
security
of
all
devices
used
at
remote
locations
to
18
access
the
licensee’s
computer
system.
19
8.
The
licensee
ensures
that
all
customer
interactions
20
and
communications
regarding
customers
comply
with
federal
21
and
state
information
security
requirements,
including
but
22
not
limited
to
the
federal
Gramm-Leach-Bliley
Act
of
1999,
23
15
U.S.C.
§6801
et
seq.,
and
the
federal
standards
for
24
safeguarding
customer
information
in
16
C.F.R.
pt.
314.
25
9.
The
licensee
annually
certifies
that
all
employees
26
and
independent
contractors
working
from
a
remote
location
27
comply
with
this
section.
The
licensee
shall
make
written
28
documentation
of
the
certification
available
to
the
29
administrator
upon
request.
30
10.
The
record
of
a
mortgage
loan
originator
working
from
a
31
remote
location
that
is
contained
in
the
nationwide
mortgage
32
licensing
system
and
registry
designates
a
licensed
location
as
33
the
mortgage
loan
originator’s
official
work
location.
34
Sec.
8.
NEW
SECTION
.
535B.22
Definitions.
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As
used
in
this
subchapter
unless
the
context
otherwise
1
provides:
2
1.
“Administrator”
means
the
superintendent
of
the
division
3
of
banking
of
the
department
of
insurance
and
financial
4
services.
5
2.
“Allowable
assets
for
liquidity”
means
any
of
the
6
following
assets
that
may
be
used
to
satisfy
the
liquidity
7
requirements
under
section
535B.24:
8
a.
Unrestricted
cash
and
cash
equivalents.
9
b.
Unencumbered
investment
grade
assets
held
for
sale
or
10
trade,
including
agency
mortgage-backed
securities,
obligations
11
of
government-sponsored
enterprises,
and
United
States
treasury
12
obligations.
13
3.
“Board
of
directors”
means
the
formal
body
established
14
by
a
covered
institution
that
is
responsible
for
corporate
15
governance
and
compliance
with
sections
535B.24
and
535B.25.
16
4.
“Corporate
governance”
means
the
structure
of
a
covered
17
institution
and
how
the
covered
institution
is
managed,
18
including
but
not
limited
to
the
corporate
rules,
policies,
19
processes,
and
practices
used
to
oversee
and
manage
the
covered
20
institution.
21
5.
“Covered
institution”
means
a
mortgage
servicer
that
22
services,
or
subservices
for
others,
two
thousand
or
more
23
residential
mortgage
loans
and
loans
being
interim
serviced
24
prior
to
sale,
excluding
whole
loans
owned,
as
of
the
most
25
recent
calendar
year
end
as
reported
on
the
nationwide
mortgage
26
licensing
system
mortgage
call
report.
27
6.
“External
audit”
means
a
formal
report
prepared
by
an
28
independent
certified
public
accountant
expressing
an
opinion
29
on
whether
a
company’s
financial
statements
are
presented
30
fairly,
in
all
material
respects,
in
accordance
with
the
31
applicable
financial
reporting
framework,
and
includes
an
32
evaluation
of
the
company’s
internal
control
structure.
33
7.
“Government-sponsored
enterprise”
means
the
federal
34
national
mortgage
association
or
the
federal
home
loan
mortgage
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corporation.
1
8.
“Interim
serviced
prior
to
sale”
means
the
activity
of
2
collecting
a
limited
number
of
contractual
mortgage
payments
3
immediately
after
origination
on
loans
held
for
sale,
but
no
4
longer
than
a
period
of
ninety
days
prior
to
the
loans
being
5
sold
into
the
secondary
market.
6
9.
“Internal
audit”
means
independent
and
objective
7
assurance
and
consulting
performed
internally
by
a
company
8
to
evaluate
and
improve
the
effectiveness
of
the
company’s
9
operations,
risk
management,
internal
controls,
and
governance
10
processes.
11
10.
“Mortgage-backed
security”
means
a
financial
instrument,
12
including
but
not
limited
to
a
debt
security,
collateralized
by
13
residential
mortgages.
14
11.
“Mortgage
call
report”
means
the
quarterly
or
annual
15
report
of
residential
real
estate
loan
origination,
servicing,
16
and
financial
information
filed
by
companies
licensed
in
the
17
nationwide
mortgage
licensing
system
and
registry.
18
12.
“Mortgage
servicer”
or
“servicer”
means
a
person
that
19
performs,
under
the
terms
of
a
servicing
contract,
the
routine
20
administration
of
residential
mortgage
loans
on
behalf
of
the
21
owner
or
owners
of
the
related
mortgages.
22
13.
“Mortgage
servicing
rights”
means
the
contractual
right
23
to
service
a
residential
mortgage
loan
on
behalf
of
the
owner
24
of
the
associated
mortgage
in
exchange
for
the
compensation
25
specified
in
the
applicable
servicing
contract.
26
14.
“Mortgage
servicing
rights
investor”
means
a
person
27
that
invests
in
and
owns
mortgage
servicing
rights
and
relies
28
on
subservicers
to
administer
mortgage
loans
on
behalf
of
the
29
person.
30
15.
“Nationwide
mortgage
licensing
system
and
registry”
means
31
the
same
as
defined
in
section
535D.3.
32
16.
“Operating
liquidity”
means
the
financial
resources
33
necessary
for
a
person
to
perform
the
person’s
normal
business
34
operations,
including
but
not
limited
to
payment
of
rent,
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salaries,
interest
expenses,
and
other
typical
expenses
1
associated
with
operating
the
business.
2
17.
“Person”
means
a
natural
person,
an
association,
3
joint
venture
or
joint
stock
company,
partnership,
limited
4
partnership,
business
corporation,
nonprofit
corporation,
or
5
any
other
group
of
individuals
however
organized.
6
18.
“Reverse
annuity
mortgage
loan”
means
the
same
as
7
defined
in
section
528.2.
8
19.
“Risk
management
assessment”
means
a
functional
9
evaluation
performed
under
a
risk
management
program,
and
the
10
report
provided
to
the
covered
institution’s
board
of
directors
11
under
a
relevant
governance
protocol.
12
20.
“Risk
management
program”
means
written
policies
and
13
procedures
commensurate
with
a
covered
institution’s
size
and
14
complexity
designed
to
identify,
measure,
monitor,
and
mitigate
15
risk.
16
21.
“Servicing
liquidity”
or
“liquidity”
means
the
17
financial
resources
necessary
to
manage
the
risk
arising
18
from
servicing
functions
required
in
acquiring
and
financing
19
mortgage
servicing
rights;
hedging
costs,
including
margin
20
calls,
associated
with
the
mortgage
servicing
rights
asset
21
and
financing
facilities;
and
advances
or
costs
of
advance
22
financing
for
principal,
interest,
taxes,
insurance,
and
any
23
other
servicing
related
advances.
24
22.
“Subservicer”
means
a
person
that
performs,
under
the
25
terms
of
a
subservicing
contract,
routine
administration
of
26
residential
mortgage
loans
as
the
agent
of
a
servicer
or
of
a
27
mortgage
servicing
rights
investor.
28
23.
“Tangible
net
worth”
means
total
equity
less
the
29
receivables
due
from
related
entities,
and
less
goodwill
and
30
other
intangibles,
and
less
pledged
assets.
31
24.
“Whole
loan”
means
a
loan
where
a
mortgage
and
the
32
underlying
credit
risk
is
owned
and
held
on
a
balance
sheet
of
33
the
person
possessing
all
ownership
rights
of
the
mortgage.
34
Sec.
9.
NEW
SECTION
.
535B.23
Applicability.
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1.
This
subchapter
shall
apply
to
covered
institutions.
1
For
entities
within
a
holding
company
or
an
affiliated
group
2
of
companies,
this
subchapter
shall
apply
at
the
covered
3
institution
level.
4
2.
This
subchapter
shall
not
apply
to
persons
exempt
from
5
licensing
under
section
535B.2.
6
Sec.
10.
NEW
SECTION
.
535B.24
Financial
condition.
7
1.
This
section
shall
not
apply
to
servicers
that
solely
8
own
or
conduct
servicing
on
reverse
annuity
mortgage
loans,
or
9
to
the
reverse
annuity
mortgage
loan
portfolio
administered
by
10
a
covered
institution.
11
2.
A
covered
institution
shall
maintain
capital
and
12
liquidity
in
compliance
with
this
section,
and
all
financial
13
data
shall
be
determined
in
accordance
with
generally
accepted
14
accounting
principles.
15
3.
A
covered
institution
may
satisfy
subsection
2
by
16
complying
with
the
capital,
net
worth
ratio,
and
liquidity
17
standards
of
the
federal
housing
finance
agency’s
eligibility
18
requirements
for
enterprise
single-family
sellers
or
19
servicers,
regardless
of
whether
the
servicer
is
approved
for
20
government-sponsored
enterprise
servicing.
21
4.
A
covered
institution
shall
maintain
the
written
22
policies
and
procedures
necessary
to
implement
the
capital
and
23
liquidity
requirements
under
this
section.
The
policies
and
24
procedures
must
include
a
sustainable
written
methodology
to
25
comply
with
subsection
3,
and
shall
be
made
available
to
the
26
administrator
upon
request.
27
5.
a.
A
covered
institution
shall
maintain
sufficient
28
allowable
assets
for
operating
liquidity,
in
addition
to
the
29
amounts
required
for
servicing
liquidity,
to
sustain
normal
30
business
operations.
31
b.
The
covered
institution
shall
develop,
establish,
and
32
implement
written
policies
and
procedures,
using
sustainable
33
documented
methodologies,
to
maintain
operating
liquidity.
34
The
policies
and
procedures
shall
be
made
available
to
the
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S.F.
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H.F.
_____
administrator
upon
request.
1
6.
A
covered
institution
shall
have
a
written
cash
2
management
plan
and
a
written
business
operating
plan
3
commensurate
with
the
complexity
of
the
covered
institution
4
that
ensures
normal
business
operations.
5
Sec.
11.
NEW
SECTION
.
535B.25
Corporate
governance.
6
1.
A
covered
institution
shall
establish
and
maintain
a
7
board
of
directors
that
is
responsible
for
oversight
of
the
8
covered
institution.
If
a
government-sponsored
enterprise
9
or
government
national
mortgage
association
has
not
approved
10
a
covered
institution
to
service
loans,
or
has
approved
an
11
alternative
to
a
board
of
directors,
the
covered
institution
12
may
establish
a
similar
oversight
committee
for
purposes
of
13
exercising
oversight
and
fulfilling
the
responsibilities
under
14
subsection
2.
15
2.
The
board
of
directors,
or
a
similar
oversight
committee
16
approved
under
subsection
1,
shall
do
all
of
the
following:
17
a.
Establish
a
written
corporate
governance
framework
that
18
includes
appropriate
internal
controls
to
monitor
and
assess
19
compliance
with
the
corporate
governance
framework.
20
b.
Make
a
copy
of
the
corporate
governance
framework
21
available
to
the
administrator
upon
request.
22
c.
Monitor
and
ensure
that
the
covered
institution
23
complies
with
the
corporate
governance
framework
and
with
this
24
subchapter.
25
d.
Perform
accurate
and
timely
regulatory
reporting,
26
including
filing
the
covered
institution’s
mortgage
call
27
report.
28
e.
Establish
internal
audit
requirements
that
are
29
appropriate
for
the
size,
complexity,
and
risk
profile
of
the
30
covered
institution,
and
ensure
appropriate
independence
to
31
provide
an
unbiased
evaluation
of
the
covered
institution’s
32
internal
control
structure,
risk
management,
and
corporate
33
governance.
34
f.
Ensure
the
covered
institution
establishes
and
maintains
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a
risk
management
program
that
identifies,
measures,
monitors,
1
and
controls
risk
commensurate
with
the
covered
institution’s
2
size
and
complexity.
The
risk
management
program
must
3
include
appropriate
processes
and
models
to
measure,
monitor,
4
and
mitigate
financial
risks
and
changes
to
the
covered
5
institution’s
risk
profile
and
assets
being
serviced.
The
risk
6
management
program
shall
address
all
of
the
following:
7
(1)
The
potential
that
a
borrower
or
counterparty
fails
to
8
perform
on
an
obligation.
9
(2)
The
potential
that
the
covered
institution
is
unable
to
10
meet
the
covered
institution’s
obligations
as
the
obligations
11
come
due
as
a
result
of
an
inability
to
liquidate
assets
or
to
12
obtain
adequate
funding.
13
(3)
The
potential
that
the
covered
institution
cannot
14
easily
unwind
or
offset
specific
exposures.
15
(4)
The
risk
resulting
from
inadequate
or
failed
internal
16
processes,
people,
or
systems;
or
from
external
events.
17
(5)
The
risk
to
the
covered
institution’s
condition
18
resulting
from
adverse
movements
in
market
rates
or
prices.
19
(6)
The
risk
of
regulatory
sanctions,
fines,
penalties,
20
or
losses
resulting
from
the
covered
institution’s
failure
to
21
comply
with
applicable
laws
and
rules
or
other
supervisory
22
requirements
that
apply
to
the
covered
institution.
23
(7)
The
potential
that
legal
proceedings
against
the
24
covered
institution
may
result
in
unenforceable
contracts,
25
lawsuits,
legal
sanctions,
or
adverse
judgements
that
26
may
disrupt
or
otherwise
negatively
affect
the
covered
27
institution’s
operations
or
condition.
28
(8)
The
risk
to
earnings
and
capital
arising
from
negative
29
publicity
regarding
the
covered
institution’s
business
30
practices.
31
3.
A
covered
institution
shall
undergo
an
annual
external
32
audit
and
shall
make
the
external
audit
available
to
the
33
administrator
upon
request.
An
external
audit
shall
include,
34
at
a
minimum,
all
of
the
following:
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a.
An
evaluation
of
the
company’s
internal
control
1
structure.
2
b.
A
review
of
the
company’s
annual
financial
statements,
3
including
the
balance
sheet,
statement
of
operations,
4
and
income
statement,
and
cash
flows,
including
notes
and
5
supplemental
schedules
prepared
in
accordance
with
generally
6
accepted
accounting
principles.
7
c.
A
computation
of
the
company’s
tangible
net
worth.
8
d.
Validation
of
the
company’s
mortgage
servicing
rights
9
valuation
and
reserve
methodology,
if
applicable.
10
e.
Verification
the
company
has
adequate
fidelity
and
errors
11
and
omissions
insurance.
12
f.
Testing
of
the
company’s
controls
related
to
risk
13
management
activities,
including
compliance
and
stress
testing,
14
if
applicable.
15
4.
A
covered
institution
shall
conduct
an
annual
risk
16
management
assessment
and
shall
make
the
risk
management
17
assessment
available
to
the
administrator
upon
request.
A
18
risk
management
assessment
shall
include
issue
findings
and
19
the
response
or
action
taken
to
address
each
issue.
A
covered
20
institution
shall
maintain
ongoing
documentation
of
risk
21
management
activities
and
shall
include
the
documentation
in
22
the
risk
management
assessment.
23
Sec.
12.
CODE
EDITOR
DIRECTIVE.
The
Code
editor
shall
24
divide
chapter
535B
into
subchapters
and
shall
designate
25
sections
535B.1
through
535B.21,
including
sections
amended
26
or
enacted
in
this
Act,
as
subchapter
I
entitled
“Mortgage
27
Banking,
Mortgage
Brokers,
and
Closing
Agents”,
and
sections
28
535B.22
through
535B.25,
as
enacted
in
this
Act,
as
subchapter
29
II
entitled
“Covered
Institutions”.
30
EXPLANATION
31
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
32
the
explanation’s
substance
by
the
members
of
the
general
assembly.
33
This
bill
relates
to
mortgage
administration
and
mortgage
34
servicers.
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The
bill
requires
applicants
for
a
mortgage
banker,
a
1
mortgage
broker,
or
a
closing
agent
license
to
submit
to
the
2
administrator
an
application
on
the
provided
forms
containing,
3
in
addition
to
other
information
laid
out
by
the
bill,
the
4
address
of
the
applicant’s
principal
place
of
business
and
of
5
all
branch
offices
where
business
is
to
be
conducted,
rather
6
than
all
addresses
as
required
under
current
law.
“Principal
7
place
of
business”
and
“branch
office”
are
defined
in
the
bill.
8
Current
law
requires
a
licensee
or
other
mortgagee
who
9
services
mortgages
on
residential
real
estate
located
in
10
the
state
to
answer
in
writing,
within
10
business
days,
11
any
written
request
for
payoff
information
received
from
a
12
mortgagor
or
the
mortgagor’s
designated
representative.
The
13
bill
requires
the
licensee
or
other
mortgagee
to
answer
as
14
required
by
12
C.F.R.
§1026.36.
15
The
bill
allows
a
licensee
to
authorize
employees
or
16
independent
contractors
(contractors)
to
work
from
a
remote
17
location,
as
defined
by
the
bill,
provided
that
in-person
18
customer
interaction
does
not
occur
at
the
residence
of
an
19
employee
or
contractor;
physical
records
are
not
maintained
20
at
the
remote
location;
the
licensee
establishes
and
enforces
21
policies
and
procedures
to
ensure
employees
and
contractors
22
comply
with
all
applicable
state
and
federal
laws
and
rules;
23
the
licensee
maintains
the
computer
system
used
by
remote
24
employees
and
contractors
and
all
customer
information
25
is
maintained
in
accordance
with
the
licensee’s
written
26
information
technology
security
plan,
and
all
applicable
state
27
and
federal
laws;
remote
employees
and
contractors
access
the
28
licensee’s
secure
systems
directly
from
an
out-of-office
device
29
using
a
virtual
private
network
that
requires
authentication;
30
the
licensee
has
the
ability
to
remotely
lock
or
erase
31
licensee-related
contents
of
any
device,
or
remotely
limit
32
access
to
the
licensee’s
secure
systems;
the
licensee
ensures
33
the
installation
and
maintenance
of
appropriate
alterations
34
to
the
security
of
all
devices
used
at
remote
locations;
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the
licensee
ensures
that
all
communications
regarding
1
customers
comply
with
federal
and
state
information
security
2
requirements;
and
the
licensee
annually
certifies
that
all
3
employees
and
contractors
working
from
a
remote
location
comply
4
with
the
requirements
of
the
bill.
In
addition,
the
record
of
5
a
mortgage
loan
originator
working
from
a
remote
location
that
6
is
contained
in
the
nationwide
mortgage
licensing
system
and
7
registry
must
designate
a
licensed
location
as
the
mortgage
8
loan
originator’s
official
work
location.
9
The
bill
requires
a
covered
institution
(institution)
10
to
maintain
capital
and
liquidity,
with
all
financial
data
11
determined
in
accordance
with
generally
accepted
accounting
12
principles.
“Covered
institution”
is
defined
in
the
bill.
13
An
institution
may
comply
with
the
capital
and
liquidity
14
requirement
by
meeting
the
capital,
net
worth,
and
liquidity
15
standards
set
forth
in
the
federal
housing
finance
agency’s
16
eligibility
requirements
for
enterprise
single-family
17
seller-servicers.
An
institution
shall
maintain
written
18
policies
and
procedures
implementing
the
capital
and
liquidity
19
requirements,
including
a
sustainable
written
methodology
20
for
satisfying
the
requirements;
make
the
written
policies
21
and
procedures
available
to
the
administrator
upon
request;
22
maintain
sufficient
allowable
assets
for
operating
liquidity;
23
and
have
written
cash
management
and
business
operating
plans
24
that
match
the
complexity
of
the
institution
and
ensure
normal
25
business
operations.
“Administrator”
is
defined
in
the
bill
as
26
the
superintendent
of
the
division
of
banking
of
the
department
27
of
insurance
and
financial
services.
28
The
bill
requires
an
institution
to
establish
and
maintain
29
a
board
of
directors,
or,
if
approved,
a
similar
body,
to
be
30
responsible
for
oversight
of
the
covered
institution.
The
31
board
of
directors,
or
similar
body,
must
establish
a
written
32
corporate
governance
framework;
make
the
corporate
governance
33
framework
available
to
the
administrator
upon
request;
34
monitor
and
ensure
the
covered
institution
complies
with
the
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corporate
governance
framework
and
with
the
provisions
of
1
the
bill;
perform
accurate
and
timely
regulatory
reporting,
2
including
filing
the
mortgage
call
report;
establish
internal
3
audit
requirements
that
are
appropriate
for
the
institution,
4
and
ensure
appropriate
independence
to
provide
an
unbiased
5
evaluation
of
the
institution’s
internal
control
structure,
6
risk
management,
and
governance;
make
the
results
of
internal
7
audits
available
to
the
administrator
upon
request;
and
ensure
8
the
institution
establishes
and
maintains
a
risk
management
9
program
that
identifies,
measures,
monitors,
and
controls
risk
10
commensurate
with
the
institution’s
size
and
complexity.
The
11
requirements
for
the
risk
management
program
are
detailed
in
12
the
bill.
An
institution
is
required
to
undergo
an
annual
13
external
audit
and
to
conduct
an
annual
risk
management
14
assessment,
and
make
the
results
of
each
available
to
the
15
administrator
upon
request.
“External
audit”
and
“risk
16
management
assessment”
are
defined
in
the
bill.
17
The
bill
makes
conforming
changes
to
Code
sections
535B.4
18
and
535B.16.
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