Bill Text: IL SB1667 | 2013-2014 | 98th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Residential Mortgage License Act of 1987. Provides that persons exempt from licensure as a federally chartered savings bank registered with the Nationwide Mortgage Licensing System and Registry may apply for an exempt company registration for the purpose of sponsoring one or more individuals subject to the mortgage loan originator licensing requirements of the Act. Establishes requirements for exempt company registration and denial, suspension, or revocation of the registration. Effective immediately.
Spectrum: Slight Partisan Bill (Republican 10-6)
Status: (Passed) 2013-08-16 - Public Act . . . . . . . . . 98-0492 [SB1667 Detail]
Download: Illinois-2013-SB1667-Introduced.html
Bill Title: Amends the Residential Mortgage License Act of 1987. Provides that persons exempt from licensure as a federally chartered savings bank registered with the Nationwide Mortgage Licensing System and Registry may apply for an exempt company registration for the purpose of sponsoring one or more individuals subject to the mortgage loan originator licensing requirements of the Act. Establishes requirements for exempt company registration and denial, suspension, or revocation of the registration. Effective immediately.
Spectrum: Slight Partisan Bill (Republican 10-6)
Status: (Passed) 2013-08-16 - Public Act . . . . . . . . . 98-0492 [SB1667 Detail]
Download: Illinois-2013-SB1667-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Residential Mortgage License Act of 1987 is | ||||||||||||||||||||||||
5 | amended by changing Section 1-3 as follows:
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6 | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) | ||||||||||||||||||||||||
7 | Sec. 1-3. Necessity for License; Scope of Act. | ||||||||||||||||||||||||
8 | (a) No person, partnership, association, corporation or | ||||||||||||||||||||||||
9 | other entity
shall engage in the business of brokering, | ||||||||||||||||||||||||
10 | funding, originating, servicing
or purchasing of residential | ||||||||||||||||||||||||
11 | mortgage loans without first obtaining a
license from the | ||||||||||||||||||||||||
12 | Commissioner in accordance with the licensing procedure
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13 | provided in this Article I and such regulations as may be | ||||||||||||||||||||||||
14 | promulgated by
the Commissioner. The licensing provisions of | ||||||||||||||||||||||||
15 | this Section shall not apply
to any entity engaged solely in | ||||||||||||||||||||||||
16 | commercial mortgage lending or
to any person, partnership | ||||||||||||||||||||||||
17 | association, corporation or other entity
exempted pursuant to | ||||||||||||||||||||||||
18 | Section 1-4, subsection (d), of this Act or in accordance
with | ||||||||||||||||||||||||
19 | regulations promulgated by the Commissioner hereunder. No | ||||||||||||||||||||||||
20 | provision of this Act shall apply to an exempt person or entity | ||||||||||||||||||||||||
21 | as defined in items (1) and (1.5) of subsection (d) of Section | ||||||||||||||||||||||||
22 | 1-4 of this Act. Notwithstanding anything to the contrary in | ||||||||||||||||||||||||
23 | the preceding sentence, an individual acting as a mortgage loan |
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1 | originator who is not employed by and acting for an entity | ||||||
2 | described in item (1) of subsection (tt) of Section 1-4 of this | ||||||
3 | Act shall be subject to the mortgage loan originator licensing | ||||||
4 | requirements of Article VII of this Act. | ||||||
5 | Effective January 1, 2011, no provision of this Act shall | ||||||
6 | apply to an exempt person or entity as defined in item (1.8) of | ||||||
7 | subsection (d) of Section 1-4 of this Act. Notwithstanding | ||||||
8 | anything to the contrary in the preceding sentence, an | ||||||
9 | individual acting as a mortgage loan originator who is not | ||||||
10 | employed by and acting for an entity described in item (1) of | ||||||
11 | subsection (tt) of Section 1-4 of this Act shall be subject to | ||||||
12 | the mortgage loan originator licensing requirements of Article | ||||||
13 | VII of this Act, and provided that an individual acting as a | ||||||
14 | mortgage loan originator under item (1.8) of subsection (d) of | ||||||
15 | Section 1-4 of this Act shall be further subject to a | ||||||
16 | determination by the U.S. Department of Housing and Urban | ||||||
17 | Development through final rulemaking or other authorized | ||||||
18 | agency determination under the federal Secure and Fair | ||||||
19 | Enforcement for Mortgage Licensing Act of 2008. | ||||||
20 | (a-1) A person who is exempt from licensure pursuant to | ||||||
21 | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of | ||||||
22 | this Act as a federally chartered savings bank that is | ||||||
23 | registered with the Nationwide Mortgage Licensing System and | ||||||
24 | Registry may apply to the Director for an exempt company | ||||||
25 | registration for the purpose of sponsoring one or more | ||||||
26 | individuals subject to the mortgage loan originator licensing |
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1 | requirements of Article VII of this Act. Registration with the | ||||||
2 | Division of Banking of the Department shall not affect the | ||||||
3 | exempt status of the applicant. | ||||||
4 | (1) A mortgage loan originator eligible for licensure | ||||||
5 | under this subsection shall (A) be covered under an | ||||||
6 | exclusive written contract with, and originate residential | ||||||
7 | mortgage loans solely on behalf of, that exempt person; and | ||||||
8 | (B) hold a current, valid insurance producer license under | ||||||
9 | Article XXXI of the Illinois Insurance Code. | ||||||
10 | (2) An exempt person shall: (A) fulfill any reporting | ||||||
11 | requirements required by the Nationwide Mortgage Licensing | ||||||
12 | System and Registry or the Director; (B) provide a blanket | ||||||
13 | surety bond pursuant to Section 7-12 of this Act covering | ||||||
14 | the activities of all its sponsored mortgage loan | ||||||
15 | originators; (C) reasonably supervise the activities of | ||||||
16 | all its sponsored mortgage loan originators; (D) comply | ||||||
17 | with all rules and orders (including the averments | ||||||
18 | contained in Section 2-4 of this Act) that the Director | ||||||
19 | deems necessary to ensure compliance with the federal SAFE | ||||||
20 | Act; and (E) pay an annual registration fee established by | ||||||
21 | the Director. | ||||||
22 | (3) The Director may deny an exempt company | ||||||
23 | registration to an exempt person or suspend or revoke an | ||||||
24 | exempt company registration if the Director finds that the | ||||||
25 | exempt person has: | ||||||
26 | (A) shown that the exempt person is not a person of |
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1 | honesty, truthfulness, or good character; | ||||||
2 | (B) violated any applicable law, rule, or order; | ||||||
3 | (C) refused or failed to furnish, within a | ||||||
4 | reasonable time, any information or make any report | ||||||
5 | that may be required by the Director; | ||||||
6 | (D) had a final judgment entered against him or her | ||||||
7 | in a civil action on grounds of fraud, deceit, or | ||||||
8 | misrepresentation, and the conduct on which the | ||||||
9 | judgment is based indicates that it would be contrary | ||||||
10 | to the interest of the public to permit the exempt | ||||||
11 | person to manage a loan originator; | ||||||
12 | (E) had an order entered against him or her | ||||||
13 | involving fraud, deceit, or misrepresentation by an | ||||||
14 | administrative agency of this State, the federal | ||||||
15 | government, or any other state or territory of the | ||||||
16 | United States, and the facts relating to the order | ||||||
17 | indicate that it would be contrary to the interest of | ||||||
18 | the public to permit the exempt person to manage a loan | ||||||
19 | originator; or | ||||||
20 | (F) made a material misstatement or suppressed or | ||||||
21 | withheld information on the application for an exempt | ||||||
22 | company registration or any document required to be | ||||||
23 | filed with the superintendent. | ||||||
24 | (b) No person, partnership, association, corporation, or | ||||||
25 | other entity
except a licensee under this Act or an entity | ||||||
26 | exempt from licensing
pursuant to Section 1-4, subsection (d), |
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1 | of this Act shall do any business
under any name or title, or | ||||||
2 | circulate or use any advertising or make any
representation or | ||||||
3 | give any information to any person, which indicates or
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4 | reasonably implies activity within the scope
of this Act. | ||||||
5 | (c) The Commissioner may, through the Attorney General, | ||||||
6 | request the circuit
court of either Cook or Sangamon County to | ||||||
7 | issue an injunction to restrain
any person from violating or | ||||||
8 | continuing to violate any of the foregoing
provisions of this | ||||||
9 | Section. | ||||||
10 | (d) When the Commissioner has reasonable cause to believe | ||||||
11 | that any
entity which has not submitted an application for | ||||||
12 | licensure is conducting
any of the activities described in | ||||||
13 | subsection (a) hereof, the Commissioner
shall have the power to | ||||||
14 | examine all books and records of the entity and any
additional | ||||||
15 | documentation necessary in order to determine whether such
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16 | entity should become licensed under this Act. | ||||||
17 | (d-1) The Commissioner may issue orders against any person | ||||||
18 | if the Commissioner has reasonable cause to believe that an | ||||||
19 | unsafe, unsound, or unlawful practice has occurred, is | ||||||
20 | occurring, or is about to occur, if any person has violated, is | ||||||
21 | violating, or is about to violate any law, rule, or written | ||||||
22 | agreement with the Commissioner, or for the purposes of | ||||||
23 | administering the provisions of this Act and any rule adopted | ||||||
24 | in accordance with this Act.
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25 | (e) Any person, partnership, association, corporation or | ||||||
26 | other entity
who violates any provision of this Section commits |
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1 | a business offense and
shall be fined an amount not to exceed | ||||||
2 | $25,000. | ||||||
3 | (f) Each person, partnership, association, corporation or | ||||||
4 | other entity
conducting activities regulated by this Act shall | ||||||
5 | be issued one license.
Each office, place of business or | ||||||
6 | location at which a residential mortgage
licensee conducts any | ||||||
7 | part of his or her business must
be recorded with the | ||||||
8 | Commissioner pursuant to Section 2-8 of this Act. | ||||||
9 | (g) Licensees under this Act shall solicit, broker, fund, | ||||||
10 | originate,
service and purchase residential mortgage loans | ||||||
11 | only in conformity with the
provisions of this Act and such | ||||||
12 | rules and regulations as may be promulgated
by the | ||||||
13 | Commissioner. | ||||||
14 | (h) This Act applies to all entities doing business in | ||||||
15 | Illinois as
residential mortgage bankers, as defined by "An Act | ||||||
16 | to provide for the
regulation of mortgage bankers", approved | ||||||
17 | September 15, 1977, as amended,
regardless of whether licensed | ||||||
18 | under that or any prior Act. Any existing
residential mortgage | ||||||
19 | lender or residential mortgage broker in Illinois
whether or | ||||||
20 | not previously licensed, must operate in accordance with this | ||||||
21 | Act. | ||||||
22 | (i) This Act is a successor Act to and a continuance of the | ||||||
23 | regulation
of residential mortgage bankers provided in, "An Act | ||||||
24 | to provide for the
regulation of mortgage bankers", approved | ||||||
25 | September 15, 1977, as amended. | ||||||
26 | Entities and persons subject to the predecessor Act shall |
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1 | be subject to
this Act from and after its effective date. | ||||||
2 | (Source: P.A. 96-112, eff. 7-31-09; 96-1216, eff. 1-1-11; | ||||||
3 | 97-143, eff. 7-14-11.)
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4 | Section 99. Effective date. This Act takes effect upon | ||||||
5 | becoming law.
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