NOTICE OF PROPOSED CHANGES ON MORTGAGE LENDING
IN THE REGULATIONS OF THE DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT
BRIEF DESCRIPTION
The Department of Commerce, Community, and Economic Development proposes regulation changes to implement HB12, effective January 1, 2017, update fees for mortgage lending licensees, streamline reporting requirements for mortgage broker/lenders, and update and clarify various sections throughout 3 AAC 14.
The Department of Commerce, Community, and Economic Development proposes to adopt regulation changes in Title 3, Chapter 14, of the Alaska Administrative Code, dealing with mortgage lending, including the following:
(1) Repeal and readopt 3 AAC 14.020 to implement HB12 by adding registered depository institutions (“RDIs”) to this section which requires that mortgage loan originators be licensed. Subsection (b) is proposed to implement HB12 by exempting an employee acting as a mortgage loan originator for a government agency from the mortgage loan originator licensing requirements.
(2) Amend 3 AAC 14.051 to implement HB12 by adding RDIs to this section to require RDIs to comply with the requirements of the Nationwide Multistate Licensing System and Registry (“registry”).
(3) Amend 3 AAC 14.052 to implement HB12 by adding RDIs to this section to allow RDIs the right to challenge information entered by the department in the registry.
(4) Amend 3 AAC 14.053 to implement HB12 by adding RDIs to this section to require RDIs to comply with certain surety bond requirements. This section is also proposed to be amended to remove a requirement that the surety provide notice by certified mail before canceling the surety bond and to add that certain notification requirements may be made electronically.
(5) Amend 3 AAC 14.054 to implement HB12 by adding RDIs to this section to require submission of a financial statement with an RDI application.
(6) Amend 3 AAC 14.057 to implement HB12 by adding RDIs to this section to provide that a registered agent must be designated on a RDI application and an agent must be continuously maintained while the RDI is registered.
(7) Amend 3 AAC 14.062 to implement HB12 by adding RDIs to this section to require mortgage loan originators to be sponsored by either a mortgage licensee or RDI and may only be sponsored by one mortgage licensee or one RDI.
(8) Amend 3 AAC 14.064 to implement HB12 by adding RDIs to this section to require that all registration requirements for a RDI application be completed.
(9) Amend 3 AAC 14.065 to implement HB12 by adding RDIs to this section to require reimbursement of department costs and investigative expenses related to a RDI application.
(10) Amend 3 AAC 14.072(a) to raise fees for a mortgage licensee, from $250 to $500 for the application fee, and from $500 to $1,000 for the annual license fee. Amend subsection (b) to raise fees for a mortgage loan originator licensee, from $250 to $300 for the annual license fee, and to lower the surety fund fee from $150 to $50.
(11) Amend 3 AAC 14.075 to correct a clerical error.
(12) Amend 3 AAC 14.085 to implement HB12 by adding RDIs to the requirements of this section and to change the time frame from 90 to 60 days that an application is considered abandoned if no response is received after a notice of deficiency is assigned in the registry.
(13) Add 3 AAC 14.150 to implement HB12 by establishing the application requirements for RDIs.
(14) Add 3 AAC 14.155 to implement HB 12 by establishing the registration renewal requirements for RDIs.
(15) Add 3 AAC 14.160 to implement HB12 by establishing the application and registration fees for RDIs.
(16) Add 3 AAC 14.165 to implement HB12 by setting out a process if a RDI fails to renew its annual registration and establishes a late renewal fee.
(17) Repeal 3 AAC 14.214 to eliminate a provision related to the testing requirement for a mortgage loan originator licensed in 2010 that is obsolete.
(18) Repeal 3 AAC 14.217 to eliminate a provision related to prelicensing education for a mortgage loan originator licensed in 2010 that is obsolete.
(19) Repeal and readopt 3 AAC 14.224 to clarify that the prelicensing education obtained for a mortgage loan originator license may satisfy the continuing education requirement to renew a license, but only if it was completed in the calendar year immediately before the new licensing period.
(20) Amend 3 AAC 14.305 to implement HB12 by adding RDIs to this section to provide that when an employment relationship between a RDI and a mortgage loan originator is terminated then the sponsorship must be terminated in the registry and the mortgage loan originator license becomes inactive.
(21) Amend 3 AAC 14.315 to change “delayed renewal” to “late renewal.” Amend subsection (a) to raise the late renewal fee for mortgage licensees from $250 to $500.
(22) Repeal 3 AAC 14.325 to eliminate the $50 fee to reactive an inactive license.
(23) Repeal and readopt 3 AAC 14.410 to remove the requirement to file a separate annual report by specifying that the quarterly reports of condition required under AS 06.60.100(c) satisfy the annual reporting requirement of AS 06.60.100(a).
(24) Amend 3 AAC 14.411 to implement HB12 by adding RDIs to this section to require RDIs to submit a financial statement within 90 days of fiscal year end.
(25) Amend 3 AAC 14.414 to implement HB12 by adding RDIs to this section to require RDIs to pay a civil penalty for late filings. This section is also proposed to be amended to clarify that the $25 per day for a late filing is a civil penalty.
(26) Amend 3 AAC 14.415 to implement HB12 by adding RDIs to this section to require RDIs to adequately supervise their branch offices and mortgage loan originators. Add subsection (c) to require that if a majority of a mortgage loan originator’s work is conducted at home or another location then it must be registered as a branch office.
(27) Amend 3 AAC 14.420 to implement HB12 by adding RDIs to this section to require RDIs to maintain certain recordkeeping practices.
(28) Amend 3 AAC 14.425 to implement HB12 by adding RDIs to this section to require RDIs to register branch offices. Amend subsections (a) and (e) to raise fees for branch office registrations, from $150 to $200 for an application and from $250 to $300 for annual registration. Amend subsection (f) to change “delayed renewal” to “late renewal” and to raise this fee from $125 to $250. Add subsection (k) to require that if a mortgage loan originator conducts the majority of activities of a loan originator from home or other location, then the sponsoring mortgage licensee or RDI must register that location as a branch office. Add subsections (l) and (m) to clarify that fees under this section are nonrefundable and that applicants must pay processing or other fees charged by the registry.
(29) Amend 3 AAC 14.427 to implement HB12 by adding RDIs to this section to require RDIs to provide the department with written notice if an office is relocated. Amend this section to change the advance notice requirement from 14 to 30 days for a change of address.
(30) Amend 3 AAC 14.430 to implement HB12 by adding RDIs to this section to require RDIs to request department approval before closing the main office without relocating the office or surrendering registration.
(31) Amend 3 AAC 14.431 to implement HB12 by adding RDIs to this section to require RDIs to request department approval before closing the main office and surrendering registration.
(32) Amend 3 AAC 14.432 to implement HB12 by adding RDIs to this section to require RDIs to submit an application to surrender a branch office registration.
(33) Amend 3 AAC 14.434 to require applications for a change in control be submitted 30 days before the change. Amend subsection (c) to raise the fee for a change in control person from $150 to $300 per control person. Add subsection (d) to require that mortgage licensees maintain at least two control persons at all times.
(34) Amend 3 AAC 14.435 to implement HB12 by adding RDIs to this section to provide that a RDI may share office space with another business if certain requirements are met.
(35) Amend 3 AAC 14.440 to implement HB12 by adding RDIs to this section to require RDIs to notify the department if any information on file changes.
(36) Amend 3 AAC 14.510 to implement HB12 by adding RDIs to this section to prohibit RDIs from practicing any misleading, unfair, or deceptive advertising. Amend paragraph (2) to clarify that licensees must disclose a name listed in the registry when advertising.
(37) Amend 3 AAC 14.515 by adding conducting loan modification without servicing rights, foreclosure relief services for a fee without a mortgage license, and conducting the majority of activities for which a license is required at a location that is not the main office or registered as a branch office to the list of unfair or deceptive practices.
(38) Repeal the editor’s note in 3 AAC 14.825 to delete an outdated department address.
(39) Repeal the editor’s note in 3 AAC 14.910 to delete an outdated department address.
(40) Amend 3 AAC 14.917 to implement HB12 by adding RDIs to this section to provide that a RDI’s status change in the registry is still effective regardless of whether there is a difference in the label used by the registry and in regulation.
(41) Amend 3 AAC 14.920 to implement HB12 by adding RDIs to this section to require RDIs to notify the department through the registry and pay a fee upon a mailing address or name change. Amend subsection (b) to require that amendments for change of mailing address be submitted 30 days in advance. Amend subsection (c) to raise the name change fee from $50 to $100.
(42) Amend 3 AAC 14.990 to add definitions for “mortgage loan originator’s home” and “report of condition.”
You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, by submitting written comments to Patrice Walsh, Division of Banking and Securities, Department of Commerce, Community, and Economic Development, 550 West Seventh Avenue, Suite 1850, Anchorage, AK 99501. Additionally, the Department of Commerce, Community, and Economic Development will accept comments by facsimile at (907) 269-8146 and by electronic mail at dbsregs@alaska.gov. Comments may also be submitted through the Alaska Online Public Notice System by accessing this notice on the system and using the comment link. The comments must be received not later than 4:30 p.m. on October 12, 2016.
You may submit written questions relevant to the proposed action to Patrice Walsh by electronic mail at dbsregs@alaska.gov or by mail at 550 West Seventh Avenue, Suite 1850, Anchorage, AK 99501. The questions must be received at least 10 days before the end of the public comment period. The Department of Commerce, Community, and Economic Development will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and the Division of Banking and Securities’ website at https://www.commerce.alaska.gov/web/dbs. The Department of Commerce, Community, and Economic Development may, but is not required to, answer written questions received after the 10-day cut-off date and before the end of the comment period.
If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Patrice Walsh at dbsregs@alaska.gov or (907) 269-5496 not later than October 3, 2016, to ensure that any necessary accommodation can be provided.
A copy of the proposed regulation changes is available on the Division of Banking and Securities’ website at https://www.commerce.alaska.gov/web/dbs and the Alaska Online Public Notice System. You may also request a copy by contacting Patrice Walsh at dbsregs@alaska.gov or (907) 269-5496.
After the public comment period ends, the Department of Commerce, Community, and Economic Development will either adopt the proposed regulation changes or other provisions dealing with the same subject, without further notice, or decide to take no action. The language of the final regulation may be different from that of the proposed regulation. You should comment during the time allowed if your interests could be affected. Written comments and questions received are public records and are subject to public inspection.
Statutory authority: AS 06.60.910
Statutes being implemented, interpreted, or made specific: AS 06.60.010; AS 06.60.012; AS 06.60.014; AS 06.60.015; AS 06.60.016; AS 06.60.020; AS 06.60.027; AS 06.60.035; AS 06.60.038; AS 06.60.045; AS 06.60.050; AS 06.60.060; AS 06.60.085; AS 06.60.087; AS 06.60.090; AS 06.60.095; AS 06.60.097; AS 06.60.100; AS 06.60.110; AS 06.60.112; AS 06.60.115; AS 06.60.130; AS 06.60.135; AS 06.60.155; AS 06.60.159; AS 06.60.160; AS 06.60.250; AS 06.60.320; AS 06.60.330; AS 06.60.340; AS 06.60.800; AS 06.60.870; AS 06.60.910
Fiscal information: The proposed regulation changes are not expected to require an increased appropriation.
Date: September 6, 2016
/s/ Patrice Walsh, Chief of Examinations
The Department of Commerce, Community, and Economic Development, Division of Banking and Securities keeps a list of individuals and organizations interested in its regulations. Those on the list will automatically be sent a copy of all the Division’s Notice of Proposed Regulation Changes. To be added to or removed from the list, send the request to Division of Banking and Securities, Department of Commerce, Community, and Economic Development, 550 West Seventh Avenue, Suite 1850, Anchorage, AK 99501 or to dbsregs@alaska.gov. Please include your name and either your electronic mail address or mailing address, as you prefer for receiving notices.
ADDITIONAL REGULATION NOTICE INFORMATION
(AS 44.62.190(d))
1. Adopting agency: Department of Commerce, Community, and Economic Development.
2. General subject of regulation: mortgage lending.
3. Citation of regulation: 3 AAC 14.020; 3 AAC 14.051; 3 AAC 14.052; 3 AAC 14.053; 3 AAC 14.054; 3 AAC 14.057; 3 AAC 14.062; 3 AAC 14.064; 3 AAC 14.065; 3 AAC 14.072; 3 AAC 14.075; 3 AAC 14.085; 3 AAC 14.150; 3 AAC 14.155; 3 AAC 14.160; 3 AAC 14.165; 3 AAC 14.214; 3 AAC 14.217; 3 AAC 14.224; 3 AAC 14.305; 3 AAC 14.315; 3 AAC 14.325; 3 AAC 14.410; 3 AAC 14.411; 3 AAC 14.414; 3 AAC 14.415; 3 AAC 14.420; 3 AAC 14.425; 3 AAC 14.427; 3 AAC 14.430; 3 AAC 14.431; 3 AAC 14.432; 3 AAC 14.434; 3 AAC 14.435; 3 AAC 14.440; 3 AAC 14.510; 3 AAC 14.515; 3 AAC 14.825; 3 AAC 14.910; 3 AAC 14.917; 3 AAC 14.920; 3 AAC 14.990.
4. Department of Law file number: to be assigned.
5. Reason for the proposed action: implement HB12, effective January 1, 2017; update fees for mortgage lending licensees; streamline reporting requirements for mortgage broker/lenders; and update and clarify various sections throughout 3 AAC 14.
6. Appropriation/Allocation: Department of Commerce, Community, and Economic Development, Division of Banking and Securities.
7. Estimated annual cost to comply with the proposed action to:
A private person: for a mortgage licensee, raises the application fee from $250 to $500, the annual license fee from $500 to $1,000, the late renewal fee from $250 to $500, the fee for a change in control person from $150 to $300 per control person, and the name change fee from $50 to $100; for a mortgage loan originator, raises the annual license fee from $250 to $300 and lowers the surety fund fee from $150 to $50; for a registered depository institution, establishes an application fee of $500, an annual registration fee of $1,000, a late renewal fee of $500, a name change fee of $100; and an address change fee of $50; for a branch office, raises the application fee from $150 to $200, the annual registration fee from $250 to $300, and the late renewal fee from $125 to $250; and eliminates a $50 fee to reactivate an inactive license.
Another state agency: none.
A municipality: none.
8. Cost of implementation to the state agency and available funding: no costs are expected in FY2017 or in subsequent years.
9. The name of the contact person for the regulation:
Patrice Walsh, Chief of Examinations
550 West Seventh Avenue, Suite 1850
Anchorage, AK 99501
(907) 269-5496
dbsregs@alaska.gov
10. The origin of the proposed action: Division of Banking and Securities.
11. Date: September 6, 2016
Prepared by Patrice Walsh, Chief of Examinations