S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   430

                      Seventh Extraordinary Session

                            I N  S E N A T E

                              June 28, 2009
                               ___________

Introduced by COMMITTEE ON RULES -- (at request of the Governor) -- read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Rules

AN ACT to amend the banking law, in relation  to  conforming  the  regu-
  lation  of  mortgage  loan  originators in New York Law to the federal
  law; and to repeal article 12-E of such law relating thereto

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Article 12-E of the banking law is REPEALED and a new arti-
cle 12-E is added to read as follows:
                              ARTICLE 12-E
                   LICENSED MORTGAGE LOAN ORIGINATORS
SECTION 599-A. LEGISLATIVE PURPOSE.
        599-B. DEFINITIONS.
        599-C. LICENSE REQUIRED.
        599-D. STATE LICENSE APPLICATION.
        599-E. ISSUANCE OF A LICENSE.
        599-F. PRE-LICENSING EDUCATIONAL REQUIREMENTS.
        599-G. TESTING OF MORTGAGE LOAN ORIGINATORS.
        599-H. MORTGAGE CALL REPORTS.
        599-I. STANDARDS FOR LICENSE RENEWAL; INACTIVE STATUS.
        599-J. CONTINUING EDUCATION FOR MORTGAGE LOAN ORIGINATORS.
        599-K. REQUIRED SURETY BOND.
        599-L. REPORTS  BY  THE SUPERINTENDENT; PERMISSIVE CHALLENGES BY
                 LICENSEES.
        599-M. REQUIRED RECORDS AND REPORTING.
        599-N. ENFORCEMENT AUTHORITY; GROUNDS FOR SUSPENSION OR  REVOCA-
                 TION  OF  A  MORTGAGE LOAN ORIGINATOR LICENSE; RESTITU-
                 TION.
        599-O. RULES, REGULATIONS AND EXAMINATIONS.
        599-P. UNIQUE IDENTIFIER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09527-10-9
              

S. 430                              2

        599-Q. CONFIDENTIALITY.
        599-R. CONSTRUCTION.
  S  599-A.  LEGISLATIVE PURPOSE. THE LEGISLATURE DEEMS IT NECESSARY, IN
ORDER TO ENHANCE CONSUMER PROTECTION, REDUCE FRAUD AND ENSURE THE PUBLIC
WELFARE, THAT MORTGAGE LOAN ORIGINATORS WHO ORIGINATE MORTGAGE LOANS  ON
RESIDENTIAL REAL PROPERTY BE SUBJECT TO REGULATION BY THE SUPERINTENDENT
AND  THAT  SUCH REGULATION BE CONSISTENT WITH TITLE V OF THE HOUSING AND
ECONOMIC RECOVERY ACT OF 2008,  ALSO  KNOWN  AS  THE  S.A.F.E.  MORTGAGE
LICENSING  ACT,  AS IT MAY BE AMENDED FROM TIME TO TIME, AND REGULATIONS
THEREUNDER OR INTERPRETATIONS THEREOF, THAT MAY BE ADOPTED FROM TIME  TO
TIME BY THE SECRETARY OF THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVEL-
OPMENT.
  S 599-B. DEFINITIONS. AS USED IN THIS ARTICLE:
  1. "ANNUAL EXPIRATION DATE" MEANS DECEMBER THIRTY-FIRST OF EACH YEAR.
  2.  "DEPOSITORY  INSTITUTION" HAS THE SAME MEANING AS IN SECTION THREE
OF THE FEDERAL DEPOSIT INSURANCE ACT, AND INCLUDES ANY CREDIT UNION.
  3. "FEDERAL BANKING AGENCIES" MEANS THE  BOARD  OF  GOVERNORS  OF  THE
FEDERAL RESERVE SYSTEM, THE COMPTROLLER OF THE CURRENCY, THE DIRECTOR OF
THE  OFFICE  OF  THRIFT  SUPERVISION, THE NATIONAL CREDIT UNION ADMINIS-
TRATION, AND THE FEDERAL DEPOSIT INSURANCE CORPORATION.
  4. "IMMEDIATE FAMILY MEMBER" MEANS A SPOUSE, CHILD,  SIBLING,  PARENT,
GRANDPARENT,  OR  GRANDCHILD.  THIS  INCLUDES STEPPARENTS, STEPCHILDREN,
STEPSIBLINGS AND ADOPTIVE RELATIONSHIPS.
  5. "INDIVIDUAL" MEANS A NATURAL PERSON.
  6. LOAN PROCESSOR OR UNDERWRITER-
  (A) "LOAN PROCESSOR OR UNDERWRITER" MEANS AN INDIVIDUAL  WHO  PERFORMS
CLERICAL  OR  SUPPORT  DUTIES  AS  AN  EMPLOYEE  AT THE DIRECTION OF AND
SUBJECT TO THE SUPERVISION AND INSTRUCTION  OF  A  PERSON  LICENSED,  OR
EXEMPT FROM LICENSING, UNDER THIS ARTICLE, PROVIDED THAT SUCH INDIVIDUAL
DOES  NOT REPRESENT TO THE PUBLIC, THROUGH ADVERTISING OR OTHER MEANS OF
COMMUNICATING OR PROVIDING INFORMATION, INCLUDING THE  USE  OF  BUSINESS
CARDS,  STATIONERY,  BROCHURES,  SIGNS, RATE LISTS, OR OTHER PROMOTIONAL
ITEMS, THAT SUCH INDIVIDUAL CAN OR WILL PERFORM ANY OF THE ACTIVITIES OF
A MORTGAGE LOAN ORIGINATOR.
  (B) FOR PURPOSES OF THIS SUBDIVISION, "CLERICAL OR SUPPORT DUTIES" MAY
INCLUDE, SUBSEQUENT TO THE RECEIPT OF AN APPLICATION:
  (I) THE RECEIPT, COLLECTION, DISTRIBUTION, AND ANALYSIS OF INFORMATION
COMMON FOR THE PROCESSING OR  UNDERWRITING  OF  A  RESIDENTIAL  MORTGAGE
LOAN; AND
  (II) COMMUNICATING WITH A CONSUMER TO OBTAIN THE INFORMATION NECESSARY
FOR  THE  PROCESSING  OR UNDERWRITING OF A LOAN, TO THE EXTENT THAT SUCH
COMMUNICATION DOES NOT INCLUDE OFFERING OR  NEGOTIATING  LOAN  RATES  OR
TERMS,  OR COUNSELING CONSUMERS ABOUT RESIDENTIAL MORTGAGE LOAN RATES OR
TERMS.
  7. MORTGAGE LOAN ORIGINATOR (MLO) --
  (A) "MORTGAGE LOAN ORIGINATOR" MEANS AN  INDIVIDUAL  WHO  FOR  COMPEN-
SATION OR GAIN OR IN THE EXPECTATION OF COMPENSATION OR GAIN:
  (I) TAKES A RESIDENTIAL MORTGAGE LOAN APPLICATION; OR
  (II) OFFERS OR NEGOTIATES TERMS OF A RESIDENTIAL MORTGAGE LOAN.
  (B) DOES NOT INCLUDE:
  (I)  ANY  INDIVIDUAL ENGAGED SOLELY AS A LOAN PROCESSOR OR UNDERWRITER
EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION FOUR OF SECTION FIVE HUNDRED
NINETY-NINE-C OF THIS ARTICLE;
  (II) AN INDIVIDUAL WHO PERFORMS ONLY REAL ESTATE BROKERAGE  ACTIVITIES
AND  IS  LICENSED  OR  REGISTERED IN ACCORDANCE WITH APPLICABLE NEW YORK
LAW, UNLESS THE INDIVIDUAL  IS  COMPENSATED  BY  A  LENDER,  A  MORTGAGE

S. 430                              3

BROKER,  OR OTHER MORTGAGE LOAN ORIGINATOR OR BY ANY AGENT OF SUCH LEND-
ER, MORTGAGE BROKER, OR OTHER MORTGAGE LOAN ORIGINATOR; AND
  (III)  AN  INDIVIDUAL SOLELY INVOLVED IN EXTENSIONS OF CREDIT RELATING
TO TIMESHARE PLANS, AS THAT TERM IS DEFINED IN SECTION 101(53D) OF TITLE
11, UNITED STATES CODE.
  (C) FOR PURPOSES OF THIS ARTICLE,  "REAL  ESTATE  BROKERAGE  ACTIVITY"
MEANS  ANY  ACTIVITY  THAT  INVOLVES  OFFERING  OR PROVIDING REAL ESTATE
BROKERAGE SERVICES TO THE PUBLIC, INCLUDING:
  (I) ACTING AS A REAL ESTATE AGENT OR REAL ESTATE BROKER FOR  A  BUYER,
SELLER, LESSOR, OR LESSEE OF REAL PROPERTY;
  (II)  BRINGING  TOGETHER  PARTIES  INTERESTED  IN  THE SALE, PURCHASE,
LEASE, RENTAL, OR EXCHANGE OF REAL PROPERTY;
  (III) NEGOTIATING, ON BEHALF OF ANY PARTY, ANY PORTION OF  A  CONTRACT
RELATING TO THE SALE, PURCHASE, LEASE, RENTAL, OR EXCHANGE OF REAL PROP-
ERTY  (OTHER THAN IN CONNECTION WITH PROVIDING FINANCING WITH RESPECT TO
ANY SUCH TRANSACTION);
  (IV) ENGAGING IN ANY ACTIVITY FOR WHICH A PERSON ENGAGED IN THE ACTIV-
ITY IS REQUIRED TO BE REGISTERED OR LICENSED AS A REAL ESTATE  AGENT  OR
REAL ESTATE BROKER UNDER ANY APPLICABLE  LAW; AND
  (V)  OFFERING  TO  ENGAGE  IN  ANY  ACTIVITY,  OR ACT IN ANY CAPACITY,
DESCRIBED IN SUBPARAGRAPHS (I), (II), (III), OR (IV) OF THIS PARAGRAPH.
  8. "RESIDENTIAL MORTGAGE LOAN" SHALL MEAN A LOAN TO A  NATURAL  PERSON
MADE  PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD USE, SECURED BY EITHER
A MORTGAGE, DEED OF TRUST OR OTHER EQUIVALENT CONSENSUAL SECURITY INTER-
EST ON A DWELLING (AS DEFINED IN SECTION 1203(V) OF THE TRUTH IN LENDING
ACT) OR RESIDENTIAL REAL PROPERTY OR ANY CERTIFICATE OF STOCK  OR  OTHER
EVIDENCE  OF  OWNERSHIP IN, AND PROPRIETARY LEASE FROM, A CORPORATION OR
PARTNERSHIP FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF  RESIDEN-
TIAL  REAL  PROPERTY  AND SHALL INCLUDE ANY REFINANCE OR MODIFICATION OF
ANY SUCH EXISTING LOAN.
  9. "NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY" (NMLSR) MEANS A
MORTGAGE LICENSING SYSTEM DEVELOPED AND MAINTAINED BY THE CONFERENCE  OF
STATE BANK SUPERVISORS AND THE AMERICAN ASSOCIATION OF RESIDENTIAL MORT-
GAGE  REGULATORS FOR THE LICENSING AND REGISTRATION OF LICENSED MORTGAGE
LOAN ORIGINATORS.
  10. "NONTRADITIONAL MORTGAGE PRODUCT"  MEANS,  FOR  PURPOSES  OF  THIS
ARTICLE,  ANY MORTGAGE PRODUCT OTHER THAN A THIRTY-YEAR FIXED RATE MORT-
GAGE.
  11.  "ORIGINATING ENTITY" MEANS A PERSON OR ENTITY LICENSED OR  REGIS-
TERED PURSUANT TO ARTICLE TWELVE-D OF THIS CHAPTER OR SUCH OTHER EMPLOY-
ER OF MORTGAGE LOAN ORIGINATORS AS THE SUPERINTENDENT MAY APPROVE.
  12.  "PERSON" MEANS AN INDIVIDUAL OR ANY CORPORATION, COMPANY, LIMITED
LIABILITY COMPANY, PARTNERSHIP, ASSOCIATION OR OTHER ENTITY.
  13. "REGISTERED MORTGAGE LOAN ORIGINATOR" MEANS ANY INDIVIDUAL WHO:
  (A) MEETS THE DEFINITION OF MORTGAGE LOAN ORIGINATOR AND IS AN EMPLOY-
EE OF:
  (I) A DEPOSITORY INSTITUTION;
  (II) A SUBSIDIARY THAT IS OWNED AND CONTROLLED BY A DEPOSITORY  INSTI-
TUTION AND REGULATED BY A FEDERAL BANKING AGENCY; OR
  (III) AN INSTITUTION REGULATED BY THE FARM CREDIT ADMINISTRATION; AND
  (B) IS REGISTERED WITH, AND MAINTAINS A UNIQUE IDENTIFIER THROUGH, THE
NMLSR.
  14.  "RESIDENTIAL  REAL  PROPERTY" SHALL MEAN REAL PROPERTY LOCATED IN
THIS STATE IMPROVED BY A ONE-TO-FOUR  FAMILY  RESIDENCE  OR  RESIDENTIAL
UNIT IN A BUILDING USED OR OCCUPIED, OR INTENDED TO BE USED OR OCCUPIED,
WHOLLY  OR  PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS, BUT

S. 430                              4

SHALL NOT REFER TO UNIMPROVED REAL PROPERTY UPON WHICH SUCH RESIDENCE IS
TO BE CONSTRUCTED.
  15. "UNIQUE IDENTIFIER" MEANS A NUMBER OR OTHER IDENTIFIER ASSIGNED BY
PROTOCOLS ESTABLISHED BY THE NMLSR.
  S  599-C. LICENSE REQUIRED. 1. LICENSE REQUIRED. NO INDIVIDUAL, UNLESS
SPECIFICALLY EXEMPT PURSUANT TO SUBDIVISION THREE OF THIS SECTION  SHALL
ENGAGE IN THE BUSINESS OF A MORTGAGE LOAN ORIGINATOR WITH RESPECT TO ANY
DWELLING  OR  RESIDENTIAL  REAL  PROPERTY  IN  THIS  STATE WITHOUT FIRST
OBTAINING AND MAINTAINING ANNUALLY A LICENSE UNDER  THIS  ARTICLE.  EACH
LICENSED  MORTGAGE  LOAN  ORIGINATOR  MUST  REGISTER WITH AND MAINTAIN A
VALID UNIQUE IDENTIFIER ISSUED BY THE NMLSR.
  2. EFFECTIVE DATE. IN ORDER TO FACILITATE  AN  ORDERLY  TRANSITION  TO
LICENSING AND MINIMIZE DISRUPTION IN THE MORTGAGE MARKETPLACE:
  (A)  EACH  INDIVIDUAL, OTHER THAN AN INDIVIDUAL DESCRIBED IN PARAGRAPH
(B) OF THIS SUBDIVISION, SHALL BE LICENSED PURSUANT TO  SUBDIVISION  ONE
OF  THIS  SECTION NOT LATER THAN JULY THIRTY-FIRST, TWO THOUSAND TEN, OR
SUCH LATER DATE APPROVED FOR MORTGAGE LOAN ORIGINATORS IN THIS STATE  BY
THE  SECRETARY  OF THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,
PURSUANT TO THE AUTHORITY GRANTED  UNDER  PUBLIC  LAW  110-289,  SECTION
1508(A) AND APPROVED BY THE SUPERINTENDENT;
  (B)  EACH  INDIVIDUAL  AUTHORIZED  AS A MORTGAGE LOAN ORIGINATOR UNDER
PRIOR LAW NOT LATER THAN JULY THIRTY-FIRST, TWO THOUSAND NINE, SHALL  BE
LICENSED  PURSUANT  TO  SUBDIVISION  ONE  OF THIS SECTION NOT LATER THAN
JANUARY FIRST, TWO THOUSAND ELEVEN, OR  SUCH  LATER  DATE  APPROVED  FOR
MORTGAGE  LOAN  ORIGINATORS  IN  THIS STATE BY THE SECRETARY OF THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PURSUANT TO  THE  AUTHORITY
GRANTED  UNDER  PUBLIC  LAW 110-289, SECTION 1508(A) AND APPROVED BY THE
SUPERINTENDENT.
  (C) NOTWITHSTANDING PARAGRAPHS (A) AND (B) OF THIS SUBDIVISION,  AFTER
THE  EFFECTIVE  DATE OF THIS ARTICLE, NO INDIVIDUAL SHALL ACT AS A MORT-
GAGE LOAN ORIGINATOR IF SUCH INDIVIDUAL HAS BEEN CONVICTED OF,  OR  PLED
GUILTY  OR NOLO CONTENDERE TO, A FELONY OF THE TYPES AND DURING THE TIME
PERIODS DESCRIBED IN PARAGRAPH (B) OF SUBDIVISION ONE  OF  SECTION  FIVE
HUNDRED  NINETY-NINE-E  OF THIS ARTICLE, IN A DOMESTIC, FOREIGN OR MILI-
TARY COURT, UNLESS EXPRESSLY AUTHORIZED TO ACT AS A MORTGAGE LOAN ORIGI-
NATOR BY THE SUPERINTENDENT.
  3. EXEMPTION FROM LICENSING REQUIREMENTS. THE  FOLLOWING  PERSONS  ARE
EXEMPT  FROM  THE LICENSING REQUIREMENTS OTHERWISE APPLICABLE UNDER THIS
ARTICLE:
  (A) REGISTERED MORTGAGE LOAN ORIGINATORS, WHEN ACTING  FOR  AN  ENTITY
DESCRIBED  IN  SUBPARAGRAPHS  (I),  (II)  AND  (III) OF PARAGRAPH (A) OF
SUBDIVISION THIRTEEN OF SECTION FIVE HUNDRED NINETY-NINE-B OF THIS ARTI-
CLE.
  (B) ANY INDIVIDUAL WHO OFFERS OR NEGOTIATES THE TERMS OF A RESIDENTIAL
MORTGAGE LOAN WITH OR ON BEHALF OF AN IMMEDIATE  FAMILY  MEMBER  OF  THE
INDIVIDUAL.
  (C)  ANY  INDIVIDUAL  WHO  OFFERS OR NEGOTIATES TERMS OF A RESIDENTIAL
MORTGAGE LOAN SECURED BY A DWELLING OR RESIDENTIAL  REAL  PROPERTY  THAT
SERVED AS THE INDIVIDUAL'S OWN RESIDENCE.
  (D)  A  LICENSED  ATTORNEY  WHO  NEGOTIATES THE TERMS OF A RESIDENTIAL
MORTGAGE LOAN ON BEHALF OF A CLIENT AS AN ANCILLARY MATTER TO THE ATTOR-
NEY'S REPRESENTATION OF THE CLIENT, UNLESS THE ATTORNEY  IS  COMPENSATED
BY  A LENDER, A MORTGAGE BROKER, OR OTHER MORTGAGE LOAN ORIGINATOR OR BY
ANY AGENT OF SUCH LENDER, MORTGAGE BROKER, OR OTHER MORTGAGE LOAN ORIGI-
NATOR.

S. 430                              5

  (E) ANY INDIVIDUAL EMPLOYED BY A  MORTGAGE  LOAN  SERVICER  REGISTERED
UNDER  ARTICLE TWELVE-D OF THIS CHAPTER, WHO NEGOTIATES ANY MODIFICATION
OF AN EXISTING RESIDENTIAL MORTGAGE LOAN ON BEHALF OF SUCH SERVICER, AND
DOES NOT OTHERWISE ACT AS A MORTGAGE LOAN ORIGINATOR,  UNLESS  LICENSING
IS REQUIRED BY A RULE, REGULATION, GUIDELINE OR INTERPRETATION ISSUED BY
THE  U.S.  DEPARTMENT  OF HOUSING AND URBAN DEVELOPMENT UNDER PUBLIC LAW
110-289.
  (F) ANY INDIVIDUAL INVOLVED IN  THE  SALE  OF  MANUFACTURED  HOMES  IF
EXEMPTED  FROM LICENSING BY A RULE, REGULATION, GUIDELINE OR INTERPRETA-
TION ISSUED BY THE U.S. DEPARTMENT  OF  HOUSING  AND  URBAN  DEVELOPMENT
UNDER PUBLIC LAW 110-289.
  4.  INDEPENDENT  CONTRACTOR  LOAN  PROCESSORS  OR UNDERWRITERS. A LOAN
PROCESSOR OR UNDERWRITER WHO IS AN INDEPENDENT CONTRACTOR OF  AN  ORIGI-
NATING  ENTITY  MAY  NOT ENGAGE IN RESIDENTIAL MORTGAGE LOAN ORIGINATION
ACTIVITIES UNLESS SUCH INDEPENDENT CONTRACTOR LOAN PROCESSOR  OR  UNDER-
WRITER  OBTAINS  AND  MAINTAINS A LICENSE UNDER THIS ARTICLE. EACH INDE-
PENDENT CONTRACTOR LOAN PROCESSOR OR UNDERWRITER LICENSED AS A  MORTGAGE
LOAN  ORIGINATOR MUST HAVE AND MAINTAIN A VALID UNIQUE IDENTIFIER ISSUED
BY THE NMLSR.
  S 599-D. STATE LICENSE APPLICATION. 1. FORM OF APPLICATION. APPLICANTS
FOR A LICENSE UNDER THIS ARTICLE SHALL APPLY ON A FORM PRESCRIBED BY THE
SUPERINTENDENT. EACH SUCH FORM SHALL CONTAIN CONTENT  AS  SET  FORTH  BY
RULE, REGULATION, INSTRUCTION OR PROCEDURE OF THE SUPERINTENDENT AND MAY
BE  CHANGED  OR  UPDATED  AS NECESSARY BY THE SUPERINTENDENT IN ORDER TO
CARRY OUT THE PURPOSES OF THIS ARTICLE. AS PART OF SUCH APPLICATION  AND
NOTWITHSTANDING  SECTION  EIGHTEEN-A  OF THIS CHAPTER, THE APPLICANT (OR
HIS OR HER ORIGINATING ENTITY ON HIS OR HER BEHALF) SHALL PAY A  FEE  AS
DETERMINED BY THE SUPERINTENDENT AS AN INVESTIGATION AND INITIAL LICENSE
FEE; PROVIDED, HOWEVER, THAT THE INVESTIGATION PORTION OF SUCH FEE SHALL
BE  NO  MORE THAN THE SUPERINTENDENT'S REASONABLE ESTIMATE OF THE ACTUAL
COST OR COSTS TO THE DEPARTMENT TO UNDERTAKE SUCH INVESTIGATION  OF  THE
APPLICANT,  AND  THE  INITIAL LICENSE PORTION OF SUCH FEE AND THE ANNUAL
LICENSE FEE AS HEREAFTER REQUIRED PURSUANT TO THIS ARTICLE  SHALL  BE  A
LICENSE FEE AMOUNT DETERMINED BY THE SUPERINTENDENT.
  2.  CHARGES TO ORIGINATING ENTITIES. ANY EXPENSE OF THE ADMINISTRATION
OF THIS ARTICLE WITH RESPECT TO THE LICENSING OF MORTGAGE LOAN  ORIGINA-
TORS  THAT IS INCLUDED WITH AN ASSESSMENT OF ORIGINATING ENTITIES PURSU-
ANT TO SECTION SEVENTEEN OF THIS CHAPTER SHALL BE LEVIED ONLY UPON  SUCH
ORIGINATING  ENTITIES HAVING EMPLOYED OR AFFILIATED MORTGAGE LOAN ORIGI-
NATORS THAT ARE REQUIRED TO BE LICENSED.
  3. FEE COLLECTION BY THE NMLSR. ANY FEE ESTABLISHED PURSUANT  TO  THIS
SECTION  MAY  BE  COLLECTED  BY  THE  NMLSR AND INCLUDE A PROCESSING FEE
CHARGED BY THAT ENTITY. ANY SUCH PROCESSING FEES SHALL NOT  BE  REMITTED
TO  THE  SUPERINTENDENT AND SHALL NOT BE DEEMED REVENUE PURSUANT TO THIS
SECTION OR THE STATE FINANCE LAW.
  4. RELATIONSHIP WITH NMLSR. IN ORDER TO FULFILL THE PURPOSES  OF  THIS
ARTICLE,  THE  SUPERINTENDENT  IS AUTHORIZED TO ESTABLISH CONTRACTS WITH
THE NMLSR OR OTHER ENTITIES DESIGNATED BY THE NMLSR TO COLLECT AND MAIN-
TAIN RECORDS AND PROCESS TRANSACTION  FEES  OR  OTHER  FEES  RELATED  TO
LICENSEES OR OTHER PERSONS SUBJECT TO THIS ARTICLE.
  5.  WAIVER  OR  MODIFICATION  OF  REQUIREMENTS.  THE SUPERINTENDENT IS
AUTHORIZED TO WAIVE OR MODIFY, IN WHOLE OR PART, BY RULE, REGULATION  OR
ORDER,  ANY  AND  ALL  REQUIREMENTS OF THIS ARTICLE AND TO ESTABLISH NEW
REQUIREMENTS AS MAY BE REASONABLY NECESSARY TO PARTICIPATE IN THE  NMLSR
OR  TO  COMPLY  WITH TITLE V OF THE HOUSING AND ECONOMIC RECOVERY ACT OF
2008, ALSO KNOWN AS THE S.A.F.E. MORTGAGE LICENSING ACT, AS  IT  MAY  BE

S. 430                              6

AMENDED FROM TIME TO TIME, AND REGULATIONS THEREUNDER OR INTERPRETATIONS
THEREOF,  THAT  MAY BE ADOPTED FROM TIME TO TIME BY THE SECRETARY OF THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
  6. ELECTRONIC FILING. NOTWITHSTANDING ARTICLE THREE OF THE STATE TECH-
NOLOGY  LAW  OR  ANY  OTHER  LAW TO THE CONTRARY, THE SUPERINTENDENT MAY
REQUIRE THAT ANY APPLICATION FOR, OR RENEWAL OF, A LICENSE  OR  FOR  ANY
OTHER SUBMISSION OR APPROVAL AS MAY BE REQUIRED BY THIS ARTICLE, BE MADE
OR  EXECUTED  BY  ELECTRONIC MEANS, INCLUDING THROUGH THE NMLSR OR OTHER
ENTITIES DESIGNATED BY THE NMLSR IF HE OR  SHE  DEEMS  IT  NECESSARY  TO
ENSURE THE EFFICIENT AND EFFECTIVE ADMINISTRATION OF THIS ARTICLE.
  7.  NMLSR  AS AGENT TO DISTRIBUTE CRIMINAL BACKGROUND INFORMATION. FOR
THE PURPOSES OF THIS SECTION AND IN ORDER TO EXPEDITE THE PROCESSING  OF
ALL FINGERPRINTS, THE SUPERINTENDENT IS AUTHORIZED TO USE THE NMLSR AS A
CHANNELING AGENT FOR REQUESTING INFORMATION FROM AND DISTRIBUTING INFOR-
MATION TO THE U.S. DEPARTMENT OF JUSTICE OR ANY GOVERNMENTAL AGENCY.
  8.  NMLSR  AS AGENT TO DISTRIBUTE NON-CRIMINAL BACKGROUND INFORMATION.
FOR THE PURPOSES OF THIS SECTION AND IN ORDER TO EXPEDITE THE PROCESSING
OF ALL APPLICATIONS, INCLUDING OBTAINING INDEPENDENT CREDIT REPORTS  AND
INFORMATION RELATED TO ADMINISTRATIVE, CIVIL OR CRIMINAL FINDINGS BY ANY
GOVERNMENTAL  JURISDICTION,  THE SUPERINTENDENT IS AUTHORIZED TO USE THE
NMLSR AS A CHANNELING AGENT FOR REQUESTING AND DISTRIBUTING  INFORMATION
TO AND FROM ANY SOURCE.
  9.  BACKGROUND  INFORMATION.  IN  CONNECTION  WITH  AN APPLICATION FOR
LICENSING AS A MORTGAGE LOAN ORIGINATOR, THE APPLICANT SHALL, AT A MINI-
MUM, FURNISH TO THE NMLSR AND THE SUPERINTENDENT,  AS  REQUIRED  BY  THE
SUPERINTENDENT, INFORMATION CONCERNING THE APPLICANT'S IDENTITY, INCLUD-
ING:
  (A)  FINGERPRINTS  FOR  SUBMISSION  TO  THE FEDERAL BUREAU OF INVESTI-
GATION, AND ANY GOVERNMENTAL AGENCY OR ENTITY AUTHORIZED TO RECEIVE SUCH
INFORMATION FOR A STATE, NATIONAL  AND  INTERNATIONAL  CRIMINAL  HISTORY
BACKGROUND CHECK, AS MAY BE DESIGNATED BY THE SUPERINTENDENT; AND
  (B) PERSONAL HISTORY AND EXPERIENCE IN A FORM PRESCRIBED BY THE NMLSR,
INCLUDING THE SUBMISSION OF AUTHORIZATION FOR THE NMLSR TO OBTAIN:
  (I)  AN  INDEPENDENT  CREDIT  REPORT  FROM A CONSUMER REPORTING AGENCY
DESCRIBED IN SECTION 603(P) OF THE FAIR CREDIT REPORTING ACT; AND
  (II) INFORMATION RELATED TO  ANY  ADMINISTRATIVE,  CIVIL  OR  CRIMINAL
FINDINGS BY ANY GOVERNMENTAL JURISDICTION.
  (C) THE CURRENT BUSINESS NAME AND PRINCIPAL ADDRESS OF THE ORIGINATING
ENTITY EMPLOYING THE APPLICANT OR WITH WHICH THE APPLICANT HAS AN AFFIL-
IATION; AND
  (D)  SUCH  OTHER  PERTINENT  INFORMATION  AS  THE  SUPERINTENDENT  MAY
REQUIRE.
  S 599-E. ISSUANCE OF A LICENSE. 1. FINDINGS. NOTWITHSTANDING ANY OTHER
LAW, THE SUPERINTENDENT SHALL NOT  ISSUE  A  MORTGAGE  LOAN  ORIGINATION
LICENSE UNLESS HE OR SHE MAKES, AT A MINIMUM, THE FOLLOWING FINDINGS:
  (A) NO LICENSE REVOCATION. THAT THE APPLICANT HAS NEVER HAD A MORTGAGE
LOAN  ORIGINATOR AUTHORIZATION, LICENSE OR LICENSE EQUIVALENT REVOKED IN
ANY GOVERNMENTAL JURISDICTION, EXCEPT THAT A SUBSEQUENT FORMAL  VACATION
OF SUCH REVOCATION SHALL NOT BE DEEMED A REVOCATION;
  (B)  NO  FELONY  CONVICTION. THAT THE APPLICANT HAS NOT BEEN CONVICTED
OF, OR PLED GUILTY OR NOLO  CONTENDERE  TO,  A  FELONY  IN  A  DOMESTIC,
FOREIGN, OR MILITARY COURT:
  (I) DURING THE SEVEN-YEAR PERIOD PRECEDING THE DATE OF THE APPLICATION
FOR LICENSING; OR
  (II)  AT  ANY  TIME PRECEDING SUCH DATE OF APPLICATION, IF SUCH FELONY
INVOLVED AN ACT OF FRAUD, DISHONESTY, OR A BREACH  OF  TRUST,  OR  MONEY

S. 430                              7

LAUNDERING,  PROVIDED  THAT FOR PURPOSES OF THIS SUBDIVISION, THE SUPER-
INTENDENT MAY, IN HIS OR HER DISCRETION, DISREGARD  A  CONVICTION  WHERE
THE FELON HAS BEEN PARDONED;
  (C)  CHARACTER AND FITNESS. THAT THE APPLICANT HAS DEMONSTRATED FINAN-
CIAL RESPONSIBILITY, CHARACTER, AND GENERAL FITNESS SUCH AS  TO  COMMAND
THE  CONFIDENCE OF THE COMMUNITY AND TO WARRANT A DETERMINATION THAT THE
MLO WILL OPERATE HONESTLY, FAIRLY, AND EFFICIENTLY WITHIN  THE  PURPOSES
OF THIS ARTICLE;
  (D)  PRE-LICENSING  EDUCATION.  THAT  THE  APPLICANT HAS COMPLETED THE
PRE-LICENSING EDUCATION REQUIREMENT DESCRIBED IN  SECTION  FIVE  HUNDRED
NINETY-NINE-F OF THIS ARTICLE;
  (E)  WRITTEN  TEST.  THAT THE APPLICANT HAS PASSED A WRITTEN TEST THAT
MEETS  THE  TEST  REQUIREMENT  DESCRIBED   IN   SECTION   FIVE   HUNDRED
NINETY-NINE-G OF THIS ARTICLE;
  (F)  SURETY  BOND. THAT THE APPLICANT HAS MET THE SURETY BOND REQUIRE-
MENT DESCRIBED IN SECTION FIVE HUNDRED NINETY-NINE-K  OF  THIS  ARTICLE;
AND
  (G)  AFFILIATION.    UNLESS  THE  SUPERINTENDENT SHALL HAVE WAIVED THE
AFFILIATION REQUIREMENT PURSUANT TO REGULATIONS ADOPTED BY  THE  BANKING
BOARD,  THAT THE APPLICANT IS EMPLOYED BY, OR IS AN INDEPENDENT CONTRAC-
TOR OF (I) AN ORIGINATING ENTITY, (II) SOLELY IN THE CASE OF A  MORTGAGE
LOAN ORIGINATOR ENGAGED IN THE ORIGINATION OF RESIDENTIAL MORTGAGE LOANS
ON MANUFACTURED HOMES, AN ENTITY LICENSED UNDER ARTICLE NINE OR ELEVEN-B
OF  THIS  CHAPTER,  OR  (III)  IN THE CASE OF A MORTGAGE LOAN ORIGINATOR
ENGAGED IN MORTGAGE LOAN SERVICING  AND  EMPLOYED  BY  A  MORTGAGE  LOAN
SERVICER, AN ENTITY REGISTERED AS A MORTGAGE LOAN SERVICER UNDER ARTICLE
TWELVE-D OF THIS CHAPTER OR EXEMPT FROM REGISTRATION UNDER SUCH ARTICLE.
A  MORTGAGE LOAN ORIGINATOR MAY NOT BE SIMULTANEOUSLY EMPLOYED OR AFFIL-
IATED WITH MORE THAN ONE ORIGINATING ENTITY.
  2. DISQUALIFYING ASSOCIATIONS. THE SUPERINTENDENT MAY REFUSE TO  ISSUE
A  LICENSE  PURSUANT  TO  THIS  ARTICLE IF HE OR SHE SHALL FIND THAT THE
APPLICANT (A) HAS BEEN A DIRECTOR, PARTNER, OR  SUBSTANTIAL  STOCKHOLDER
OF AN ORIGINATING ENTITY WHICH HAS HAD A REGISTRATION OR LICENSE REVOKED
BY  THE  SUPERINTENDENT  OR  A REGULATOR OF ANOTHER STATE THAT REGULATES
SUCH ORIGINATING ENTITY, OR (B) HAS BEEN AN EMPLOYEE, OFFICER  OR  AGENT
OF,  OR  A CONSULTANT TO, AN ORIGINATING ENTITY THAT HAS HAD A REGISTRA-
TION OR LICENSE REVOKED BY THE SUPERINTENDENT OR A REGULATOR OF  ANOTHER
STATE  THAT  REGULATES  SUCH  ORIGINATING ENTITY WHERE SUCH PERSON SHALL
HAVE BEEN FOUND BY THE SUPERINTENDENT OR BY SUCH  REGULATOR  OF  ANOTHER
STATE  TO BEAR RESPONSIBILITY FOR THE ACTS RESULTING IN SUCH REVOCATION.
FOR THE PURPOSES OF THIS SUBDIVISION, A PERSON SHALL BE DEEMED  TO  HAVE
BEEN  CONVICTED  OF  A  CRIME IF SUCH PERSON SHALL HAVE PLED GUILTY TO A
CHARGE THEREOF BEFORE A COURT OR MAGISTRATE, OR SHALL  HAVE  BEEN  FOUND
GUILTY  THEREOF  BY THE DECISION OR JUDGMENT OF A COURT OR MAGISTRATE OR
BY THE VERDICT OF A JURY, IRRESPECTIVE OF THE PRONOUNCEMENT OF  SENTENCE
OR THE SUSPENSION THEREOF.
  3.  ISSUANCE  OF A LICENSE. THE SUPERINTENDENT, AFTER MAKING THE FIND-
INGS REQUIRED BY SUBDIVISION ONE OF THIS SECTION SHALL THEREUPON ISSUE A
LICENSE TO THE APPLICANT AS MORTGAGE LOAN ORIGINATOR. THE SUPERINTENDENT
SHALL TRANSMIT ONE COPY OF SUCH CERTIFICATE TO THE  APPLICANT  AND  FILE
ANOTHER  IN  HIS OR HER OFFICE, AND SHALL TRANSMIT NOTICE OF APPROVAL OF
SUCH APPLICATION, IN SUCH FORM AS THE SUPERINTENDENT DEEMS  APPROPRIATE,
TO THE ORIGINATING ENTITY FOR WHICH THE APPLICANT IS PROVIDING SERVICES.
SUCH  LICENSE  SHALL  BE  DEEMED  TO  TERMINATE AT THE END OF THE ANNUAL
LICENSE PERIOD, UNLESS  SUCH  LICENSE  IS  RENEWED  IN  ACCORDANCE  WITH
SECTION FIVE HUNDRED NINETY-NINE-I OF THIS ARTICLE.

S. 430                              8

  S  599-F.  PRE-LICENSING  EDUCATIONAL  REQUIREMENTS. 1. MINIMUM EDUCA-
TIONAL REQUIREMENTS.  IN  ORDER  TO  MEET  THE  PRE-LICENSING  EDUCATION
REQUIREMENT  REFERRED  TO  IN  THIS  ARTICLE, A PERSON SHALL COMPLETE AT
LEAST TWENTY HOURS OF EDUCATION APPROVED IN ACCORDANCE WITH  SUBDIVISION
TWO  OF THIS SECTION, WHICH SHALL INCLUDE AT LEAST THE FOLLOWING MINIMUM
REQUIREMENTS:
  (A) THREE HOURS OF FEDERAL LAW AND REGULATIONS;
  (B) THREE HOURS OF ETHICS, WHICH SHALL INCLUDE INSTRUCTION  ON  FRAUD,
CONSUMER PROTECTION, AND FAIR LENDING ISSUES;
  (C) TWO HOURS OF TRAINING RELATED TO LENDING STANDARDS FOR THE NONTRA-
DITIONAL MORTGAGE PRODUCT MARKETPLACE; AND
  (D) THREE HOURS OF TRAINING ON APPLICABLE NEW YORK STATE LAW AND REGU-
LATIONS AS MAY BE APPROVED BY THE SUPERINTENDENT.
  2. APPROVED EDUCATION COURSES. FOR PURPOSES OF SUBDIVISION ONE OF THIS
SECTION,  PRE-LICENSING EDUCATION COURSES SHALL BE SUCH COURSES, INCLUD-
ING THE COURSE PROVIDER  THEREOF,  AS  SHALL  HAVE  BEEN  REVIEWED,  AND
APPROVED,  BY  THE  NMLSR  BASED  UPON  REASONABLE STANDARDS. AN HOUR OF
EDUCATION FOR PURPOSES OF THIS ARTICLE SHALL BE AS DEFINED BY THE NMLSR.
  3. EMPLOYER AND AFFILIATE EDUCATION COURSES. NOTHING IN  THIS  SECTION
SHALL  PRECLUDE  ANY  PRE-LICENSING EDUCATION COURSE, AS APPROVED BY THE
NMLSR, THAT IS PROVIDED BY THE EMPLOYER OF THE APPLICANT  OR  AN  ENTITY
THAT  IS  AFFILIATED  WITH  THE  APPLICANT BY AN AGENCY CONTRACT, OR ANY
SUBSIDIARY OR AFFILIATE OF SUCH EMPLOYER OR ENTITY.
  4. VENUE OF EDUCATION. PRE-LICENSING EDUCATION MAY BE  OFFERED  EITHER
IN A CLASSROOM, ONLINE OR BY ANY OTHER MEANS APPROVED BY THE NMLSR.
  5.  RECIPROCITY  OF EDUCATION COURSES. PRE-LICENSING EDUCATION COURSES
APPROVED BY THE NMLSR PURSUANT TO PARAGRAPHS (A), (B) AND (C) OF  SUBDI-
VISION  ONE  OF  THIS  SECTION FOR ANY STATE SHALL BE ACCEPTED AS CREDIT
TOWARDS COMPLETION  OF  PRE-LICENSING  EDUCATION  REQUIREMENTS  IN  THIS
STATE.
  6. RE-LICENSING EDUCATIONAL REQUIREMENTS. AN INDIVIDUAL LICENSED UNDER
THIS  ARTICLE  SUBSEQUENT  TO ITS EFFECTIVE DATE APPLYING TO BE LICENSED
AGAIN MUST PROVE THAT HE OR SHE HAS COMPLETED ALL THE CONTINUING  EDUCA-
TION REQUIREMENTS FOR THE YEAR IN WHICH THE LICENSE WAS LAST HELD.
  S  599-G.  TESTING  OF MORTGAGE LOAN ORIGINATORS.  1. GENERAL REQUIRE-
MENTS. IN ORDER TO MEET THE WRITTEN TEST REQUIREMENT REFERRED TO IN THIS
ARTICLE, AN INDIVIDUAL SHALL PASS,  IN  ACCORDANCE  WITH  THE  STANDARDS
ESTABLISHED  UNDER  THIS  SECTION, A QUALIFIED WRITTEN TEST DEVELOPED BY
THE NMLSR AND ADMINISTERED BY A TEST  PROVIDER  APPROVED  BY  THE  NMLSR
BASED UPON REASONABLE STANDARDS.
  2.  QUALIFIED TEST. A WRITTEN TEST SHALL NOT BE TREATED AS A QUALIFIED
WRITTEN TEST FOR PURPOSES OF SUBDIVISION ONE OF THIS SECTION UNLESS  THE
TEST  ADEQUATELY MEASURES THE APPLICANT'S KNOWLEDGE AND COMPREHENSION IN
APPROPRIATE SUBJECT AREAS, INCLUDING THE FOLLOWING:
  (A) ETHICS;
  (B) FEDERAL LAW AND REGULATION PERTAINING TO MORTGAGE ORIGINATION;
  (C) STATE LAW AND REGULATION PERTAINING TO MORTGAGE ORIGINATION; AND
  (D) FEDERAL AND STATE LAW AND  REGULATION,  INCLUDING  INSTRUCTION  ON
FRAUD, CONSUMER PROTECTION, THE NONTRADITIONAL MORTGAGE MARKETPLACE, AND
FAIR LENDING ISSUES.
  3.  TESTING  LOCATION.  NOTHING  IN THIS SECTION SHALL PROHIBIT A TEST
PROVIDER APPROVED BY THE NMLSR FROM PROVIDING A TEST AT THE LOCATION  OF
THE  EMPLOYER  OF  THE  APPLICANT  OR  THE LOCATION OF ANY SUBSIDIARY OR
AFFILIATE OF SUCH ENTITY, OR THE LOCATION OF ANY ENTITY WITH  WHICH  THE
APPLICANT  HOLDS  AN  EXCLUSIVE ARRANGEMENT TO CONDUCT THE BUSINESS OF A
MORTGAGE LOAN ORIGINATOR.

S. 430                              9

  4. MINIMUM COMPETENCY. THE FOLLOWING CONDITIONS APPLY  TO  INDIVIDUALS
TAKING SUCH COMPETENCY TESTS:
  (A)  AN  INDIVIDUAL SHALL NOT BE CONSIDERED TO HAVE PASSED A QUALIFIED
WRITTEN TEST UNLESS THE INDIVIDUAL SHALL HAVE ACHIEVED A TEST  SCORE  OF
NOT LESS THAN SEVENTY-FIVE PERCENT CORRECT ANSWERS TO QUESTIONS;
  (B) AN INDIVIDUAL MAY RETAKE A TEST THREE CONSECUTIVE TIMES, WITH EACH
CONSECUTIVE  TAKING  OCCURRING  AT LEAST THIRTY DAYS AFTER THE PRECEDING
TEST;
  (C) AFTER FAILING THREE CONSECUTIVE TESTS, AN INDIVIDUAL SHALL WAIT AT
LEAST SIX MONTHS BEFORE TAKING THE TEST AGAIN; AND
  (D) A LICENSED MORTGAGE LOAN ORIGINATOR WHO FAILS TO MAINTAIN A  VALID
LICENSE  FOR  A  PERIOD OF FIVE YEARS OR LONGER, NOT TAKING INTO ACCOUNT
ANY TIME DURING WHICH SUCH INDIVIDUAL  IS  A  REGISTERED  MORTGAGE  LOAN
ORIGINATOR, SHALL RETAKE THE TEST.
  S  599-H.  MORTGAGE CALL REPORTS. EACH ORIGINATING ENTITY SHALL SUBMIT
TO THE NMLSR REPORTS OF CONDITION, WHICH SHALL BE IN SUCH FORM AND SHALL
CONTAIN SUCH INFORMATION AS THE NMLSR MAY REQUIRE.
  S 599-I. STANDARDS FOR LICENSE RENEWAL; INACTIVE STATUS. 1.  STANDARDS
FOR  RENEWAL.  THE  FOLLOWING  MINIMUM STANDARDS FOR LICENSE RENEWAL FOR
MORTGAGE LOAN ORIGINATORS ARE HEREBY ESTABLISHED:
  (A) THE MORTGAGE LOAN ORIGINATOR MUST CONTINUE  TO  MEET  THE  MINIMUM
STANDARDS  FOR  LICENSE ISSUANCE SET FORTH IN SECTION FIVE HUNDRED NINE-
TY-NINE-E OF THIS ARTICLE;
  (B) THE MORTGAGE LOAN ORIGINATOR MUST SATISFY  THE  ANNUAL  CONTINUING
EDUCATION  REQUIREMENTS  DESCRIBED IN SECTION FIVE HUNDRED NINETY-NINE-J
OF THIS ARTICLE; AND
  (C) THE MORTGAGE LOAN ORIGINATOR MUST HAVE PAID ALL REQUIRED FEES  FOR
THE RENEWAL OF THE LICENSE.
  2. FAILURE TO SATISFY STANDARDS. THE LICENSE OF A MORTGAGE LOAN ORIGI-
NATOR  FAILING TO SATISFY THE MINIMUM STANDARDS FOR RENEWAL SHALL TERMI-
NATE. IN THE EVENT THE LICENSED MORTGAGE LOAN ORIGINATOR  FAILS  TO  PAY
SUCH  FEE  OR  OTHERWISE SATISFY THIS SECTION, THEN THE DEPARTMENT SHALL
NOTIFY THE ORIGINATING ENTITY OF THE TERMINATION OF THE LICENSE.    SUCH
LICENSE  SHALL  BE  REINSTATED,  IN THE CASE OF A LICENSED MORTGAGE LOAN
ORIGINATOR FAILING TO TIMELY PAY SUCH FEE,  IF  SUCH  LICENSED  MORTGAGE
LOAN ORIGINATOR PAYS SUCH FEE WITHIN SIXTY DAYS OF SUCH DUE DATE.
  3.  SUBMISSION  OF  ANNUAL REQUEST. AN ANNUAL REQUEST FOR RENEWAL OF A
LICENSE AS A MORTGAGE LOAN ORIGINATOR SHALL BE AFFIRMED BY THE  MORTGAGE
LOAN  ORIGINATOR  AND  SUBMITTED  ELECTRONICALLY,  INCLUDING THROUGH THE
NMLSR, IN SUCH FORM AND IN SUCH MANNER  AS  MAY  BE  PRESCRIBED  BY  THE
SUPERINTENDENT. THE ANNUAL REQUEST FOR RENEWAL SHALL CONTAIN SUCH INFOR-
MATION AS SPECIFIED BY THE SUPERINTENDENT.
  4.  INACTIVE  STATUS. THE LICENSE OF A MORTGAGE LOAN ORIGINATOR IS NOT
EFFECTIVE DURING ANY PERIOD DURING WHICH THE MORTGAGE LOAN ORIGINATOR IS
NOT EMPLOYED BY, OR IS AN  INDEPENDENT  CONTRACTOR  OF,  AN  ORIGINATING
ENTITY.  WHEN A MORTGAGE LOAN ORIGINATOR CEASES TO BE EMPLOYED BY, OR IS
AN INDEPENDENT CONTRACTOR OF, AN  ORIGINATING  ENTITY,  THE  ORIGINATING
ENTITY  SHALL PROMPTLY NOTIFY THE SUPERINTENDENT OF THE TERMINATION DATE
OF SUCH EMPLOYMENT OR AFFILIATION. THE LICENSE  OF  SUCH  MORTGAGE  LOAN
ORIGINATOR  SHALL  BE PLACED IN INACTIVE STATUS UNTIL THE SUPERINTENDENT
RECEIVES WRITTEN OR ELECTRONIC NOTICE OF THE MORTGAGE LOAN  ORIGINATOR'S
NEW EMPLOYMENT OR AFFILIATION. A MORTGAGE LOAN ORIGINATOR SHALL CONTINUE
TO  PAY  THE  ANNUAL  LICENSE FEE AND TO TAKE REQUIRED EDUCATION COURSES
WHILE IN INACTIVE STATUS.
  S 599-J.  CONTINUING  EDUCATION  FOR  MORTGAGE  LOAN  ORIGINATORS.  1.
CONTINUING  EDUCATION REQUIREMENTS. IN ORDER TO MEET THE ANNUAL CONTINU-

S. 430                             10

ING  EDUCATION  REQUIREMENTS  REFERRED  TO  IN  SECTION   FIVE   HUNDRED
NINETY-NINE-I OF THIS ARTICLE, A LICENSED MORTGAGE LOAN ORIGINATOR SHALL
COMPLETE,  BEGINNING  IN  THE YEAR AFTER SUCH INDIVIDUAL IS LICENSED, AT
LEAST  ELEVEN HOURS OF EDUCATION APPROVED IN ACCORDANCE WITH SUBDIVISION
TWO OF THIS SECTION, WHICH SHALL INCLUDE AT LEAST:
  (A) THREE HOURS OF FEDERAL LAW AND REGULATIONS;
  (B) TWO HOURS OF ETHICS, WHICH SHALL  INCLUDE  INSTRUCTION  ON  FRAUD,
CONSUMER PROTECTION, AND FAIR LENDING ISSUES;
  (C) TWO HOURS OF TRAINING RELATED TO LENDING STANDARDS FOR THE NONTRA-
DITIONAL MORTGAGE PRODUCT MARKETPLACE; AND
  (D) THREE HOURS OF TRAINING ON APPLICABLE NEW YORK STATE LAW AND REGU-
LATIONS.
  2. APPROVED EDUCATION COURSES. FOR PURPOSES OF SUBDIVISION ONE OF THIS
SECTION,  CONTINUING EDUCATION COURSES SHALL BE REVIEWED AND APPROVED BY
THE NMLSR BASED UPON REASONABLE STANDARDS.  REVIEW  AND  APPROVAL  OF  A
CONTINUING  EDUCATION  COURSE  SHALL  INCLUDE REVIEW AND APPROVAL OF THE
COURSE PROVIDER.
  3. EMPLOYER AND AFFILIATE EDUCATION COURSES. NOTHING IN  THIS  SECTION
SHALL  PRECLUDE  ANY  EDUCATION  COURSE  APPROVED  BY  THE NMLSR THAT IS
PROVIDED BY THE EMPLOYER OF THE MORTGAGE LOAN ORIGINATOR  OR  AN  ENTITY
WHICH  IS  AFFILIATED  WITH  THE  MORTGAGE  LOAN ORIGINATOR BY AN AGENCY
CONTRACT, OR ANY SUBSIDIARY OR AFFILIATE OF SUCH EMPLOYER OR ENTITY.
  4. VENUE OF EDUCATION. CONTINUING EDUCATION MAY BE OFFERED EITHER IN A
CLASSROOM, ONLINE OR BY ANY OTHER MEANS APPROVED BY THE NMLSR.
  5. CALCULATION OF CREDITS. A LICENSED MORTGAGE LOAN ORIGINATOR:
  (A) EXCEPT FOR SUBDIVISION NINE OF THIS SECTION,  MAY  RECEIVE  CREDIT
FOR A CONTINUING EDUCATION COURSE ONLY IN THE CALENDAR YEAR IN WHICH THE
COURSE IS TAKEN; AND
  (B)  MAY  NOT  TAKE THE SAME APPROVED COURSE IN THE SAME OR SUCCESSIVE
YEARS TO MEET THE ANNUAL REQUIREMENTS FOR CONTINUING EDUCATION.
  6. INSTRUCTOR CREDIT. A LICENSED MORTGAGE LOAN ORIGINATOR  WHO  IS  AN
INSTRUCTOR OF AN APPROVED CONTINUING EDUCATION COURSE MAY RECEIVE CREDIT
FOR THE LICENSED MORTGAGE LOAN ORIGINATOR'S OWN ANNUAL CONTINUING EDUCA-
TION  REQUIREMENT  AT  THE  RATE  OF TWO HOURS CREDIT FOR EVERY ONE HOUR
TAUGHT.
  7. RECIPROCITY OF EDUCATION. A PERSON  HAVING  SUCCESSFULLY  COMPLETED
THE  EDUCATION REQUIREMENTS APPROVED BY THE NMLSR PURSUANT TO PARAGRAPHS
(A), (B), AND (C) OF SUBDIVISION ONE OF THIS SECTION FOR ANY STATE SHALL
BE  ACCEPTED  AS  CREDIT  TOWARDS  COMPLETION  OF  CONTINUING  EDUCATION
REQUIREMENTS IN THIS STATE.
  8.  LAPSE  IN  LICENSE. A LICENSED MORTGAGE LOAN ORIGINATOR WHO SUBSE-
QUENTLY  BECOMES  UNLICENSED  MUST  COMPLETE  THE  CONTINUING  EDUCATION
REQUIREMENTS  FOR  THE  LAST YEAR IN WHICH THE LICENSE WAS HELD PRIOR TO
ISSUANCE OF A NEW OR RENEWED LICENSE.
  9. MAKE UP OF CONTINUING EDUCATION. AN INDIVIDUAL MEETING THE REQUIRE-
MENTS OF PARAGRAPHS (A) AND (C)  OF  SUBDIVISION  ONE  OF  SECTION  FIVE
HUNDRED  NINETY-NINE-I  OF  THIS  ARTICLE  MAY MAKE UP ANY DEFICIENCY IN
CONTINUING EDUCATION AS ESTABLISHED BY RULE OR REGULATION OF THE  SUPER-
INTENDENT.
  S 599-K. REQUIRED SURETY BOND.  1. EACH MORTGAGE LOAN ORIGINATOR SHALL
BE  COVERED  BY  A  SURETY  BOND IN ACCORDANCE WITH THIS SECTION. IN THE
EVENT THAT THE MORTGAGE LOAN ORIGINATOR  IS  AN  EMPLOYEE  OR  EXCLUSIVE
AGENT  OF  AN  ORIGINATING ENTITY, THE SURETY BOND OF SUCH PERSON MAY BE
USED TO SATISFY THE MORTGAGE LOAN ORIGINATOR'S SURETY BOND  REQUIREMENT;
PROVIDED  THAT SUCH SURETY BOND CONTAINS COVERAGE FOR EACH MORTGAGE LOAN
ORIGINATOR NOT OTHERWISE COVERED BY  A  QUALIFYING  SURETY  BOND  IN  AN

S. 430                             11

AMOUNT  PRESCRIBED  IN  SUBDIVISION TWO OF THIS SECTION. THE SURETY BOND
SHALL BE IN A FORM PRESCRIBED BY THE SUPERINTENDENT. THE  SUPERINTENDENT
MAY PROMULGATE RULES OR REGULATIONS WITH RESPECT TO THE REQUIREMENTS FOR
SUCH  SURETY  BONDS  AS ARE NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS
ARTICLE.
  2. THE PENAL AMOUNT OF THE REQUIRED SURETY BOND SHALL BE MAINTAINED IN
AN AMOUNT THAT REFLECTS THE DOLLAR AMOUNT OF  LOANS  ORIGINATED  BY  THE
MORTGAGE LOAN ORIGINATOR AS DETERMINED BY THE SUPERINTENDENT.
  3.  WHEN  AN ACTION IS COMMENCED ON A LICENSEE'S BOND, THE SUPERINTEN-
DENT MAY REQUIRE THE FILING OF A NEW OR SUPPLEMENTAL BOND.
  4. IMMEDIATELY UPON RECOVERY UPON ANY CLAIM OR ACTION ON OR UNDER  THE
BOND,  THE  MORTGAGE  LOAN  ORIGINATOR (OR THE ORIGINATING ENTITY AS THE
CASE MAY BE), SHALL FILE A NEW OR SUPPLEMENTAL BOND RESTORING  THE  FACE
AMOUNT OF THE BOND TO THE AMOUNT REQUIRED BY THE SUPERINTENDENT.
  S  599-L.  REPORTS  BY  THE  SUPERINTENDENT;  PERMISSIVE CHALLENGES BY
LICENSEES. 1. NOTWITHSTANDING ANY OTHER PROVISIONS OF  LAW,  THE  SUPER-
INTENDENT  SHALL  REPORT ON A REGULAR BASIS, NOT MORE THAN ANNUALLY, ALL
VIOLATIONS OF THIS ARTICLE, AS WELL AS  ENFORCEMENT  ACTIONS  AND  OTHER
RELEVANT  INFORMATION,  TO THE NMLSR SUBJECT TO THE PROVISIONS CONTAINED
IN THE CONFIDENTIALITY PROVISIONS OF SECTION FIVE HUNDRED  NINETY-NINE-Q
OF THIS ARTICLE.
  2.  THE  SUPERINTENDENT  SHALL  ESTABLISH A PROCESS WHEREBY A MORTGAGE
LOAN ORIGINATOR MAY CHALLENGE INFORMATION ENTERED INTO THE NMLSR BY  THE
SUPERINTENDENT.
  S  599-M. REQUIRED RECORDS AND REPORTING. 1. EDUCATIONAL RECORDS. EACH
ORIGINATING ENTITY SHALL OBTAIN AND RETAIN ACCEPTABLE  DOCUMENTATION  OF
THE  SATISFACTORY  COMPLETION  OF EDUCATION COURSES REQUIRED PURSUANT TO
THIS ARTICLE BY EACH MORTGAGE LOAN ORIGINATOR EMPLOYED BY OR  AFFILIATED
WITH SUCH ORIGINATING ENTITY AND SHALL PROVIDE SUCH DOCUMENTATION AT THE
REQUEST  OF  THE SUPERINTENDENT. SUCH DOCUMENTATION SHALL BE RETAINED BY
AN ORIGINATING ENTITY FOR SIX YEARS. AN ORIGINATING ENTITY SHALL  RETAIN
A COPY OF ANY ORIGINAL PROOF OR RECORD OF COMPLETION PROVIDED BY A MORT-
GAGE LOAN ORIGINATOR. IN THOSE INSTANCES WHEN AN ORIGINATING ENTITY ALSO
RETAINS  THE  ORIGINAL  PROOF  OR  RECORD OF SUCH COMPLETION OF ANY THEN
APPLICABLE EDUCATION REQUIREMENT, SUCH ORIGINATING ENTITY SHALL  PROVIDE
THE  ORIGINAL PROOF OR RECORD, UPON REQUEST, WHEN A MORTGAGE LOAN ORIGI-
NATOR TERMINATES OR HAS TERMINATED HIS OR HER EMPLOYMENT OR  AFFILIATION
WITH THE ORIGINATING ENTITY.
  2.  LIST  OF  LICENSED  MORTGAGE  LOAN ORIGINATORS. THE SUPERINTENDENT
SHALL MAINTAIN UPON THE INTERNET WEB-PAGE OF THE DEPARTMENT  A  LIST  OF
THE  MORTGAGE  LOAN ORIGINATORS LICENSED AND IN GOOD STANDING. SUCH LIST
SHALL INDICATE THE NAME, LICENSE NUMBER AND CURRENT ORIGINATING  ENTITY,
IF  ANY, EMPLOYING EACH MORTGAGE LOAN ORIGINATOR OR WITH WHOM SUCH MORT-
GAGE LOAN ORIGINATOR IS AFFILIATED.
  3. REPORTS BY ORIGINATING ENTITIES. EACH ORIGINATING ENTITY SHALL ON A
QUARTERLY BASIS IN EACH CALENDAR YEAR  PROVIDE  THE  SUPERINTENDENT,  IN
WRITTEN OR ELECTRONIC FORM, WITH A LIST OF THE MORTGAGE LOAN ORIGINATORS
EMPLOYED  BY, OR AFFILIATED WITH, SUCH ORIGINATING ENTITY AND SHALL ALSO
ADVISE IN SUCH REPORT OF ANY DISMISSAL FOR  CAUSE  OF  A  MORTGAGE  LOAN
ORIGINATOR  EMPLOYED  BY,  OR  AFFILIATED  WITH, SUCH ORIGINATING ENTITY
DURING SUCH QUARTER, WHICH IS DUE OR BASED UPON AN ALLEGED VIOLATION  OF
THIS CHAPTER OR ANY LAW INVOLVING REAL PROPERTY.
  4. REPORTS BY MORTGAGE LOAN ORIGINATORS. EACH MORTGAGE LOAN ORIGINATOR
SHALL PROMPTLY NOTIFY THE SUPERINTENDENT OF THE FOLLOWING:
  (A) A CHANGE IN HIS OR HER PRIMARY RESIDENCE ADDRESS;

S. 430                             12

  (B)  ANY FELONY CONVICTION OR PENDING FELONY CHARGES; ANY CHARGE OF OR
CONVICTION WITH RESPECT TO A MISDEMEANOR INVOLVING FINANCIAL SERVICES OR
A FINANCIAL SERVICES RELATED  BUSINESS;  OR  ANY  CHARGE  OR  CONVICTION
INVOLVING FRAUD, FALSE STATEMENTS OR OMISSIONS, THEFT OR WRONGFUL TAKING
OF  PROPERTY,  BRIBERY,  PERJURY,  FORGERY  OR  EXTORTION  SUBSEQUENT TO
INITIAL AUTHORIZATION;
  (C) ANY TERMINATION OF OR RESIGNATION FROM EMPLOYMENT  OF  AFFILIATION
WITH AN ORIGINATING ENTITY;
  (D)  ANY INITIATION, SETTLEMENT OR RESOLUTION OF ANY COMPLAINT, ACTION
OR PROCEEDING BROUGHT AGAINST HIM OR HER BY A STATE OR  FEDERAL  GOVERN-
MENTAL  UNIT OR SELF-REGULATORY ORGANIZATION IN CONNECTION WITH A FINAN-
CIAL SERVICES-RELATED ACTIVITY OR BUSINESS OR INVOLVING FRAUD, MISREPRE-
SENTATION, CONSUMER DECEPTION, LARCENY OR PERJURY;
  (E) ANY INITIATION, SETTLEMENT OR RESOLUTION OF ANY OTHER CIVIL ACTION
OR PROCEEDING AGAINST HIM OR  HER  INVOLVING  FRAUD,  MISREPRESENTATION,
LARCENY OR PERJURY; AND
  (F) ANY OTHER MATTERS AS DIRECTED BY THE SUPERINTENDENT.
  S  599-N.  ENFORCEMENT AUTHORITY; GROUNDS FOR SUSPENSION OR REVOCATION
OF A MORTGAGE LOAN ORIGINATOR LICENSE; RESTITUTION.  1. LICENSEE REVOCA-
TION. IN ADDITION TO THE AUTHORITY SET FORTH  IN  SUBDIVISION  THREE  OF
THIS SECTION, THE SUPERINTENDENT MAY REVOKE A LICENSE TO ENGAGE IN BUSI-
NESS AS A MORTGAGE LOAN ORIGINATOR PURSUANT TO THIS ARTICLE IF HE OR SHE
FINDS, AFTER NOTICE AND A HEARING, THAT:
  (A)  THROUGH  A  COURSE  OF  CONDUCT,  THE  LICENSEE  HAS VIOLATED ANY
PROVISIONS OF THIS ARTICLE, OR ANY RULE OR REGULATION PROMULGATED BY THE
BANKING BOARD, OR ANY RULE OR REGULATION PRESCRIBED BY  THE  SUPERINTEN-
DENT  UNDER AND WITHIN THE AUTHORITY OF THIS ARTICLE OR ARTICLE TWELVE-D
OF THIS CHAPTER OR OF ANY OTHER APPLICABLE LAW, RULE  OR  REGULATION  OF
THIS  STATE  OR  THE  FEDERAL GOVERNMENT PERTAINING TO MORTGAGE BANKING,
BROKERING OR LOAN ORIGINATING; OR
  (B) ANY FACT OR CONDITION EXISTS WHICH, IF IT HAD EXISTED AT THE  TIME
OF  THE  ORIGINAL APPLICATION FOR SUCH LICENSE, WOULD HAVE WARRANTED THE
SUPERINTENDENT TO REFUSE TO ISSUE SUCH INITIAL LICENSE.
  2. RESTITUTION. THE SUPERINTENDENT MAY ORDER A MORTGAGE LOAN  ORIGINA-
TOR  OR ANY OTHER PERSON TO PAY RESTITUTION FOR VIOLATIONS OF THIS ARTI-
CLE OR ANY RULES OF THE BANKING BOARD OR THE SUPERINTENDENT  PROMULGATED
HEREUNDER.
  3.  SUSPENSION;  TERMINATION.  (A)  THE  SUPERINTENDENT  MAY, FOR GOOD
CAUSE, OR WHERE THERE IS A SUBSTANTIAL  RISK  OF  PUBLIC  HARM,  WITHOUT
NOTICE  OR A HEARING, ISSUE AN ORDER SUSPENDING THE LICENSE OF ANY MORT-
GAGE LOAN ORIGINATOR FOR A PERIOD NOT TO EXCEED NINETY DAYS FOR INVESTI-
GATION. "GOOD CAUSE", AS USED IN THIS SUBDIVISION, SHALL EXIST ONLY WHEN
THE MORTGAGE LOAN ORIGINATOR HAS ENGAGED  OR  ENGAGES  IN  DISHONEST  OR
INEQUITABLE  PRACTICES  OR PRACTICES WHICH DEMONSTRATE INCOMPETENT MORT-
GAGE LOAN ORIGINATING, WHICH PRACTICES MAY CAUSE SUBSTANTIAL HARM TO THE
PERSONS AFFORDED THE PROTECTION OF ARTICLE TWELVE-D OF THIS CHAPTER,  OR
THE LICENSE OF THE MORTGAGE LOAN ORIGINATOR WAS REVOKED IN ANOTHER STATE
OR JURISDICTION PARTICIPATING IN THE NMLSR.
  (B)  THE  SUPERINTENDENT  MAY,  WITHOUT  NOTICE OR A HEARING, ISSUE AN
ORDER SUSPENDING ANY LICENSE: (I) THIRTY DAYS AFTER THE DATE  THE  MORT-
GAGE  LOAN ORIGINATOR FAILS TO FILE ANY REPORT REQUIRED TO BE FILED WITH
THE SUPERINTENDENT PURSUANT TO THE AUTHORITY PROVIDED BY  THIS  ARTICLE;
OR  (II)  IMMEDIATELY  UPON  NOTICE  THAT  ANY REQUIRED SURETY BOND WITH
RESPECT TO THE LICENSEE IS NO LONGER IN EFFECT.
  (C) IF THE SUPERINTENDENT HAS ISSUED AN  ORDER  SUSPENDING  A  LICENSE
PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION, SUCH LICENSE MAY BE REIN-

S. 430                             13

STATED  IF  THE SUPERINTENDENT DETERMINES, IN HIS OR HER SOLE DISCRETION
AFTER INVESTIGATION, THAT GOOD CAUSE THEREFOR DID NOT EXIST OR NO LONGER
EXISTS. IF THE SUPERINTENDENT HAS ISSUED AN ORDER SUSPENDING  A  LICENSE
PURSUANT TO PARAGRAPH (B) OF THIS SUBDIVISION, SUCH LICENSE MAY BE REIN-
STATED, IF THE SUPERINTENDENT DETERMINES, IN HIS OR HER SOLE DISCRETION,
THAT  THE LICENSEE HAS CURED ALL DEFICIENCIES SET FORTH IN SUCH ORDER BY
THE CLOSE OF BUSINESS NINETY DAYS AFTER  THE  DATE  OF  SUCH  SUSPENSION
ORDER.  OTHERWISE,  IN CASE OF A SUSPENSION PURSUANT TO PARAGRAPH (B) OF
THIS SUBDIVISION, UNLESS THE SUPERINTENDENT HAS,  IN  HIS  OR  HER  SOLE
DISCRETION,  EXTENDED SUCH SUSPENSION, THE LICENSE OF SUCH MORTGAGE LOAN
ORIGINATOR SHALL BE DEEMED TO BE AUTOMATICALLY TERMINATED  BY  OPERATION
OF LAW AT THE CLOSE OF BUSINESS ON SUCH NINETIETH DAY.
  4.  REQUIREMENT FOR A HEARING. EXCEPT AS PROVIDED IN SUBDIVISION THREE
OF THIS SECTION, NO LICENSE SHALL BE REVOKED OR SUSPENDED  EXCEPT  AFTER
NOTICE  AND  A  HEARING  THEREON.  ANY  ORDER OF SUSPENSION ISSUED AFTER
NOTICE AND A HEARING MAY INCLUDE AS A CONDITION  OF  REINSTATEMENT  THAT
RESTITUTION  BE  MADE  TO  CONSUMERS OF FEES OR OTHER CHARGES WHICH HAVE
BEEN IMPROPERLY CHARGED OR COLLECTED AS DETERMINED  BY  THE  SUPERINTEN-
DENT.
  5. SURRENDER OF LICENSE. WITH THE PRIOR CONSENT OF THE SUPERINTENDENT,
ANY  MORTGAGE LOAN ORIGINATOR MAY SURRENDER ANY LICENSE BY DELIVERING TO
THE SUPERINTENDENT WRITTEN NOTICE THAT HE OR SHE THEREBY SURRENDERS SUCH
LICENSE, BUT SUCH SURRENDER SHALL NOT AFFECT SUCH MORTGAGE LOAN ORIGINA-
TOR'S CIVIL OR CRIMINAL LIABILITY  FOR  ACTS  COMMITTED  PRIOR  TO  SUCH
SURRENDER OR ITS OBLIGATIONS TO THE SUPERINTENDENT FOR ASSESSMENTS, FEES
OR  ADMINISTRATIVE  ACTIONS  WITH  RESPECT  TO  THE  PERIODS BEFORE SUCH
SURRENDER.
  6. CONTINUATION OF LIABILITY. A SUSPENSION, REVOCATION OR  TERMINATION
OF A LICENSE IN ACCORDANCE WITH THIS ARTICLE SHALL NOT AFFECT SUCH MORT-
GAGE  LOAN  ORIGINATOR'S  CIVIL OR CRIMINAL LIABILITY FOR ACTS COMMITTED
PRIOR TO SUCH SUSPENSION, REVOCATION OR TERMINATION OR  ITS  OBLIGATIONS
TO  THE  SUPERINTENDENT  FOR ASSESSMENTS, FEES OR ADMINISTRATIVE ACTIONS
WITH RESPECT TO THE PERIODS BEFORE SUCH SUSPENSION, REVOCATION OR TERMI-
NATION.
  7. CONTINUATION OF CONTRACTS. NO REVOCATION, SUSPENSION, SURRENDER  OR
TERMINATION OF ANY LICENSE UNDER THIS ARTICLE SHALL IMPAIR OR AFFECT THE
OBLIGATION OF ANY PREEXISTING LAWFUL CONTRACT BETWEEN ANY LICENSEE UNDER
ARTICLE TWELVE-D OF THIS CHAPTER AND ANY PERSON.
  8.  CONTINUATION  OF  LICENSE.  EVERY  LICENSE ISSUED PURSUANT TO THIS
ARTICLE SHALL REMAIN IN FORCE AND EFFECT UNTIL THE SAME SHALL HAVE  BEEN
SURRENDERED,  REVOKED,  TERMINATED  OR  SUSPENDED IN ACCORDANCE WITH ANY
PROVISION OF THIS ARTICLE, BUT THE SUPERINTENDENT SHALL  HAVE  AUTHORITY
IN  HIS  OR  HER  SOLE DISCRETION TO REINSTATE A SUSPENDED LICENSE OR TO
ISSUE A NEW LICENSE TO A MORTGAGE LOAN ORIGINATOR  WHOSE  LICENSE  SHALL
HAVE  BEEN  REVOKED  OR  TERMINATED  IF NO FACT OR CONDITION THEN EXISTS
WHICH WOULD HAVE WARRANTED THE SUPERINTENDENT TO REFUSE  TO  ISSUE  SUCH
INITIAL AUTHORIZATION UNDER THIS ARTICLE.
  9.  NOTICE  OF  REVOCATION  OR SUSPENSION; REVIEW. WHENEVER THE SUPER-
INTENDENT SHALL REVOKE OR SUSPEND A  LICENSE  ISSUED  PURSUANT  TO  THIS
ARTICLE,  HE OR SHE SHALL FORTHWITH EXECUTE MULTIPLE COPIES OF A WRITTEN
ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE  ONE  COPY  OF  SUCH
ORDER  IN  THE OFFICE OF THE DEPARTMENT AND SHALL FORTHWITH SERVE A COPY
UPON THE MORTGAGE LOAN ORIGINATOR AND ANY AFFECTED  ORIGINATING  ENTITY.
ANY  SUCH ORDER MAY BE REVIEWED IN THE MANNER PROVIDED BY ARTICLE SEVEN-
TY-EIGHT OF THE CIVIL PRACTICE  LAW  AND  RULES.  SUCH  APPLICATION  FOR

S. 430                             14

REVIEW  AS  AUTHORIZED  BY  THIS SECTION MUST BE MADE WITHIN THIRTY DAYS
FROM THE DATE OF SUCH ORDER OF SUSPENSION OR REVOCATION.
  10. NOTICE OF TERMINATION. WHENEVER A LICENSE SHALL HAVE TERMINATED IN
ACCORDANCE  WITH THIS ARTICLE, THE SUPERINTENDENT SHALL NOTIFY THE MORT-
GAGE LOAN ORIGINATOR  AND  ANY  AFFECTED  ORIGINATING  ENTITY  THAT  THE
LICENSE  HAS  TERMINATED  AND  THAT THE MORTGAGE LOAN ORIGINATOR MAY NOT
ENGAGE IN THE BUSINESS OF SOLICITING, PROCESSING, PLACING OR NEGOTIATING
A MORTGAGE LOAN OR OFFERING TO SOLICIT, PROCESS, PLACE  OR  NEGOTIATE  A
MORTGAGE LOAN IN THIS STATE.
  11.  HEARING REQUIREMENTS. ANY HEARING HELD PURSUANT TO THE PROVISIONS
OF THIS SECTION SHALL BE SUBJECT TO THE PROVISIONS OF THE STATE ADMINIS-
TRATIVE PROCEDURE ACT.
  S 599-O. RULES, REGULATIONS AND EXAMINATIONS.   1. THE  SUPERINTENDENT
IS  HEREBY  AUTHORIZED  AND EMPOWERED TO MAKE SUCH RULES AND REGULATIONS
AND INTERIM PROCEDURES FOR LICENSING AND ACCEPTANCE OF  APPLICATIONS  AS
MAY IN HIS OR HER JUDGMENT BE NECESSARY OR APPROPRIATE FOR THE EFFECTIVE
ADMINISTRATION OR ENFORCEMENT OF THIS ARTICLE. FOR INDIVIDUALS PREVIOUS-
LY  AUTHORIZED  TO  ACT AS MORTGAGE LOAN ORIGINATORS UNDER THIS CHAPTER,
THE SUPERINTENDENT MAY ESTABLISH EXPEDITED REVIEW AND  LICENSING  PROCE-
DURES.
  2. FOR THE PURPOSE OF DISCOVERING VIOLATIONS OF THIS ARTICLE OR SECUR-
ING  INFORMATION  LAWFULLY  REQUIRED BY HIM OR HER HEREUNDER, THE SUPER-
INTENDENT MAY AT ANY TIME, AND AS OFTEN AS  HE  OR  SHE  MAY  DETERMINE,
INVESTIGATE  THE  BUSINESS AND EXAMINE THE BOOKS, ACCOUNTS, RECORDS, AND
FILES OF EVERY LICENSEE UNDER THIS ARTICLE AND  ANY  ENTITY  WITH  WHICH
SUCH  INDIVIDUAL IS ASSOCIATED AS AN EMPLOYEE OR INDEPENDENT CONTRACTOR.
FOR THAT PURPOSE THE  SUPERINTENDENT  SHALL  HAVE  FREE  ACCESS  TO  THE
OFFICES AND PLACES OF BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES,
SAFES  AND  VAULTS  OF  ALL SUCH ENTITIES. THE SUPERINTENDENT SHALL HAVE
AUTHORITY TO REQUIRE THE ATTENDANCE OF AND TO  EXAMINE  UNDER  OATH  ALL
PERSONS  WHOSE TESTIMONY HE OR SHE MAY DEEM NECESSARY OR DESIRABLE RELA-
TIVE TO SUCH BUSINESS. THE EXPENSES INCURRED IN MAKING  ANY  EXAMINATION
PURSUANT  TO  THIS  SECTION  SHALL  BE  ASSESSED AGAINST AND PAID BY THE
LICENSEE SO EXAMINED, EXCEPT THAT TRAVELING AND SUBSISTENCE EXPENSES  SO
INCURRED  SHALL  BE  CHARGED  AGAINST  AND  PAID  BY  LICENSEES  IN SUCH
PROPORTIONS AS THE SUPERINTENDENT SHALL DEEM JUST  AND  REASONABLE,  AND
SUCH PROPORTIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE OTHER
EXPENSES  INCURRED  UPON  EACH  EXAMINATION.  UPON WRITTEN NOTICE BY THE
SUPERINTENDENT OF THE TOTAL AMOUNT  OF  SUCH  ASSESSMENT,  THE  LICENSEE
SHALL BECOME LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTEN-
DENT.
  S 599-P. UNIQUE IDENTIFIER.  THE UNIQUE IDENTIFIER OF ANY PERSON ORIG-
INATING  A RESIDENTIAL MORTGAGE LOAN SHALL BE CLEARLY SHOWN ON ALL RESI-
DENTIAL MORTGAGE LOAN APPLICATION  FORMS,  SOLICITATIONS  OR  ADVERTISE-
MENTS,  INCLUDING BUSINESS CARDS OR WEBSITES, AND ANY OTHER DOCUMENTS AS
ESTABLISHED BY RULE, REGULATION OR ORDER OF THE SUPERINTENDENT.
  S 599-Q. CONFIDENTIALITY.  IN ORDER TO PROMOTE  MORE  EFFECTIVE  REGU-
LATION  AND  REDUCE  REGULATORY  BURDEN  THROUGH SUPERVISORY INFORMATION
SHARING, INFORMATION PROVIDED TO THE SUPERINTENDENT BY AN MLO  SHALL  BE
SUBJECT TO THE FOLLOWING:
  1.  EXCEPT  AS OTHERWISE PROVIDED IN PUBLIC LAW 110-289, SECTION 1512,
THE REQUIREMENTS UNDER ANY FEDERAL LAW, THE FREEDOM OF  INFORMATION  LAW
("FOIL")  OR  OTHER LAW OF THIS STATE REGARDING THE PRIVACY OR CONFIDEN-
TIALITY OF ANY INFORMATION OR MATERIAL PROVIDED TO THE  NMLSR,  AND  ANY
PRIVILEGE ARISING UNDER FEDERAL OR STATE LAW (INCLUDING THE RULES OF ANY
FEDERAL  OR  STATE  COURT) WITH RESPECT TO SUCH INFORMATION OR MATERIAL,

S. 430                             15

SHALL CONTINUE TO APPLY TO SUCH INFORMATION OR MATERIAL AFTER THE INFOR-
MATION OR MATERIAL HAS BEEN DISCLOSED TO THE NMLSR. SUCH INFORMATION AND
MATERIAL MAY BE SHARED WITH ALL STATE AND FEDERAL  REGULATORY  OFFICIALS
WITH MORTGAGE INDUSTRY OVERSIGHT AUTHORITY WITHOUT THE LOSS OF PRIVILEGE
OF THE LOSS OF CONFIDENTIALITY PROTECTIONS PROVIDED BY FEDERAL LAW, FOIL
OR THIS CHAPTER.
  2.  FOR THESE PURPOSES, THE SUPERINTENDENT IS AUTHORIZED TO ENTER INTO
AGREEMENTS OR SHARING ARRANGEMENTS WITH OTHER GOVERNMENTAL AGENCIES, THE
CONFERENCE OF STATE BANK SUPERVISORS, THE AMERICAN ASSOCIATION OF  RESI-
DENTIAL  MORTGAGE  REGULATORS OR OTHER ASSOCIATIONS REPRESENTING GOVERN-
MENTAL AGENCIES AS ESTABLISHED BY  RULE,  REGULATION  OR  ORDER  OF  THE
SUPERINTENDENT.
  S  599-R.  CONSTRUCTION.  NOTHING  CONTAINED  IN THIS ARTICLE SHALL BE
DEEMED TO IMPAIR, ALTER OR RENDER INEFFECTIVE ANY PROVISION  OF  ARTICLE
TWELVE-D  OF  THIS  CHAPTER,  INCLUDING BUT NOT LIMITED TO ANY PROVISION
THEREOF RELATING TO ISSUING, SUSPENDING OR REVOKING ANY MORTGAGE  BANKER
LICENSE OR MORTGAGE BROKER REGISTRATION.
  S  2.  Subdivisions  1,  2  and 5 of section 39 of the banking law, as
amended by chapter 472 of the laws of  2008,  are  amended  to  read  as
follows:
  1.  To  appear  and  explain  an apparent violation. Whenever it shall
appear to the superintendent that any banking organization, bank holding
company, registered mortgage broker, licensed  mortgage  banker,  regis-
tered mortgage loan servicer, [authorized] LICENSED mortgage loan origi-
nator,  licensed  lender,  licensed  casher  of  checks,  licensed sales
finance company, licensed insurance  premium  finance  agency,  licensed
transmitter  of  money, licensed budget planner, out-of-state state bank
that maintains a branch or branches or representative or  other  offices
in  this  state,  or  foreign banking corporation licensed by the super-
intendent to do business or maintain a  representative  office  in  this
state  has  violated any law or regulation, he or she may, in his or her
discretion, issue  an  order  describing  such  apparent  violation  and
requiring  such  banking  organization, bank holding company, registered
mortgage broker, licensed mortgage banker, [authorized]  LICENSED  mort-
gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
licensed sales finance company, licensed insurance premium finance agen-
cy, licensed transmitter of money, licensed budget planner, out-of-state
state bank that maintains a branch  or  branches  or  representative  or
other  offices  in  this state, or foreign banking corporation to appear
before him or her, at a time and place fixed in said order,  to  present
an explanation of such apparent violation.
  2. To discontinue unauthorized or unsafe and unsound practices.  When-
ever  it  shall  appear to the superintendent that any banking organiza-
tion, bank holding company, registered mortgage broker,  licensed  mort-
gage  banker,  registered  mortgage loan servicer, [authorized] LICENSED
mortgage loan originator, licensed lender, licensed  casher  of  checks,
licensed sales finance company, licensed insurance premium finance agen-
cy, licensed transmitter of money, licensed budget planner, out-of-state
state  bank  that  maintains  a  branch or branches or representative or
other offices in this state, or foreign banking corporation licensed  by
the  superintendent  to do business in this state is conducting business
in an unauthorized or unsafe and unsound manner, he or she may,  in  his
or  her  discretion, issue an order directing the discontinuance of such
unauthorized or unsafe and unsound practices,  and  fixing  a  time  and
place  at  which such banking organization, bank holding company, regis-
tered mortgage broker, licensed  mortgage  banker,  registered  mortgage

S. 430                             16

loan  servicer, [authorized] LICENSED mortgage loan originator, licensed
lender, licensed casher  of  checks,  licensed  sales  finance  company,
licensed  insurance  premium  finance  agency,  licensed  transmitter of
money, licensed budget planner, out-of-state state bank that maintains a
branch  or branches or representative or other offices in this state, or
foreign banking corporation may voluntarily appear before him or her  to
present  any  explanation  in  defense of the practices directed in said
order to be discontinued.
  5. To keep books and accounts as prescribed. Whenever it shall  appear
to the superintendent that any banking organization, bank holding compa-
ny,  registered  mortgage  broker,  licensed mortgage banker, registered
mortgage loan servicer, [authorized] LICENSED mortgage loan  originator,
licensed  lender,  licensed  casher  of  checks,  licensed sales finance
company, licensed insurance premium finance agency, licensed transmitter
of money, licensed budget planner, agency or branch of a foreign banking
corporation licensed by the superintendent to do business in this state,
does not keep its books and accounts in such manner as to enable him  or
her  to  readily  ascertain its true condition, he or she may, in his or
her discretion, issue an order requiring such banking organization, bank
holding company, registered mortgage broker, licensed  mortgage  banker,
registered  mortgage  loan servicer, [authorized] LICENSED mortgage loan
originator, licensed lender, licensed casher of checks,  licensed  sales
finance  company,  licensed  insurance  premium finance agency, licensed
transmitter of money, licensed budget planner, or foreign banking corpo-
ration, or the officers or agents thereof, or any of them, to  open  and
keep  such books or accounts as he or she may, in his or her discretion,
determine and prescribe for the purpose of keeping accurate and  conven-
ient records of its transactions and accounts.
  S  3. Paragraph (a) of subdivision 1 of section 44 of the banking law,
as amended by chapter 472 of the laws of 2008, is  amended  to  read  as
follows:
  (a) Without limiting any power granted to the superintendent under any
other provision of this chapter, the superintendent may, in a proceeding
after  notice  and a hearing, require any safe deposit company, licensed
lender, licensed casher  of  checks,  licensed  sales  finance  company,
licensed  insurance  premium  finance  agency,  licensed  transmitter of
money, licensed mortgage banker, registered  mortgage  broker,  [author-
ized] LICENSED mortgage loan originator, registered mortgage loan servi-
cer  or  licensed  budget  planner  to pay to the people of this state a
penalty for any violation of this chapter,  any  regulation  promulgated
thereunder,  any  final  or  temporary  order issued pursuant to section
thirty-nine of this article, any condition imposed  in  writing  by  the
superintendent  or  banking  board  in  connection with the grant of any
application or request, or any written agreement entered into  with  the
superintendent.
  S  4.  The  superintendent  of  banks may provide for the licensing of
mortgage loan originators and charge fees for such purposes pursuant  to
article  12-E  of  the banking law, as added by section one of this act,
and take any other measures and use any reasonable methods necessary  to
implement  such  article  in  order  to  ensure the effective and timely
administration thereof, including but not limited to providing  for  the
licensing  of  mortgage loan originators on or before the effective date
of this act.
  S 5. This act shall take effect immediately; provided,  however,  that
sections  two  and  three of this act shall take effect on the same date
and in the same manner as sections 15 and 16 of chapter 472 of the  laws

S. 430                             17

of  2008  take  effect,  respectively,  and  provided, further, that the
superintendent of banks may delay the implementation of any provision of
this act if consistent with title V of The Housing and Economic Recovery
Act of 2008, Pub. L. No. 110-287.