SB 613 — WV Residential Mortgage Lender, Broker and Servicer Act

WEST VIRGINIA LEGISLATURE REGULAR SESSION IntroducedEnrolled Senate Bill 613 BBy YSENATORSSenators AAzinger, ZINGE,Oliverio, OLIVERI,Plymale, LYMALE,ANDand NELSONNelson [Introduced[Passed JanuaryMarch 31,5, 2024;

referredin toeffect the90 Committeedays onfrom Bankingpassage] andEnr Insurance] Intr SB 613 AAN BILLACT to amend and reenact §31-17-1, §31-17-3, §31-17-4, §31-17-6, §31-17-7, and §31-17-11 of the Code of West Virginia, 1931, as amended;

(b) "Affiliated""Amount financed" means personsthe undertotal of the samefollowing ownershipitems orto managementthe control.extent that payment is deferred:

AsEnr toSB corporations,613 limited(1) liabilityThe companiescash orprice partnerships,of wherethe commongoods, ownersservices manage or Intrinterest SBin 613land, controlless a majority of the stock,amount membership interests or general partnership interests of oneany ordown morepayment, suchwhether corporations,made limitedin liabilitycash companies or partnerships,in thoseproperty personstraded arein; considered affiliated.

In addition, persons under the ownership or management control of the members of an immediate family shall be considered affiliated.

For purposes of this section, "immediate family" means mother, stepmother, father, stepfather, sister, stepsister, brother, stepbrother, spouse, child and grandchildren (c)(b) "Amount financed" means the total of the following items to the extent that payment is deferred:

(1) The cash price of the goods, services or interest in land, less the amount of any down payment, whether made in cash or in property traded in;

(A) Any applicable sales, use, privilege, excise,excise or documentary stamp taxes;

(d)(c)(c) "Applicant" means a person who has applied for a lender or broker license;

(e)(d)(d) "Broker" means any person acting in the regular course of business who, for a fee or commission or other consideration, negotiates or arranges, or who offers to negotiate or arrange, or originates or assigns a primary or subordinate mortgage loan between a lender and a borrower.

or if he or she seeks to charge a borrower, or receive from a borrower, money or other valuable consideration in any primary or Intr SB 613 subordinate mortgage transaction before completing performance of all broker services that he or she has agreed to perform for the borrower;

(f)(e)(e) "Brokerage fee" means the fee or commission or other consideration charged by a broker or loan originator for the services described in subdivision (e) (d) of this section;

(g)(f)(f) "Commissioner" means the Commissioner of Financial Institutions of this state;

2 Enr SB 613 (B) The power to elect or appoint a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee;

(3) For the purposes of determining the percentage of a person controlled by any other person, the person's interest shall be aggregated with the interest of any other immediate family member, including the person's spouse, parents, children, siblings, mothers-in-law, fathers-in-fathers-in-law, law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law, and any other person who shares such person's home.

(h) "Finance charge" means the sum of all interest and similar charges payable directly or indirectly by the debtor imposed or collected by the lender incident to the extension of credit as Intr SB 613 coextensive with the definition of "loan finance charge" set forth in section one hundred two, article one, chapter forty-six-a of this code;

(i) (j) "Lender" means any person who makes, or offers to make, or accepts or offers to accept, or purchases, or services any primary or subordinate mortgage loan in the regular course of business.

A person is considered to be acting in the regular course of business if he or she 3 Enr SB 613 makes or accepts, or offers to make or accept, any primary or subordinate mortgage loans in any one calendar year.

(j)(k)(k) "Licensee" means any person duly licensed by the commissioner under the provisions of this article or §31-17A-1 et seq.

(k)(l)(l) "Nationwide Mortgage Multistate Licensing System and Registry" means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of licensed mortgage brokers and lenders licensed under this article and mortgage loan originators licensed underunder§31-17A-1 §31-17A-1 et seq.

Intr(m) SB 613 (l)(m) "Person" means an individual, partnership, association, trust, corporation, or any other legal entity, or any combination thereof;

(m)(n)(n) "Primary mortgage loan" means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest, on a dwelling as defined in Section 103(w) of the Truth in Lending Act or residential real estate upon which is constructed, or intended to be constructed, a dwelling;

(n)(o)(o) "Servicing" or "servicing a residential mortgage loan" means,means through any medium or mode of communication, the collection or remittance for, or the right or obligation to collect or remit for another lender, note owner or noteholder, payments of principal, interest, including sales 4 Enr SB 613 finance charges in a consumer credit sale, and escrow items as insurance and taxes for property subject to a residential mortgage loan;

and (o)(p)(p) "Subordinate mortgage loan" means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in Section 103(w) of the Truth in Lending Act or residential real estate upon which is constructed, or intended to be constructed, a dwelling and is subject to the lien of one or more prior recorded mortgages or deeds of trust.

Supervision by Commissioner of Banking Financial Institutions;

participation in the Nationwide Mortgage Multistate Licensing System and Registry.

The commissioner may Intr SB 613 promulgate emergency rules pursuant to the provisions of §29A-3-15 of this code to implement the amendments made during the regular session of the Legislature, 2024, as they relate to the licensure and regulation of mortgage brokers, lenders, and loan originators.

(b) The commissioner may participate in the Nationwide Mortgage Multistate Licensing System and Registry and permit such system to process applications for mortgage lender and mortgage broker licenses in this state and receive and maintain records related to such licenses that are allowed or required to be maintained by the commissioner.

The commissioner is authorized to establish relationships or contracts with the Nationwide Mortgage Multistate Licensing System and Registry, or other 5 Enr SB 613 entities designated by the Nationwide Mortgage Multistate Licensing System and Registry, to collect and maintain records and process transaction fees or other fees related to licensees subject to this article.

The Nationwide Mortgage Multistate Licensing System and Registry shall transfer, electronically, all fees payable to the Division of Banking Financial Institutions directly to the credit of the commissioner's special revenue account with the state Treasurer.

(c)§31-17-4. Mortgage lenders and brokers licensed pursuant to this article shall submit renewals for calendar year 2010 on or before October 1, 2009, in accordance with the amendments to this article and on a form prescribed by the commissioner.

Beginning January 2, 2010, licensees shall transition to the Nationwide Mortgage Licensing System and Registry according to the terms established by that system §31-17-4.

(a) In connection with an application for licensing as a mortgage lender or mortgage broker, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Multistate Licensing System and Registry, information concerning the applicant's identity, including:

Intr SB 613 (1) Fingerprints for submission to the Federal Bureau of Investigation and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check;

and (2) Personal history and experience in a form prescribed by the Nationwide Mortgage Multistate Licensing System and Registry and the commissioner, including the submission of authorization for the Nationwide Mortgage Multistate Licensing System and Registry and the commissioner to obtain:

(b) In order to reduce the points of contact which the Federal Bureau of Investigation may have to maintain for purposes of this article, the commissioner may use the Nationwide Mortgage Multistate Licensing System and Registry or its designated vendor as a channeling agent for requesting information from, and distributing information to, the Department of Justice or any governmental agency.

6 Enr SB 613 (c) In order to reduce the points of contact which the commissioner may have to maintain, for purposes of this article, the commissioner may use the Nationwide Mortgage Multistate Licensing System and Registry as a channeling agent for requesting and distributing information to and from any source so directed by the commissioner.

and shall contain the full name and address of the applicant and, if the applicant is a partnership, limited liability company or association, of every member thereof, and, if a corporation, of each officer, director and owner of ten percent or more of the capital stock thereof and further information as the commissioner may reasonably require Background and credit checks shall be conducted in accordance with this section for any officer, Intr SB 613 director or owner, directly or indirectly, of ten percent or more of the capital stock of a corporation or any member of a limited liability or partnership with, directly or indirectly, a ten 25 percent or greater ownership interest article.

(3) File with the commissioner a bond an electronic surety bond through the Nationwide Multistate Licensing System and Registry in favor of the state for the benefit of consumers, or for a claim by the commissioner for an unpaid civil administrative penalty, or an unpaid examination invoice in the amount of $100,000 for licensees with West Virginia annual loan originations of $0 to $3 million, $150,000 for West Virginia annual loan originations greater than $3 million and up to $10 million, and $250,000 for West Virginia annual loan originations over $10 million, in a form and with conditions as the commissioner may prescribe, and executed by a surety company authorized to do business in this state:

(4) Pay to the commissioner a license fee of $1,250 plus the actual cost of fingerprint 7 Enr SB 613 processing and the processing fees assessed by the Nationwide Mortgage Multistate Licensing System and Registry.