Chapter 526 Oregon Laws 2003

AN ACT

HB 2682

Relating to loan originators; creating new provisions; and amending ORS 59.969, 59.971 and 59.973.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 and 3 of this 2003 Act are added to and made a part of ORS 59.840 to 59.980.

SECTION 2. (1) As used in this section, “loan originator” means an individual who:

(a) Is an insurance agent or insurance consultant licensed under ORS 744.002;

(b) Has not transacted insurance as defined in ORS 731.146 for a period of 60 consecutive days; and

(c) Would qualify as a full-time loan originator if not exempted under ORS 59.840 (4).

(2) An individual who is an insurance agent or insurance consultant licensed under ORS 744.002 and who is employed full time as a loan originator shall:

(a) Complete an entry-level training course approved or provided by an organization certified as described in ORS 59.977;

(b) Pass an examination, approved or provided by an organization described in ORS 59.977, on laws and rules relating to mortgage lending in this state;

(c) If the individual has been employed as a loan originator for two or more years in this state, complete the continuing education requirements under ORS 59.975; and

(d) Undergo a criminal records check as required in section 3 of this 2003 Act.

SECTION 3. (1) A mortgage banker or mortgage broker shall conduct a criminal records check of each individual who the mortgage banker or mortgage broker employs or intends to employ as a loan originator.

(2) A mortgage banker or mortgage broker shall report to the Director of the Department of Consumer and Business Services the results of each criminal records check conducted under subsection (1) of this section.

(3) The director shall adopt rules:

(a) Necessary for the implementation and administration of criminal records checks required under this section and section 2 of this 2003 Act; and

(b) Specifying categories of criminal convictions that will prevent a person from acting as a loan originator under ORS 59.971.

SECTION 4. ORS 59.969 is amended to read:

59.969. (1) A mortgage banker or mortgage broker must provide to the Director of the Department of Consumer and Business Services, and keep current, a list of loan originators employed by the banker or broker. The banker or broker shall notify the director within 30 days of the employment or termination of employment of a loan originator.

(2) An applicant for issuance of a mortgage banker or mortgage broker license under ORS 59.850 shall include with the application evidence acceptable to the director that each [person] individual the applicant has hired or intends to hire as a loan originator has:

(a)(A) Successfully completed an [entry level] entry-level training course approved or provided by an organization certified by the director as described in ORS 59.977; and

(B) Passed an examination, approved or provided by an organization described in ORS 59.977, on laws and rules relating to mortgage lending in this state; or

(b) If the [person] individual has been employed as a loan originator for two or more years in this state, completed continuing education as required by the director pursuant to ORS 59.975.

(3) A mortgage banker or mortgage broker that applies for renewal of a license pursuant to ORS 59.855 shall include with the application evidence acceptable to the director that each [person] individual employed by the banker or broker as a loan originator has:

(a)(A) Successfully completed an [entry level] entry-level training course approved or provided by an organization certified by the director as described in ORS 59.977; and

(B) Passed an examination, approved or provided by an organization described in ORS 59.977, on laws and rules relating to mortgage lending in this state; or

(b) If the [person] individual has been employed as a loan originator for two or more years in this state, completed continuing education as required by the director pursuant to ORS 59.975.

(4) An applicant for issuance of a mortgage banker or mortgage broker license under ORS 59.850 shall include with the application evidence acceptable to the director that each individual the applicant has hired or intends to hire who is an insurance agent or insurance consultant licensed under ORS 744.002 and who is a full-time loan originator as defined in section 2 of this 2003 Act has:

(a)(A) Successfully completed an entry-level training course approved or provided by an organization certified by the director as described in ORS 59.977; and

(B) Passed an examination, approved or provided by an organization described in ORS 59.977, on laws and rules relating to mortgage lending in this state; or

(b) If the individual has been employed as a full-time loan originator for two or more years in this state, completed continuing education as required by the director pursuant to ORS 59.975.

(5) A mortgage banker or mortgage broker that applies for renewal of a license pursuant to ORS 59.855 shall include with the application evidence acceptable to the director that each individual employed by the mortgage banker or mortgage broker as a loan originator who is an insurance agent or insurance consultant licensed under ORS 744.002 and who is a full-time loan originator as defined in section 2 of this 2003 Act has:

(a)(A) Successfully completed an entry-level training course approved or provided by an organization certified by the director as described in ORS 59.977; and

(B) Passed an examination, approved or provided by an organization described in ORS 59.977, on laws and rules relating to mortgage lending in this state; or

(b) If the individual has been employed as a full-time loan originator for two or more years in this state, completed continuing education as required by the director pursuant to ORS 59.975.

[(4)] (6) An applicant under subsection (2), [or (3)] (3), (4) or (5) of this section shall, at the time of application, certify that the applicant has conducted criminal records checks required under sections 2 and 3 of this 2003 Act and:

(a) Certify that, to the best of the applicant’s belief, no [person] individual the applicant employs or intends to employ as a loan originator has engaged in conduct that would constitute a violation of ORS 59.967 (2) or 59.971; or

(b) Note any exceptions to the certification made in paragraph (a) of this subsection. An applicant is not subject to an action at law for making a notation under this paragraph in good faith.

[(5)] (7) Except as provided in subsections (4) and (5) of this section, a mortgage banker or mortgage broker may voluntarily report to the director regarding employees who would qualify as loan originators if not exempted under ORS 59.840 (4). Voluntary reporting by a banker or broker under this subsection does not make the reported employees subject to training, examination or continuing education requirements or other laws governing loan originators.

[(6)] (8) The director shall keep records that include notifications filed under subsection (1) of this section and exceptions to certifications under subsection [(4)] (6) of this section. The director shall retain the records for a period of not less than three years. The director shall keep for 10 years a record of any complaint against a loan originator that has been determined to be justified pursuant to ORS 59.973.

[(7)] (9) Notwithstanding subsections (1) to [(3)] (5) of this section and ORS 59.865 (17), 59.971 [(4)] (1)(d) and 59.975 and section 2 of this 2003 Act, the director, by rule, may waive any training, examination or continuing education requirement for a loan originator for a period not to exceed six months after the [person] individual begins or resumes employment as a loan originator.

SECTION 5. ORS 59.973 is amended to read:

59.973. (1) If the Director of the Department of Consumer and Business Services receives a complaint against a loan originator for a violation of ORS 59.967 (2) or 59.971, the director may notify the loan originator and the mortgage banker or mortgage broker employing the loan originator.

(2) The director may investigate a complaint against a loan originator. Upon the conclusion of the investigation, the director shall promptly notify the loan originator and the mortgage banker or mortgage broker employing the loan originator of the director’s proposed determination regarding the complaint.

(3) Any hearing on a complaint must be conducted as provided by rules of the director and pursuant to ORS 183.310 to 183.550.

(4) If the director determines, after opportunity for hearing, that a complaint is justified, the director shall note the complaint in the records kept pursuant to ORS 59.969 [(6)] (8). For a violation of ORS 59.967 (2) or 59.971, the director may impose requirements for supervision and remedial education of the loan originator, assess civil penalties against the loan originator as provided in ORS 59.996 or refer the matter for criminal prosecution pursuant to ORS 59.992.

SECTION 6. ORS 59.971 is amended to read:

59.971. (1) A person employed by a mortgage banker or mortgage broker as a loan originator may not:

[(1)] (a) Engage in dishonest, fraudulent or illegal practices or conduct in any business or profession or engage in unfair or unethical practices or conduct in connection with the mortgage business.

[(2)] (b) Willfully or repeatedly violate or fail to comply with a provision of ORS 59.840 to 59.980 or a rule or order of the Director of the Department of Consumer and Business Services.

[(3)] (c) Fail to account to persons interested for all money or property received in connection with a mortgage loan.

[(4)] (d) Fail to meet the training, education or continuing education requirements for loan originators.

(2) A person may not be employed by a mortgage banker or mortgage broker as a loan originator as defined in ORS 59.840 or section 2 of this 2003 Act if the person has been convicted of any crime or category of crime specified by the director by rule.

SECTION 7. (1) The training and examination requirements described in ORS 59.969 and section 2 of this 2003 Act do not apply to an individual who, on the effective date of this 2003 Act:

(a) Is an insurance agent or insurance consultant licensed under ORS 744.002;

(b) Would qualify as a loan originator if not exempted under ORS 59.840 (4); and

(c) Has worked full time performing the functions of a loan originator since January 1, 2002.

(2) The continuing education requirements described in ORS 59.969 and section 2 of this 2003 Act apply to an individual who is an insurance agent or insurance consultant licensed under ORS 744.002 and who is a loan originator as defined in section 2 of this 2003 Act. The two-year period allowed for the individual to complete the continuing education requirements begins on the filing date of the first application under ORS 59.969 that lists the individual.

SECTION 8. Section 2 (1)(b) of this 2003 Act applies to any 60-consecutive-day period beginning on or after the effective date of this 2003 Act.

Approved by the Governor July 1, 2003

Filed in the office of Secretary of State July 1, 2003

Effective date January 1, 2004

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