72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1919
A-Engrossed
House Bill 2682
Ordered by the House March 21
Including House Amendments dated March 21
Sponsored by COMMITTEE ON BUSINESS, LABOR AND CONSUMER AFFAIRS
(at the request of Oregon Association Mortgage Brokers)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Requires criminal background check of loan originators.
Requires insurance agents and insurance consultants who are
employed full time as loan originators to comply with loan
originator training, examination and continuing education
requirements. { + Requires Director of Department of Consumer
and Business Services to adopt rules specifying categories of
criminal convictions that will prevent person from acting as loan
originator. + }
A BILL FOR AN ACT
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. + }
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