74th OREGON LEGISLATIVE ASSEMBLY--2008 Special Session
Enrolled
Senate Bill 1064
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Commerce and Labor)
CHAPTER ................
AN ACT
Relating to regulation of loan originators; creating new
provisions; amending ORS 59.860, 59.969, 59.971, 59.973 and
59.996; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 59.860 is amended to read:
59.860. (1) Every mortgage banker and mortgage broker shall
make and keep such accounts, correspondence, memoranda, papers,
books and other records as the Director of the Department of
Consumer and Business Services by rule or order prescribes. All
such records shall be preserved for five years unless the
director by rule prescribes otherwise. The director may examine
all such records within or without this state at any reasonable
time or times and may require without subpoena the production of
such records at the office of the director as often as is
reasonably necessary.
(2) Every mortgage banker and mortgage broker shall file
financial reports or other information as the director by rule or
order may require and shall promptly correct any document filed
with the director that is or becomes incomplete or inaccurate in
any material respect.
{ + (3) On or before May 1 of each year or on a date the
director establishes by rule, every mortgage banker and mortgage
broker shall file a report with the director in a form prescribed
by the director. The report shall contain information the
director requires concerning the mortgage banker's or mortgage
broker's business and operations related to residential mortgage
lending during the preceding calendar year. The information shall
include the number and nature of loans originated by loan
originators that the mortgage banker or mortgage broker employed.
(4) The report and any records submitted to the director under
this section are exempt from disclosure or production and are
confidential as provided under ORS 705.137.
(5) Notwithstanding the exemption and confidentiality
provisions of subsection (4) of this section, the director may
abstract information contained in reports submitted under
subsection (3) of this section and may make the abstracted
information available for public inspection provided that the
Enrolled Senate Bill 1064 (SB 1064-A) Page 1
abstracted information does not identify a particular mortgage
banker or mortgage broker as a source of the information. + }
SECTION 2. 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 person that
applies for a license to conduct business as + } a mortgage
banker or mortgage broker { - license - } under ORS
59.850 { + or that applies to renew a license under ORS
59.855 + } shall include with the application evidence acceptable
to the director that each individual the
{ - applicant - } { + person + } has hired or intends to hire
as a loan originator 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 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
individual employed by the banker or broker as a loan originator
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 loan
originator for two or more years in this state, completed
continuing education as required by the director pursuant to ORS
59.975. - }
{ - (4) - } { + (3) + } { - An applicant for issuance
of - } { + A person that applies for a license to conduct
business as + } a mortgage banker or mortgage broker
{ - license - } under ORS 59.850 { + or that applies to renew
a license under ORS 59.855 + } shall include with the application
evidence acceptable to the director that each individual the
{ - applicant - } { + person + } has hired or intends to hire
who is an insurance producer or insurance consultant licensed
under ORS 744.002 and who is a full-time loan originator as
defined in ORS 59.970 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
Enrolled Senate Bill 1064 (SB 1064-A) Page 2
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 producer or insurance
consultant licensed under ORS 744.002 and who is a full-time loan
originator as defined in ORS 59.970 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. - }
{ - (6) - } { + (4) + } An applicant under subsection (2)
{ - , - } { + or + } (3) { - , (4) or (5) - } of this
section shall, at the time of application, certify that the
applicant has conducted criminal records checks required under
ORS 59.970 and 59.972 and:
(a) Certify that, to the best of the applicant's belief, no
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.
{ - (7) - } { + (5) + } Except as provided in
{ - subsections (4) and (5) - } { + subsection (3) + } 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) The director shall keep for not less than 10 years,
and shall maintain a registry of loan originators with
information derived from, records of:
(a) Notifications filed under subsection (1) of this section;
(b) Exceptions to certifications under subsection (4)(b) of
this section;
(c) Complaints the director has determined are justified under
ORS 59.973; and
(d) Actions taken in accordance with the provisions of ORS
59.973. + }
{ - (8) The director shall keep records that include
notifications filed under subsection (1) of this section and
exceptions to certifications under subsection (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. - }
{ - (9) - } { + (7) + } Notwithstanding subsections (1) to
{ - (5) - } { + (3) + } of this section and ORS 59.865 (17),
59.970, 59.971 (1)(d) and 59.975, the director, by rule, may
Enrolled Senate Bill 1064 (SB 1064-A) Page 3
waive any training, examination or continuing education
requirement for a loan originator for a period not to exceed six
months after the individual begins or resumes employment as a
loan originator.
SECTION 3. 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:
(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.
(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.
(c) Fail to account to persons interested for all money or
property received in connection with a mortgage loan.
(d) Fail to meet the training, education or continuing
education requirements for loan originators.
{ + (e) Perform an act as a loan originator in a negligent or
incompetent manner. + }
(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
59.970 if { + :
(a) + } The person has been convicted of any crime or category
of crime specified by the director by rule { - . - } { + ;
(b) The person is suspended or has been prohibited from
employment as a loan originator under ORS 59.973 (5)(c);
(c) The employment violates any conditions imposed under ORS
59.973 (5)(c); or
(d) The employment violates an order issued by the director, a
state or federal agency or a court of competent jurisdiction. + }
SECTION 4. 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 - } { +
59.840 to 59.980 + }, 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 chapter 183.
(4) If the director determines, after opportunity for hearing,
that a complaint is justified, the director shall note the
complaint { + and any action taken + } in the records kept
pursuant to ORS 59.969 { - (8) - } { + (6) + }. { - For a
violation of ORS 59.967 (2) or 59.971, the director may - }
{ + (5) The director, after finding that a loan originator
has violated a provision of ORS 59.840 to 59.980 or a rule or
order of the director, may:
(a) + } Impose requirements for supervision and remedial
education of the loan originator { - , - } { + ;
(b) + } Assess civil penalties against the loan originator as
provided in ORS 59.996 { + ;
(c) Suspend or permanently prohibit the loan originator from
employment as a loan originator or place conditions on the loan
originator's employment; + } or
Enrolled Senate Bill 1064 (SB 1064-A) Page 4
{ + (d) + } Refer the matter for criminal prosecution
pursuant to ORS 59.992.
SECTION 5. ORS 59.996 is amended to read:
59.996. (1) In addition to all other penalties and enforcement
provisions provided by law, any person who violates or who
procures, aids or abets in the violation of any provision of ORS
59.840 to 59.980 or any rule or order of the Director of the
Department of Consumer and Business Services shall be subject to
a penalty of not more than $5,000 for every violation, which
shall be paid to the General Fund of the State Treasury.
{ + (2) Notwithstanding subsection (1) of this section, a
person who fails to submit a report required under ORS 59.860 (3)
on the date specified is subject to a penalty of not more than
$100 per day for each day after the specified date during which
the failure continues. + }
{ - (2) - } { + (3) + } Every violation is a separate
offense and, in the case of a continuing violation, each day's
continuance is a separate violation, but the maximum penalty for
any continuing violation shall not exceed $20,000 for each
offense.
{ - (3) - } { + (4) + } Civil penalties under this section
shall be imposed as provided in ORS 183.745.
SECTION 6. { + (1) The amendments to ORS 59.860, 59.969,
59.971, 59.973 and 59.996 by sections 1 to 5 of this 2008 Act
become operative May 1, 2008, and apply to:
(a) A person that was licensed under ORS 59.840 to 59.980
before May 1, 2008, or is licensed on or after May 1, 2008, and
that is conducting business as a mortgage banker or mortgage
broker on or after May 1, 2008;
(b) A person that applies to become a licensed mortgage banker
or mortgage broker on or after May 1, 2008; and
(c) A person that was employed as a loan originator before May
1, 2008, or that becomes employed as a loan originator on or
after May 1, 2008, and whose employment continues on and after
May 1, 2008.
(2) The Director of the Department of Consumer and Business
Services may take any action before the operative date set forth
in subsection (1) of this section that is necessary to enable the
director to exercise, on and after the operative date, all the
duties, functions and powers conferred on the director by the
amendments to ORS 59.860, 59.969, 59.971, 59.973 and 59.996 by
sections 1 to 5 of this 2008 Act. + }
SECTION 7. { + This 2008 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2008 Act takes effect on its
passage. + }
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Enrolled Senate Bill 1064 (SB 1064-A) Page 5
Passed by Senate February 22, 2008
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House February 22, 2008
...........................................................
Speaker of House
Enrolled Senate Bill 1064 (SB 1064-A) Page 6
Received by Governor:
......M.,............., 2008
Approved:
......M.,............., 2008
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2008
...........................................................
Secretary of State
Enrolled Senate Bill 1064 (SB 1064-A) Page 7