Hawaii, Indiana, Oklahoma and Texas Compliance Update

The states of Hawaii, Indiana, Oklahoma and Texas have recently amended their laws or regulations regarding various aspects of licensing for mortgage loan originators, mortgage brokers, and mortgage lenders.

 

HAWAII HOUSE BILL 988

 

The Hawaii amendment, effective November 24, 2019, allows for temporary authority to act as a mortgage loan originator.

 

An individual who has completed an application for a mortgage loan originator license and is either moving from a depository institution to a non-depository institution or is licensed as a mortgage loan originator in another state will have temporary authority to act as a mortgage loan originator if the individual meets certain requirements.  The temporary authority period will end after 120 days or when the application is granted, denied or withdrawn, whichever is earlier.

 

An individual with temporary authority is subject to the same laws and regulations as a licensed loan originator.

 

INDIANA RULES 750 IAC

 

The Indiana Department of Financial Institutions has added rules to allow for temporary authority to act as a mortgage loan originator, effective November 24, 2019.

 

An individual who has completed an application for a mortgage loan originator license and is either operating as a registered mortgage loan originator for a depository institution or licensed as a mortgage loan originator in another state will have temporary authority to act as a state-licensed mortgage loan originator if the individual meets certain requirements.  The temporary authority period will end after 120 days or when the application is granted, denied or withdrawn, whichever is earlier.

 

An individual with temporary authority is subject to the same laws and regulations as a licensed loan originator.

 

OKLAHOMA SENATE BILL 1373

 

Oklahoma has amended provisions related to mortgage loan originator, mortgage broker and mortgage lender licensing as it relates to criminal history, effective November 1, 2019.

 

The amendment narrows the limitation on applicants for a mortgage loan originator or mortgage broker license that prohibits licensing an applicant who has been convicted of, or pled guilty or nolo contendere to, a felony crime.  The law now specifies that the crime must have been substantially related to the occupation of a mortgage loan originator or mortgage broker as applicable and posed a reasonable threat to public safety in order to be a reason for rejection of a licensing application.

 

“Substantially relates” means the nature of criminal conduct for which the person was convicted has a direct bearing on the fitness or ability to perform one or more of the duties or responsibilities necessarily related to the occupation.

 

“Poses a reasonable threat” means the nature of criminal conduct for which the person was convicted involved an act or threat of harm against another and has a bearing on the fitness or ability to serve the public or work with others in the occupation.

 

The law was similarly updated for mortgage lender applicants to provide the same standard for any owner, officer, director or partner of the applicant.

 

TEXAS SENATE BILL 2330

 

The Texas amendment, effective November 24, 2019, allows for temporary authority to act as a mortgage loan originator.

 

An individual who has completed an application for a mortgage loan originator license and is either federally licensed or licensed in another state will have temporary authority to act as a state-licensed mortgage loan originator if the individual meets certain requirements.  The temporary authority period will end after 120 days or when the application is granted, denied or withdrawn, whichever is earlier.

 

An individual with temporary authority is subject to the same laws and regulations as a licensed loan originator.

 

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Expert insights and regulatory updates on RegTech, compliance management, and fair lending.

Diane Jenkins

Attorney

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