SB2908 93RD GENERAL ASSEMBLY

LRB093 18470 SAS 44184 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2908

Introduced 2/6/2004, by M. Maggie Crotty

SYNOPSIS AS INTRODUCED:

205 ILCS 635/1-3	from Ch. 17, par. 2321-3
205 ILCS 635/2-3	from Ch. 17, par. 2322-3
205 ILCS 635/2-4	from Ch. 17, par. 2322-4
205 ILCS 635/2-6	from Ch. 17, par. 2322-6
205 ILCS 635/3-1	from Ch. 17, par. 2323-1
205 ILCS 635/3-2	from Ch. 17, par. 2323-2
205 ILCS 635/3-4	from Ch. 17, par. 2323-4
205 ILCS 635/3-5	from Ch. 17, par. 2323-5
205 ILCS 635/4-1	from Ch. 17, par. 2324-1
205 ILCS 635/4-5	from Ch. 17, par. 2324-5
205 ILCS 635/4-9.1 new
205 ILCS 635/4-15 new

Amends the Residential Mortgage Act of 1987. In provisions pertaining to applications for a residential mortgage license and disclosing information about any person, entity, or ultimate equitable owner that owns or controls stock ownership, requires reporting any class of stock of the license applicant (now 10% of any class of stock). Requires an applicant or licensee to aver with his or her license application or renewal that he or she will not knowingly employ or permit an individual to serve as an officer, director, or employee for the licensee if the individual has been convicted of a felony or any criminal offense relating to dishonesty or breach of trust unless the Commissioner of Banks and Real Estate has waived this requirement. Provides that the Commissioner may require a plan for the disposition of any residential mortgage loans not closed or funded when the licensee becomes inactive. Provides that the Commissioner may no longer require licensees to maintain a bond for errors and omissions in performing activities regulated by the Act. Provides that, beginning 2 years after the effective date of this amendatory Act, mortgage brokers and licensees may no longer substitute compilation financial statements with certain audits. Requires a licensee's corporate or full service branch office to comply with any applicable zoning laws or ordinances and home office or business regulations. Provides that the Commissioner may, in making rules with respect to net worth, establish separate requirements for not for profit entities or their affiliates that are serving economically depressed or financially underserved areas. Expands the Commissioner's functions, powers, and duties. Reinstates a Section to require licensees to submit annual reports of mortgage activity to the Commissioner. Creates a returned check policy for residential mortgage licensees and applicants. Increases certain fines.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning financial regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Residential Mortgage License Act of 1987 is amended by changing Sections 1-3, 2-3, 2-4, 2-6, 3-1, 3-2, 3-4, 3-5, 4-1, and 4-5 and by adding Sections 4-9.1 and 4-15 as follows:

(205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)

Sec. 1-3. Necessity for License; Scope of Act.

(a) No person, partnership, association, corporation or other entity shall engage in the business of brokering, funding, originating, servicing or purchasing of residential mortgage loans without first obtaining a license from the Commissioner in accordance with the licensing procedure provided in this Article I and such regulations as may be promulgated by the Commissioner. The licensing provisions of this Section shall not apply to any entity engaged solely in commercial mortgage lending or to any person, partnership association, corporation or other entity exempted pursuant to Section 1-4, subsection (d), of this Act or in accordance with regulations promulgated by the Commissioner hereunder.

(b) No person, partnership, association, corporation, or other entity except a licensee under this Act or an entity exempt from licensing pursuant to Section 1-4, subsection (d), of this Act shall do any business under any name or title, or circulate or use any advertising or make any representation or give any information to any person, which indicates or reasonably implies activity within the scope of this Act.

(c) The Commissioner may, through the Attorney General, request the circuit court of either Cook or Sangamon County to issue an injunction to restrain any person from violating or continuing to violate any of the foregoing provisions of this Section.

(d) When the Commissioner has reasonable cause to believe that any entity which has not submitted an application for licensure is conducting any of the activities described in subsection (a) hereof, the Commissioner shall have the power to examine all books and records of the entity and any additional documentation necessary in order to determine whether such entity should become licensed under this Act.

(e) Any person, partnership, association, corporation or other entity who violates any provision of this Section commits a business offense and shall be fined an amount not to exceed $25,000 $5,000.

(f) Each person, partnership, association, corporation or other entity conducting activities regulated by this Act shall be issued one license. Each office, place of business or location at which a residential mortgage licensee conducts any part of his or her business must be recorded with the Commissioner pursuant to Section 2-8 of this Act.

(g) Licensees under this Act shall solicit, broker, fund, originate, service and purchase residential mortgage loans only in conformity with the provisions of this Act and such rules and regulations as may be promulgated by the Commissioner.

(h) This Act applies to all entities doing business in Illinois as residential mortgage bankers, as defined by "An Act to provide for the regulation of mortgage bankers", approved September 15, 1977, as amended, regardless of whether licensed under that or any prior Act. Any existing residential mortgage lender or residential mortgage broker in Illinois whether or not previously licensed, must operate in accordance with this Act.

(i) This Act is a successor Act to and a continuance of the regulation of residential mortgage bankers provided in, "An Act to provide for the regulation of mortgage bankers", approved September 15, 1977, as amended.

Entities and persons subject to the predecessor Act shall be subject to this Act from and after its effective date.

(Source: P.A. 86-137; 87-642.)

(205 ILCS 635/2-3) (from Ch. 17, par. 2322-3)

Sec. 2-3. Application form.

(a) Application for a residential mortgage license must be made in accordance with Section 2-6. The application shall be in writing, under oath, and on a form obtained from and prescribed by the Commissioner.

(b) The application shall contain the name and complete business and residential address or addresses of the license applicant. If the license applicant is a partnership, association, corporation or other form of business organization, the application shall contain the names and complete business and residential addresses of each member, director and principal officer thereof. Such application shall also include a description of the activities of the license applicant, in such detail and for such periods, as the Commissioner may require, including all of the following:

(1) An affirmation of financial solvency noting such capitalization requirements as may be required by the Commissioner, and access to such credit as may be required by the Commissioner.

(2) An affirmation that the license applicant or its members, directors or principals as may be appropriate, are at least 18 years of age.

(3) Information as to the character, fitness, financial and business responsibility, background, experience, and criminal record of any (i) person, entity, or ultimate equitable owner that owns or controls, directly or indirectly, any amount of 10% or more of any class of stock of the license applicant; (ii) person, entity, or ultimate equitable owner that is not a depository institution, as defined in Section 1007.50 of the Savings Bank Act, that lends, provides, or infuses, directly or indirectly, in any way, funds to or into a license applicant, in an amount equal to or more than 10% of the license applicant's net worth; (iii) person, entity, or ultimate equitable owner that controls, directly or indirectly, the election of 25% or more of the members of the board of directors of a license applicant; or (iv) person, entity, or ultimate equitable owner that the Commissioner finds influences management of the license applicant.

(4) Upon written request by the licensee and notwithstanding the provisions of paragraphs (1), (2), and (3) of this subsection, the Commissioner may permit the licensee to omit all or part of the information required by those paragraphs if, in lieu of the omitted information, the licensee submits an affidavit stating that the information submitted on the licensee's previous renewal application is still true and accurate. The Commissioner may promulgate rules prescribing the form and content of the affidavit that are necessary to accomplish the purposes of this Section.

(5) Such other information as required by regulations of the Commissioner.

(Source: P.A. 89-355, eff. 8-17-95.)

(205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)

Sec. 2-4. Averments of Licensee. Each application for license or for the renewal of a license shall be accompanied by the following averments stating that the applicant:

(a) Will maintain at least one full service office within the State of Illinois pursuant to Section 3-4 of this Act;

(b) Will maintain staff reasonably adequate to meet the requirements of Section 3-4 of this Act;

(c) Will keep and maintain for 36 months the same written records as required by the federal Equal Credit Opportunity Act, and any other information required by regulations of the Commissioner regarding any home mortgage in the course of the conduct of its residential mortgage business;

(d) Will file with the Commissioner, when due, any report or reports which it is required to file under any of the provisions of this Act;

(e) Will not engage, whether as principal or agent, in the practice of rejecting residential mortgage applications without reasonable cause, or varying terms or application procedures without reasonable cause, for home mortgages on real estate within any specific geographic area from the terms or procedures generally provided by the licensee within other geographic areas of the State;

(f) Will not engage in fraudulent home mortgage underwriting practices;

(g) Will not make payment, whether directly or indirectly, of any kind to any in house or fee appraiser of any government or private money lending agency with which an application for a home mortgage has been filed for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate which is to be covered by such home mortgage;

(h) Has filed tax returns (State and Federal) for the past 3 years or filed with the Commissioner an accountant's or attorney's statement as to why no return was filed;

(i) Will not engage in any discrimination or redlining activities prohibited by Section 3-8 of this Act;

(j) Will not knowingly make any false promises likely to influence or persuade, or pursue a course of misrepresentation and false promises through agents, solicitors, advertising or otherwise;

(k) Will not knowingly misrepresent, circumvent or conceal, through whatever subterfuge or device, any of the material particulars or the nature thereof, regarding a transaction to which it is a party to the injury of another party thereto;

(l) Will disburse funds in accordance with its agreements;

(m) Has not committed a crime against the law of this State, any other state or of the United States, involving moral turpitude, fraudulent or dishonest dealing, and that no final judgment has been entered against it in a civil action upon grounds of fraud, misrepresentation or deceit which has not been previously reported to the Commissioner;

(n) Will account or deliver to any person any personal property such as money, fund, deposit, check, draft, mortgage, other document or thing of value, which has come into its possession, and which is not its property, or which it is not in law or equity entitled to retain under the circumstances, at the time which has been agreed upon or is required by law, or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(o) Has not engaged in any conduct which would be cause for denial of a license;

(p) Has not become insolvent;

(q) Has not submitted an application for a license under this Act which contains a material misstatement;

(r) Has not demonstrated by course of conduct, negligence or incompetence in performing any act for which it is required to hold a license under this Act;

(s) Will advise the Commissioner in writing of any changes to the information submitted on the most recent application for license within 30 days of said change. The written notice must be signed in the same form as the application for license being amended;

(t) Will comply with the provisions of this Act, or with any lawful order, rule or regulation made or issued under the provisions of this Act;

(u) Will submit to periodic examination by the Commissioner as required by this Act;

(v) Will advise the Commissioner in writing of judgments entered against, and bankruptcy petitions by, the license applicant within 5 days of occurrence;

(w) Will advise the Commissioner in writing within 30 days when the license applicant requests a licensee under this Act to repurchase a loan, and the circumstances therefor; and

(x) Will advise the Commissioner in writing within 30 days when the license applicant is requested by another entity to repurchase a loan, and the circumstances therefor; .

(y) Will at all times act in a manner consistent with subsections (a) and (b) of Section 1-2 of this Act; .

(z) (x) Will not knowingly hire or employ a loan originator who is not registered with the Commissioner as required under Section 7-1 of this Act; and

(z-1) Will not knowingly employ or otherwise permit, except with prior written consent of the Commissioner, an individual to serve as an officer, director, or employee for the licensee if the individual has been convicted of a felony or any criminal offense relating to dishonesty or breach of trust.

A licensee who fails to fulfill obligations of an averment, to comply with averments made, or otherwise violates any of the averments made under this Section shall be subject to the penalties in Section 4-5 of this Act.

(Source: P.A. 93-561, eff. 1-1-04; revised 10-9-03.)

(205 ILCS 635/2-6) (from Ch. 17, par. 2322-6)

Sec. 2-6. License issuance and renewal; fee.

(a) Beginning July 1, 2003, licenses shall be renewed every year on the anniversary of the date of issuance of the original license. Properly completed renewal application forms and filing fees must be received by the Commissioner 60 days prior to the renewal date.

(b) It shall be the responsibility of each licensee to accomplish renewal of its license; failure of the licensee to receive renewal forms absent a request sent by certified mail for such forms will not waive said responsibility. Failure by a licensee to submit a properly completed renewal application form and fees in a timely fashion, absent a written extension from the Commissioner, will result in the assessment of additional fees, as follows:

(1) A fee of $750 will be assessed to the licensee 30 days after the proper renewal date and $1,500 each month thereafter, until the license is either renewed or expires pursuant to Section 2-6, subsections (c) and (d), of this Act.

(2) Such fee will be assessed without prior notice to the licensee, but will be assessed only in cases wherein the Commissioner has in his or her possession documentation of the licensee's continuing activity for which the unrenewed license was issued.

(c) A license which is not renewed by the date required in this Section shall automatically become inactive. No activity regulated by this Act shall be conducted by the licensee when a license becomes inactive. The Commissioner may require the licensee to provide a plan for the disposition of any residential mortgage loans not closed or funded when the license becomes inactive. The Commissioner may approve the licensee conducting activities regulated by this Act with an inactive license for the sole purpose of assisting borrowers in the closing or funding of loans for which the licensee had an active license at the time the loan application was taken from a borrower. An inactive license may be reactivated by filing a completed reactivation application with the Commissioner upon , payment of the renewal fee, and payment of a reactivation fee equal to the renewal fee.

(d) A license which is not renewed within one year of becoming inactive shall expire.

(e) A licensee ceasing an activity or activities regulated by this Act and desiring to no longer be licensed shall so inform the Commissioner in writing and, at the same time, convey the license and all other symbols or indicia of licensure. The licensee shall include a plan for the withdrawal from regulated business, including a timetable for the disposition of the business. Upon receipt of such written notice, the Commissioner shall issue a certified statement canceling the license.

(Source: P.A. 93-32, eff. 7-1-03; 93-561, eff. 1-1-04; revised 9-23-03.)

(205 ILCS 635/3-1) (from Ch. 17, par. 2323-1)

Sec. 3-1. Bonds of licensees.

(a) Every licensee, with respect to any person appointed or elected to any position requiring the receipt of payment, management, or use of money belonging to a residential mortgage licensee engaged in the activities of originating, servicing, or purchasing mortgage loans or whose duties permit him or her to have access to or custody of any of its money or securities or custody of any money or securities belonging to third parties or whose duties permit him or her regularly to make entries in the books or other records of a licensee, shall, before assuming his or her duties, maintain a fidelity bond in the amount of $100,000 by some fidelity insurance company licensed to do business in this State.

(b) Each bond shall be for any loss the licensee may sustain in money or other property through the commission of any dishonest or criminal act or omission by any person required to be bonded, whether committed alone or in concert with another. The bond shall be in the form and amount approved by the Commissioner who may at any time require one or more additional bonds. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner. Each bond shall provide that a cancellation thereof shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner unless he or she shall have approved the cancellation earlier. If the Commissioner believes the licensee's business is being conducted in an unsafe manner due to the lack of bonds or the inadequacy of bonds, he or she may proceed against the licensee as provided for in Section 4-5.

(c) All licensees shall maintain a bond in accordance with this subsection. Each bond shall be for the recovery of expenses, fines, or fees due to or levied by the Commissioner in accordance with this Act. The bond shall be payable when the licensee fails to comply with any provisions of this Act and shall be in the form of a surety or licensure bond in the amount and form as prescribed by the Commissioner pursuant to rules and regulations. The bond shall be payable to the Office of Banks and Real Estate and shall be issued by some insurance company authorized to do business in this State. A copy of the bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be placed on file with the Office of Banks and Real Estate within 10 days of the execution thereof.

(d) The Commissioner may promulgate rules with respect to bonding requirements for residential mortgage licensees that are reasonable and necessary to accomplish the purposes of this Act.

(e) The Commissioner may require licensees to maintain a bond for errors and omissions in performing activities regulated by this Act.

(Source: P.A. 89-508, eff. 7-3-96.)

(205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)

Sec. 3-2. Annual audit.

(a) At the licensee's fiscal year-end, but in no case more than 12 months after the last audit conducted pursuant to this Section, except as otherwise provided in this Section, it shall be mandatory for each residential mortgage licensee to cause its books and accounts to be audited by a certified public accountant not connected with such licensee. The books and records of all licensees under this Act shall be maintained on an accrual basis. The audit must be sufficiently comprehensive in scope to permit the expression of an opinion on the financial statements, which must be prepared in accordance with generally accepted accounting principles, and must be performed in accordance with generally accepted auditing standards. Notwithstanding the requirements of this subsection, a licensee that is a first tier subsidiary may submit audited consolidated financial statements of its parent as long as the consolidated statements are supported by consolidating statements. The licensee's chief financial officer shall attest to the licensee's financial statements disclosed in the consolidating statements.

(b) As used herein, the term "expression of opinion" includes either (1) an unqualified opinion, (2) a qualified opinion, (3) a disclaimer of opinion, or (4) an adverse opinion.

(c) If a qualified or adverse opinion is expressed or if an opinion is disclaimed, the reasons therefore must be fully explained. An opinion, qualified as to a scope limitation, shall not be acceptable.

(d) The most recent audit report shall be filed with the Commissioner within 90 days after the end of the licensee's fiscal year. The report filed with the Commissioner shall be certified by the certified public accountant conducting the audit. The Commissioner may promulgate rules regarding late audit reports.

(e) If any licensee required to make an audit shall fail to cause an audit to be made, the Commissioner shall cause the same to be made by a certified public accountant at the licensee's expense. The Commissioner shall select such certified public accountant by advertising for bids or by such other fair and impartial means as he or she establishes by regulation.

(f) In lieu of the audit or compilation financial statement required by this Section, a licensee shall submit and the Commissioner may accept any audit made in conformance with the audit requirements of the U.S. Department of Housing and Urban Development.

(g) With respect to licensees who solely broker residential mortgage loans after the effective date of this amendatory Act of the 93rd General Assembly, as defined in subsection (o) of Section 1-4, instead of the audit required by this Section, the Commissioner may accept for a period no later than 2 years after the effective date of this amendatory Act of the 93rd General Assembly compilation financial statements prepared at least every 12 months, and the compilation financial statement must be prepared by an independent certified public accountant licensed under the Illinois Public Accounting Act or by an equivalent state licensing law with full disclosure in accordance with generally accepted accounting principals and must be submitted within 90 days after the end of the licensee's fiscal year. If a licensee under this Section fails to file a compilation as required, the Commissioner shall cause an audit of the licensee's books and accounts to be made by a certified public accountant at the licensee's expense. The Commissioner shall select the certified public accountant by advertising for bids or by such other fair and impartial means as he or she establishes by rule. A licensee who files false or misleading compilation financial statements is guilty of a business offense and shall be fined not less than $5,000.

(h) The workpapers of the certified public accountants employed by each licensee for purposes of this Section are to be made available to the Commissioner or the Commissioner's designee upon request and may be reproduced by the Commissioner or the Commissioner's designee to enable to the Commissioner to carry out the purposes of this Act.

(i) Notwithstanding any other provision of this Section, if a licensee relying on subsection (g) of this Section causes its books to be audited at any other time or causes its financial statements to be reviewed, a complete copy of the audited or reviewed financial statements shall be delivered to the Commissioner at the time of the annual license renewal payment following receipt by the licensee of the audited or reviewed financial statements. All workpapers shall be made available to the Commissioner upon request. The financial statements and workpapers may be reproduced by the Commissioner or the Commissioner's designee to carry out the purposes of this Act.

(Source: P.A. 93-561, eff. 1-1-04.)

(205 ILCS 635/3-4) (from Ch. 17, par. 2323-4)

Sec. 3-4. Office and staff within the State.

(a) A licensee whose principal place of business is located in the State of Illinois shall maintain at least one full service office with staff reasonably adequate to handle efficiently communications, questions, and all other matters relating to any application for a home mortgage or an existing home mortgage with respect to which such licensee is performing services, regardless of kind, for any borrower or lender, note owner or holder, or for himself or herself while engaged in the residential mortgage business. The location and operation of a full service office shall be in compliance with any applicable zoning laws or ordinances and home office or business regulations.

(b) In lieu of maintaining a full service office in the State of Illinois, a licensee whose principal place of business is located outside the State of Illinois must submit a certified audit as required in Section 3-2 of this Act evidencing a minimum net worth of $100,000, which must be maintained at all times, and shall submit and maintain a fidelity bond in the amount of $100,000.

(Source: P.A. 89-355, eff. 8-17-95; 90-301, eff. 8-1-97; 90-772, eff. 1-1-99.)

(205 ILCS 635/3-5) (from Ch. 17, par. 2323-5)

Sec. 3-5. Net worth requirement. A licensee that holds a license on the effective date of this amendatory Act of the 93rd General Assembly shall have and maintain a net worth of not less than $100,000; however, no later than 2 years after the effective date of this amendatory Act of the 93rd General Assembly, the licensee must maintain a net worth of not less than $150,000. A licensee that first obtains a license after the effective date of this amendatory Act of the 93rd General Assembly must have and maintain a net worth of not less than $150,000. Notwithstanding other requirements of this Section, the net worth requirement for a residential mortgage licensee whose only licensable activity is that of brokering residential mortgage loans and that holds a license on the effective date of this amendatory Act of the 93rd General Assembly shall be $35,000; however, no later than 2 years after the effective date of this amendatory Act of the 93rd General Assembly, the licensee must maintain a net worth of not less than $50,000. Such a licensee that first obtains a license after the effective date of this amendatory Act of the 93rd General Assembly must have and maintain a net worth of not less than $50,000. Net worth shall be evidenced by a balance sheet prepared by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards or by the compilation financial statements authorized under subsection (g) of Section 3-2. The Commissioner may promulgate rules with respect to net worth definitions and requirements for residential mortgage licensees as necessary to accomplish the purposes of this Act. In promulgating such rules, the Commissioner may consider establishing separate net worth requirements for not for profit entities or their affiliates that are serving economically depressed or financially underserved areas. In lieu of the net worth requirement established by this Section, the Commissioner may accept evidence of conformance by the licensee with the net worth requirements of the United States Department of Housing and Urban Development.

(Source: P.A. 93-561, eff. 1-1-04.)

(205 ILCS 635/4-1) (from Ch. 17, par. 2324-1)

Sec. 4-1. Commissioner of Banks and Real Estate; functions, powers, and duties. The functions, powers, and duties of the Commissioner of Banks and Real Estate shall include the following:

(a) To issue or refuse to issue any license as provided by this Act;

(b) To revoke or suspend for cause any license issued under this Act;

(c) To keep records of all licenses issued under this Act;

(d) To receive, consider, investigate, and act upon complaints made by any person in connection with any residential mortgage licensee in this State;

(e) To consider and act upon any recommendations from the Residential Mortgage Board;

(f) To prescribe the forms of and receive:

(1) applications for licenses; and

(2) all reports and all books and records required to be made by any licensee under this Act, including annual audited financial statements and annual reports of mortgage activity;

(g) To adopt rules and regulations necessary and proper for the administration of this Act;

(h) To subpoena documents and witnesses and compel their attendance and production, to administer oaths, and to require the production of any books, papers, or other materials relevant to any inquiry authorized by this Act;

(i) To require information with regard to any license applicant as he or she may deem desirable, with due regard to the paramount interests of the public as to the experience, background, honesty, truthfulness, integrity, and competency of the license applicant as to financial transactions involving primary or subordinate mortgage financing, and where the license applicant is an entity other than an individual, as to the honesty, truthfulness, integrity, and competency of any officer or director of the corporation, association, or other entity, or the members of a partnership;

(j) To examine the books and records of every licensee under this Act at intervals as specified in Section 4-2;

(k) To enforce provisions of this Act;

(l) To levy fees, fines, and charges for services performed in administering this Act; the aggregate of all fees collected by the Commissioner on and after the effective date of this Act shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the Savings and Residential Finance Regulatory Fund; the amounts deposited into that Fund shall be used for the ordinary and contingent expenses of the Office of Banks and Real Estate. Nothing in this Act shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance of State officers by appropriation from the General Revenue Fund.

(m) To appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this Act; and

(n) To conduct hearings for the purpose of:

(1) appeals of orders of the Commissioner;

(2) suspensions or revocations of licenses, or fining of licensees;

(3) investigating:

(i) complaints against licensees; or

(ii) annual gross delinquency rates; and

(4) carrying out the purposes of this Act; .

(o) To exercise exclusive visitorial power over a licensee and to permit a foreign residential mortgage regulator with an appropriate supervisory interest in the parent or affiliate of a licensee to exercise exclusive visitorial power over a licensee;

(p) To enter into cooperative agreements with state regulatory authorities of other states to provide for examination of corporate offices or branches of those states and to accept reports of such examinations;

(q) To assign an examiner or examiners to monitor the affairs of a licensee with whatever frequency the Commissioner determines appropriate and to charge the licensee for reasonable and necessary expenses of the Commissioner, if in the opinion of the Commissioner an emergency exists or appears likely to occur; and

(r) To impose civil penalties of up to $50 per day against a licensee for failing to respond to a regulatory request or reporting requirement.

(Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)

(205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)

Sec. 4-5. Suspension, revocation of licenses; fines.

(a) Upon written notice to a licensee, the Commissioner may suspend or revoke any license issued pursuant to this Act if he or she shall make a finding of one or more of the following in the notice that:

(1) Through separate acts or an act or a course of conduct, the licensee has violated any provisions of this Act, any rule or regulation promulgated by the Commissioner or of any other law, rule or regulation of this State or the United States.

(2) Any fact or condition exists which, if it had existed at the time of the original application for such license would have warranted the Commissioner in refusing originally to issue such license.

(3) If a licensee is other than an individual, any ultimate equitable owner, officer, director, or member of the licensed partnership, association, corporation, or other entity has so acted or failed to act as would be cause for suspending or revoking a license to that party as an individual.

(b) No license shall be suspended or revoked, except as provided in this Section, nor shall any licensee be fined without notice of his or her right to a hearing as provided in Section 4-12 of this Act.

(c) The Commissioner, on good cause shown that an emergency exists, may suspend any license for a period not exceeding 180 days, pending investigation. Upon a showing that a licensee has failed to meet the experience or educational requirements of Section 2-2 or the requirements of subsection (g) of Section 3-2, the Commissioner shall suspend, prior to hearing as provided in Section 4-12, the license until those requirements have been met.

(d) The provisions of subsection (e) of Section 2-6 of this Act shall not affect a licensee's civil or criminal liability for acts committed prior to surrender of a license.

(e) No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any person.

(f) Every license issued under this Act shall remain in force and effect until the same shall have expired without renewal, have been surrendered, revoked or suspended in accordance with the provisions of this Act, but the Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the Commissioner in refusing originally to issue such license under this Act.

(g) Whenever the Commissioner shall revoke or suspend a license issued pursuant to this Act or fine a licensee under this Act, he or she shall forthwith execute in duplicate a written order to that effect. The Commissioner shall publish notice of such order in the Illinois Register and a newspaper of general circulation in the county in which the license is located and shall forthwith serve a copy of such order upon the licensee. Any such order may be reviewed in the manner provided by Section 4-12 of this Act.

(h) When the Commissioner finds any person in violation of the grounds set forth in subsection (i), he or she may enter an order imposing one or more of the following penalties:

(1) Revocation of license;

(2) Suspension of a license subject to reinstatement upon satisfying all reasonable conditions the Commissioner may specify;

(3) Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions as the Commissioner may specify;

(4) Issuance of a reprimand;

(5) Imposition of a fine not to exceed $25,000 for each count of separate offense; and

(6) Denial of a license.

(i) The following acts shall constitute grounds for which the disciplinary actions specified in subsection (h) above may be taken:

(1) Being convicted or found guilty, regardless of pendency of an appeal, of a crime in any jurisdiction which involves fraud, dishonest dealing, or any other act of moral turpitude;

(2) Fraud, misrepresentation, deceit or negligence in any mortgage financing transaction;

(3) A material or intentional misstatement of fact on an initial or renewal application;

(4) Failure to follow the Commissioner's regulations with respect to placement of funds in escrow accounts;

(5) Insolvency or filing under any provision of the Bankruptcy Code as a debtor;

(6) Failure to account or deliver to any person any property such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, which has come into his or her hands and which is not his or her property or which he or she is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(7) Failure to disburse funds in accordance with agreements;

(8) Any misuse, misapplication, or misappropriation of trust funds or escrow funds;

(9) Having a license, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory or country for fraud, dishonest dealing or any other act of moral turpitude;

(10) Failure to issue a satisfaction of mortgage when the residential mortgage has been executed and proceeds were not disbursed to the benefit of the mortgagor and when the mortgagor has fully paid licensee's costs and commission;

(11) Failure to comply with any order of the Commissioner or rule made or issued under the provisions of this Act;

(12) Engaging in activities regulated by this Act without a current, active license unless specifically exempted by this Act;

(13) Failure to pay in a timely manner any fee, charge or fine under this Act;

(14) Failure to maintain, preserve, and keep available for examination, all books, accounts or other documents required by the provisions of this Act and the rules of the Commissioner;

(15) Refusal to permit an investigation or examination of the licensee's or its affiliates' books and records or refusal to comply with the Commissioner's subpoena or subpoena duces tecum;

(16) A pattern of substantially underestimating the maximum closing costs;

(17) Failure to comply with or violation of any provision of this Act.

(j) A licensee shall be subject to the disciplinary actions specified in this Act for violations of subsection (i) by any officer, director, shareholder, joint venture, partner, ultimate equitable owner, or employee of the licensee.

(k) Such licensee shall be subject to suspension or revocation for employee actions only if there is a pattern of repeated violations by employees or the licensee has knowledge of the violations.

(l) Procedure for surrender of license:

(1) The Commissioner may, after 10 days notice by certified mail to the licensee at the address set forth on the license, stating the contemplated action and in general the grounds therefor and the date, time and place of a hearing thereon, and after providing the licensee with a reasonable opportunity to be heard prior to such action, fine such licensee an amount not exceeding $25,000 $10,000 per violation, or revoke or suspend any license issued hereunder if he or she finds that:

(i) The licensee has failed to comply with any provision of this Act or any order, decision, finding, rule, regulation or direction of the Commissioner lawfully made pursuant to the authority of this Act; or

(ii) Any fact or condition exists which, if it had existed at the time of the original application for the license, clearly would have warranted the Commissioner in refusing to issue the license.

(2) Any licensee may surrender a license by delivering to the Commissioner written notice that he or she thereby surrenders such license, but surrender shall not affect the licensee's civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the license fee.

(Source: P.A. 93-561, eff. 1-1-04.)

(205 ILCS 635/4-9.1 new)

Sec. 4-9.1. Annual report of mortgage activity. On or before March 1 of each year, each licensee, except residential mortgage loan brokers, shall file a report with the Commissioner that shall disclose the following information with respect to the immediately preceding calendar year:

(a) A list of home mortgages granted, issued, originated or closed during the report period, with respect to which such licensee has had any connection. This list shall show each census tract, in regions where such census tracts have been established, and by zip code in all other regions, the number and aggregate dollar amount of applications for, and the number granted and aggregate dollar amount of:

(1) Conventional mortgage loans;

(2) Mortgage loans issued under the National Housing Act, Title 12, United States Code, Chapter 13; and

(3) Mortgage loans guaranteed under the provisions of the Federal Veteran's Benefit Act, Title 38, United States Code, Chapter 37, Subchapter II.

(b) List by zip code in those areas having no census tract:

(1) The total number of home mortgages on real estate situated in this State with respect to which the licensee has had any connection and which are in default on the last day of the reporting period; and

(2) The total number of claims paid during the reporting period on home mortgages with respect to which the licensee has had any connection, including the date of the first default thereon and the date each such foreclosure proceeding was instituted.

(c) If the Commissioner finds that another report that the licensee is required to compile is equivalent to the Annual Report of Mortgage Activity, then the Commissioner may accept that report as fulfilling the reporting requirements of this Section. The report required pursuant to the Home Mortgage Disclosure Act of 1975, 12 U.S.C., 2801 et seq. and Federal Reserve Board Regulation C, 12 C.F.R. Part 203, is an example of a report that the Commissioner may find fulfills the requirements of this Section, if the Commissioner finds the report equivalent to the Annual Report of Mortgage Activity.

(d) The Commissioner may also require by rules that licensees report such additional information as is necessary to assure strict compliance with this Act.

Notwithstanding the exemption from licensure provided for service corporations of certain savings institutions and subsidiaries or affiliates of certain banks and foreign banking corporations in clauses (viii) and (ix) of paragraph (1) of subsection (d) of Section 1-4, such service corporations, subsidiaries or affiliates shall file the annual report of mortgage activity required by this Section.

(205 ILCS 635/4-15 new)

Sec. 4-15. Returned checks; fees. Any person who delivers a check or other payment to the Commissioner that is returned to the Commissioner unpaid by the financial institution upon which it is drawn shall pay to the Commissioner, in addition to the amount already owed to the Commissioner, a fee of $50. The Commissioner shall notify the person that payment of fees and fines shall be paid to the Commissioner by certified check or money order within 30 calendar days of the notification. If, after the expiration of 30 days from the date of the notification, the person has failed to submit the necessary remittance, the Commissioner shall automatically terminate the license or certificate of registration or deny the application, without a hearing. If, after termination or denial, the person seeks a license or certificate of registration, he or she shall apply to the Commissioner for restoration or issuance of the license or certificate of registration and pay all expenses of processing this application. The Commissioner may establish a fee for the processing of an application for restoration of a license to pay all the expenses of processing this application. The Commissioner may waive the fees due under this Section in individual cases where the Commissioner finds that the fees would be unreasonable or unnecessarily burdensome.