Full Text of HB2814 99th General Assembly
HB2814enr 99TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Residential Mortgage License Act of 1987 is | 5 | | amended by changing Section 1-3 as follows: | 6 | | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) | 7 | | Sec. 1-3. Necessity for License; Scope of Act. | 8 | | (a) No person, partnership, association, corporation or | 9 | | other entity
shall engage in the business of brokering, | 10 | | funding, originating, servicing
or purchasing of residential | 11 | | mortgage loans without first obtaining a
license from the | 12 | | Secretary in accordance with the licensing procedure
provided | 13 | | in this Article I and such regulations as may be promulgated by
| 14 | | the Secretary. The licensing provisions of this Section shall | 15 | | not apply
to any entity engaged solely in commercial mortgage | 16 | | lending or
to any person, partnership association, corporation | 17 | | or other entity
exempted pursuant to Section 1-4, subsection | 18 | | (d), of this Act or in accordance
with regulations promulgated | 19 | | by the Secretary hereunder. No provision of this Act shall | 20 | | apply to an exempt person or entity as defined in items (1) and | 21 | | (1.5) of subsection (d) of Section 1-4 of this Act. | 22 | | Notwithstanding anything to the contrary in the preceding | 23 | | sentence, an individual acting as a mortgage loan originator |
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| 1 | | who is not employed by and acting for an entity described in | 2 | | item (1) of subsection (tt) of Section 1-4 of this Act shall be | 3 | | subject to the mortgage loan originator licensing requirements | 4 | | of Article VII of this Act. | 5 | | Effective January 1, 2011, no provision of this Act shall | 6 | | apply to an exempt person or entity as defined in item (1.8) of | 7 | | subsection (d) of Section 1-4 of this Act. Notwithstanding | 8 | | anything to the contrary in the preceding sentence, an | 9 | | individual acting as a mortgage loan originator who is not | 10 | | employed by and acting for an entity described in item (1) of | 11 | | subsection (tt) of Section 1-4 of this Act shall be subject to | 12 | | the mortgage loan originator licensing requirements of Article | 13 | | VII of this Act, and provided that an individual acting as a | 14 | | mortgage loan originator under item (1.8) of subsection (d) of | 15 | | Section 1-4 of this Act shall be further subject to a | 16 | | determination by the U.S. Department of Housing and Urban | 17 | | Development through final rulemaking or other authorized | 18 | | agency determination under the federal Secure and Fair | 19 | | Enforcement for Mortgage Licensing Act of 2008. | 20 | | (a-1) A person who is exempt from licensure pursuant to | 21 | | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of | 22 | | this Act as a federally chartered savings bank that is | 23 | | registered with the Nationwide Mortgage Licensing System and | 24 | | Registry may apply to the Secretary for an exempt company | 25 | | registration for the purpose of sponsoring one or more | 26 | | individuals subject to the mortgage loan originator licensing |
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| 1 | | requirements of Article VII of this Act. Registration with the | 2 | | Division of Banking of the Department shall not affect the | 3 | | exempt status of the applicant. | 4 | | (1) A mortgage loan originator eligible for licensure | 5 | | under this subsection shall (A) be covered under an | 6 | | exclusive written contract with, and originate residential | 7 | | mortgage loans solely on behalf of, that exempt person; and | 8 | | (B) hold a current, valid insurance producer license under | 9 | | Article XXXI of the Illinois Insurance Code. | 10 | | (2) An exempt person shall: (A) fulfill any reporting | 11 | | requirements required by the Nationwide Mortgage Licensing | 12 | | System and Registry or the Secretary; (B) provide a blanket | 13 | | surety bond pursuant to Section 7-12 of this Act covering | 14 | | the activities of all its sponsored mortgage loan | 15 | | originators; (C) reasonably supervise the activities of | 16 | | all its sponsored mortgage loan originators; (D) comply | 17 | | with all rules and orders (including the averments | 18 | | contained in Section 2-4 of this Act as applicable to a | 19 | | non-licensed exempt entity provided for in this Section) | 20 | | that the Secretary deems necessary to ensure compliance | 21 | | with the federal SAFE Act; and (E) pay an annual | 22 | | registration fee established by the Director. | 23 | | (3) The Secretary may deny an exempt company | 24 | | registration to an exempt person or fine, suspend, or | 25 | | revoke an exempt company registration if the Secretary | 26 | | finds one of the following: |
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| 1 | | (A) that the exempt person is not a person of | 2 | | honesty, truthfulness, or good character; | 3 | | (B) that the exempt person violated any applicable | 4 | | law, rule, or order; | 5 | | (C) that the exempt person refused or failed to | 6 | | furnish, within a reasonable time, any information or | 7 | | make any report that may be required by the Secretary; | 8 | | (D) that the exempt person had a final judgment | 9 | | entered against him or her in a civil action on grounds | 10 | | of fraud, deceit, or misrepresentation, and the | 11 | | conduct on which the judgment is based indicates that | 12 | | it would be contrary to the interest of the public to | 13 | | permit the exempt person to manage a loan originator; | 14 | | (E) that the exempt person had an order entered | 15 | | against him or her involving fraud, deceit, or | 16 | | misrepresentation by an administrative agency of this | 17 | | State, the federal government, or any other state or | 18 | | territory of the United States, and the facts relating | 19 | | to the order indicate that it would be contrary to the | 20 | | interest of the public to permit the exempt person to | 21 | | manage a loan originator; | 22 | | (F) that the exempt person made a material | 23 | | misstatement or suppressed or withheld information on | 24 | | the application for an exempt company registration or | 25 | | any document required to be filed with the Secretary; | 26 | | or |
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| 1 | | (G) that the exempt person violated Section 4-5 of | 2 | | this Act. | 3 | | (b) No person, partnership, association, corporation, or | 4 | | other entity
except a licensee under this Act or an entity | 5 | | exempt from licensing
pursuant to Section 1-4, subsection (d), | 6 | | of this Act shall do any business
under any name or title, or | 7 | | circulate or use any advertising or make any
representation or | 8 | | give any information to any person, which indicates or
| 9 | | reasonably implies activity within the scope
of this Act. | 10 | | (c) The Secretary may, through the Attorney General, | 11 | | request the circuit
court of either Cook or Sangamon County to | 12 | | issue an injunction to restrain
any person from violating or | 13 | | continuing to violate any of the foregoing
provisions of this | 14 | | Section. | 15 | | (d) When the Secretary has reasonable cause to believe that | 16 | | any
entity which has not submitted an application for licensure | 17 | | is conducting
any of the activities described in subsection (a) | 18 | | hereof, the Secretary
shall have the power to examine all books | 19 | | and records of the entity and any
additional documentation | 20 | | necessary in order to determine whether such
entity should | 21 | | become licensed under this Act. | 22 | | (d-1) The Secretary may issue orders against any person if | 23 | | the Secretary has reasonable cause to believe that an unsafe, | 24 | | unsound, or unlawful practice has occurred, is occurring, or is | 25 | | about to occur, if any person has violated, is violating, or is | 26 | | about to violate any law, rule, or written agreement with the |
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| 1 | | Secretary, or for the purposes of administering the provisions | 2 | | of this Act and any rule adopted in accordance with this Act.
| 3 | | (e) Any person, partnership, association, corporation or | 4 | | other entity
who violates any provision of this Section commits | 5 | | a business offense and
shall be fined an amount not to exceed | 6 | | $25,000. A mortgage loan brokered, funded, originated, | 7 | | serviced, or purchased by a party who is not licensed under | 8 | | this Section shall not be held to be invalid solely on the | 9 | | basis of a violation under this Section. The changes made to | 10 | | this Section by this amendatory Act of the 99th General | 11 | | Assembly are declarative of existing law. | 12 | | (f) Each person, partnership, association, corporation or | 13 | | other entity
conducting activities regulated by this Act shall | 14 | | be issued one license.
Each office, place of business or | 15 | | location at which a residential mortgage
licensee conducts any | 16 | | part of his or her business must
be recorded with the Secretary | 17 | | pursuant to Section 2-8 of this Act. | 18 | | (g) Licensees under this Act shall solicit, broker, fund, | 19 | | originate,
service and purchase residential mortgage loans | 20 | | only in conformity with the
provisions of this Act and such | 21 | | rules and regulations as may be promulgated
by the Secretary. | 22 | | (h) This Act applies to all entities doing business in | 23 | | Illinois as
residential mortgage bankers, as defined by "An Act | 24 | | to provide for the
regulation of mortgage bankers", approved | 25 | | September 15, 1977, as amended,
regardless of whether licensed | 26 | | under that or any prior Act. Any existing
residential mortgage |
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| 1 | | lender or residential mortgage broker in Illinois
whether or | 2 | | not previously licensed, must operate in accordance with this | 3 | | Act. | 4 | | (i) This Act is a successor Act to and a continuance of the | 5 | | regulation
of residential mortgage bankers provided in, "An Act | 6 | | to provide for the
regulation of mortgage bankers", approved | 7 | | September 15, 1977, as amended. | 8 | | Entities and persons subject to the predecessor Act shall | 9 | | be subject to
this Act from and after its effective date. | 10 | | (Source: P.A. 97-143, eff. 7-14-11; 98-492, eff. 8-16-13.)
| 11 | | Section 99. Effective date. This Act takes effect upon | 12 | | becoming law.
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