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Sen. Jacqueline Y. Collins
Filed: 4/15/2013
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1 | | AMENDMENT TO SENATE BILL 1667
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2 | | AMENDMENT NO. ______. Amend Senate Bill 1667 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Residential Mortgage License Act of 1987 is |
5 | | amended by changing Sections 1-3 and 4-2 and adding Section |
6 | | 7-15 as follows: |
7 | | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) |
8 | | Sec. 1-3. Necessity for License; Scope of Act. |
9 | | (a) No person, partnership, association, corporation or |
10 | | other entity
shall engage in the business of brokering, |
11 | | funding, originating, servicing
or purchasing of residential |
12 | | mortgage loans without first obtaining a
license from the |
13 | | Secretary Commissioner in accordance with the licensing |
14 | | procedure
provided in this Article I and such regulations as |
15 | | may be promulgated by
the Secretary Commissioner . The licensing |
16 | | provisions of this Section shall not apply
to any entity |
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1 | | engaged solely in commercial mortgage lending or
to any person, |
2 | | partnership association, corporation or other entity
exempted |
3 | | pursuant to Section 1-4, subsection (d), of this Act or in |
4 | | accordance
with regulations promulgated by the Secretary |
5 | | Commissioner hereunder. No provision of this Act shall apply to |
6 | | an exempt person or entity as defined in items (1) and (1.5) 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. |
14 | | Effective January 1, 2011, no provision of this Act shall |
15 | | apply to an exempt person or entity as defined in item (1.8) of |
16 | | subsection (d) of Section 1-4 of this Act. Notwithstanding |
17 | | anything to the contrary in the preceding sentence, an |
18 | | individual acting as a mortgage loan originator who is not |
19 | | employed by and acting for an entity described in item (1) of |
20 | | subsection (tt) of Section 1-4 of this Act shall be subject to |
21 | | the mortgage loan originator licensing requirements of Article |
22 | | VII of this Act, and provided that an individual acting as a |
23 | | mortgage loan originator under item (1.8) of subsection (d) of |
24 | | Section 1-4 of this Act shall be further subject to a |
25 | | determination by the U.S. Department of Housing and Urban |
26 | | Development through final rulemaking or other authorized |
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1 | | agency determination under the federal Secure and Fair |
2 | | Enforcement for Mortgage Licensing Act of 2008. |
3 | | (a-1) A person who is exempt from licensure pursuant to |
4 | | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of |
5 | | this Act as a federally chartered savings bank that is |
6 | | registered with the Nationwide Mortgage Licensing System and |
7 | | Registry may apply to the Secretary for an exempt company |
8 | | registration for the purpose of sponsoring one or more |
9 | | individuals subject to the mortgage loan originator licensing |
10 | | requirements of Article VII of this Act. Registration with the |
11 | | Division of Banking of the Department shall not affect the |
12 | | exempt status of the applicant. |
13 | | (1) A mortgage loan originator eligible for licensure |
14 | | under this subsection shall (A) be covered under an |
15 | | exclusive written contract with, and originate residential |
16 | | mortgage loans solely on behalf of, that exempt person; and |
17 | | (B) hold a current, valid insurance producer license under |
18 | | Article XXXI of the Illinois Insurance Code. |
19 | | (2) An exempt person shall: (A) fulfill any reporting |
20 | | requirements required by the Nationwide Mortgage Licensing |
21 | | System and Registry or the Secretary; (B) provide a blanket |
22 | | surety bond pursuant to Section 7-12 of this Act covering |
23 | | the activities of all its sponsored mortgage loan |
24 | | originators; (C) reasonably supervise the activities of |
25 | | all its sponsored mortgage loan originators; (D) comply |
26 | | with all rules and orders (including the averments |
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1 | | contained in Section 2-4 of this Act as applicable to a |
2 | | non-licensed exempt entity provided for in this Section) |
3 | | that the Secretary deems necessary to ensure compliance |
4 | | with the federal SAFE Act; and (E) pay an annual |
5 | | registration fee established by the Director. |
6 | | (3) The Secretary may deny an exempt company |
7 | | registration to an exempt person or fine, suspend, or |
8 | | revoke an exempt company registration if the Secretary |
9 | | finds one of the following: |
10 | | (A) that the exempt person is not a person of |
11 | | honesty, truthfulness, or good character; |
12 | | (B) that the exempt person violated any applicable |
13 | | law, rule, or order; |
14 | | (C) that the exempt person refused or failed to |
15 | | furnish, within a reasonable time, any information or |
16 | | make any report that may be required by the Secretary; |
17 | | (D) that the exempt person had a final judgment |
18 | | entered against him or her in a civil action on grounds |
19 | | of fraud, deceit, or misrepresentation, and the |
20 | | conduct on which the judgment is based indicates that |
21 | | it would be contrary to the interest of the public to |
22 | | permit the exempt person to manage a loan originator; |
23 | | (E) that the exempt person had an order entered |
24 | | against him or her involving fraud, deceit, or |
25 | | misrepresentation by an administrative agency of this |
26 | | State, the federal government, or any other state or |
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1 | | territory of the United States, and the facts relating |
2 | | to the order indicate that it would be contrary to the |
3 | | interest of the public to permit the exempt person to |
4 | | manage a loan originator; |
5 | | (F) that the exempt person made a material |
6 | | misstatement or suppressed or withheld information on |
7 | | the application for an exempt company registration or |
8 | | any document required to be filed with the Secretary; |
9 | | or |
10 | | (G) that the exempt person violated Section 4-5 of |
11 | | this Act. |
12 | | (b) No person, partnership, association, corporation, or |
13 | | other entity
except a licensee under this Act or an entity |
14 | | exempt from licensing
pursuant to Section 1-4, subsection (d), |
15 | | of this Act shall do any business
under any name or title, or |
16 | | circulate or use any advertising or make any
representation or |
17 | | give any information to any person, which indicates or
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18 | | reasonably implies activity within the scope
of this Act. |
19 | | (c) The Secretary Commissioner may, through the Attorney |
20 | | General, request the circuit
court of either Cook or Sangamon |
21 | | County to issue an injunction to restrain
any person from |
22 | | violating or continuing to violate any of the foregoing
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23 | | provisions of this Section. |
24 | | (d) When the Secretary Commissioner has reasonable cause to |
25 | | believe that any
entity which has not submitted an application |
26 | | for licensure is conducting
any of the activities described in |
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1 | | subsection (a) hereof, the Secretary Commissioner
shall have |
2 | | the power to examine all books and records of the entity and |
3 | | any
additional documentation necessary in order to determine |
4 | | whether such
entity should become licensed under this Act. |
5 | | (d-1) The Secretary Commissioner may issue orders against |
6 | | any person if the Secretary Commissioner has reasonable cause |
7 | | to believe that an unsafe, unsound, or unlawful practice has |
8 | | occurred, is occurring, or is about to occur, if any person has |
9 | | violated, is violating, or is about to violate any law, rule, |
10 | | or written agreement with the Secretary Commissioner , or for |
11 | | the purposes of administering the provisions of this Act and |
12 | | any rule adopted in accordance with this Act.
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13 | | (e) Any person, partnership, association, corporation or |
14 | | other entity
who violates any provision of this Section commits |
15 | | a business offense and
shall be fined an amount not to exceed |
16 | | $25,000. |
17 | | (f) Each person, partnership, association, corporation or |
18 | | other entity
conducting activities regulated by this Act shall |
19 | | be issued one license.
Each office, place of business or |
20 | | location at which a residential mortgage
licensee conducts any |
21 | | part of his or her business must
be recorded with the Secretary |
22 | | Commissioner pursuant to Section 2-8 of this Act. |
23 | | (g) Licensees under this Act shall solicit, broker, fund, |
24 | | originate,
service and purchase residential mortgage loans |
25 | | only in conformity with the
provisions of this Act and such |
26 | | rules and regulations as may be promulgated
by the Secretary |
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1 | | Commissioner . |
2 | | (h) This Act applies to all entities doing business in |
3 | | Illinois as
residential mortgage bankers, as defined by "An Act |
4 | | to provide for the
regulation of mortgage bankers", approved |
5 | | September 15, 1977, as amended,
regardless of whether licensed |
6 | | under that or any prior Act. Any existing
residential mortgage |
7 | | lender or residential mortgage broker in Illinois
whether or |
8 | | not previously licensed, must operate in accordance with this |
9 | | Act. |
10 | | (i) This Act is a successor Act to and a continuance of the |
11 | | regulation
of residential mortgage bankers provided in, "An Act |
12 | | to provide for the
regulation of mortgage bankers", approved |
13 | | September 15, 1977, as amended. |
14 | | Entities and persons subject to the predecessor Act shall |
15 | | be subject to
this Act from and after its effective date. |
16 | | (Source: P.A. 96-112, eff. 7-31-09; 96-1216, eff. 1-1-11; |
17 | | 97-143, eff. 7-14-11.)
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18 | | (205 ILCS 635/4-2) (from Ch. 17, par. 2324-2)
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19 | | Sec. 4-2. Examination; prohibited activities.
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20 | | (a) The business affairs of a licensee under this Act shall |
21 | | be examined
for compliance with this Act as often as the |
22 | | Secretary Commissioner deems necessary and
proper. The |
23 | | Secretary Commissioner shall promulgate rules with respect to |
24 | | the frequency
and manner of examination. The Secretary |
25 | | Commissioner shall appoint a suitable person
to perform such
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1 | | examination. The Secretary Commissioner and his appointees may |
2 | | examine the
entire
books, records, documents, and operations of |
3 | | each licensee and its subsidiary, affiliate, or agent, and may |
4 | | examine
any of the licensee's or its subsidiary's, affiliate's, |
5 | | or agent's officers, directors, employees and agents under |
6 | | oath. For purposes of this Section, "agent" includes service |
7 | | providers such as accountants, closing services providers, |
8 | | providers of outsourced services such as call centers, |
9 | | marketing consultants, and loan processors, even if exempt from |
10 | | licensure under this Act. This Section does not apply to an |
11 | | attorney's privileged work product or communications.
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12 | | (b) The Secretary Commissioner shall prepare a
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13 | | sufficiently
detailed
report of each
licensee's examination, |
14 | | shall issue a copy of such report to each
licensee's |
15 | | principals, officers, or directors and shall take appropriate
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16 | | steps to ensure correction of violations of this Act.
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17 | | (c) Affiliates of a licensee shall be subject to |
18 | | examination by the Secretary
Commissioner on the same terms as |
19 | | the licensee, but only when reports
from, or examination of a |
20 | | licensee provides for documented evidence of
unlawful activity |
21 | | between a licensee and affiliate benefiting, affecting or
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22 | | deriving from the activities regulated by this Act.
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23 | | (d) The expenses of any examination of the licensee and |
24 | | affiliates shall
be borne by the licensee and assessed by the |
25 | | Secretary Commissioner as established
by regulation.
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26 | | (e) Upon completion of the examination, the Secretary |
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1 | | Commissioner shall issue a
report to the licensee. All |
2 | | confidential supervisory information, including the |
3 | | examination report
and the work papers
of the report, shall |
4 | | belong to the Secretary's Commissioner's office and may not be
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5 | | disclosed to anyone other than the licensee, law enforcement |
6 | | officials or other
regulatory agencies that have an appropriate |
7 | | regulatory interest as determined by the Secretary |
8 | | Commissioner , or to a party presenting a lawful subpoena to the |
9 | | Office of the Secretary
Commissioner . The Secretary |
10 | | Commissioner may immediately appeal to the court of |
11 | | jurisdiction the disclosure of such confidential supervisory |
12 | | information and seek a stay of the subpoena pending the outcome |
13 | | of the appeal. Reports required of licensees by the Secretary |
14 | | Commissioner under this Act
and results of examinations |
15 | | performed by the Secretary Commissioner under this Act shall
be |
16 | | the property of only the Secretary Commissioner , but may be |
17 | | shared with the licensee. Access under this
Act to the books |
18 | | and records of each licensee shall be limited to the Secretary
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19 | | Commissioner and his agents as provided in this Act and to the |
20 | | licensee and its
authorized agents and designees. No other |
21 | | person shall have access to the
books and records of a licensee |
22 | | under this Act. Any person upon whom a demand for production of |
23 | | confidential supervisory information is made, whether by |
24 | | subpoena, order, or other judicial or administrative process, |
25 | | must withhold production of the confidential supervisory |
26 | | information and must notify the Secretary Commissioner of the |
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1 | | demand, at which time the Secretary Commissioner is authorized |
2 | | to intervene for the purpose of enforcing the limitations of |
3 | | this Section or seeking the withdrawal or termination of the |
4 | | attempt to compel production of the confidential supervisory |
5 | | information. The Secretary Commissioner may impose any |
6 | | conditions and limitations on the disclosure of confidential |
7 | | supervisory information that are necessary to protect the |
8 | | confidentiality of such information. Except as authorized by |
9 | | the Secretary Commissioner , no person obtaining access to |
10 | | confidential supervisory information may make a copy of the |
11 | | confidential supervisory information. The Secretary |
12 | | Commissioner may condition a decision to disclose confidential |
13 | | supervisory information on entry of a protective order by the |
14 | | court or administrative tribunal presiding in the particular |
15 | | case or on a written agreement of confidentiality. In a case in |
16 | | which a protective order or agreement has already been entered |
17 | | between parties other than the Secretary Commissioner , the |
18 | | Secretary Commissioner may nevertheless condition approval for |
19 | | release of confidential supervisory information upon the |
20 | | inclusion of additional or amended provisions in the protective |
21 | | order. The Secretary Commissioner may authorize a party who |
22 | | obtained the records for use in one case to provide them to |
23 | | another party in another case, subject to any conditions that |
24 | | the Secretary Commissioner may impose on either or both |
25 | | parties. The requestor shall promptly notify other parties to a |
26 | | case of the release of confidential supervisory information |
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1 | | obtained and, upon entry of a protective order, shall provide |
2 | | copies of confidential supervisory information to the other |
3 | | parties.
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4 | | (f) The Secretary Commissioner , deputy commissioners, and |
5 | | employees
of the Office of Banks and Real Estate shall be |
6 | | subject to the restrictions
provided in Section 2.5 of the |
7 | | Division of Banking Act including,
without limitation, the |
8 | | restrictions on (i) owning shares of stock or holding
any other |
9 | | equity interest in an entity regulated under this Act or in any
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10 | | corporation or company that owns or controls an entity |
11 | | regulated under this
Act; (ii) being an officer, director, |
12 | | employee, or agent of an entity regulated
under this Act; and |
13 | | (iii) obtaining a loan or accepting a gratuity from an
entity |
14 | | regulated under this Act.
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15 | | (g) After the initial examination for those licensees whose |
16 | | only mortgage
activity is servicing fewer than 1,000 Illinois |
17 | | residential loans,
the
examination required in subsection (a) |
18 | | may be waived upon submission of a
letter from the licensee's |
19 | | independent certified auditor that the licensee
serviced fewer |
20 | | than 1,000 Illinois residential loans during the
year
in which |
21 | | the
audit was performed.
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22 | | (h) An exempt entity under subsection (a-1) of Section 1-3 |
23 | | of this Act shall cooperate with the Secretary in the |
24 | | examination and investigation of its sponsored and licensed |
25 | | mortgage loan originators at a frequency determined by the |
26 | | Secretary. The exempt entity under subsection (a-1) of Section |
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1 | | 1-3 of this Act shall cooperate with the Secretary in providing |
2 | | mortgage loan originator documents and access to mortgage loan |
3 | | originator offices for the purposes of examination and |
4 | | investigation. The activities of the exempt entity shall not |
5 | | relieve a mortgage loan originator of his or her individual |
6 | | requirements under Section 7-15 of this Act. An exempt entity |
7 | | under subsection (a-1) of Section 1-3 of this Act shall pay to |
8 | | the Department any examination fees invoiced by the Secretary |
9 | | for examination of its sponsored mortgage loan originators. The |
10 | | Secretary shall have the authority to make oral or written |
11 | | inquiries regarding the management of an exempt entity under |
12 | | subsection (a-1) of Section 1-3 of this Act and it shall be the |
13 | | duty of the exempt entity to promptly reply by telephone, in |
14 | | writing, or other means to the inquiry. |
15 | | (Source: P.A. 96-112, eff. 7-31-09; 96-1365, eff. 7-28-10.)
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16 | | (205 ILCS 635/7-15 new) |
17 | | Sec. 7-15. Examination and investigation of certain |
18 | | mortgage loan originators. The activities requiring a licensee |
19 | | of a mortgage loan originator that are sponsored by an exempt |
20 | | entity under subsection (a-1) of Section 1-3 of this Act are |
21 | | subject to examination and investigation by the Secretary. |
22 | | Mortgage loan originators sponsored by an exempt entity shall |
23 | | keep and maintain records of his or her loan activities for a |
24 | | period of 36 months and shall produce records on demand by the |
25 | | Secretary. The records shall include a loan log or loan |
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1 | | production log as approved by the Secretary and any loan |
2 | | application entered, prepared, or created through or from the |
3 | | mortgage loan originator's activities. Mortgage loan |
4 | | originators sponsored by an exempt entity shall provide access, |
5 | | upon the Secretary's demand, to his or her offices for the |
6 | | purposes of the Department's examination and investigation. |
7 | | The Secretary shall determine the manner and frequency at which |
8 | | the Department shall conduct examinations of the mortgage loan |
9 | | originators. Mortgage loan originators sponsored by an exempt |
10 | | entity shall cooperate at all times with the Department |
11 | | pursuant to requirements of this Section and shall be subject |
12 | | to penalties under Section 7-11 of this Act for failure to |
13 | | comply.
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14 | | Section 99. Effective date. This Act takes effect upon |
15 | | becoming law.".
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