Full Text of HB3369 99th General Assembly
HB3369ham001 99TH GENERAL ASSEMBLY | Rep. Patricia R. Bellock Filed: 3/19/2015
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| 1 | | AMENDMENT TO HOUSE BILL 3369
| 2 | | AMENDMENT NO. ______. Amend House Bill 3369 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Residential Mortgage License Act of 1987 is | 5 | | amended by changing Sections 2-1, 2-2, 2-6, 4-5, and 4-8 as | 6 | | follows:
| 7 | | (205 ILCS 635/2-1) (from Ch. 17, par. 2322-1)
| 8 | | Sec. 2-1. Licensee Name.
| 9 | | (a) No person, partnership, association,
corporation, | 10 | | limited liability company, or other entity engaged in the
| 11 | | business regulated by this Act
shall operate such business | 12 | | under a name other than the real names of the entity and
| 13 | | individuals conducting such business. Such business may in | 14 | | addition operate under , an assumed corporate name pursuant to
| 15 | | the Business Corporation Act of 1983, an assumed limited
| 16 | | liability company
name
pursuant to the Limited Liability |
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| 1 | | Company Act,
or an assumed business name pursuant to the | 2 | | Assumed Business Name Act.
| 3 | | (b) A knowing violation of this Section constitutes an | 4 | | unlawful practice
within the meaning of this Act, and in | 5 | | addition to the administrative relief
available under this Act, | 6 | | may be prosecuted for the commission of a Class A
misdemeanor. | 7 | | A person who is convicted of a second or subsequent violation
| 8 | | of this Section is guilty of a Class 4 felony.
| 9 | | (Source: P.A. 89-355, eff. 8-17-95.)
| 10 | | (205 ILCS 635/2-2)
| 11 | | Sec. 2-2. Application process; investigation; fee.
| 12 | | (a) The Secretary shall issue a license upon completion of | 13 | | all of the
following:
| 14 | | (1) The filing of an application for license with the | 15 | | Director or the Nationwide Mortgage Licensing System and | 16 | | Registry as approved by the Director.
| 17 | | (2) The filing with the Secretary of a listing of | 18 | | judgments entered
against, and bankruptcy petitions by, | 19 | | the license applicant for the
preceding 10 years.
| 20 | | (3) The payment, in certified funds, of
investigation | 21 | | and application fees, the total of which shall be in an
| 22 | | amount equal to $2,700 annually. To comply with the common | 23 | | renewal date and requirements of the Nationwide Mortgage | 24 | | Licensing System and Registry, the term of initial licenses | 25 | | may be extended or shortened with applicable fees prorated |
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| 1 | | or combined accordingly.
| 2 | | (4) Except for a broker applying to renew a license, | 3 | | the filing of an
audited balance sheet including all | 4 | | footnotes prepared by a certified public
accountant in | 5 | | accordance with generally accepted accounting principles | 6 | | and
generally accepted auditing standards which evidences | 7 | | that the applicant meets
the net worth requirements of | 8 | | Section 3-5. Notwithstanding the requirements of this | 9 | | subsection, an applicant that is a subsidiary may submit | 10 | | audited consolidated financial statements of its parent, | 11 | | intermediary parent, or ultimate parent as long as the | 12 | | consolidated statements are supported by consolidating | 13 | | statements which include the applicant's financial | 14 | | statement. If the consolidating statements are unaudited, | 15 | | the applicant's chief financial officer shall attest to the | 16 | | applicant's financial statements disclosed in the | 17 | | consolidating statements.
| 18 | | (5) The filing of proof satisfactory to the | 19 | | Commissioner that the
applicant, the members thereof if the | 20 | | applicant is a partnership or
association, the members or | 21 | | managers thereof that retain any authority or
| 22 | | responsibility under the operating agreement if the | 23 | | applicant is a limited
liability company, or the officers | 24 | | thereof if the applicant
is a corporation have 3 years | 25 | | experience preceding application
in real estate finance. | 26 | | Instead of this requirement, the applicant and the
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| 1 | | applicant's officers or members, as applicable, may
| 2 | | satisfactorily complete a program of education in real | 3 | | estate finance and
fair lending, as
approved by the | 4 | | Commissioner, prior to receiving the
initial license.
The | 5 | | Commissioner shall promulgate rules regarding proof of | 6 | | experience
requirements and educational requirements and | 7 | | the satisfactory completion of
those requirements. The | 8 | | Commissioner may establish by rule a list of duly
licensed | 9 | | professionals and others who may be exempt from this | 10 | | requirement.
| 11 | | (6) An investigation of the averments required by | 12 | | Section 2-4, which
investigation must allow the | 13 | | Commissioner to issue positive findings stating
that the | 14 | | financial responsibility, experience, character, and | 15 | | general fitness
of the license applicant and of the members | 16 | | thereof if the license applicant is
a partnership or | 17 | | association, of the officers and directors thereof if the
| 18 | | license applicant is a corporation, and of the managers and | 19 | | members that retain
any authority or responsibility under | 20 | | the operating agreement if the license
applicant is a | 21 | | limited liability company are such as to command the | 22 | | confidence
of the community and to warrant belief that the | 23 | | business will be operated
honestly, fairly and efficiently | 24 | | within the purpose of this Act. If the
Commissioner shall | 25 | | not so find, he or she shall not issue such license, and he
| 26 | | or she shall notify the license applicant of the denial. |
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| 1 | | The Commissioner may impose conditions on a license if the | 2 | | Commissioner determines that the conditions are necessary or | 3 | | appropriate. These conditions shall be imposed in writing and | 4 | | shall continue in effect for the period prescribed by the | 5 | | Commissioner.
| 6 | | (b) All licenses shall be issued to the license applicant.
| 7 | | Upon receipt of such license, a residential mortgage | 8 | | licensee shall be
authorized to engage in the business | 9 | | regulated by this Act. Such license
shall remain in full force | 10 | | and effect until it expires without renewal, is
surrendered by | 11 | | the licensee or revoked or suspended as hereinafter provided.
| 12 | | (Source: P.A. 97-891, eff. 8-3-12; 98-1081, eff. 1-1-15 .)
| 13 | | (205 ILCS 635/2-6)
| 14 | | Sec. 2-6. License issuance and renewal; fee.
| 15 | | (a) Licenses Beginning July 1, 2003, licenses shall be | 16 | | renewed every year using on the
anniversary of the date of | 17 | | issuance of the original license, or the common renewal date of | 18 | | the Nationwide Mortgage Licensing System and Registry as | 19 | | adopted by the Director. To comply with the common renewal date | 20 | | of the Nationwide Mortgage Licensing System and Registry, the | 21 | | term of existing licenses may be extended or shortened with | 22 | | applicable fees prorated accordingly.
Properly completed | 23 | | renewal application forms and filing fees may must be received
| 24 | | by the Secretary 60 days prior to the license expiration | 25 | | renewal date , but, to be deemed timely, the completed renewal |
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| 1 | | application forms and filing fees must be received by the | 2 | | Secretary no later than 30 days prior to the license expiration | 3 | | date .
| 4 | | (b) It shall be the responsibility of each licensee to | 5 | | accomplish renewal
of its license ; failure of the licensee to | 6 | | receive renewal forms absent a
request sent by certified mail | 7 | | for such forms will not waive said
responsibility . Failure by a | 8 | | licensee to submit a properly completed
renewal application | 9 | | form and fees in a timely fashion, absent a written
extension | 10 | | from the Secretary, will result in the license becoming | 11 | | inactive. in the assessment of
additional fees, as follows:
| 12 | | (1) A fee of $567.50 will be assessed to the licensee | 13 | | 30 days
after the
proper renewal date and $1,135 each month | 14 | | thereafter, until the
license is
either renewed or expires | 15 | | pursuant to Section 2-6, subsections (c) and (d),
of this | 16 | | Act.
| 17 | | (2) Such fee will be assessed without prior notice to | 18 | | the licensee, but
will be assessed only in cases wherein | 19 | | the Secretary has in his or her
possession documentation of | 20 | | the licensee's continuing activity for which
the unrenewed | 21 | | license was issued.
| 22 | | (c) A license which is not renewed by the date required in | 23 | | this Section
shall automatically become inactive. No activity | 24 | | regulated by this Act
shall be conducted by the licensee when a | 25 | | license becomes inactive. The Commissioner may require the | 26 | | licensee to provide a plan for the disposition of any |
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| 1 | | residential mortgage loans not closed or funded when the | 2 | | license becomes inactive. The Commissioner may allow a licensee | 3 | | with an inactive license to conduct activities regulated by | 4 | | this Act for the sole purpose of assisting borrowers in the | 5 | | closing or funding of loans for which the loan application was | 6 | | taken from a borrower while the license was active. An
inactive | 7 | | license may be reactivated by the Commissioner upon payment of | 8 | | the renewal fee, and payment
of a reactivation fee equal to the | 9 | | renewal fee.
| 10 | | (d) (Blank) A license which is not renewed within one year | 11 | | of becoming inactive
shall expire .
| 12 | | (e) A licensee ceasing an activity or activities regulated | 13 | | by this Act
and desiring to no longer be licensed shall so | 14 | | inform the Commissioner in
writing and, at the same time, | 15 | | convey any the license issued and all other symbols or
indicia | 16 | | of licensure. The licensee shall include a plan for the | 17 | | withdrawal
from regulated business, including a timetable for | 18 | | the disposition of the
business, and comply with the surrender | 19 | | guidelines or requirements of the Director. Upon receipt of | 20 | | such written notice, the Commissioner shall post the | 21 | | cancellation or issue
a certified statement canceling the | 22 | | license.
| 23 | | (Source: P.A. 95-1047, eff. 4-6-09; 96-112, eff. 7-31-09; | 24 | | 96-1000, eff. 7-2-10.)
| 25 | | (205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)
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| 1 | | Sec. 4-5. Suspension, revocation of licenses; fines.
| 2 | | (a) Upon written notice to a licensee, the Commissioner may | 3 | | suspend
or revoke any license issued pursuant to this Act if he | 4 | | or she shall make a
finding of one or more of the following in | 5 | | the notice that:
| 6 | | (1) Through separate acts or an act or a course of | 7 | | conduct, the licensee
has violated any provisions of this | 8 | | Act, any rule or regulation
promulgated by the Commissioner | 9 | | or of any other law, rule or regulation of
this State or | 10 | | the United States.
| 11 | | (2) Any fact or condition exists which, if it had | 12 | | existed at the time of
the original application for such | 13 | | license would have warranted the
Commissioner in refusing | 14 | | originally to issue such license.
| 15 | | (3) If a licensee is other than an individual, any | 16 | | ultimate
equitable owner, officer, director, or member of | 17 | | the licensed partnership,
association, corporation, or | 18 | | other entity has so acted or failed to act as
would be | 19 | | cause for suspending or revoking a license to that party as | 20 | | an
individual.
| 21 | | (b) No license shall be suspended or revoked, except as | 22 | | provided in this
Section, nor shall any licensee be fined | 23 | | without notice of his or her right
to a hearing as provided in | 24 | | Section 4-12 of this Act.
| 25 | | (c) The Commissioner, on good cause shown that an emergency | 26 | | exists, may
suspend any license for a period not
exceeding 180 |
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| 1 | | days, pending investigation. Upon a showing that a
licensee has | 2 | | failed to meet the experience or educational requirements of
| 3 | | Section 2-2 or the requirements of subsection (g) of Section | 4 | | 3-2, the
Commissioner shall suspend, prior to hearing as | 5 | | provided in Section 4-12, the
license until those requirements | 6 | | have been met.
| 7 | | (d) The provisions of subsection (e) of Section 2-6 of this | 8 | | Act
shall not affect a licensee's civil or criminal liability
| 9 | | for acts committed prior to surrender of a license.
| 10 | | (e) No revocation, suspension or surrender of any license | 11 | | shall impair
or affect the obligation of any pre-existing | 12 | | lawful contract between the
licensee and any person.
| 13 | | (f) Every license issued under this Act shall remain in | 14 | | force and effect
until the same shall have expired without | 15 | | renewal, have been surrendered,
revoked or suspended in | 16 | | accordance with the provisions of this Act, but the
| 17 | | Commissioner shall have authority to reinstate a suspended | 18 | | license or to
issue a new license to a licensee whose license | 19 | | shall have been revoked if
no fact or condition then exists | 20 | | which would have warranted the
Commissioner in refusing | 21 | | originally to issue such license under this Act.
| 22 | | (g) Whenever the Commissioner shall revoke or suspend a | 23 | | license issued
pursuant to this Act or fine a licensee under | 24 | | this Act, he or she shall
forthwith execute a written order to | 25 | | that effect. The
Commissioner shall publish notice of such | 26 | | order in the Illinois Register
and post notice of the order on |
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| 1 | | an agency Internet site maintained by the Commissioner or on | 2 | | the Nationwide Mortgage Licensing System and Registry and shall | 3 | | forthwith serve a copy of such order upon the
licensee. Any | 4 | | such order may be reviewed in the manner provided by
Section | 5 | | 4-12 of this Act.
| 6 | | (h) When the Commissioner finds any person in violation of | 7 | | the grounds
set forth in subsection (i), he or she may enter an | 8 | | order imposing one or
more of the following penalties:
| 9 | | (1) Revocation of license;
| 10 | | (2) Suspension of a license subject to reinstatement | 11 | | upon satisfying all
reasonable conditions the Commissioner | 12 | | may specify;
| 13 | | (3) Placement of the licensee or applicant on probation | 14 | | for a period of
time and subject to all reasonable | 15 | | conditions as the Commissioner may specify;
| 16 | | (4) Issuance of a reprimand;
| 17 | | (5) Imposition of a fine not to exceed $25,000 for each
| 18 | | count of
separate offense, provided that a fine may be | 19 | | imposed not to exceed $75,000 for each separate count of | 20 | | offense of paragraph (2) of subsection (i) of this Section; | 21 | | and
| 22 | | (6) Denial of a license.
| 23 | | (i) The following acts shall constitute grounds for which | 24 | | the
disciplinary actions specified in subsection (h) above may | 25 | | be taken:
| 26 | | (1) Being convicted or found guilty, regardless of |
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| 1 | | pendency of an
appeal, of a crime in any jurisdiction which | 2 | | involves fraud, dishonest
dealing, or any other act of | 3 | | moral turpitude;
| 4 | | (2) Fraud, misrepresentation, deceit or negligence in | 5 | | any mortgage
financing transaction;
| 6 | | (3) A material or intentional misstatement of fact on | 7 | | an initial or
renewal application;
| 8 | | (4) Failure to follow the Commissioner's regulations | 9 | | with respect to
placement of funds in escrow accounts;
| 10 | | (5) Insolvency or filing under any provision of the | 11 | | Bankruptcy Code
as a debtor;
| 12 | | (6) Failure to account or deliver to any person any | 13 | | property such as any
money, fund, deposit, check, draft, | 14 | | mortgage, or other document or thing of
value, which has | 15 | | come into his or her hands and which is not his or her
| 16 | | property or which he or she is not in law or equity | 17 | | entitled to retain,
under the circumstances and at the time | 18 | | which has been agreed upon or is
required by law or, in the | 19 | | absence of a fixed time, upon demand of the
person entitled | 20 | | to such accounting and delivery;
| 21 | | (7) Failure to disburse funds in accordance with | 22 | | agreements;
| 23 | | (8) Any misuse, misapplication, or misappropriation of | 24 | | trust funds
or escrow funds;
| 25 | | (9) Having a license, or the equivalent, to practice | 26 | | any profession or
occupation revoked, suspended, or |
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| 1 | | otherwise acted against, including the
denial of licensure | 2 | | by a licensing authority of this State or another
state, | 3 | | territory or country for fraud, dishonest dealing or any | 4 | | other act
of moral turpitude;
| 5 | | (10) Failure to issue a satisfaction of mortgage when | 6 | | the residential
mortgage has been executed and proceeds | 7 | | were not disbursed to the benefit
of the mortgagor and when | 8 | | the mortgagor has fully paid licensee's costs
and | 9 | | commission;
| 10 | | (11) Failure to comply with any order of the | 11 | | Commissioner or rule made
or issued under the provisions of | 12 | | this Act;
| 13 | | (12) Engaging in activities regulated by this Act | 14 | | without a current,
active license unless specifically | 15 | | exempted by this Act;
| 16 | | (13) Failure to pay in a timely manner any fee, charge | 17 | | or fine under
this Act;
| 18 | | (14) Failure to maintain, preserve, and keep available | 19 | | for examination,
all books, accounts or other documents | 20 | | required by the provisions of this
Act and the rules of the | 21 | | Commissioner;
| 22 | | (15) Refusing, obstructing, evading, or unreasonably | 23 | | delaying an investigation, information request, or | 24 | | examination authorized under this Act, or refusing, | 25 | | obstructing, evading, or unreasonably delaying compliance | 26 | | with the Director's subpoena or subpoena duces tecum;
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| 1 | | (16) A pattern of substantially underestimating the | 2 | | maximum closing costs;
| 3 | | (17) Failure to comply with or violation of any | 4 | | provision of this Act; | 5 | | (18) Failure to comply with or violation of any | 6 | | provision of Article 3 of the Residential Real Property | 7 | | Disclosure Act.
| 8 | | (j) A licensee shall be subject to the disciplinary actions | 9 | | specified in
this Act for violations of subsection (i) by any | 10 | | officer, director,
shareholder, joint venture, partner, | 11 | | ultimate equitable owner, or employee
of the licensee.
| 12 | | (k) Such licensee shall be subject to suspension or | 13 | | revocation for
unauthorized employee actions only if there is a | 14 | | pattern of repeated violations by
employees or the licensee has | 15 | | knowledge of the violations, or there is substantial harm to a | 16 | | consumer.
| 17 | | (l) Procedure for surrender of license:
| 18 | | (1) The Commissioner may, after 10 days notice by | 19 | | certified mail to the
licensee at the address set forth on | 20 | | the license, stating the contemplated
action and in general | 21 | | the grounds therefor and the date, time and place of
a | 22 | | hearing thereon, and after providing the licensee with a | 23 | | reasonable
opportunity to be heard prior to such action, | 24 | | fine such licensee an amount
not exceeding $25,000
per | 25 | | violation, or revoke or suspend any license
issued | 26 | | hereunder if he or she finds that:
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| 1 | | (i) The licensee has failed to comply with any | 2 | | provision of this Act or
any order, decision, finding, | 3 | | rule, regulation or direction of the
Commissioner | 4 | | lawfully made pursuant to the authority of this Act; or
| 5 | | (ii) Any fact or condition exists which, if it had | 6 | | existed at the time
of the original application for the | 7 | | license, clearly would have warranted
the Commissioner | 8 | | in refusing to issue the license.
| 9 | | (2) Any licensee may submit application to surrender a | 10 | | license,
but upon the Director approving the surrender, it | 11 | | shall not affect the licensee's civil or criminal liability
| 12 | | for acts committed prior to surrender or entitle the | 13 | | licensee to a return
of any part of the license fee.
| 14 | | (Source: P.A. 96-112, eff. 7-31-09; 97-891, eff. 8-3-12.)
| 15 | | (205 ILCS 635/4-8) (from Ch. 17, par. 2324-8)
| 16 | | Sec. 4-8. Delinquency Default rate ; examination.
| 17 | | (a) The Commissioner shall obtain from the U.S. Department | 18 | | of Housing and
Urban Development on a semi-annual basis that | 19 | | Department's loan delinquency data default claim rates
for | 20 | | endorsements issued by that Department .
| 21 | | (b) The Commissioner shall conduct as part of an | 22 | | examination of each licensee a review of the licensee's loan | 23 | | delinquency data
having a default rate equal to or greater than | 24 | | 5% .
| 25 | | This subsection shall not be construed as a limitation
of |
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| 1 | | the Commissioner's examination authority under Section 4-2 of | 2 | | this Act or as
otherwise provided in this Act.
The Commissioner | 3 | | may require a licensee to provide loan delinquency default
data | 4 | | as the Commissioner deems necessary for the proper enforcement
| 5 | | of the Act.
| 6 | | (c) The purpose of the examination under subsection (b) | 7 | | shall be
to determine whether the loan delinquency data default | 8 | | rate of the
licensee has resulted from practices which deviate | 9 | | from
sound and accepted mortgage underwriting practices, | 10 | | including but not
limited to credit fraud, appraisal fraud and | 11 | | property inspection fraud.
For the purpose of conducting this | 12 | | examination, the Commissioner may accept
materials prepared | 13 | | for the U.S. Department of Housing and Urban Development.
At | 14 | | the conclusion of the examination, the Commissioner shall make | 15 | | his or
her findings available to the Residential Mortgage | 16 | | Board.
| 17 | | (d) The Commissioner, at his or her discretion, may hold | 18 | | public
hearings, or at the direction of the Residential | 19 | | Mortgage Board, shall hold
public hearings. Such testimony | 20 | | shall be by a homeowner or mortgagor or his
agent, whose | 21 | | residential interest is affected by the activities of the
| 22 | | residential mortgage licensee subject to such hearing.
At such | 23 | | public hearing, a witness may present testimony on his or her | 24 | | behalf
concerning only his or her home, or home mortgage or a | 25 | | witness may authorize a
third party to appear on his or her | 26 | | behalf. The testimony shall be
restricted to information and |
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| 1 | | comments related to a specific residence or
specific | 2 | | residential mortgage application or applications for a | 3 | | residential
mortgage or residential loan transaction. The | 4 | | testimony must be preceded
by either a letter of complaint or a | 5 | | completed consumer complaint form
prescribed by the | 6 | | Commissioner.
| 7 | | (e) The Commissioner shall, at the conclusion of the public | 8 | | hearings,
release his or her findings and shall also make | 9 | | public any action taken
with respect to the licensee. The | 10 | | Commissioner shall also give full
consideration to the findings | 11 | | of this examination whenever reapplication is
made by the | 12 | | licensee for a new license under this Act.
| 13 | | (f) A licensee that is examined pursuant to subsection (b)
| 14 | | shall submit to the Commissioner a plan which shall be designed | 15 | | to reduce that
licensee's loan delinquencies default rate to a | 16 | | figure that is
less than 5% . The plan shall be implemented by | 17 | | the
licensee as approved by the Commissioner. A licensee that | 18 | | is
examined pursuant to subsection (b) shall report monthly,
| 19 | | for a one year period, one, 2, and 3 month loan delinquencies | 20 | | defaults .
| 21 | | (g) Whenever the Commissioner finds that a licensee's loan | 22 | | delinquencies
default rate
on insured mortgages is unusually | 23 | | high within a particular
geographic area, he or she shall | 24 | | require that licensee to submit such
information as is | 25 | | necessary to determine whether that licensee's practices
have | 26 | | constituted credit fraud, appraisal fraud or property |
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| 1 | | inspection
fraud. The Commissioner shall promulgate such rules | 2 | | as are necessary to
determine whether any licensee's loan | 3 | | delinquencies are default rate is
unusually high within a | 4 | | particular area.
| 5 | | (Source: P.A. 89-355, eff. 1-1-96; 89-626, eff. 8-9-96; 90-301, | 6 | | eff. 8-1-97.)".
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