22100. (a) No person shall engage in the business of a finance
lender or broker without obtaining a license from the commissioner.
(b) Every licensee engaging in the business of making or brokering
residential mortgage loans shall require that every mortgage loan
originator employed or compensated by that licensee obtains and
maintains a mortgage loan originator license from the commissioner
under this division or Division 20 (commencing with Section 50000),
or has first obtained a license endorsement from the Commissioner of
Real Estate pursuant to Article 2.1 (commencing with Section
10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and
Professions Code.
(c) A finance lender or broker shall not employ a mortgage loan
originator whose license or license endorsement has lapsed.
(d) A finance lender or broker may not make or broker a
residential mortgage loan unless that loan is offered by, negotiated
by, or applied for through a licensed mortgage loan originator.
(e) Every licensee engaged in the business of making or brokering
residential mortgage loans and every mortgage loan originator
licensed under this division shall register with and maintain a valid
unique identifier issued by the Nationwide Mortgage Licensing System
and Registry.
22101. (a) An application for a license as a finance lender or
broker under this division shall be in the form and contain the
information that the commissioner may by rule require and shall be
filed upon payment of the fee specified in Section 22103.
(b) Notwithstanding any other provision of law, an applicant who
does not currently hold a license as a finance lender or broker under
this division shall furnish with his or her application, a full set
of fingerprints and related information for purposes of the
commissioner conducting a criminal history record check. The
commissioner shall obtain and receive criminal history information
from the Department of Justice and the Federal Bureau of
Investigation pursuant to Section 22101.5.
(c) Nothing in this section shall be construed to prevent a
licensee from engaging in the business of a finance lender through a
subsidiary corporation if the subsidiary corporation is licensed
pursuant to this division.
(d) For purposes of this section, "subsidiary corporation" means a
corporation that is wholly owned by a licensee.
(e) A new application shall not be required for a change in the
address of an existing location previously licensed under this
division. However, the licensee shall comply with the requirements of
Section 22153.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require an application to be made through
the Nationwide Mortgage Licensing System and Registry, and may
require fees, fingerprints, financial statements, supporting
documents, changes of address, and any other information, and
amendments or modifications thereto, to be submitted in the same
manner.
22101.5. (a) The commissioner shall submit to the Department of
Justice fingerprint images and related information required by the
Department of Justice of all finance lender and broker license
candidates, as defined by subdivision (a) of Section 22101, for
purposes of obtaining information as to the existence and content of
a record of state or federal convictions, state or federal arrests,
and information as to the existence and content of a record of state
or federal arrests for which the Department of Justice establishes
that the person is free on bail or on his or her own recognizance
pending trial or appeal.
(b) When received, the Department of Justice shall forward to the
Federal Bureau of Investigation requests for federal summary criminal
history information received pursuant to this section. The
Department of Justice shall review the information returned from the
Federal Bureau of Investigation and compile and disseminate a
response to the commissioner.
(c) The Department of Justice shall provide a response to the
commissioner pursuant to paragraph (1) of subdivision (p) of Section
11105 of the Penal Code.
(d) The commissioner shall request from the Department of Justice
subsequent arrest notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for license candidates described
in subdivision (a).
(e) The Department of Justice shall charge a fee sufficient to
cover the costs of processing the requests pursuant to this section.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require fingerprints submitted by an
applicant to be submitted to the Nationwide Mortgage Licensing System
and Registry in addition to the Department of Justice.
22102. (a) A finance lender or broker licensee seeking to engage in
business at a new location shall submit an application for a branch
office license to the commissioner at least 10 days before engaging
in business at a new location and pay the fee required by Section
22103. The commissioner may require an applicant seeking to engage in
business at a new location to submit its application, or parts
thereof, through the Nationwide Mortgage Licensing System and
Registry.
(b) The licensee may engage in business at the new location 10
days after the date of submission of a branch office application.
(c) (1) The commissioner shall approve or deny the person
responsible for the lending activity at the new location in
accordance with Section 22109, and shall notify the licensee of this
decision within 90 days of the date of receipt of the application.
(2) If the commissioner denies the application, the licensee
shall, within 10 days of the date of receipt of notification of the
commissioner's denial, submit a new application to the commissioner
designating a different person responsible for the lending activity
at the new location. The commissioner shall approve or deny the
different person as provided in paragraph (1).
(d) A licensee shall not engage in business at a new location in a
name other than a name approved by the commissioner.
(e) The commissioner may adopt regulations to implement the
requirements of this section.
(f) A branch office license to engage in business at a new
location shall be issued in accordance with this section. A change of
street address of a place of business designated in a license shall
be made in accordance with Section 22153 and shall not constitute a
new location subject to the requirements of this section.
22103. At the time of filing the application for a finance lender,
broker, or branch office license, the applicant shall pay to the
commissioner the sum of one hundred dollars ($100) as a fee for
investigating the application, plus the cost of fingerprint
processing and the criminal history record check under Section
22101.5, and two hundred dollars ($200) as an application fee. The
investigation fee, including the amount for the criminal history
record check, and the application fee are not refundable if an
application is denied or withdrawn.
22104. (a) The applicant shall file with the application for a
finance lender or broker license financial statements prepared in
accordance with generally accepted accounting principles and
acceptable to the commissioner that indicate a net worth of at least
twenty-five thousand dollars ($25,000). Except as provided in
subdivisions (b) and (c), a licensee shall maintain a net worth of at
least twenty-five thousand dollars ($25,000) at all times.
(b) A licensed finance lender or broker, that employs one or more
mortgage loan originators and that makes residential mortgage loans,
shall continuously maintain a minimum net worth of at least two
hundred fifty thousand dollars ($250,000).
(c) A licensed finance broker, that employs one or more mortgage
loan originators and that arranges, but does not make, residential
mortgage loans, shall continuously maintain a minimum net worth of at
least fifty thousand dollars ($50,000).
(d) The commissioner may promulgate rules or regulations with
respect to the requirements for minimum net worth, as are necessary
to accomplish the purposes of this division and comply with the SAFE
Act.
22105. Upon the filing of an application pursuant to Section 22101
and the payment of the fees, the commissioner shall investigate the
applicant and its general partners and persons owning or controlling,
directly or indirectly, 10 percent or more of the outstanding
interests or any person responsible for the conduct of the applicant'
s lending activities in this state, if the applicant is a
partnership. If the applicant is a corporation, trust, limited
liability company, or association, including an unincorporated
organization, the commissioner shall investigate the applicant, its
principal officers, directors, managing members, and persons owning
or controlling, directly or indirectly, 10 percent or more of the
outstanding equity securities or any person responsible for the
conduct of the applicant's lending activities in this state. Upon the
filing of an application pursuant to Section 22102 and the payment
of the fees, the commissioner shall investigate the person
responsible for the lending activity of the licensee at the new
location described in the application. The investigation may be
limited to information that was not included in prior applications
filed pursuant to this division. If the commissioner determines that
the applicant has satisfied this division and does not find facts
constituting reasons for denial under Section 22109, the commissioner
shall issue and deliver a license to the applicant.
For the purposes of this section, "principal officers" shall mean
president, chief executive officer, treasurer, and chief financial
officer, as may be applicable, and any other officer with direct
responsibility for the conduct of the applicant's lending activities
within the state.
22105.1. (a) An applicant for a mortgage loan originator license
shall apply by submitting the uniform form prescribed for such
purpose by the Nationwide Mortgage Licensing System and Registry. The
commissioner may require the submission of additional information or
supporting documentation to the department.
(b) Section 461 of the Business and Professions Code shall not be
applicable to the Department of Corporations when using a national
uniform application adopted or approved for use by the Nationwide
Mortgage Licensing System and Registry in connection with the SAFE
Act.
(c) In connection with an application for a license as a mortgage
loan originator, the applicant shall, at a minimum, furnish to the
Nationwide Mortgage Licensing System and Registry information
concerning the applicant's identity, including the following:
(1) Fingerprint images and related information, for purposes of
performing a federal, or both a state and federal, criminal history
background check.
(2) Personal history and experience in a form prescribed by the
Nationwide Mortgage Licensing System and Registry, including the
submission of authorization for the Nationwide Mortgage Licensing
System and Registry and the commissioner to obtain both of the
following:
(A) An independent credit report obtained from a consumer
reporting agency.
(B) Information related to any administrative, civil, or criminal
findings by any governmental jurisdiction.
(d) The commissioner may ask the Nationwide Mortgage Licensing
System and Registry to obtain state criminal history background check
information on applicants described in subdivision (a) using the
procedures set forth in subdivisions (e) and (f).
(e) If the Nationwide Mortgage Licensing System and Registry
electronically submits fingerprint images and related information, as
required by the Department of Justice, for an applicant for a
mortgage loan originator license, for the purposes of obtaining
information as to the existence and content of a record of state
convictions and state arrests and to the existence and content of a
record of state arrests for which the Department of Justice
establishes that the person is free on bail or on his or her
recognizance pending trial or appeal, the Department of Justice shall
provide an electronic response to the Nationwide Mortgage Licensing
System and Registry pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code, and shall provide the same
electronic response to the commissioner.
(f) The Nationwide Mortgage Licensing System and Registry may
request from the Department of Justice subsequent arrest notification
service, as provided pursuant to Section 11105.2 of the Penal Code,
for persons described in subdivision (a). The Department of Justice
shall provide the same electronic response to the commissioner.
(g) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the requests described in this section.
22105.2. (a) The commissioner is authorized to establish
relationships or contracts with the Nationwide Mortgage Licensing
System and Registry or other entities designated by the Nationwide
Mortgage Licensing System and Registry to collect and maintain
records and process transaction fees or other fees related to
licensees or other persons subject to this division.
(b) For the purpose of participating in the Nationwide Mortgage
Licensing System and Registry, the commissioner is authorized to
waive or modify, in whole or in part, by rule, regulation, or order,
any or all of the requirements of this division and to establish new
requirements as reasonably necessary to participate in the Nationwide
Mortgage Licensing System and Registry.
(c) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting information
from, and distributing information to, the Department of Justice or
any governmental agency.
(d) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting and
distributing information to and from any source so directed by the
commissioner.
(e) The commissioner shall establish a process where applicants
and licensees may challenge information entered into the Nationwide
Mortgage Licensing System and Registry by the commissioner.
22105.3. (a) Except as otherwise provided in Section 1512 of the
SAFE Act, the requirements under any federal or state law regarding
the privacy or confidentiality of any information or material
provided to the Nationwide Mortgage Licensing System and Registry,
and any privilege arising under federal or state law, including the
rules of any federal or state court, with respect to that information
or material, shall continue to apply to the information or material
after the information or material has been disclosed to the
Nationwide Mortgage Licensing System and Registry. The information
and material may be shared with all state and federal regulatory
officials with mortgage industry oversight authority without the loss
of privilege or the loss of confidentiality protections provided by
federal or state law.
(b) For these purposes, the commissioner is authorized to enter
agreements or share arrangements with other governmental agencies,
the Conference of State Bank Supervisors, the American Association of
Residential Mortgage Regulators, or other associations representing
governmental agencies as established by rule, regulation, or order of
the commissioner.
(c) Information or material that is subject to a privilege or
confidentiality under subdivision (a) shall not be subject to the
following:
(1) Disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or an
agency of the federal government or the state.
(2) Subpoena or discovery, or admission into evidence, in any
private civil action or administrative process, unless with respect
to any privilege held by the Nationwide Mortgage Licensing System and
Registry with respect to the information or material, the person to
whom the information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(3) This section shall not apply with respect to the information
or material relating to the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, mortgage
loan originators that is included in the Nationwide Mortgage
Licensing System and Registry for access by the public.
22105.4. The commissioner shall regularly report violations of this
division, as well as enforcement actions and other relevant
information, to the Nationwide Mortgage Licensing System and
Registry, to the extent that information is public record.
22106. (a) The finance lender or broker license shall state the
name of the licensee, and if the licensee is a partnership, the names
of its general partners, and if a corporation or an association, the
date and place of its incorporation or organization, and the address
of the licensee's principal business location. On the approval and
licensing of a location pursuant to Section 22101 or 22102, the
commissioner shall issue an original license endorsed to show the
address of the authorized location and, if applicable, the name of
the subsidiary corporation licensed to operate the location. The
license shall state whether the licensee is licensed as a finance
lender or a broker.
(b) An application for a license for a business location outside
this state shall constitute an agreement by the applicant to do all
of the following:
(1) Make the licensee's books, accounts, papers, records, and
files available to the commissioner or the commissioner's
representatives in this state.
(2) Pay the reasonable expenses for travel, meals, and lodging of
the commissioner or the commissioner's representatives incurred
during any investigation or examination made at the licensee's
location outside this state.
A licensee located outside this state is not required to maintain
books and records regarding licensed loans separate from those for
other loans if the licensed loans can be readily identified.
22107. (a) Each finance lender and broker licensee shall pay to the
commissioner its pro rata share of all costs and expenses, including
the costs and expenses associated with the licensing of mortgage
loan originators it employs, reasonably incurred in the
administration of this division, as estimated by the commissioner,
for the ensuing year and any deficit actually incurred or anticipated
in the administration of the program in the year in which the
assessment is made. The pro rata share shall be the proportion that a
licensee's gross income bears to the aggregate gross income of all
licensees as shown by the annual financial reports to the
commissioner, for the costs and expenses remaining after the amount
assessed pursuant to subdivision (c).
(b) On or before the 30th day of September in each year, the
commissioner shall notify each licensee of the amount assessed and
levied against it and that amount shall be paid by October 31. If
payment is not made by October 31, the commissioner shall assess and
collect a penalty, in addition to the assessment, of 1 percent of the
assessment for each month or part of a month that the payment is
delayed or withheld.
(c) In the levying and collection of the assessment, a licensee
shall neither be assessed for nor be permitted to pay less than two
hundred fifty dollars ($250) per licensed location per year.
(d) If a licensee fails to pay the assessment on or before the
31st day of October, the commissioner may by order summarily suspend
or revoke the certificate issued to the licensee. If, after an order
is made, a request for hearing is filed in writing within 30 days,
and a hearing is not held within 60 days thereafter, the order is
deemed rescinded as of its effective date. During any period when its
certificate is revoked or suspended, a finance lender or broker
licensee and any mortgage loan originator licensee employed by the
finance lender or broker shall not conduct business pursuant to this
division except as may be permitted by order of the commissioner.
However, the revocation, suspension, or surrender of a certificate
shall not affect the powers of the commissioner as provided in this
division.
(e) The commissioner shall, by rule, establish the timelines,
fees, and assessments applicable to applicants for original mortgage
loan originator licenses, license renewals, and license changes under
this division.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require licensees to pay assessments through
the Nationwide Mortgage Licensing System and Registry.
22108. (a) The commissioner may by rule require licensees to file,
at the times that he or she may specify, the information that he or
she may reasonably require regarding any changes in the information
provided in any application filed pursuant to this division.
(b) The commissioner may by rule require a licensee to file
information through the Nationwide Mortgage Licensing System and
Registry.
22109. (a) Upon reasonable notice and opportunity to be heard, the
commissioner may deny the application for a finance lender or broker
license for any of the following reasons:
(1) A false statement of a material fact has been made in the
application.
(2) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has, within the last 10 years, been convicted of or pleaded
nolo contendere to a crime, or committed an act involving
dishonesty, fraud, or deceit, if the crime or act is substantially
related to the qualifications, functions, or duties of a person
engaged in business in accordance with this division.
(3) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has violated any provision of this division or the rules
thereunder or any similar regulatory scheme of the State of
California or a foreign jurisdiction.
(4) The applicant employs a mortgage loan originator who is not
licensed, or has not initiated an application to become licensed,
pursuant to this division.
(b) The application shall be considered withdrawn within the
meaning of this section if the applicant fails to respond to a
written notification of a deficiency in the application within 90
days of the date of the notification.
(c) The commissioner shall, within 60 days from the filing of a
full and complete application for a license with the fees, either
issue a license or file a statement of issues prepared in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code.
22109.1. (a) The commissioner shall deny an application for a
mortgage loan originator license unless the commissioner makes, at a
minimum, the following findings:
(1) The applicant has never had a mortgage loan originator license
revoked in any governmental jurisdiction, except that a subsequent
formal vacation of a revocation shall not be deemed a revocation.
(2) The applicant has not been convicted of, or pled guilty or
nolo contendere to, a felony in a domestic, foreign, or military
court, as follows:
(A) During the seven-year period preceding the date of the
application for licensing and registration.
(B) At any time preceding the date of application, if the felony
involved an act of fraud, dishonesty, or a breach of trust, or money
laundering.
(C) Provided that any pardon of a conviction shall not be a
conviction for purposes of this paragraph.
(3) The applicant has demonstrated such financial responsibility,
character, and general fitness as to command the confidence of the
community and to warrant a determination that the mortgage loan
originator will operate honestly, fairly, and efficiently within the
purposes of this division.
(4) The applicant has completed the prelicensing education
requirement described in Section 22109.2.
(5) The applicant has passed a written test that meets the test
requirement described in Section 22109.3.
(6) The applicant is employed by, and subject to the supervision
of, a finance lender or broker that has obtained a license from the
commissioner pursuant to this division.
(b) Before denying a license under this section, the commissioner
shall proceed as prescribed by Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code and
shall have all the powers granted under that chapter.
22109.2. (a) An applicant for a mortgage loan originator license
shall complete at least 20 hours of education approved in accordance
with subdivision (b). The education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Three hours of ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of subdivision (a), prelicensing education
courses shall be reviewed and approved by the Nationwide Mortgage
Licensing System and Registry. Review and approval of a prelicensing
education course shall include review and approval of the course
provider.
(c) Nothing in this section shall preclude any prelicensing
education course, as approved by the Nationwide Mortgage Licensing
System and Registry, that is provided by the employer of the
applicant or an entity that is affiliated with the applicant by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Prelicensing education may be offered either in a classroom,
online, or by any other means approved by the Nationwide Mortgage
Licensing System and Registry.
(e) The prelicensing education requirements approved by the
Nationwide Mortgage Licensing System and Registry for any state other
than California shall be accepted as credit toward completion of
prelicensing education requirements in California.
(f) An individual previously licensed under this division as a
mortgage loan originator, applying to be licensed again, shall prove
that he or she has completed all of the continuing education
requirements for the year in which the license was last held.
22109.3. (a) An applicant for a mortgage loan originator license
shall pass a qualified written test developed by the Nationwide
Mortgage Licensing System and Registry and administered by a test
provider approved by the Nationwide Mortgage Licensing System and
Registry.
(b) A written test shall not be treated as a qualified written
test for purposes of subdivision (a) unless the test adequately
measures the applicant's knowledge and comprehension in appropriate
subject areas, including all of the following:
(1) Ethics.
(2) Federal law and regulation relating to mortgage origination.
(3) State law and regulation relating to mortgage origination.
(4) Federal and state law and regulation, including instruction on
fraud, consumer protection, the nontraditional mortgage marketplace,
and fair lending issues.
(c) Nothing in this section shall prohibit a test provider
approved by the Nationwide Mortgage Licensing System and Registry
from providing a test at the location of the employer of the
applicant or the location of any subsidiary or affiliate of the
employer of the applicant, or the location of any entity with which
the applicant holds an exclusive arrangement to conduct the business
of a mortgage loan originator.
(d) An individual shall not be considered to have passed a
qualified written test administered pursuant to this section unless
the individual achieves a test score of not less than 75 percent of
correct answers to questions.
(e) An individual who fails the qualified written test may retake
the test up to three consecutive times, although at least 30 days
shall pass between each retesting.
(f) An applicant who fails three consecutive retests shall wait at
least six months before retesting.
(g) A licensed mortgage loan originator who fails to maintain a
valid license for a period of five years or longer shall retake the
test, not taking into account any time during which the individual is
a registered mortgage loan originator.
22109.4. (a) A mortgage loan originator shall comply with the
requirements of this section on or before December 31 of every year.
(b) The minimum standards for license renewal for a mortgage loan
originator shall include the following:
(1) The mortgage loan originator continues to meet the minimum
standards for license issuance under Section 22109.1.
(2) The mortgage loan originator has satisfied the annual
continuing education requirements described in Section 22109.5.
(3) The mortgage loan originator, or the finance lender or broker
employing the mortgage loan originator, has paid all required fees
for renewal of the license as provided in Section 22107.
(c) The license of a mortgage loan originator failing to satisfy
the minimum standards for license renewal shall expire at midnight on
December 31, except as provided in subdivision (h) of Section
22109.5. The commissioner may adopt procedures for the reinstatement
of expired licenses consistent with the standards established by the
Nationwide Mortgage Licensing System and Registry.
22109.5. (a) A licensed mortgage loan originator shall complete at
least eight hours of continuing education approved in accordance with
subdivision (b). The continuing education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Two hours of ethics, which shall include instruction on fraud,
consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of this section, continuing education courses
shall be reviewed and approved by the Nationwide Mortgage Licensing
System and Registry. Review and approval of a continuing education
course shall include review and approval of the course provider.
(c) Nothing in this section shall preclude any education course,
as approved by the Nationwide Mortgage Licensing System and Registry,
that is provided by the employer of the mortgage loan originator or
an entity which is affiliated with the mortgage loan originator by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Continuing education may be offered in a classroom, online,
and by any other means approved by the Nationwide Mortgage Licensing
System and Registry.
(e) Except as provided in subdivision (i), a licensed mortgage
loan originator:
(1) May only receive credit for a continuing education course in
the year in which the course is taken.
(2) May not take the same approved course in the same or
successive years to meet the annual requirements for continuing
education.
(f) A licensed mortgage loan originator who is an approved
instructor of an approved continuing education course may receive
credit for the licensed mortgage loan originator's own annual
continuing education requirement at the rate of two hours credit for
every one hour taught.
(g) A person who has successfully completed continuing education
requirements approved by the Nationwide Mortgage Licensing System and
Registry for any state other than California shall be granted credit
toward completion of continuing education requirements in
California.
(h) A licensed mortgage loan originator who subsequently becomes
unlicensed shall complete the continuing education requirements for
the last year in which the license was held prior to issuance of a
new or renewed license.
(i) A person meeting the requirements of paragraphs (1) and (3) of
subdivision (b) of Section 22109.4 may correct any deficiency in
continuing education as established by rule or regulation of the
commissioner.
22109.6. In addition to any other duties imposed upon the
commissioner by law, the commissioner shall require mortgage loan
originators to be licensed and registered through the Nationwide
Mortgage Licensing System and Registry. In order to carry out this
requirement, the commissioner is authorized to participate in the
Nationwide Mortgage Licensing System and Registry. For this purpose,
the commissioner may establish by rule, regulation, or order,
requirements as necessary, including, but not limited to, the
following:
(a) Background information for the following:
(1) Criminal history through fingerprint or other databases.
(2) Civil or administrative records.
(3) Credit history.
(4) Any other information as deemed necessary by the Nationwide
Mortgage Licensing System and Registry.
(b) The payment of fees to apply for or renew licenses through the
Nationwide Mortgage Licensing System and Registry.
(c) The setting or resetting as necessary of renewal or reporting
dates.
(d) Requirements for amending or surrendering a license or any
other activities as the commissioner deems necessary for
participation in the Nationwide Mortgage Licensing System and
Registry.
22110. The proceedings for a denial of a license shall be conducted
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner has all the powers granted therein.
22111. All money paid or collected under this division shall be
deposited in the State Treasury to the credit of the State
Corporations Fund. The administration of this division shall be
supported out of the State Corporations Fund.
22112. (a) A licensee shall maintain a surety bond in accordance
with this subdivision in a minimum amount of twenty-five thousand
dollars ($25,000). The bond shall be payable to the commissioner and
issued by an insurer authorized to do business in this state. An
original surety bond, including any and all riders and endorsements
executed subsequent to the effective date of the bond, shall be filed
with the commissioner within 10 days of execution. For licensees
with multiple licensed locations, only one surety bond is required.
The bond shall be used for the recovery of expenses, fines, and fees
levied by the commissioner in accordance with this division or for
losses or damages incurred by borrowers or consumers as the result of
a licensee's noncompliance with the requirements of this division.
(b) When an action is commenced on a licensee's bond, the
commissioner may require the filing of a new bond. Immediately upon
recovery of any action on the bond, the licensee shall file a new
bond. Failure to file a new bond within 10 days of the recovery on a
bond, or within 10 days after notification by the commissioner that a
new bond is required, constitutes sufficient grounds for the
suspension or revocation of the license.
(c) The commissioner may by rule require a higher bond amount for
a licensee who employs one or more mortgage loan originators and who
makes or arranges residential mortgage loans, based on the dollar
amount of residential mortgage loans originated by that licensee and
any mortgage loan originators employed by that licensee. Every
mortgage loan originator employed by the licensee shall be covered by
the surety bond.
22100. (a) No person shall engage in the business of a finance
lender or broker without obtaining a license from the commissioner.
(b) Every licensee engaging in the business of making or brokering
residential mortgage loans shall require that every mortgage loan
originator employed or compensated by that licensee obtains and
maintains a mortgage loan originator license from the commissioner
under this division or Division 20 (commencing with Section 50000),
or has first obtained a license endorsement from the Commissioner of
Real Estate pursuant to Article 2.1 (commencing with Section
10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and
Professions Code.
(c) A finance lender or broker shall not employ a mortgage loan
originator whose license or license endorsement has lapsed.
(d) A finance lender or broker may not make or broker a
residential mortgage loan unless that loan is offered by, negotiated
by, or applied for through a licensed mortgage loan originator.
(e) Every licensee engaged in the business of making or brokering
residential mortgage loans and every mortgage loan originator
licensed under this division shall register with and maintain a valid
unique identifier issued by the Nationwide Mortgage Licensing System
and Registry.
22101. (a) An application for a license as a finance lender or
broker under this division shall be in the form and contain the
information that the commissioner may by rule require and shall be
filed upon payment of the fee specified in Section 22103.
(b) Notwithstanding any other provision of law, an applicant who
does not currently hold a license as a finance lender or broker under
this division shall furnish with his or her application, a full set
of fingerprints and related information for purposes of the
commissioner conducting a criminal history record check. The
commissioner shall obtain and receive criminal history information
from the Department of Justice and the Federal Bureau of
Investigation pursuant to Section 22101.5.
(c) Nothing in this section shall be construed to prevent a
licensee from engaging in the business of a finance lender through a
subsidiary corporation if the subsidiary corporation is licensed
pursuant to this division.
(d) For purposes of this section, "subsidiary corporation" means a
corporation that is wholly owned by a licensee.
(e) A new application shall not be required for a change in the
address of an existing location previously licensed under this
division. However, the licensee shall comply with the requirements of
Section 22153.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require an application to be made through
the Nationwide Mortgage Licensing System and Registry, and may
require fees, fingerprints, financial statements, supporting
documents, changes of address, and any other information, and
amendments or modifications thereto, to be submitted in the same
manner.
22101.5. (a) The commissioner shall submit to the Department of
Justice fingerprint images and related information required by the
Department of Justice of all finance lender and broker license
candidates, as defined by subdivision (a) of Section 22101, for
purposes of obtaining information as to the existence and content of
a record of state or federal convictions, state or federal arrests,
and information as to the existence and content of a record of state
or federal arrests for which the Department of Justice establishes
that the person is free on bail or on his or her own recognizance
pending trial or appeal.
(b) When received, the Department of Justice shall forward to the
Federal Bureau of Investigation requests for federal summary criminal
history information received pursuant to this section. The
Department of Justice shall review the information returned from the
Federal Bureau of Investigation and compile and disseminate a
response to the commissioner.
(c) The Department of Justice shall provide a response to the
commissioner pursuant to paragraph (1) of subdivision (p) of Section
11105 of the Penal Code.
(d) The commissioner shall request from the Department of Justice
subsequent arrest notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for license candidates described
in subdivision (a).
(e) The Department of Justice shall charge a fee sufficient to
cover the costs of processing the requests pursuant to this section.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require fingerprints submitted by an
applicant to be submitted to the Nationwide Mortgage Licensing System
and Registry in addition to the Department of Justice.
22102. (a) A finance lender or broker licensee seeking to engage in
business at a new location shall submit an application for a branch
office license to the commissioner at least 10 days before engaging
in business at a new location and pay the fee required by Section
22103. The commissioner may require an applicant seeking to engage in
business at a new location to submit its application, or parts
thereof, through the Nationwide Mortgage Licensing System and
Registry.
(b) The licensee may engage in business at the new location 10
days after the date of submission of a branch office application.
(c) (1) The commissioner shall approve or deny the person
responsible for the lending activity at the new location in
accordance with Section 22109, and shall notify the licensee of this
decision within 90 days of the date of receipt of the application.
(2) If the commissioner denies the application, the licensee
shall, within 10 days of the date of receipt of notification of the
commissioner's denial, submit a new application to the commissioner
designating a different person responsible for the lending activity
at the new location. The commissioner shall approve or deny the
different person as provided in paragraph (1).
(d) A licensee shall not engage in business at a new location in a
name other than a name approved by the commissioner.
(e) The commissioner may adopt regulations to implement the
requirements of this section.
(f) A branch office license to engage in business at a new
location shall be issued in accordance with this section. A change of
street address of a place of business designated in a license shall
be made in accordance with Section 22153 and shall not constitute a
new location subject to the requirements of this section.
22103. At the time of filing the application for a finance lender,
broker, or branch office license, the applicant shall pay to the
commissioner the sum of one hundred dollars ($100) as a fee for
investigating the application, plus the cost of fingerprint
processing and the criminal history record check under Section
22101.5, and two hundred dollars ($200) as an application fee. The
investigation fee, including the amount for the criminal history
record check, and the application fee are not refundable if an
application is denied or withdrawn.
22104. (a) The applicant shall file with the application for a
finance lender or broker license financial statements prepared in
accordance with generally accepted accounting principles and
acceptable to the commissioner that indicate a net worth of at least
twenty-five thousand dollars ($25,000). Except as provided in
subdivisions (b) and (c), a licensee shall maintain a net worth of at
least twenty-five thousand dollars ($25,000) at all times.
(b) A licensed finance lender or broker, that employs one or more
mortgage loan originators and that makes residential mortgage loans,
shall continuously maintain a minimum net worth of at least two
hundred fifty thousand dollars ($250,000).
(c) A licensed finance broker, that employs one or more mortgage
loan originators and that arranges, but does not make, residential
mortgage loans, shall continuously maintain a minimum net worth of at
least fifty thousand dollars ($50,000).
(d) The commissioner may promulgate rules or regulations with
respect to the requirements for minimum net worth, as are necessary
to accomplish the purposes of this division and comply with the SAFE
Act.
22105. Upon the filing of an application pursuant to Section 22101
and the payment of the fees, the commissioner shall investigate the
applicant and its general partners and persons owning or controlling,
directly or indirectly, 10 percent or more of the outstanding
interests or any person responsible for the conduct of the applicant'
s lending activities in this state, if the applicant is a
partnership. If the applicant is a corporation, trust, limited
liability company, or association, including an unincorporated
organization, the commissioner shall investigate the applicant, its
principal officers, directors, managing members, and persons owning
or controlling, directly or indirectly, 10 percent or more of the
outstanding equity securities or any person responsible for the
conduct of the applicant's lending activities in this state. Upon the
filing of an application pursuant to Section 22102 and the payment
of the fees, the commissioner shall investigate the person
responsible for the lending activity of the licensee at the new
location described in the application. The investigation may be
limited to information that was not included in prior applications
filed pursuant to this division. If the commissioner determines that
the applicant has satisfied this division and does not find facts
constituting reasons for denial under Section 22109, the commissioner
shall issue and deliver a license to the applicant.
For the purposes of this section, "principal officers" shall mean
president, chief executive officer, treasurer, and chief financial
officer, as may be applicable, and any other officer with direct
responsibility for the conduct of the applicant's lending activities
within the state.
22105.1. (a) An applicant for a mortgage loan originator license
shall apply by submitting the uniform form prescribed for such
purpose by the Nationwide Mortgage Licensing System and Registry. The
commissioner may require the submission of additional information or
supporting documentation to the department.
(b) Section 461 of the Business and Professions Code shall not be
applicable to the Department of Corporations when using a national
uniform application adopted or approved for use by the Nationwide
Mortgage Licensing System and Registry in connection with the SAFE
Act.
(c) In connection with an application for a license as a mortgage
loan originator, the applicant shall, at a minimum, furnish to the
Nationwide Mortgage Licensing System and Registry information
concerning the applicant's identity, including the following:
(1) Fingerprint images and related information, for purposes of
performing a federal, or both a state and federal, criminal history
background check.
(2) Personal history and experience in a form prescribed by the
Nationwide Mortgage Licensing System and Registry, including the
submission of authorization for the Nationwide Mortgage Licensing
System and Registry and the commissioner to obtain both of the
following:
(A) An independent credit report obtained from a consumer
reporting agency.
(B) Information related to any administrative, civil, or criminal
findings by any governmental jurisdiction.
(d) The commissioner may ask the Nationwide Mortgage Licensing
System and Registry to obtain state criminal history background check
information on applicants described in subdivision (a) using the
procedures set forth in subdivisions (e) and (f).
(e) If the Nationwide Mortgage Licensing System and Registry
electronically submits fingerprint images and related information, as
required by the Department of Justice, for an applicant for a
mortgage loan originator license, for the purposes of obtaining
information as to the existence and content of a record of state
convictions and state arrests and to the existence and content of a
record of state arrests for which the Department of Justice
establishes that the person is free on bail or on his or her
recognizance pending trial or appeal, the Department of Justice shall
provide an electronic response to the Nationwide Mortgage Licensing
System and Registry pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code, and shall provide the same
electronic response to the commissioner.
(f) The Nationwide Mortgage Licensing System and Registry may
request from the Department of Justice subsequent arrest notification
service, as provided pursuant to Section 11105.2 of the Penal Code,
for persons described in subdivision (a). The Department of Justice
shall provide the same electronic response to the commissioner.
(g) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the requests described in this section.
22105.2. (a) The commissioner is authorized to establish
relationships or contracts with the Nationwide Mortgage Licensing
System and Registry or other entities designated by the Nationwide
Mortgage Licensing System and Registry to collect and maintain
records and process transaction fees or other fees related to
licensees or other persons subject to this division.
(b) For the purpose of participating in the Nationwide Mortgage
Licensing System and Registry, the commissioner is authorized to
waive or modify, in whole or in part, by rule, regulation, or order,
any or all of the requirements of this division and to establish new
requirements as reasonably necessary to participate in the Nationwide
Mortgage Licensing System and Registry.
(c) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting information
from, and distributing information to, the Department of Justice or
any governmental agency.
(d) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting and
distributing information to and from any source so directed by the
commissioner.
(e) The commissioner shall establish a process where applicants
and licensees may challenge information entered into the Nationwide
Mortgage Licensing System and Registry by the commissioner.
22105.3. (a) Except as otherwise provided in Section 1512 of the
SAFE Act, the requirements under any federal or state law regarding
the privacy or confidentiality of any information or material
provided to the Nationwide Mortgage Licensing System and Registry,
and any privilege arising under federal or state law, including the
rules of any federal or state court, with respect to that information
or material, shall continue to apply to the information or material
after the information or material has been disclosed to the
Nationwide Mortgage Licensing System and Registry. The information
and material may be shared with all state and federal regulatory
officials with mortgage industry oversight authority without the loss
of privilege or the loss of confidentiality protections provided by
federal or state law.
(b) For these purposes, the commissioner is authorized to enter
agreements or share arrangements with other governmental agencies,
the Conference of State Bank Supervisors, the American Association of
Residential Mortgage Regulators, or other associations representing
governmental agencies as established by rule, regulation, or order of
the commissioner.
(c) Information or material that is subject to a privilege or
confidentiality under subdivision (a) shall not be subject to the
following:
(1) Disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or an
agency of the federal government or the state.
(2) Subpoena or discovery, or admission into evidence, in any
private civil action or administrative process, unless with respect
to any privilege held by the Nationwide Mortgage Licensing System and
Registry with respect to the information or material, the person to
whom the information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(3) This section shall not apply with respect to the information
or material relating to the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, mortgage
loan originators that is included in the Nationwide Mortgage
Licensing System and Registry for access by the public.
22105.4. The commissioner shall regularly report violations of this
division, as well as enforcement actions and other relevant
information, to the Nationwide Mortgage Licensing System and
Registry, to the extent that information is public record.
22106. (a) The finance lender or broker license shall state the
name of the licensee, and if the licensee is a partnership, the names
of its general partners, and if a corporation or an association, the
date and place of its incorporation or organization, and the address
of the licensee's principal business location. On the approval and
licensing of a location pursuant to Section 22101 or 22102, the
commissioner shall issue an original license endorsed to show the
address of the authorized location and, if applicable, the name of
the subsidiary corporation licensed to operate the location. The
license shall state whether the licensee is licensed as a finance
lender or a broker.
(b) An application for a license for a business location outside
this state shall constitute an agreement by the applicant to do all
of the following:
(1) Make the licensee's books, accounts, papers, records, and
files available to the commissioner or the commissioner's
representatives in this state.
(2) Pay the reasonable expenses for travel, meals, and lodging of
the commissioner or the commissioner's representatives incurred
during any investigation or examination made at the licensee's
location outside this state.
A licensee located outside this state is not required to maintain
books and records regarding licensed loans separate from those for
other loans if the licensed loans can be readily identified.
22107. (a) Each finance lender and broker licensee shall pay to the
commissioner its pro rata share of all costs and expenses, including
the costs and expenses associated with the licensing of mortgage
loan originators it employs, reasonably incurred in the
administration of this division, as estimated by the commissioner,
for the ensuing year and any deficit actually incurred or anticipated
in the administration of the program in the year in which the
assessment is made. The pro rata share shall be the proportion that a
licensee's gross income bears to the aggregate gross income of all
licensees as shown by the annual financial reports to the
commissioner, for the costs and expenses remaining after the amount
assessed pursuant to subdivision (c).
(b) On or before the 30th day of September in each year, the
commissioner shall notify each licensee of the amount assessed and
levied against it and that amount shall be paid by October 31. If
payment is not made by October 31, the commissioner shall assess and
collect a penalty, in addition to the assessment, of 1 percent of the
assessment for each month or part of a month that the payment is
delayed or withheld.
(c) In the levying and collection of the assessment, a licensee
shall neither be assessed for nor be permitted to pay less than two
hundred fifty dollars ($250) per licensed location per year.
(d) If a licensee fails to pay the assessment on or before the
31st day of October, the commissioner may by order summarily suspend
or revoke the certificate issued to the licensee. If, after an order
is made, a request for hearing is filed in writing within 30 days,
and a hearing is not held within 60 days thereafter, the order is
deemed rescinded as of its effective date. During any period when its
certificate is revoked or suspended, a finance lender or broker
licensee and any mortgage loan originator licensee employed by the
finance lender or broker shall not conduct business pursuant to this
division except as may be permitted by order of the commissioner.
However, the revocation, suspension, or surrender of a certificate
shall not affect the powers of the commissioner as provided in this
division.
(e) The commissioner shall, by rule, establish the timelines,
fees, and assessments applicable to applicants for original mortgage
loan originator licenses, license renewals, and license changes under
this division.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require licensees to pay assessments through
the Nationwide Mortgage Licensing System and Registry.
22108. (a) The commissioner may by rule require licensees to file,
at the times that he or she may specify, the information that he or
she may reasonably require regarding any changes in the information
provided in any application filed pursuant to this division.
(b) The commissioner may by rule require a licensee to file
information through the Nationwide Mortgage Licensing System and
Registry.
22109. (a) Upon reasonable notice and opportunity to be heard, the
commissioner may deny the application for a finance lender or broker
license for any of the following reasons:
(1) A false statement of a material fact has been made in the
application.
(2) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has, within the last 10 years, been convicted of or pleaded
nolo contendere to a crime, or committed an act involving
dishonesty, fraud, or deceit, if the crime or act is substantially
related to the qualifications, functions, or duties of a person
engaged in business in accordance with this division.
(3) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has violated any provision of this division or the rules
thereunder or any similar regulatory scheme of the State of
California or a foreign jurisdiction.
(4) The applicant employs a mortgage loan originator who is not
licensed, or has not initiated an application to become licensed,
pursuant to this division.
(b) The application shall be considered withdrawn within the
meaning of this section if the applicant fails to respond to a
written notification of a deficiency in the application within 90
days of the date of the notification.
(c) The commissioner shall, within 60 days from the filing of a
full and complete application for a license with the fees, either
issue a license or file a statement of issues prepared in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code.
22109.1. (a) The commissioner shall deny an application for a
mortgage loan originator license unless the commissioner makes, at a
minimum, the following findings:
(1) The applicant has never had a mortgage loan originator license
revoked in any governmental jurisdiction, except that a subsequent
formal vacation of a revocation shall not be deemed a revocation.
(2) The applicant has not been convicted of, or pled guilty or
nolo contendere to, a felony in a domestic, foreign, or military
court, as follows:
(A) During the seven-year period preceding the date of the
application for licensing and registration.
(B) At any time preceding the date of application, if the felony
involved an act of fraud, dishonesty, or a breach of trust, or money
laundering.
(C) Provided that any pardon of a conviction shall not be a
conviction for purposes of this paragraph.
(3) The applicant has demonstrated such financial responsibility,
character, and general fitness as to command the confidence of the
community and to warrant a determination that the mortgage loan
originator will operate honestly, fairly, and efficiently within the
purposes of this division.
(4) The applicant has completed the prelicensing education
requirement described in Section 22109.2.
(5) The applicant has passed a written test that meets the test
requirement described in Section 22109.3.
(6) The applicant is employed by, and subject to the supervision
of, a finance lender or broker that has obtained a license from the
commissioner pursuant to this division.
(b) Before denying a license under this section, the commissioner
shall proceed as prescribed by Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code and
shall have all the powers granted under that chapter.
22109.2. (a) An applicant for a mortgage loan originator license
shall complete at least 20 hours of education approved in accordance
with subdivision (b). The education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Three hours of ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of subdivision (a), prelicensing education
courses shall be reviewed and approved by the Nationwide Mortgage
Licensing System and Registry. Review and approval of a prelicensing
education course shall include review and approval of the course
provider.
(c) Nothing in this section shall preclude any prelicensing
education course, as approved by the Nationwide Mortgage Licensing
System and Registry, that is provided by the employer of the
applicant or an entity that is affiliated with the applicant by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Prelicensing education may be offered either in a classroom,
online, or by any other means approved by the Nationwide Mortgage
Licensing System and Registry.
(e) The prelicensing education requirements approved by the
Nationwide Mortgage Licensing System and Registry for any state other
than California shall be accepted as credit toward completion of
prelicensing education requirements in California.
(f) An individual previously licensed under this division as a
mortgage loan originator, applying to be licensed again, shall prove
that he or she has completed all of the continuing education
requirements for the year in which the license was last held.
22109.3. (a) An applicant for a mortgage loan originator license
shall pass a qualified written test developed by the Nationwide
Mortgage Licensing System and Registry and administered by a test
provider approved by the Nationwide Mortgage Licensing System and
Registry.
(b) A written test shall not be treated as a qualified written
test for purposes of subdivision (a) unless the test adequately
measures the applicant's knowledge and comprehension in appropriate
subject areas, including all of the following:
(1) Ethics.
(2) Federal law and regulation relating to mortgage origination.
(3) State law and regulation relating to mortgage origination.
(4) Federal and state law and regulation, including instruction on
fraud, consumer protection, the nontraditional mortgage marketplace,
and fair lending issues.
(c) Nothing in this section shall prohibit a test provider
approved by the Nationwide Mortgage Licensing System and Registry
from providing a test at the location of the employer of the
applicant or the location of any subsidiary or affiliate of the
employer of the applicant, or the location of any entity with which
the applicant holds an exclusive arrangement to conduct the business
of a mortgage loan originator.
(d) An individual shall not be considered to have passed a
qualified written test administered pursuant to this section unless
the individual achieves a test score of not less than 75 percent of
correct answers to questions.
(e) An individual who fails the qualified written test may retake
the test up to three consecutive times, although at least 30 days
shall pass between each retesting.
(f) An applicant who fails three consecutive retests shall wait at
least six months before retesting.
(g) A licensed mortgage loan originator who fails to maintain a
valid license for a period of five years or longer shall retake the
test, not taking into account any time during which the individual is
a registered mortgage loan originator.
22109.4. (a) A mortgage loan originator shall comply with the
requirements of this section on or before December 31 of every year.
(b) The minimum standards for license renewal for a mortgage loan
originator shall include the following:
(1) The mortgage loan originator continues to meet the minimum
standards for license issuance under Section 22109.1.
(2) The mortgage loan originator has satisfied the annual
continuing education requirements described in Section 22109.5.
(3) The mortgage loan originator, or the finance lender or broker
employing the mortgage loan originator, has paid all required fees
for renewal of the license as provided in Section 22107.
(c) The license of a mortgage loan originator failing to satisfy
the minimum standards for license renewal shall expire at midnight on
December 31, except as provided in subdivision (h) of Section
22109.5. The commissioner may adopt procedures for the reinstatement
of expired licenses consistent with the standards established by the
Nationwide Mortgage Licensing System and Registry.
22109.5. (a) A licensed mortgage loan originator shall complete at
least eight hours of continuing education approved in accordance with
subdivision (b). The continuing education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Two hours of ethics, which shall include instruction on fraud,
consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of this section, continuing education courses
shall be reviewed and approved by the Nationwide Mortgage Licensing
System and Registry. Review and approval of a continuing education
course shall include review and approval of the course provider.
(c) Nothing in this section shall preclude any education course,
as approved by the Nationwide Mortgage Licensing System and Registry,
that is provided by the employer of the mortgage loan originator or
an entity which is affiliated with the mortgage loan originator by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Continuing education may be offered in a classroom, online,
and by any other means approved by the Nationwide Mortgage Licensing
System and Registry.
(e) Except as provided in subdivision (i), a licensed mortgage
loan originator:
(1) May only receive credit for a continuing education course in
the year in which the course is taken.
(2) May not take the same approved course in the same or
successive years to meet the annual requirements for continuing
education.
(f) A licensed mortgage loan originator who is an approved
instructor of an approved continuing education course may receive
credit for the licensed mortgage loan originator's own annual
continuing education requirement at the rate of two hours credit for
every one hour taught.
(g) A person who has successfully completed continuing education
requirements approved by the Nationwide Mortgage Licensing System and
Registry for any state other than California shall be granted credit
toward completion of continuing education requirements in
California.
(h) A licensed mortgage loan originator who subsequently becomes
unlicensed shall complete the continuing education requirements for
the last year in which the license was held prior to issuance of a
new or renewed license.
(i) A person meeting the requirements of paragraphs (1) and (3) of
subdivision (b) of Section 22109.4 may correct any deficiency in
continuing education as established by rule or regulation of the
commissioner.
22109.6. In addition to any other duties imposed upon the
commissioner by law, the commissioner shall require mortgage loan
originators to be licensed and registered through the Nationwide
Mortgage Licensing System and Registry. In order to carry out this
requirement, the commissioner is authorized to participate in the
Nationwide Mortgage Licensing System and Registry. For this purpose,
the commissioner may establish by rule, regulation, or order,
requirements as necessary, including, but not limited to, the
following:
(a) Background information for the following:
(1) Criminal history through fingerprint or other databases.
(2) Civil or administrative records.
(3) Credit history.
(4) Any other information as deemed necessary by the Nationwide
Mortgage Licensing System and Registry.
(b) The payment of fees to apply for or renew licenses through the
Nationwide Mortgage Licensing System and Registry.
(c) The setting or resetting as necessary of renewal or reporting
dates.
(d) Requirements for amending or surrendering a license or any
other activities as the commissioner deems necessary for
participation in the Nationwide Mortgage Licensing System and
Registry.
22110. The proceedings for a denial of a license shall be conducted
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner has all the powers granted therein.
22111. All money paid or collected under this division shall be
deposited in the State Treasury to the credit of the State
Corporations Fund. The administration of this division shall be
supported out of the State Corporations Fund.
22112. (a) A licensee shall maintain a surety bond in accordance
with this subdivision in a minimum amount of twenty-five thousand
dollars ($25,000). The bond shall be payable to the commissioner and
issued by an insurer authorized to do business in this state. An
original surety bond, including any and all riders and endorsements
executed subsequent to the effective date of the bond, shall be filed
with the commissioner within 10 days of execution. For licensees
with multiple licensed locations, only one surety bond is required.
The bond shall be used for the recovery of expenses, fines, and fees
levied by the commissioner in accordance with this division or for
losses or damages incurred by borrowers or consumers as the result of
a licensee's noncompliance with the requirements of this division.
(b) When an action is commenced on a licensee's bond, the
commissioner may require the filing of a new bond. Immediately upon
recovery of any action on the bond, the licensee shall file a new
bond. Failure to file a new bond within 10 days of the recovery on a
bond, or within 10 days after notification by the commissioner that a
new bond is required, constitutes sufficient grounds for the
suspension or revocation of the license.
(c) The commissioner may by rule require a higher bond amount for
a licensee who employs one or more mortgage loan originators and who
makes or arranges residential mortgage loans, based on the dollar
amount of residential mortgage loans originated by that licensee and
any mortgage loan originators employed by that licensee. Every
mortgage loan originator employed by the licensee shall be covered by
the surety bond.
22100. (a) No person shall engage in the business of a finance
lender or broker without obtaining a license from the commissioner.
(b) Every licensee engaging in the business of making or brokering
residential mortgage loans shall require that every mortgage loan
originator employed or compensated by that licensee obtains and
maintains a mortgage loan originator license from the commissioner
under this division or Division 20 (commencing with Section 50000),
or has first obtained a license endorsement from the Commissioner of
Real Estate pursuant to Article 2.1 (commencing with Section
10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and
Professions Code.
(c) A finance lender or broker shall not employ a mortgage loan
originator whose license or license endorsement has lapsed.
(d) A finance lender or broker may not make or broker a
residential mortgage loan unless that loan is offered by, negotiated
by, or applied for through a licensed mortgage loan originator.
(e) Every licensee engaged in the business of making or brokering
residential mortgage loans and every mortgage loan originator
licensed under this division shall register with and maintain a valid
unique identifier issued by the Nationwide Mortgage Licensing System
and Registry.
22101. (a) An application for a license as a finance lender or
broker under this division shall be in the form and contain the
information that the commissioner may by rule require and shall be
filed upon payment of the fee specified in Section 22103.
(b) Notwithstanding any other provision of law, an applicant who
does not currently hold a license as a finance lender or broker under
this division shall furnish with his or her application, a full set
of fingerprints and related information for purposes of the
commissioner conducting a criminal history record check. The
commissioner shall obtain and receive criminal history information
from the Department of Justice and the Federal Bureau of
Investigation pursuant to Section 22101.5.
(c) Nothing in this section shall be construed to prevent a
licensee from engaging in the business of a finance lender through a
subsidiary corporation if the subsidiary corporation is licensed
pursuant to this division.
(d) For purposes of this section, "subsidiary corporation" means a
corporation that is wholly owned by a licensee.
(e) A new application shall not be required for a change in the
address of an existing location previously licensed under this
division. However, the licensee shall comply with the requirements of
Section 22153.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require an application to be made through
the Nationwide Mortgage Licensing System and Registry, and may
require fees, fingerprints, financial statements, supporting
documents, changes of address, and any other information, and
amendments or modifications thereto, to be submitted in the same
manner.
22101.5. (a) The commissioner shall submit to the Department of
Justice fingerprint images and related information required by the
Department of Justice of all finance lender and broker license
candidates, as defined by subdivision (a) of Section 22101, for
purposes of obtaining information as to the existence and content of
a record of state or federal convictions, state or federal arrests,
and information as to the existence and content of a record of state
or federal arrests for which the Department of Justice establishes
that the person is free on bail or on his or her own recognizance
pending trial or appeal.
(b) When received, the Department of Justice shall forward to the
Federal Bureau of Investigation requests for federal summary criminal
history information received pursuant to this section. The
Department of Justice shall review the information returned from the
Federal Bureau of Investigation and compile and disseminate a
response to the commissioner.
(c) The Department of Justice shall provide a response to the
commissioner pursuant to paragraph (1) of subdivision (p) of Section
11105 of the Penal Code.
(d) The commissioner shall request from the Department of Justice
subsequent arrest notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for license candidates described
in subdivision (a).
(e) The Department of Justice shall charge a fee sufficient to
cover the costs of processing the requests pursuant to this section.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require fingerprints submitted by an
applicant to be submitted to the Nationwide Mortgage Licensing System
and Registry in addition to the Department of Justice.
22102. (a) A finance lender or broker licensee seeking to engage in
business at a new location shall submit an application for a branch
office license to the commissioner at least 10 days before engaging
in business at a new location and pay the fee required by Section
22103. The commissioner may require an applicant seeking to engage in
business at a new location to submit its application, or parts
thereof, through the Nationwide Mortgage Licensing System and
Registry.
(b) The licensee may engage in business at the new location 10
days after the date of submission of a branch office application.
(c) (1) The commissioner shall approve or deny the person
responsible for the lending activity at the new location in
accordance with Section 22109, and shall notify the licensee of this
decision within 90 days of the date of receipt of the application.
(2) If the commissioner denies the application, the licensee
shall, within 10 days of the date of receipt of notification of the
commissioner's denial, submit a new application to the commissioner
designating a different person responsible for the lending activity
at the new location. The commissioner shall approve or deny the
different person as provided in paragraph (1).
(d) A licensee shall not engage in business at a new location in a
name other than a name approved by the commissioner.
(e) The commissioner may adopt regulations to implement the
requirements of this section.
(f) A branch office license to engage in business at a new
location shall be issued in accordance with this section. A change of
street address of a place of business designated in a license shall
be made in accordance with Section 22153 and shall not constitute a
new location subject to the requirements of this section.
22103. At the time of filing the application for a finance lender,
broker, or branch office license, the applicant shall pay to the
commissioner the sum of one hundred dollars ($100) as a fee for
investigating the application, plus the cost of fingerprint
processing and the criminal history record check under Section
22101.5, and two hundred dollars ($200) as an application fee. The
investigation fee, including the amount for the criminal history
record check, and the application fee are not refundable if an
application is denied or withdrawn.
22104. (a) The applicant shall file with the application for a
finance lender or broker license financial statements prepared in
accordance with generally accepted accounting principles and
acceptable to the commissioner that indicate a net worth of at least
twenty-five thousand dollars ($25,000). Except as provided in
subdivisions (b) and (c), a licensee shall maintain a net worth of at
least twenty-five thousand dollars ($25,000) at all times.
(b) A licensed finance lender or broker, that employs one or more
mortgage loan originators and that makes residential mortgage loans,
shall continuously maintain a minimum net worth of at least two
hundred fifty thousand dollars ($250,000).
(c) A licensed finance broker, that employs one or more mortgage
loan originators and that arranges, but does not make, residential
mortgage loans, shall continuously maintain a minimum net worth of at
least fifty thousand dollars ($50,000).
(d) The commissioner may promulgate rules or regulations with
respect to the requirements for minimum net worth, as are necessary
to accomplish the purposes of this division and comply with the SAFE
Act.
22105. Upon the filing of an application pursuant to Section 22101
and the payment of the fees, the commissioner shall investigate the
applicant and its general partners and persons owning or controlling,
directly or indirectly, 10 percent or more of the outstanding
interests or any person responsible for the conduct of the applicant'
s lending activities in this state, if the applicant is a
partnership. If the applicant is a corporation, trust, limited
liability company, or association, including an unincorporated
organization, the commissioner shall investigate the applicant, its
principal officers, directors, managing members, and persons owning
or controlling, directly or indirectly, 10 percent or more of the
outstanding equity securities or any person responsible for the
conduct of the applicant's lending activities in this state. Upon the
filing of an application pursuant to Section 22102 and the payment
of the fees, the commissioner shall investigate the person
responsible for the lending activity of the licensee at the new
location described in the application. The investigation may be
limited to information that was not included in prior applications
filed pursuant to this division. If the commissioner determines that
the applicant has satisfied this division and does not find facts
constituting reasons for denial under Section 22109, the commissioner
shall issue and deliver a license to the applicant.
For the purposes of this section, "principal officers" shall mean
president, chief executive officer, treasurer, and chief financial
officer, as may be applicable, and any other officer with direct
responsibility for the conduct of the applicant's lending activities
within the state.
22105.1. (a) An applicant for a mortgage loan originator license
shall apply by submitting the uniform form prescribed for such
purpose by the Nationwide Mortgage Licensing System and Registry. The
commissioner may require the submission of additional information or
supporting documentation to the department.
(b) Section 461 of the Business and Professions Code shall not be
applicable to the Department of Corporations when using a national
uniform application adopted or approved for use by the Nationwide
Mortgage Licensing System and Registry in connection with the SAFE
Act.
(c) In connection with an application for a license as a mortgage
loan originator, the applicant shall, at a minimum, furnish to the
Nationwide Mortgage Licensing System and Registry information
concerning the applicant's identity, including the following:
(1) Fingerprint images and related information, for purposes of
performing a federal, or both a state and federal, criminal history
background check.
(2) Personal history and experience in a form prescribed by the
Nationwide Mortgage Licensing System and Registry, including the
submission of authorization for the Nationwide Mortgage Licensing
System and Registry and the commissioner to obtain both of the
following:
(A) An independent credit report obtained from a consumer
reporting agency.
(B) Information related to any administrative, civil, or criminal
findings by any governmental jurisdiction.
(d) The commissioner may ask the Nationwide Mortgage Licensing
System and Registry to obtain state criminal history background check
information on applicants described in subdivision (a) using the
procedures set forth in subdivisions (e) and (f).
(e) If the Nationwide Mortgage Licensing System and Registry
electronically submits fingerprint images and related information, as
required by the Department of Justice, for an applicant for a
mortgage loan originator license, for the purposes of obtaining
information as to the existence and content of a record of state
convictions and state arrests and to the existence and content of a
record of state arrests for which the Department of Justice
establishes that the person is free on bail or on his or her
recognizance pending trial or appeal, the Department of Justice shall
provide an electronic response to the Nationwide Mortgage Licensing
System and Registry pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code, and shall provide the same
electronic response to the commissioner.
(f) The Nationwide Mortgage Licensing System and Registry may
request from the Department of Justice subsequent arrest notification
service, as provided pursuant to Section 11105.2 of the Penal Code,
for persons described in subdivision (a). The Department of Justice
shall provide the same electronic response to the commissioner.
(g) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the requests described in this section.
22105.2. (a) The commissioner is authorized to establish
relationships or contracts with the Nationwide Mortgage Licensing
System and Registry or other entities designated by the Nationwide
Mortgage Licensing System and Registry to collect and maintain
records and process transaction fees or other fees related to
licensees or other persons subject to this division.
(b) For the purpose of participating in the Nationwide Mortgage
Licensing System and Registry, the commissioner is authorized to
waive or modify, in whole or in part, by rule, regulation, or order,
any or all of the requirements of this division and to establish new
requirements as reasonably necessary to participate in the Nationwide
Mortgage Licensing System and Registry.
(c) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting information
from, and distributing information to, the Department of Justice or
any governmental agency.
(d) The commissioner may use the Nationwide Mortgage Licensing
System and Registry as a channeling agent for requesting and
distributing information to and from any source so directed by the
commissioner.
(e) The commissioner shall establish a process where applicants
and licensees may challenge information entered into the Nationwide
Mortgage Licensing System and Registry by the commissioner.
22105.3. (a) Except as otherwise provided in Section 1512 of the
SAFE Act, the requirements under any federal or state law regarding
the privacy or confidentiality of any information or material
provided to the Nationwide Mortgage Licensing System and Registry,
and any privilege arising under federal or state law, including the
rules of any federal or state court, with respect to that information
or material, shall continue to apply to the information or material
after the information or material has been disclosed to the
Nationwide Mortgage Licensing System and Registry. The information
and material may be shared with all state and federal regulatory
officials with mortgage industry oversight authority without the loss
of privilege or the loss of confidentiality protections provided by
federal or state law.
(b) For these purposes, the commissioner is authorized to enter
agreements or share arrangements with other governmental agencies,
the Conference of State Bank Supervisors, the American Association of
Residential Mortgage Regulators, or other associations representing
governmental agencies as established by rule, regulation, or order of
the commissioner.
(c) Information or material that is subject to a privilege or
confidentiality under subdivision (a) shall not be subject to the
following:
(1) Disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or an
agency of the federal government or the state.
(2) Subpoena or discovery, or admission into evidence, in any
private civil action or administrative process, unless with respect
to any privilege held by the Nationwide Mortgage Licensing System and
Registry with respect to the information or material, the person to
whom the information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(3) This section shall not apply with respect to the information
or material relating to the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, mortgage
loan originators that is included in the Nationwide Mortgage
Licensing System and Registry for access by the public.
22105.4. The commissioner shall regularly report violations of this
division, as well as enforcement actions and other relevant
information, to the Nationwide Mortgage Licensing System and
Registry, to the extent that information is public record.
22106. (a) The finance lender or broker license shall state the
name of the licensee, and if the licensee is a partnership, the names
of its general partners, and if a corporation or an association, the
date and place of its incorporation or organization, and the address
of the licensee's principal business location. On the approval and
licensing of a location pursuant to Section 22101 or 22102, the
commissioner shall issue an original license endorsed to show the
address of the authorized location and, if applicable, the name of
the subsidiary corporation licensed to operate the location. The
license shall state whether the licensee is licensed as a finance
lender or a broker.
(b) An application for a license for a business location outside
this state shall constitute an agreement by the applicant to do all
of the following:
(1) Make the licensee's books, accounts, papers, records, and
files available to the commissioner or the commissioner's
representatives in this state.
(2) Pay the reasonable expenses for travel, meals, and lodging of
the commissioner or the commissioner's representatives incurred
during any investigation or examination made at the licensee's
location outside this state.
A licensee located outside this state is not required to maintain
books and records regarding licensed loans separate from those for
other loans if the licensed loans can be readily identified.
22107. (a) Each finance lender and broker licensee shall pay to the
commissioner its pro rata share of all costs and expenses, including
the costs and expenses associated with the licensing of mortgage
loan originators it employs, reasonably incurred in the
administration of this division, as estimated by the commissioner,
for the ensuing year and any deficit actually incurred or anticipated
in the administration of the program in the year in which the
assessment is made. The pro rata share shall be the proportion that a
licensee's gross income bears to the aggregate gross income of all
licensees as shown by the annual financial reports to the
commissioner, for the costs and expenses remaining after the amount
assessed pursuant to subdivision (c).
(b) On or before the 30th day of September in each year, the
commissioner shall notify each licensee of the amount assessed and
levied against it and that amount shall be paid by October 31. If
payment is not made by October 31, the commissioner shall assess and
collect a penalty, in addition to the assessment, of 1 percent of the
assessment for each month or part of a month that the payment is
delayed or withheld.
(c) In the levying and collection of the assessment, a licensee
shall neither be assessed for nor be permitted to pay less than two
hundred fifty dollars ($250) per licensed location per year.
(d) If a licensee fails to pay the assessment on or before the
31st day of October, the commissioner may by order summarily suspend
or revoke the certificate issued to the licensee. If, after an order
is made, a request for hearing is filed in writing within 30 days,
and a hearing is not held within 60 days thereafter, the order is
deemed rescinded as of its effective date. During any period when its
certificate is revoked or suspended, a finance lender or broker
licensee and any mortgage loan originator licensee employed by the
finance lender or broker shall not conduct business pursuant to this
division except as may be permitted by order of the commissioner.
However, the revocation, suspension, or surrender of a certificate
shall not affect the powers of the commissioner as provided in this
division.
(e) The commissioner shall, by rule, establish the timelines,
fees, and assessments applicable to applicants for original mortgage
loan originator licenses, license renewals, and license changes under
this division.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require licensees to pay assessments through
the Nationwide Mortgage Licensing System and Registry.
22108. (a) The commissioner may by rule require licensees to file,
at the times that he or she may specify, the information that he or
she may reasonably require regarding any changes in the information
provided in any application filed pursuant to this division.
(b) The commissioner may by rule require a licensee to file
information through the Nationwide Mortgage Licensing System and
Registry.
22109. (a) Upon reasonable notice and opportunity to be heard, the
commissioner may deny the application for a finance lender or broker
license for any of the following reasons:
(1) A false statement of a material fact has been made in the
application.
(2) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has, within the last 10 years, been convicted of or pleaded
nolo contendere to a crime, or committed an act involving
dishonesty, fraud, or deceit, if the crime or act is substantially
related to the qualifications, functions, or duties of a person
engaged in business in accordance with this division.
(3) The applicant or an officer, director, general partner, person
responsible for the applicant's lending activities in this state, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has violated any provision of this division or the rules
thereunder or any similar regulatory scheme of the State of
California or a foreign jurisdiction.
(4) The applicant employs a mortgage loan originator who is not
licensed, or has not initiated an application to become licensed,
pursuant to this division.
(b) The application shall be considered withdrawn within the
meaning of this section if the applicant fails to respond to a
written notification of a deficiency in the application within 90
days of the date of the notification.
(c) The commissioner shall, within 60 days from the filing of a
full and complete application for a license with the fees, either
issue a license or file a statement of issues prepared in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code.
22109.1. (a) The commissioner shall deny an application for a
mortgage loan originator license unless the commissioner makes, at a
minimum, the following findings:
(1) The applicant has never had a mortgage loan originator license
revoked in any governmental jurisdiction, except that a subsequent
formal vacation of a revocation shall not be deemed a revocation.
(2) The applicant has not been convicted of, or pled guilty or
nolo contendere to, a felony in a domestic, foreign, or military
court, as follows:
(A) During the seven-year period preceding the date of the
application for licensing and registration.
(B) At any time preceding the date of application, if the felony
involved an act of fraud, dishonesty, or a breach of trust, or money
laundering.
(C) Provided that any pardon of a conviction shall not be a
conviction for purposes of this paragraph.
(3) The applicant has demonstrated such financial responsibility,
character, and general fitness as to command the confidence of the
community and to warrant a determination that the mortgage loan
originator will operate honestly, fairly, and efficiently within the
purposes of this division.
(4) The applicant has completed the prelicensing education
requirement described in Section 22109.2.
(5) The applicant has passed a written test that meets the test
requirement described in Section 22109.3.
(6) The applicant is employed by, and subject to the supervision
of, a finance lender or broker that has obtained a license from the
commissioner pursuant to this division.
(b) Before denying a license under this section, the commissioner
shall proceed as prescribed by Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code and
shall have all the powers granted under that chapter.
22109.2. (a) An applicant for a mortgage loan originator license
shall complete at least 20 hours of education approved in accordance
with subdivision (b). The education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Three hours of ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of subdivision (a), prelicensing education
courses shall be reviewed and approved by the Nationwide Mortgage
Licensing System and Registry. Review and approval of a prelicensing
education course shall include review and approval of the course
provider.
(c) Nothing in this section shall preclude any prelicensing
education course, as approved by the Nationwide Mortgage Licensing
System and Registry, that is provided by the employer of the
applicant or an entity that is affiliated with the applicant by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Prelicensing education may be offered either in a classroom,
online, or by any other means approved by the Nationwide Mortgage
Licensing System and Registry.
(e) The prelicensing education requirements approved by the
Nationwide Mortgage Licensing System and Registry for any state other
than California shall be accepted as credit toward completion of
prelicensing education requirements in California.
(f) An individual previously licensed under this division as a
mortgage loan originator, applying to be licensed again, shall prove
that he or she has completed all of the continuing education
requirements for the year in which the license was last held.
22109.3. (a) An applicant for a mortgage loan originator license
shall pass a qualified written test developed by the Nationwide
Mortgage Licensing System and Registry and administered by a test
provider approved by the Nationwide Mortgage Licensing System and
Registry.
(b) A written test shall not be treated as a qualified written
test for purposes of subdivision (a) unless the test adequately
measures the applicant's knowledge and comprehension in appropriate
subject areas, including all of the following:
(1) Ethics.
(2) Federal law and regulation relating to mortgage origination.
(3) State law and regulation relating to mortgage origination.
(4) Federal and state law and regulation, including instruction on
fraud, consumer protection, the nontraditional mortgage marketplace,
and fair lending issues.
(c) Nothing in this section shall prohibit a test provider
approved by the Nationwide Mortgage Licensing System and Registry
from providing a test at the location of the employer of the
applicant or the location of any subsidiary or affiliate of the
employer of the applicant, or the location of any entity with which
the applicant holds an exclusive arrangement to conduct the business
of a mortgage loan originator.
(d) An individual shall not be considered to have passed a
qualified written test administered pursuant to this section unless
the individual achieves a test score of not less than 75 percent of
correct answers to questions.
(e) An individual who fails the qualified written test may retake
the test up to three consecutive times, although at least 30 days
shall pass between each retesting.
(f) An applicant who fails three consecutive retests shall wait at
least six months before retesting.
(g) A licensed mortgage loan originator who fails to maintain a
valid license for a period of five years or longer shall retake the
test, not taking into account any time during which the individual is
a registered mortgage loan originator.
22109.4. (a) A mortgage loan originator shall comply with the
requirements of this section on or before December 31 of every year.
(b) The minimum standards for license renewal for a mortgage loan
originator shall include the following:
(1) The mortgage loan originator continues to meet the minimum
standards for license issuance under Section 22109.1.
(2) The mortgage loan originator has satisfied the annual
continuing education requirements described in Section 22109.5.
(3) The mortgage loan originator, or the finance lender or broker
employing the mortgage loan originator, has paid all required fees
for renewal of the license as provided in Section 22107.
(c) The license of a mortgage loan originator failing to satisfy
the minimum standards for license renewal shall expire at midnight on
December 31, except as provided in subdivision (h) of Section
22109.5. The commissioner may adopt procedures for the reinstatement
of expired licenses consistent with the standards established by the
Nationwide Mortgage Licensing System and Registry.
22109.5. (a) A licensed mortgage loan originator shall complete at
least eight hours of continuing education approved in accordance with
subdivision (b). The continuing education shall include at least the
following:
(1) Three hours of instruction on federal law and regulations.
(2) Two hours of ethics, which shall include instruction on fraud,
consumer protection, and fair lending issues.
(3) Two hours of training related to lending standards for the
nontraditional mortgage product marketplace.
(b) For purposes of this section, continuing education courses
shall be reviewed and approved by the Nationwide Mortgage Licensing
System and Registry. Review and approval of a continuing education
course shall include review and approval of the course provider.
(c) Nothing in this section shall preclude any education course,
as approved by the Nationwide Mortgage Licensing System and Registry,
that is provided by the employer of the mortgage loan originator or
an entity which is affiliated with the mortgage loan originator by an
agency contract, or any subsidiary or affiliate of the employer or
entity.
(d) Continuing education may be offered in a classroom, online,
and by any other means approved by the Nationwide Mortgage Licensing
System and Registry.
(e) Except as provided in subdivision (i), a licensed mortgage
loan originator:
(1) May only receive credit for a continuing education course in
the year in which the course is taken.
(2) May not take the same approved course in the same or
successive years to meet the annual requirements for continuing
education.
(f) A licensed mortgage loan originator who is an approved
instructor of an approved continuing education course may receive
credit for the licensed mortgage loan originator's own annual
continuing education requirement at the rate of two hours credit for
every one hour taught.
(g) A person who has successfully completed continuing education
requirements approved by the Nationwide Mortgage Licensing System and
Registry for any state other than California shall be granted credit
toward completion of continuing education requirements in
California.
(h) A licensed mortgage loan originator who subsequently becomes
unlicensed shall complete the continuing education requirements for
the last year in which the license was held prior to issuance of a
new or renewed license.
(i) A person meeting the requirements of paragraphs (1) and (3) of
subdivision (b) of Section 22109.4 may correct any deficiency in
continuing education as established by rule or regulation of the
commissioner.
22109.6. In addition to any other duties imposed upon the
commissioner by law, the commissioner shall require mortgage loan
originators to be licensed and registered through the Nationwide
Mortgage Licensing System and Registry. In order to carry out this
requirement, the commissioner is authorized to participate in the
Nationwide Mortgage Licensing System and Registry. For this purpose,
the commissioner may establish by rule, regulation, or order,
requirements as necessary, including, but not limited to, the
following:
(a) Background information for the following:
(1) Criminal history through fingerprint or other databases.
(2) Civil or administrative records.
(3) Credit history.
(4) Any other information as deemed necessary by the Nationwide
Mortgage Licensing System and Registry.
(b) The payment of fees to apply for or renew licenses through the
Nationwide Mortgage Licensing System and Registry.
(c) The setting or resetting as necessary of renewal or reporting
dates.
(d) Requirements for amending or surrendering a license or any
other activities as the commissioner deems necessary for
participation in the Nationwide Mortgage Licensing System and
Registry.
22110. The proceedings for a denial of a license shall be conducted
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner has all the powers granted therein.
22111. All money paid or collected under this division shall be
deposited in the State Treasury to the credit of the State
Corporations Fund. The administration of this division shall be
supported out of the State Corporations Fund.
22112. (a) A licensee shall maintain a surety bond in accordance
with this subdivision in a minimum amount of twenty-five thousand
dollars ($25,000). The bond shall be payable to the commissioner and
issued by an insurer authorized to do business in this state. An
original surety bond, including any and all riders and endorsements
executed subsequent to the effective date of the bond, shall be filed
with the commissioner within 10 days of execution. For licensees
with multiple licensed locations, only one surety bond is required.
The bond shall be used for the recovery of expenses, fines, and fees
levied by the commissioner in accordance with this division or for
losses or damages incurred by borrowers or consumers as the result of
a licensee's noncompliance with the requirements of this division.
(b) When an action is commenced on a licensee's bond, the
commissioner may require the filing of a new bond. Immediately upon
recovery of any action on the bond, the licensee shall file a new
bond. Failure to file a new bond within 10 days of the recovery on a
bond, or within 10 days after notification by the commissioner that a
new bond is required, constitutes sufficient grounds for the
suspension or revocation of the license.
(c) The commissioner may by rule require a higher bond amount for
a licensee who employs one or more mortgage loan originators and who
makes or arranges residential mortgage loans, based on the dollar
amount of residential mortgage loans originated by that licensee and
any mortgage loan originators employed by that licensee. Every
mortgage loan originator employed by the licensee shall be covered by
the surety bond.
