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CHAPTER 13-10MORTGAGE LOAN ORIGINATORS13-10-01.Purpose.The purpose of this chapter is to protect consumers seekingmortgage loans and to ensure that the mortgage lending industry is operating without unfair,<br>deceptive, and fraudulent practices on the part of mortgage loan originators.13-10-02. Definitions. For purposes of this chapter:1.&quot;Depository institution&quot; has the same meaning as is currently defined under<br>section 3 of the Federal Deposit Insurance Act and includes any credit union.2.&quot;Federal banking agencies&quot; means the board of governors of the federal reserve<br>system, the comptroller of the currency, the director of the office of thrift supervision,<br>the national credit union administration, and the federal deposit insurance<br>corporation.3.&quot;Immediate family member&quot; means a spouse, child, sibling, parent, grandparent, or<br>grandchild.This includes stepparents, stepchildren, stepsiblings, and adoptiverelationships.4.&quot;Individual&quot; means a natural person.5.&quot;Loan processor or underwriter&quot; means an individual who performs clerical or<br>support duties as an employee at the direction of and subject to the supervision and<br>instruction of a person licensed, or exempt from licensing, under this chapter.a.For purposes of this subsection, &quot;clerical or support duties&quot; may include<br>subsequent to the receipt of an application:(1)The receipt, collection, distribution, and analysis of information common<br>for the processing or underwriting of a residential mortgage loan; and(2)Communicating with a consumer to obtain the information necessary for<br>the processing or underwriting of a loan, to the extent that such<br>communication does not include offering or negotiating loan rates or<br>terms, or counseling consumers about residential mortgage loan rates or<br>terms.b.An individual engaging solely in loan processor or underwriter activities shall<br>not represent to the public, through advertising or other means of<br>communicating or providing information, including the use of business cards,<br>stationery, brochures, signs, rate lists, or other promotional items, that such<br>individual can or will perform any of the activities of a mortgage loan originator.6.&quot;Mortgage loan originator&quot;:a.Means an individual who for compensation or gain or in the expectation of<br>compensation or gain:(1)Takes a residential mortgage loan application; or(2)Offers or negotiates terms of a residential mortgage loan;b.Does not include an individual engaged solely as a loan processor or<br>underwriter except as otherwise provided in subsection 4 of section 13-10-03;Page No. 1c.Does not include a person or entity that only performs real estate brokerage<br>activities and is licensed or registered in accordance with North Dakota law,<br>unless the person or entity is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator; andd.Does not include a person or entity solely involved in extensions of credit<br>relating to timeshare plans, as that term is defined in 11 U.S.C. 101(53D).7.&quot;Nationwide mortgage licensing system and registry&quot; means a mortgage licensing<br>system developed and maintained by the conference of state bank supervisors and<br>the American association of residential mortgage regulators for the licensing and<br>registration of licensed mortgage loan originators.8.&quot;Nontraditional mortgage product&quot; means any mortgage product other than a<br>thirty-year fixed rate mortgage.9.&quot;Person&quot; means a natural person, corporation, company, limited liability company,<br>partnership, or association.10.&quot;Real estate brokerage activity&quot; means any activity that involves offering or providing<br>real estate brokerage services to the public, including:a.Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or<br>lessee of real property;b.Bringing together parties interested in the sale, purchase, lease, rental, or<br>exchange of real property;c.Negotiating, on behalf of any party, any portion of a contract relating to the sale,<br>purchase, lease, rental, or exchange of real property, other than in connection<br>with providing financing with respect to any such transaction;d.Engaging in any activity for which a person engaged in the activity is required to<br>be registered or licensed as a real estate agent or real estate broker under any<br>applicable law; ande.Offering to engage in any activity, or act in any capacity, described in this<br>subsection.11.&quot;Registered mortgage loan originator&quot; means any individual who:a.Meets the definition of mortgage loan originator and is an employee of:(1)A depository institution;(2)A subsidiary that is:(a)Owned and controlled by a depository institution; and(b)Regulated by a federal banking agency; or(3)An institution regulated by the farm credit administration; andb.Is registered with, and maintains a unique identifier through, the nationwide<br>mortgage licensing system and registry.12.&quot;Residential mortgage loan&quot; means any loan primarily for personal, family, or<br>household use that is secured by a mortgage, deed of trust, or other equivalentPage No. 2consensual security interest on a dwelling, as defined in section 103(v) of the Truth<br>in Lending Act, or residential real estate upon which is constructed or intended to be<br>constructed such a dwelling.13.&quot;Residential real estate&quot; means any real property located in North Dakota, upon<br>which is constructed or intended to be constructed a dwelling.14.&quot;Unique identifier&quot; means a number or other identifier assigned by protocols<br>established by the nationwide mortgage licensing system and registry.13-10-03. License and registration required.1.An individual, unless specifically exempted from this chapter under subsection 3,<br>shall not engage in the business of a mortgage loan originator with respect to any<br>dwelling located in this state without first obtaining and maintaining annually a<br>license under this chapter. Each licensed mortgage loan originator must register<br>with and maintain a valid unique identifier issued by the nationwide mortgage<br>licensing system and registry.2.To facilitate an orderly transition to licensing and minimize disruption in the<br>mortgage marketplace, the effective date for subsection 1 is August 1, 2009, or such<br>later date approved by the secretary of the United States department of housing and<br>urban development, pursuant to the authority granted under Public Law 110-289,<br>section 1508(a).All persons subject to licensing under this section, who arecurrently licensed under chapter 13-04.1, shall continue to be subject to licensure<br>under chapter 13-04.1 until January 1, 2010, when they shall be required to be<br>licensed under this chapter. If at any point before January 1, 2010, a person subject<br>to licensing under this section fails to be licensed under chapter 13-04.1, that person<br>shall be required to be licensed under this chapter.3.The following are exempt from this chapter:a.Registered mortgage loan originators, when acting for an entity described in<br>subdivision a of subsection 11 of section 13-10-02 are exempt from this<br>chapter.b.Any individual who offers or negotiates terms of a residential mortgage loan<br>with or on behalf of an immediate family member of the individual.c.Any individual who offers or negotiates terms of a residential mortgage loan<br>secured by a dwelling that served as the individual's residence.d.A licensed attorney who negotiates the terms of a residential mortgage loan on<br>behalf of a client as an ancillary matter to the attorney's representation of the<br>client, unless the attorney is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator.4.A loan processor or underwriter who is an independent contractor may not engage in<br>the activities of a loan processor or underwriter unless such independent contractor<br>loan processor or underwriter obtains and maintains a license under subsection 1.<br>Each independent contractor loan processor or underwriter licensed as a mortgage<br>loan originator must have and maintain a valid unique identifier issued by the<br>nationwide mortgage licensing system and registry.5.To implement an orderly and efficient licensing process, the commissioner may<br>establish licensing rules or regulations and interim procedures for licensing and<br>acceptance of applications. For previously registered or licensed individuals, the<br>commissioner may establish expedited review and licensing procedures.Page No. 313-10-04. State license and registration application and issuance.1.Applicants for a license shall apply in a form as prescribed by the commissioner.<br>Each such form must contain content as set forth by rule, regulation, instruction, or<br>procedure of the commissioner and may be changed or updated as necessary by<br>the commissioner in order to carry out the purposes of this chapter.2.To fulfill the purposes of this chapter, the commissioner may establish relationships<br>or contracts with the nationwide mortgage licensing system and registry or other<br>entities designated by the nationwide mortgage licensing system and registry to<br>collect and maintain records and process transaction fees or other fees related to<br>licensees or other persons subject to this chapter.3.In connection with an application for licensing as a mortgage loan originator, the<br>applicant shall, at a minimum, furnish to the nationwide mortgage licensing system<br>and registry information concerning the applicant's identity, including:a.Fingerprints for submission to the federal bureau of investigation and any<br>governmental agency or entity authorized to receive such information for a<br>state, national, and international criminal history background check; andb.Personal history and experience in a form prescribed by the nationwide<br>mortgage licensing system and registry, including the submission of<br>authorization for the nationwide mortgage licensing system and registry and the<br>commissioner to obtain:(1)An independent credit report obtained from a consumer reporting agency<br>described in section 603(p) of the Fair Credit Reporting Act; and(2)Information related to any administrative, civil, or criminal findings by any<br>governmental jurisdiction.4.For the purposes of this section and in order to reduce the points of contact which<br>the federal bureau of investigation may have to maintain for purposes of<br>subsection 3, the commissioner may use the nationwide mortgage licensing system<br>and registry as a channeling agent for requesting information from and distributing<br>information to the department of justice or any governmental agency.5.For the purposes of this section and in order to reduce the points of contact which<br>the commissioner may have to maintain for purposes of subsection 3, the<br>commissioner may use the nationwide mortgage licensing system and registry as a<br>channeling agent for requesting and distributing information to and from any source<br>so directed by the commissioner.13-10-05. Issuance of license. The commissioner shall not issue a mortgage loanoriginator 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<br>governmental jurisdiction, except that a subsequent formal vacation of such<br>revocation shall not be deemed a revocation.2.The applicant has not been convicted of, or pled guilty or nolo contendere to, a<br>felony in a domestic, foreign, or military court:a.During the seven-year period preceding the date of the application for licensing<br>and registration; orb.At any time preceding such date of application, if such felony involved an act of<br>fraud, dishonesty, or a breach of trust, or money laundering;Page No. 4c.Provided that any pardon of a conviction shall not be a conviction for purposes<br>of this subsection.3.a.The applicant has demonstrated financial responsibility, character, and general<br>fitness such as to command the confidence of the community and to warrant a<br>determination that the mortgage loan originator will operate honestly, fairly, and<br>efficiently within the purposes of this chapter.b.For purposes of this subsection, a person has shown that that person is not<br>financially responsible when that person has shown a disregard in the<br>management of that person's own financial condition. A determination that an<br>individual has not shown financial responsibility may include:(1)Current outstanding judgments, except judgments solely as a result of<br>medical expenses;(2)Current outstanding tax liens or other government liens and filings;(3)Foreclosures within the past three years; and(4)A pattern of seriously delinquent accounts within the past three years.4.The applicant has completed the prelicensing education requirement described in<br>section 13-10-06.5.The applicant has passed a written test that meets the test requirement described in<br>section 13-10-07.6.The applicant has met the net worth and surety bond requirements under section<br>13-10-13.13-10-06. Prelicensing and relicensing education of loan originators.1.To meet the prelicensing education requirement referred to in subsection 4 of<br>section 13-10-05, a person shall complete at least twenty hours of education<br>approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Three hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, prelicensing education courses must be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards.Review and approval of a prelicensing education coursemust include review and approval of the course provider.3.Nothing in this section precludes any prelicensing education course, as approved by<br>the nationwide mortgage licensing system and registry, which is provided by the<br>employer of the applicant or an entity that is affiliated with the applicant by an<br>agency contract or any subsidiary or affiliate of such employer or entity.4.Prelicensing education may be offered in a classroom, online, or by any other<br>means approved by the nationwide mortgage licensing system and registry.Page No. 55.The prelicensing education requirements approved by the nationwide mortgage<br>licensing system and registry in subsection 1 for any state shall be accepted as<br>credit toward completion of prelicensing education requirements in North Dakota.6.A person previously licensed under this chapter after the effective date of this<br>chapter applying to be licensed again must prove that that person has completed all<br>of the continuing education requirements for the year in which the license was last<br>held.13-10-07. Testing of loan originators.1.In order to meet the written test requirement referred to in subsection 5 of section<br>13-10-05, an individual must pass, in accordance with the standards established<br>under this subsection, a qualified written test developed by the nationwide mortgage<br>licensing system and registry and administered by a test provider approved by the<br>nationwide mortgage licensing system and registry based upon reasonable<br>standards.2.A written test shall not be treated as a qualified written test for purposes of<br>subsection 1 unless the test adequately measures the applicant's knowledge and<br>comprehension in appropriate subject areas, including:a.Ethics;b.Federal law and regulation pertaining to mortgage origination;c.State law and regulation pertaining to mortgage origination; andd.Federal and state law and regulation, including instruction on fraud, consumer<br>protection, the nontraditional mortgage marketplace, and fair lending issues.3.Nothing in this section prohibits a test provider approved by the nationwide mortgage<br>licensing system and registry from providing a test at the location of the employer of<br>the applicant or the location of any subsidiary or affiliate of the employer of the<br>applicant or the location of any entity with which the applicant holds an exclusive<br>arrangement to conduct the business of a mortgage loan originator.4.a.An individual shall not be considered to have passed a qualified written test<br>unless the individual achieves a test score of not less than seventy-five percent<br>correct answers to questions.b.An individual may retake a test three consecutive times, with each consecutive<br>taking occurring at least thirty days after the preceding test.c.After failing three consecutive tests, an individual shall wait at least six months<br>before taking the test again.d.A licensed mortgage loan originator who fails to maintain a valid license for a<br>period of five years or longer shall retake the test, not taking into account any<br>time during which individual is a registered mortgage loan originator.13-10-08. Standards for license renewal.1.The minimum standards for license renewal for mortgage loan originators include<br>the following:a.The mortgage loan originator continues to meet the minimum standards for<br>license issuance under section 13-10-05.Page No. 6b.The mortgage loan originator has satisfied the annual continuing education<br>requirements described in section 13-10-09.c.The mortgage loan originator has paid all required fees for renewal of the<br>license.2.The license of a mortgage loan originator failing to satisfy the minimum standards for<br>license renewal shall expire.The commissioner may adopt procedures for thereinstatement of expired licenses consistent with the standards established by the<br>nationwide mortgage licensing system and registry.13-10-09. Continuing education for mortgage loan originators.1.To meet the annual continuing education requirements referred to in section<br>13-10-08, a licensed mortgage loan originator shall complete at least eight hours of<br>education approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Two hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, continuing education courses shall be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards. Review and approval of a continuing education course must<br>include review and approval of the course provider.3.Nothing in this section precludes any education course, as approved by the<br>nationwide mortgage licensing system and registry, which is provided by the<br>employer of the mortgage loan originator or an entity that is affiliated with the<br>mortgage loan originator by an agency contract or any subsidiary or affiliate of such<br>employer or entity.4.Continuing education may be offered in a classroom, online, or by any other means<br>approved by the nationwide mortgage licensing system and registry.5.For a licensed mortgage loan originator:a.Except as allowed by subsection 2 of section 13-10-08 and subsection 9 of this<br>section, an individual may only receive credit for a continuing education course<br>in the year in which the course is taken; andb.An individual may not take the same approved course in the same or<br>successive years to meet the annual requirements for continuing education.6.A licensed mortgage loan originator who is an approved instructor of an approved<br>continuing education course may receive credit for the licensed mortgage loan<br>originator's own annual continuing education requirement at the rate of two hours<br>credit for every one hour taught.7.A person having successfully completed the education requirements approved by<br>the nationwide mortgage licensing system and registry in subsection 1 for any state<br>shall be accepted as credit toward completion of continuing education requirements<br>in North Dakota.Page No. 78.A licensed mortgage loan originator who subsequently becomes unlicensed must<br>complete the continuing education requirements for the last year in which the license<br>was held prior to issuance of a new or renewed license.9.A person meeting the requirements of subdivisions a and c of subsection 1 of<br>section 13-10-08 may make up any deficiency in continuing education as<br>established by rule or regulation of the commissioner.13-10-10. Authority to require license. In addition to any other duties imposed uponthe commissioner by law, the commissioner shall require mortgage loan originators to be<br>licensed and registered through the nationwide mortgage licensing system and registry. To carry<br>out this requirement, the commissioner may participate in the nationwide mortgage licensing<br>system and registry. For this purpose, the commissioner may establish by rule requirements as<br>necessary, including:1.Background checks for:a.Criminal history through fingerprint or other databases;b.Civil or administrative records;c.Credit history; ord.Any other information as deemed necessary by the nationwide mortgage<br>licensing system and registry;2.The payment of fees to apply for or renew licenses through the nationwide mortgage<br>licensing system and registry;3.The setting or resetting as necessary of renewal or reporting dates; and4.Requirements for amending or surrendering a license or any other such activities as<br>the commissioner deems necessary for participation in the nationwide mortgage<br>licensing system and registry.13-10-11.Nationwide mortgage licensing system and registry informationchallenge process.The commissioner shall establish a process by which mortgage loanoriginators may challenge information entered into the nationwide mortgage licensing system and<br>registry by the commissioner.13-10-12. Enforcement authorities, violations, and penalties.1.To ensure the effective supervision and enforcement of this chapter the<br>commissioner may:a.Deny, suspend, revoke, condition, or decline to renew a license for a violation<br>of this chapter, rules or regulations issued under this chapter or order or<br>directive entered under this chapter.b.Deny, suspend, revoke, condition, or decline to renew a license if an applicant<br>or licensee fails at any time to meet the requirements of section 13-10-05 or<br>13-10-08, or withholds information or makes a material misstatement in an<br>application for a license or renewal of a license.c.Order restitution against persons subject to this chapter for violations of this<br>chapter.d.Impose fines on persons subject to this chapter pursuant to subsections 2, 3,<br>and 4.Page No. 8e.Issue orders or directives under this chapter as follows:(1)Order or direct persons subject to this chapter to cease and desist from<br>conducting business, including immediate temporary orders to cease and<br>desist.(2)Order or direct persons subject to this chapter to cease any harmful<br>activities or violations of this chapter, including immediate temporary<br>orders to cease and desist.(3)Enter immediate temporary orders to cease business under a license or<br>interimlicense issued pursuant to the authority grantedundersubsection 5 of section 13-10-03 if the commissioner determines that<br>such license was erroneously granted or the licensee is currently in<br>violation of this chapter.(4)Order or direct such other affirmative action as the commissioner deems<br>necessary.2.The commissioner may impose a civil penalty on a mortgage loan originator or<br>person subject to this chapter, if the commissioner finds, on the record after notice<br>and opportunity for hearing, that such mortgage loan originator or person subject to<br>this chapter has violated or failed to comply with any requirement of this chapter or<br>any regulation prescribed by the commissioner under this chapter or order issued<br>under authority of this chapter.3.The maximum amount of penalty for each act or omission described in subsection 2<br>is twenty-five thousand dollars.4.Each violation or failure to comply with any directive or order of the commissioner is<br>a separate and distinct violation or failure.13-10-13.Surety bond and minimum net worth requirements - Surety bondrequired.1.Each mortgage loan originator must be covered by a surety bond in accordance with<br>this section. If the mortgage loan originator is an employee or exclusive agent of a<br>person subject to this chapter, the surety bond of such person subject to this chapter<br>may be used in lieu of the mortgage loan originator's surety bond requirement.a.The surety bond shall provide coverage for each mortgage loan originator in an<br>amount as prescribed in subsection 2.b.The surety bond must be in a form as prescribed by the commissioner.c.The commissioner may promulgate rules or regulations with respect to the<br>requirements for such surety bonds as are necessary to accomplish the<br>purposes of this chapter.2.The licensee shall maintain a surety bond in the amount as determined by the<br>commissioner by rule. The amount must be reflective of the dollar amount of loans<br>originated as of the previous yearend. However, the commissioner may increase<br>the amount of the surety bond if the commissioner determines that such an increase<br>is necessary to protect the public interests.3.When an action is commenced on a licensee's bond, the commissioner may require<br>the filing of a new bond.Page No. 94.Immediately upon recovery upon any action on the bond, the licensee shall file a<br>new bond.13-10-14. Minimum net worth required. A minimum net worth must be continuouslymaintained for mortgage loan originators in accordance with this section. If the mortgage loan<br>originator is an employee or exclusive agent of a person subject to this chapter, the net worth of<br>such person subject to this chapter may be used in lieu of the mortgage loan originator's<br>minimum net worth requirement.1.Minimum net worth must be maintained in the amount of twenty-five thousand<br>dollars.However, the commissioner may increase the amount of minimum networth if the commissioner determines that such an increase is necessary to protect<br>the public interest.2.The commissioner may promulgate rules or regulations with respect to the<br>requirements for minimum net worth as are necessary to accomplish the purposes<br>of this chapter.13-10-15. Confidentiality. To promote more effective regulation and reduce regulatoryburden through supervisory information sharing:1.Except as otherwise provided in Public Law 110-289, section 1512, the requirements<br>under any federal law or chapter 44-04 regarding the privacy or confidentiality of any<br>information or material provided to the nationwide mortgage licensing system and<br>registry, and any privilege arising under federal or state law, including the rules of<br>any federal or state court, with respect to such information or material, continue to<br>apply to such information or material after the information or material has been<br>disclosed to the nationwide mortgage licensing system and registry.Suchinformation and material may be shared with all state and federal regulatory officials<br>with mortgage industry oversight authority without the loss of privilege or the loss of<br>confidentiality protections provided by federal law or chapter 44-04.2.For these purposes, the commissioner may enter agreements or sharing<br>arrangements with other governmental agencies, the conference of state bank<br>supervisors, the American association of residential mortgage regulators, or other<br>associations representing governmental agencies as established by rule, regulation,<br>or order of the commissioner.3.Information or material that is subject to a privilege or confidentiality under<br>subsection 1 is not subject to:a.Disclosure under any federal or state law governing the disclosure to the public<br>of information held by an officer or an agency of the federal government or the<br>respective state; orb.Subpoena or discovery, or admission into evidence, in any private civil action or<br>administrative process, unless with respect to any privilege held by the<br>nationwide mortgage licensing system and registry with respect to such<br>information or material, the person to whom such information or material<br>pertains waives, in whole or in part, in the discretion of such person, that<br>privilege.4.Application of chapter 44-04 relating to the disclosure of confidential supervisory<br>information or any information or material described in subsection 1 which is<br>inconsistent with subsection 1 shall be superseded by the requirements of this<br>section.5.This section does not apply with respect to the information or material relating to the<br>employment history of, and publicly adjudicated disciplinary and enforcementPage No. 10actions against, mortgage loan originators that is included in the nationwide<br>mortgage licensing system and registry for access by the public.13-10-16.Investigation and examination authority.In addition to any authorityallowed under this chapter, the commissioner may conduct investigations and examinations as<br>follows:1.For purposes of initial licensing, license renewal, license suspension, license<br>conditioning, license revocation or termination, or general or specific inquiry or<br>investigation to determine compliance with this chapter, the commissioner may<br>access, receive, and use any books, accounts, records, files, documents,<br>information, or evidence, including:a.Criminal, civil, and administrative history information, including nonconviction<br>data;b.Personal history and experience information, including independent credit<br>reports obtained from a consumer reporting agency described in section 603(p)<br>of the Fair Credit Reporting Act; andc.Any other documents, information, or evidence the commissioner deems<br>relevant to the inquiry or investigation regardless of the location, possession,<br>control, or custody of such documents, information, or evidence.2.For the purposes of investigating violations or complaints arising under this chapter,<br>or for the purposes of examination, the commissioner may review, investigate, or<br>examine any licensee, individual, or person subject to this chapter, as often as<br>necessary in order to carry out the purposes of this chapter. The commissioner may<br>direct, subpoena, or order the attendance of and examine under oath all persons<br>whose testimony may be required about the loans or the business or subject matter<br>of any such examination or investigation, and may direct, subpoena, or order such<br>person to produce books, accounts, records, files, and any other documents the<br>commissioner deems relevant to the inquiry.3.Each licensee, individual, or person subject to this chapter shall make available to<br>the commissioner upon request the books and records relating to the operations of<br>such licensee, individual, or person subject to this chapter. The commissioner shall<br>have access to such books and records and interview the officers, principals,<br>mortgage loan originators, employees, independent contractors, agents, and<br>customers of the licensee, individual, or person subject to this chapter concerning<br>their business.4.Each licensee, individual, or person subject to this chapter shall make or compile<br>reports or prepare other information as directed by the commissioner in order to<br>carry out the purposes of this section, including:a.Accounting compilations;b.Information lists and data concerning loan transactions in a format prescribed<br>by the commissioner; orc.Such other information deemed necessary to carry out the purposes of this<br>section.5.In making any examination or investigation authorized by this chapter, the<br>commissioner may control access to any documents and records of the licensee or<br>person under examination or investigation. The commissioner may take possession<br>of the documents and records or place a person in exclusive charge of the<br>documents and records in the place where they are usually kept. During the periodPage No. 11of control, no individual or person shall remove or attempt to remove any of the<br>documents and records except pursuant to a court order or with the consent of the<br>commissioner.Unless the commissioner has reasonable grounds to believe thedocuments or records of the licensee have been, or are at risk of being altered or<br>destroyed for purposes of concealing a violation of this chapter, the licensee or<br>owner of the documents and records shall have access to the documents or records<br>as necessary to conduct its ordinary business affairs.6.In order to carry out the purposes of this section, the commissioner may:a.Retain attorneys, accountants, or other professionals and specialists as<br>examiners, auditors, or investigators to conduct or assist in the conduct of<br>examinations or investigations;b.Enter into agreements or relationships with other government officials or<br>regulatory associations in order to improve efficiencies and reduce regulatory<br>burden by sharing resources, standardized or uniform methods or procedures,<br>and documents, records, information, or evidence obtained under this section;c.Use, hire, contract, or employ publicly or privately available analytical systems,<br>methods, or software to examine or investigate the licensee, individual, or<br>person subject to this chapter;d.Accept and rely on examination or investigation reports made by other<br>government officials, within or without this state; ore.Accept audit reports made by an independent certified public accountant for the<br>licensee, individual, or person subject to this chapter in the course of that part<br>of the examination covering the same general subject matter as the audit and<br>may incorporate the audit report in the report of the examination, report of<br>investigation, or other writing of the commissioner.7.The authority of this section remains in effect, whether such a licensee, individual, or<br>person subject to this chapter acts or claims to act under any licensing or registration<br>law of this state or claims to act without such authority.8.No licensee, individual, or person subject to investigation or examination under this<br>section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any<br>books, records, computer records, or other information.13-10-17. Prohibited acts and practices. It is a violation of this chapter for a person orindividual subject to this chapter to:1.Directly or indirectly employ any scheme, device, or artifice to defraud or mislead<br>borrowers or lenders or to defraud any person;2.Engage in any unfair or deceptive practice toward any person;3.Obtain property by fraud or misrepresentation;4.Solicit or enter into a contract with a borrower that provides in substance that the<br>person or individual subject to this chapter may earn a fee or commission through<br>best efforts to obtain a loan even though no loan is actually obtained for the<br>borrower;5.Solicit, advertise, or enter into a contract for specific interest rates, points, or other<br>financing terms unless the terms are actually available at the time of soliciting,<br>advertising, or contracting;Page No. 126.Conduct any business covered by this chapter without holding a valid license as<br>required under this chapter, or assist or aid and abet any person in the conduct of<br>business under this chapter without a valid license as required under this chapter;7.Fail to make disclosures as required by this chapter and any other applicable state<br>or federal law and regulations;8.Fail to comply with this chapter or rules or regulations promulgated under this<br>chapter, or fail to comply with any other state or federal law, including the rules and<br>regulations thereunder, applicable to any business authorized or conducted under<br>this chapter;9.Make, in any manner, any false or deceptive statement or representation, including,<br>with regard to the rates, points, or other financing terms or conditions for a<br>residential mortgage loan or engage in bait and switch advertising;10.Negligently make any false statement or knowingly and willfully make any omission<br>of material fact in connection with any information or reports filed with a<br>governmental agency or the nationwide mortgage licensing system and registry or in<br>connection with any investigation conducted by the commissioner or another<br>governmental agency;11.Make any payment, threat, or promise, directly or indirectly, to any person for the<br>purposes of influencing the independent judgment of the person in connection with a<br>residential mortgage loan or make any payment, threat, or promise, directly or<br>indirectly, to any appraiser of a property, for the purposes of influencing the<br>independent judgment of the appraiser with respect to the value of the property;12.Collect, charge, attempt to collect or charge, or use or propose any agreement<br>purporting to collect or charge any fee prohibited by this chapter;13.Cause or require a borrower to obtain property insurance coverage in an amount<br>that exceeds the replacement cost of the improvements as established by the<br>property insurer; or14.Fail to truthfully account for moneys belonging to a party to a residential mortgage<br>loan transaction.13-10-18.Mortgage call reports.Each mortgage licensee shall submit to thenationwide mortgage licensing system and registry reports of condition, which shall be in such<br>form and shall contain such information as the nationwide mortgage licensing system and<br>registry may require.13-10-19.Report to nationwide mortgage licensing system and registry.Notwithstanding state privacy law, the commissioner is required to report regularly violations of<br>this chapter, as well as enforcement actions and other relevant information, to the nationwide<br>mortgage licensing system and registry subject to the provisions contained in section 13-10-15.13-10-20. Privately insured credit unions. Nonfederally insured credit unions whichemploy loan originators, as defined in Public Law 110-289, title V, the S.A.F.E. Act, shall register<br>such employees with the nationwide mortgage licensing system and registry by furnishing the<br>information concerning the employees' identity set forth in section 1507(a)(2) of Public Law<br>110-289, title V.13-10-21. Unique identifier shown. The unique identifier of any person originating aresidential mortgage loan shall be clearly shown on all residential mortgage loan application<br>forms, solicitations, or advertisements, including business cards or websites, and any other<br>documents as established by rule, regulation, or order of the commissioner.Page No. 13Document Outlinechapter 13-10 mortgage loan originators

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CHAPTER 13-10MORTGAGE LOAN ORIGINATORS13-10-01.Purpose.The purpose of this chapter is to protect consumers seekingmortgage loans and to ensure that the mortgage lending industry is operating without unfair,<br>deceptive, and fraudulent practices on the part of mortgage loan originators.13-10-02. Definitions. For purposes of this chapter:1.&quot;Depository institution&quot; has the same meaning as is currently defined under<br>section 3 of the Federal Deposit Insurance Act and includes any credit union.2.&quot;Federal banking agencies&quot; means the board of governors of the federal reserve<br>system, the comptroller of the currency, the director of the office of thrift supervision,<br>the national credit union administration, and the federal deposit insurance<br>corporation.3.&quot;Immediate family member&quot; means a spouse, child, sibling, parent, grandparent, or<br>grandchild.This includes stepparents, stepchildren, stepsiblings, and adoptiverelationships.4.&quot;Individual&quot; means a natural person.5.&quot;Loan processor or underwriter&quot; means an individual who performs clerical or<br>support duties as an employee at the direction of and subject to the supervision and<br>instruction of a person licensed, or exempt from licensing, under this chapter.a.For purposes of this subsection, &quot;clerical or support duties&quot; may include<br>subsequent to the receipt of an application:(1)The receipt, collection, distribution, and analysis of information common<br>for the processing or underwriting of a residential mortgage loan; and(2)Communicating with a consumer to obtain the information necessary for<br>the processing or underwriting of a loan, to the extent that such<br>communication does not include offering or negotiating loan rates or<br>terms, or counseling consumers about residential mortgage loan rates or<br>terms.b.An individual engaging solely in loan processor or underwriter activities shall<br>not represent to the public, through advertising or other means of<br>communicating or providing information, including the use of business cards,<br>stationery, brochures, signs, rate lists, or other promotional items, that such<br>individual can or will perform any of the activities of a mortgage loan originator.6.&quot;Mortgage loan originator&quot;:a.Means an individual who for compensation or gain or in the expectation of<br>compensation or gain:(1)Takes a residential mortgage loan application; or(2)Offers or negotiates terms of a residential mortgage loan;b.Does not include an individual engaged solely as a loan processor or<br>underwriter except as otherwise provided in subsection 4 of section 13-10-03;Page No. 1c.Does not include a person or entity that only performs real estate brokerage<br>activities and is licensed or registered in accordance with North Dakota law,<br>unless the person or entity is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator; andd.Does not include a person or entity solely involved in extensions of credit<br>relating to timeshare plans, as that term is defined in 11 U.S.C. 101(53D).7.&quot;Nationwide mortgage licensing system and registry&quot; means a mortgage licensing<br>system developed and maintained by the conference of state bank supervisors and<br>the American association of residential mortgage regulators for the licensing and<br>registration of licensed mortgage loan originators.8.&quot;Nontraditional mortgage product&quot; means any mortgage product other than a<br>thirty-year fixed rate mortgage.9.&quot;Person&quot; means a natural person, corporation, company, limited liability company,<br>partnership, or association.10.&quot;Real estate brokerage activity&quot; means any activity that involves offering or providing<br>real estate brokerage services to the public, including:a.Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or<br>lessee of real property;b.Bringing together parties interested in the sale, purchase, lease, rental, or<br>exchange of real property;c.Negotiating, on behalf of any party, any portion of a contract relating to the sale,<br>purchase, lease, rental, or exchange of real property, other than in connection<br>with providing financing with respect to any such transaction;d.Engaging in any activity for which a person engaged in the activity is required to<br>be registered or licensed as a real estate agent or real estate broker under any<br>applicable law; ande.Offering to engage in any activity, or act in any capacity, described in this<br>subsection.11.&quot;Registered mortgage loan originator&quot; means any individual who:a.Meets the definition of mortgage loan originator and is an employee of:(1)A depository institution;(2)A subsidiary that is:(a)Owned and controlled by a depository institution; and(b)Regulated by a federal banking agency; or(3)An institution regulated by the farm credit administration; andb.Is registered with, and maintains a unique identifier through, the nationwide<br>mortgage licensing system and registry.12.&quot;Residential mortgage loan&quot; means any loan primarily for personal, family, or<br>household use that is secured by a mortgage, deed of trust, or other equivalentPage No. 2consensual security interest on a dwelling, as defined in section 103(v) of the Truth<br>in Lending Act, or residential real estate upon which is constructed or intended to be<br>constructed such a dwelling.13.&quot;Residential real estate&quot; means any real property located in North Dakota, upon<br>which is constructed or intended to be constructed a dwelling.14.&quot;Unique identifier&quot; means a number or other identifier assigned by protocols<br>established by the nationwide mortgage licensing system and registry.13-10-03. License and registration required.1.An individual, unless specifically exempted from this chapter under subsection 3,<br>shall not engage in the business of a mortgage loan originator with respect to any<br>dwelling located in this state without first obtaining and maintaining annually a<br>license under this chapter. Each licensed mortgage loan originator must register<br>with and maintain a valid unique identifier issued by the nationwide mortgage<br>licensing system and registry.2.To facilitate an orderly transition to licensing and minimize disruption in the<br>mortgage marketplace, the effective date for subsection 1 is August 1, 2009, or such<br>later date approved by the secretary of the United States department of housing and<br>urban development, pursuant to the authority granted under Public Law 110-289,<br>section 1508(a).All persons subject to licensing under this section, who arecurrently licensed under chapter 13-04.1, shall continue to be subject to licensure<br>under chapter 13-04.1 until January 1, 2010, when they shall be required to be<br>licensed under this chapter. If at any point before January 1, 2010, a person subject<br>to licensing under this section fails to be licensed under chapter 13-04.1, that person<br>shall be required to be licensed under this chapter.3.The following are exempt from this chapter:a.Registered mortgage loan originators, when acting for an entity described in<br>subdivision a of subsection 11 of section 13-10-02 are exempt from this<br>chapter.b.Any individual who offers or negotiates terms of a residential mortgage loan<br>with or on behalf of an immediate family member of the individual.c.Any individual who offers or negotiates terms of a residential mortgage loan<br>secured by a dwelling that served as the individual's residence.d.A licensed attorney who negotiates the terms of a residential mortgage loan on<br>behalf of a client as an ancillary matter to the attorney's representation of the<br>client, unless the attorney is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator.4.A loan processor or underwriter who is an independent contractor may not engage in<br>the activities of a loan processor or underwriter unless such independent contractor<br>loan processor or underwriter obtains and maintains a license under subsection 1.<br>Each independent contractor loan processor or underwriter licensed as a mortgage<br>loan originator must have and maintain a valid unique identifier issued by the<br>nationwide mortgage licensing system and registry.5.To implement an orderly and efficient licensing process, the commissioner may<br>establish licensing rules or regulations and interim procedures for licensing and<br>acceptance of applications. For previously registered or licensed individuals, the<br>commissioner may establish expedited review and licensing procedures.Page No. 313-10-04. State license and registration application and issuance.1.Applicants for a license shall apply in a form as prescribed by the commissioner.<br>Each such form must contain content as set forth by rule, regulation, instruction, or<br>procedure of the commissioner and may be changed or updated as necessary by<br>the commissioner in order to carry out the purposes of this chapter.2.To fulfill the purposes of this chapter, the commissioner may establish relationships<br>or contracts with the nationwide mortgage licensing system and registry or other<br>entities designated by the nationwide mortgage licensing system and registry to<br>collect and maintain records and process transaction fees or other fees related to<br>licensees or other persons subject to this chapter.3.In connection with an application for licensing as a mortgage loan originator, the<br>applicant shall, at a minimum, furnish to the nationwide mortgage licensing system<br>and registry information concerning the applicant's identity, including:a.Fingerprints for submission to the federal bureau of investigation and any<br>governmental agency or entity authorized to receive such information for a<br>state, national, and international criminal history background check; andb.Personal history and experience in a form prescribed by the nationwide<br>mortgage licensing system and registry, including the submission of<br>authorization for the nationwide mortgage licensing system and registry and the<br>commissioner to obtain:(1)An independent credit report obtained from a consumer reporting agency<br>described in section 603(p) of the Fair Credit Reporting Act; and(2)Information related to any administrative, civil, or criminal findings by any<br>governmental jurisdiction.4.For the purposes of this section and in order to reduce the points of contact which<br>the federal bureau of investigation may have to maintain for purposes of<br>subsection 3, the commissioner may use the nationwide mortgage licensing system<br>and registry as a channeling agent for requesting information from and distributing<br>information to the department of justice or any governmental agency.5.For the purposes of this section and in order to reduce the points of contact which<br>the commissioner may have to maintain for purposes of subsection 3, the<br>commissioner may use the nationwide mortgage licensing system and registry as a<br>channeling agent for requesting and distributing information to and from any source<br>so directed by the commissioner.13-10-05. Issuance of license. The commissioner shall not issue a mortgage loanoriginator 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<br>governmental jurisdiction, except that a subsequent formal vacation of such<br>revocation shall not be deemed a revocation.2.The applicant has not been convicted of, or pled guilty or nolo contendere to, a<br>felony in a domestic, foreign, or military court:a.During the seven-year period preceding the date of the application for licensing<br>and registration; orb.At any time preceding such date of application, if such felony involved an act of<br>fraud, dishonesty, or a breach of trust, or money laundering;Page No. 4c.Provided that any pardon of a conviction shall not be a conviction for purposes<br>of this subsection.3.a.The applicant has demonstrated financial responsibility, character, and general<br>fitness such as to command the confidence of the community and to warrant a<br>determination that the mortgage loan originator will operate honestly, fairly, and<br>efficiently within the purposes of this chapter.b.For purposes of this subsection, a person has shown that that person is not<br>financially responsible when that person has shown a disregard in the<br>management of that person's own financial condition. A determination that an<br>individual has not shown financial responsibility may include:(1)Current outstanding judgments, except judgments solely as a result of<br>medical expenses;(2)Current outstanding tax liens or other government liens and filings;(3)Foreclosures within the past three years; and(4)A pattern of seriously delinquent accounts within the past three years.4.The applicant has completed the prelicensing education requirement described in<br>section 13-10-06.5.The applicant has passed a written test that meets the test requirement described in<br>section 13-10-07.6.The applicant has met the net worth and surety bond requirements under section<br>13-10-13.13-10-06. Prelicensing and relicensing education of loan originators.1.To meet the prelicensing education requirement referred to in subsection 4 of<br>section 13-10-05, a person shall complete at least twenty hours of education<br>approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Three hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, prelicensing education courses must be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards.Review and approval of a prelicensing education coursemust include review and approval of the course provider.3.Nothing in this section precludes any prelicensing education course, as approved by<br>the nationwide mortgage licensing system and registry, which is provided by the<br>employer of the applicant or an entity that is affiliated with the applicant by an<br>agency contract or any subsidiary or affiliate of such employer or entity.4.Prelicensing education may be offered in a classroom, online, or by any other<br>means approved by the nationwide mortgage licensing system and registry.Page No. 55.The prelicensing education requirements approved by the nationwide mortgage<br>licensing system and registry in subsection 1 for any state shall be accepted as<br>credit toward completion of prelicensing education requirements in North Dakota.6.A person previously licensed under this chapter after the effective date of this<br>chapter applying to be licensed again must prove that that person has completed all<br>of the continuing education requirements for the year in which the license was last<br>held.13-10-07. Testing of loan originators.1.In order to meet the written test requirement referred to in subsection 5 of section<br>13-10-05, an individual must pass, in accordance with the standards established<br>under this subsection, a qualified written test developed by the nationwide mortgage<br>licensing system and registry and administered by a test provider approved by the<br>nationwide mortgage licensing system and registry based upon reasonable<br>standards.2.A written test shall not be treated as a qualified written test for purposes of<br>subsection 1 unless the test adequately measures the applicant's knowledge and<br>comprehension in appropriate subject areas, including:a.Ethics;b.Federal law and regulation pertaining to mortgage origination;c.State law and regulation pertaining to mortgage origination; andd.Federal and state law and regulation, including instruction on fraud, consumer<br>protection, the nontraditional mortgage marketplace, and fair lending issues.3.Nothing in this section prohibits a test provider approved by the nationwide mortgage<br>licensing system and registry from providing a test at the location of the employer of<br>the applicant or the location of any subsidiary or affiliate of the employer of the<br>applicant or the location of any entity with which the applicant holds an exclusive<br>arrangement to conduct the business of a mortgage loan originator.4.a.An individual shall not be considered to have passed a qualified written test<br>unless the individual achieves a test score of not less than seventy-five percent<br>correct answers to questions.b.An individual may retake a test three consecutive times, with each consecutive<br>taking occurring at least thirty days after the preceding test.c.After failing three consecutive tests, an individual shall wait at least six months<br>before taking the test again.d.A licensed mortgage loan originator who fails to maintain a valid license for a<br>period of five years or longer shall retake the test, not taking into account any<br>time during which individual is a registered mortgage loan originator.13-10-08. Standards for license renewal.1.The minimum standards for license renewal for mortgage loan originators include<br>the following:a.The mortgage loan originator continues to meet the minimum standards for<br>license issuance under section 13-10-05.Page No. 6b.The mortgage loan originator has satisfied the annual continuing education<br>requirements described in section 13-10-09.c.The mortgage loan originator has paid all required fees for renewal of the<br>license.2.The license of a mortgage loan originator failing to satisfy the minimum standards for<br>license renewal shall expire.The commissioner may adopt procedures for thereinstatement of expired licenses consistent with the standards established by the<br>nationwide mortgage licensing system and registry.13-10-09. Continuing education for mortgage loan originators.1.To meet the annual continuing education requirements referred to in section<br>13-10-08, a licensed mortgage loan originator shall complete at least eight hours of<br>education approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Two hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, continuing education courses shall be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards. Review and approval of a continuing education course must<br>include review and approval of the course provider.3.Nothing in this section precludes any education course, as approved by the<br>nationwide mortgage licensing system and registry, which is provided by the<br>employer of the mortgage loan originator or an entity that is affiliated with the<br>mortgage loan originator by an agency contract or any subsidiary or affiliate of such<br>employer or entity.4.Continuing education may be offered in a classroom, online, or by any other means<br>approved by the nationwide mortgage licensing system and registry.5.For a licensed mortgage loan originator:a.Except as allowed by subsection 2 of section 13-10-08 and subsection 9 of this<br>section, an individual may only receive credit for a continuing education course<br>in the year in which the course is taken; andb.An individual may not take the same approved course in the same or<br>successive years to meet the annual requirements for continuing education.6.A licensed mortgage loan originator who is an approved instructor of an approved<br>continuing education course may receive credit for the licensed mortgage loan<br>originator's own annual continuing education requirement at the rate of two hours<br>credit for every one hour taught.7.A person having successfully completed the education requirements approved by<br>the nationwide mortgage licensing system and registry in subsection 1 for any state<br>shall be accepted as credit toward completion of continuing education requirements<br>in North Dakota.Page No. 78.A licensed mortgage loan originator who subsequently becomes unlicensed must<br>complete the continuing education requirements for the last year in which the license<br>was held prior to issuance of a new or renewed license.9.A person meeting the requirements of subdivisions a and c of subsection 1 of<br>section 13-10-08 may make up any deficiency in continuing education as<br>established by rule or regulation of the commissioner.13-10-10. Authority to require license. In addition to any other duties imposed uponthe commissioner by law, the commissioner shall require mortgage loan originators to be<br>licensed and registered through the nationwide mortgage licensing system and registry. To carry<br>out this requirement, the commissioner may participate in the nationwide mortgage licensing<br>system and registry. For this purpose, the commissioner may establish by rule requirements as<br>necessary, including:1.Background checks for:a.Criminal history through fingerprint or other databases;b.Civil or administrative records;c.Credit history; ord.Any other information as deemed necessary by the nationwide mortgage<br>licensing system and registry;2.The payment of fees to apply for or renew licenses through the nationwide mortgage<br>licensing system and registry;3.The setting or resetting as necessary of renewal or reporting dates; and4.Requirements for amending or surrendering a license or any other such activities as<br>the commissioner deems necessary for participation in the nationwide mortgage<br>licensing system and registry.13-10-11.Nationwide mortgage licensing system and registry informationchallenge process.The commissioner shall establish a process by which mortgage loanoriginators may challenge information entered into the nationwide mortgage licensing system and<br>registry by the commissioner.13-10-12. Enforcement authorities, violations, and penalties.1.To ensure the effective supervision and enforcement of this chapter the<br>commissioner may:a.Deny, suspend, revoke, condition, or decline to renew a license for a violation<br>of this chapter, rules or regulations issued under this chapter or order or<br>directive entered under this chapter.b.Deny, suspend, revoke, condition, or decline to renew a license if an applicant<br>or licensee fails at any time to meet the requirements of section 13-10-05 or<br>13-10-08, or withholds information or makes a material misstatement in an<br>application for a license or renewal of a license.c.Order restitution against persons subject to this chapter for violations of this<br>chapter.d.Impose fines on persons subject to this chapter pursuant to subsections 2, 3,<br>and 4.Page No. 8e.Issue orders or directives under this chapter as follows:(1)Order or direct persons subject to this chapter to cease and desist from<br>conducting business, including immediate temporary orders to cease and<br>desist.(2)Order or direct persons subject to this chapter to cease any harmful<br>activities or violations of this chapter, including immediate temporary<br>orders to cease and desist.(3)Enter immediate temporary orders to cease business under a license or<br>interimlicense issued pursuant to the authority grantedundersubsection 5 of section 13-10-03 if the commissioner determines that<br>such license was erroneously granted or the licensee is currently in<br>violation of this chapter.(4)Order or direct such other affirmative action as the commissioner deems<br>necessary.2.The commissioner may impose a civil penalty on a mortgage loan originator or<br>person subject to this chapter, if the commissioner finds, on the record after notice<br>and opportunity for hearing, that such mortgage loan originator or person subject to<br>this chapter has violated or failed to comply with any requirement of this chapter or<br>any regulation prescribed by the commissioner under this chapter or order issued<br>under authority of this chapter.3.The maximum amount of penalty for each act or omission described in subsection 2<br>is twenty-five thousand dollars.4.Each violation or failure to comply with any directive or order of the commissioner is<br>a separate and distinct violation or failure.13-10-13.Surety bond and minimum net worth requirements - Surety bondrequired.1.Each mortgage loan originator must be covered by a surety bond in accordance with<br>this section. If the mortgage loan originator is an employee or exclusive agent of a<br>person subject to this chapter, the surety bond of such person subject to this chapter<br>may be used in lieu of the mortgage loan originator's surety bond requirement.a.The surety bond shall provide coverage for each mortgage loan originator in an<br>amount as prescribed in subsection 2.b.The surety bond must be in a form as prescribed by the commissioner.c.The commissioner may promulgate rules or regulations with respect to the<br>requirements for such surety bonds as are necessary to accomplish the<br>purposes of this chapter.2.The licensee shall maintain a surety bond in the amount as determined by the<br>commissioner by rule. The amount must be reflective of the dollar amount of loans<br>originated as of the previous yearend. However, the commissioner may increase<br>the amount of the surety bond if the commissioner determines that such an increase<br>is necessary to protect the public interests.3.When an action is commenced on a licensee's bond, the commissioner may require<br>the filing of a new bond.Page No. 94.Immediately upon recovery upon any action on the bond, the licensee shall file a<br>new bond.13-10-14. Minimum net worth required. A minimum net worth must be continuouslymaintained for mortgage loan originators in accordance with this section. If the mortgage loan<br>originator is an employee or exclusive agent of a person subject to this chapter, the net worth of<br>such person subject to this chapter may be used in lieu of the mortgage loan originator's<br>minimum net worth requirement.1.Minimum net worth must be maintained in the amount of twenty-five thousand<br>dollars.However, the commissioner may increase the amount of minimum networth if the commissioner determines that such an increase is necessary to protect<br>the public interest.2.The commissioner may promulgate rules or regulations with respect to the<br>requirements for minimum net worth as are necessary to accomplish the purposes<br>of this chapter.13-10-15. Confidentiality. To promote more effective regulation and reduce regulatoryburden through supervisory information sharing:1.Except as otherwise provided in Public Law 110-289, section 1512, the requirements<br>under any federal law or chapter 44-04 regarding the privacy or confidentiality of any<br>information or material provided to the nationwide mortgage licensing system and<br>registry, and any privilege arising under federal or state law, including the rules of<br>any federal or state court, with respect to such information or material, continue to<br>apply to such information or material after the information or material has been<br>disclosed to the nationwide mortgage licensing system and registry.Suchinformation and material may be shared with all state and federal regulatory officials<br>with mortgage industry oversight authority without the loss of privilege or the loss of<br>confidentiality protections provided by federal law or chapter 44-04.2.For these purposes, the commissioner may enter agreements or sharing<br>arrangements with other governmental agencies, the conference of state bank<br>supervisors, the American association of residential mortgage regulators, or other<br>associations representing governmental agencies as established by rule, regulation,<br>or order of the commissioner.3.Information or material that is subject to a privilege or confidentiality under<br>subsection 1 is not subject to:a.Disclosure under any federal or state law governing the disclosure to the public<br>of information held by an officer or an agency of the federal government or the<br>respective state; orb.Subpoena or discovery, or admission into evidence, in any private civil action or<br>administrative process, unless with respect to any privilege held by the<br>nationwide mortgage licensing system and registry with respect to such<br>information or material, the person to whom such information or material<br>pertains waives, in whole or in part, in the discretion of such person, that<br>privilege.4.Application of chapter 44-04 relating to the disclosure of confidential supervisory<br>information or any information or material described in subsection 1 which is<br>inconsistent with subsection 1 shall be superseded by the requirements of this<br>section.5.This section does not apply with respect to the information or material relating to the<br>employment history of, and publicly adjudicated disciplinary and enforcementPage No. 10actions against, mortgage loan originators that is included in the nationwide<br>mortgage licensing system and registry for access by the public.13-10-16.Investigation and examination authority.In addition to any authorityallowed under this chapter, the commissioner may conduct investigations and examinations as<br>follows:1.For purposes of initial licensing, license renewal, license suspension, license<br>conditioning, license revocation or termination, or general or specific inquiry or<br>investigation to determine compliance with this chapter, the commissioner may<br>access, receive, and use any books, accounts, records, files, documents,<br>information, or evidence, including:a.Criminal, civil, and administrative history information, including nonconviction<br>data;b.Personal history and experience information, including independent credit<br>reports obtained from a consumer reporting agency described in section 603(p)<br>of the Fair Credit Reporting Act; andc.Any other documents, information, or evidence the commissioner deems<br>relevant to the inquiry or investigation regardless of the location, possession,<br>control, or custody of such documents, information, or evidence.2.For the purposes of investigating violations or complaints arising under this chapter,<br>or for the purposes of examination, the commissioner may review, investigate, or<br>examine any licensee, individual, or person subject to this chapter, as often as<br>necessary in order to carry out the purposes of this chapter. The commissioner may<br>direct, subpoena, or order the attendance of and examine under oath all persons<br>whose testimony may be required about the loans or the business or subject matter<br>of any such examination or investigation, and may direct, subpoena, or order such<br>person to produce books, accounts, records, files, and any other documents the<br>commissioner deems relevant to the inquiry.3.Each licensee, individual, or person subject to this chapter shall make available to<br>the commissioner upon request the books and records relating to the operations of<br>such licensee, individual, or person subject to this chapter. The commissioner shall<br>have access to such books and records and interview the officers, principals,<br>mortgage loan originators, employees, independent contractors, agents, and<br>customers of the licensee, individual, or person subject to this chapter concerning<br>their business.4.Each licensee, individual, or person subject to this chapter shall make or compile<br>reports or prepare other information as directed by the commissioner in order to<br>carry out the purposes of this section, including:a.Accounting compilations;b.Information lists and data concerning loan transactions in a format prescribed<br>by the commissioner; orc.Such other information deemed necessary to carry out the purposes of this<br>section.5.In making any examination or investigation authorized by this chapter, the<br>commissioner may control access to any documents and records of the licensee or<br>person under examination or investigation. The commissioner may take possession<br>of the documents and records or place a person in exclusive charge of the<br>documents and records in the place where they are usually kept. During the periodPage No. 11of control, no individual or person shall remove or attempt to remove any of the<br>documents and records except pursuant to a court order or with the consent of the<br>commissioner.Unless the commissioner has reasonable grounds to believe thedocuments or records of the licensee have been, or are at risk of being altered or<br>destroyed for purposes of concealing a violation of this chapter, the licensee or<br>owner of the documents and records shall have access to the documents or records<br>as necessary to conduct its ordinary business affairs.6.In order to carry out the purposes of this section, the commissioner may:a.Retain attorneys, accountants, or other professionals and specialists as<br>examiners, auditors, or investigators to conduct or assist in the conduct of<br>examinations or investigations;b.Enter into agreements or relationships with other government officials or<br>regulatory associations in order to improve efficiencies and reduce regulatory<br>burden by sharing resources, standardized or uniform methods or procedures,<br>and documents, records, information, or evidence obtained under this section;c.Use, hire, contract, or employ publicly or privately available analytical systems,<br>methods, or software to examine or investigate the licensee, individual, or<br>person subject to this chapter;d.Accept and rely on examination or investigation reports made by other<br>government officials, within or without this state; ore.Accept audit reports made by an independent certified public accountant for the<br>licensee, individual, or person subject to this chapter in the course of that part<br>of the examination covering the same general subject matter as the audit and<br>may incorporate the audit report in the report of the examination, report of<br>investigation, or other writing of the commissioner.7.The authority of this section remains in effect, whether such a licensee, individual, or<br>person subject to this chapter acts or claims to act under any licensing or registration<br>law of this state or claims to act without such authority.8.No licensee, individual, or person subject to investigation or examination under this<br>section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any<br>books, records, computer records, or other information.13-10-17. Prohibited acts and practices. It is a violation of this chapter for a person orindividual subject to this chapter to:1.Directly or indirectly employ any scheme, device, or artifice to defraud or mislead<br>borrowers or lenders or to defraud any person;2.Engage in any unfair or deceptive practice toward any person;3.Obtain property by fraud or misrepresentation;4.Solicit or enter into a contract with a borrower that provides in substance that the<br>person or individual subject to this chapter may earn a fee or commission through<br>best efforts to obtain a loan even though no loan is actually obtained for the<br>borrower;5.Solicit, advertise, or enter into a contract for specific interest rates, points, or other<br>financing terms unless the terms are actually available at the time of soliciting,<br>advertising, or contracting;Page No. 126.Conduct any business covered by this chapter without holding a valid license as<br>required under this chapter, or assist or aid and abet any person in the conduct of<br>business under this chapter without a valid license as required under this chapter;7.Fail to make disclosures as required by this chapter and any other applicable state<br>or federal law and regulations;8.Fail to comply with this chapter or rules or regulations promulgated under this<br>chapter, or fail to comply with any other state or federal law, including the rules and<br>regulations thereunder, applicable to any business authorized or conducted under<br>this chapter;9.Make, in any manner, any false or deceptive statement or representation, including,<br>with regard to the rates, points, or other financing terms or conditions for a<br>residential mortgage loan or engage in bait and switch advertising;10.Negligently make any false statement or knowingly and willfully make any omission<br>of material fact in connection with any information or reports filed with a<br>governmental agency or the nationwide mortgage licensing system and registry or in<br>connection with any investigation conducted by the commissioner or another<br>governmental agency;11.Make any payment, threat, or promise, directly or indirectly, to any person for the<br>purposes of influencing the independent judgment of the person in connection with a<br>residential mortgage loan or make any payment, threat, or promise, directly or<br>indirectly, to any appraiser of a property, for the purposes of influencing the<br>independent judgment of the appraiser with respect to the value of the property;12.Collect, charge, attempt to collect or charge, or use or propose any agreement<br>purporting to collect or charge any fee prohibited by this chapter;13.Cause or require a borrower to obtain property insurance coverage in an amount<br>that exceeds the replacement cost of the improvements as established by the<br>property insurer; or14.Fail to truthfully account for moneys belonging to a party to a residential mortgage<br>loan transaction.13-10-18.Mortgage call reports.Each mortgage licensee shall submit to thenationwide mortgage licensing system and registry reports of condition, which shall be in such<br>form and shall contain such information as the nationwide mortgage licensing system and<br>registry may require.13-10-19.Report to nationwide mortgage licensing system and registry.Notwithstanding state privacy law, the commissioner is required to report regularly violations of<br>this chapter, as well as enforcement actions and other relevant information, to the nationwide<br>mortgage licensing system and registry subject to the provisions contained in section 13-10-15.13-10-20. Privately insured credit unions. Nonfederally insured credit unions whichemploy loan originators, as defined in Public Law 110-289, title V, the S.A.F.E. Act, shall register<br>such employees with the nationwide mortgage licensing system and registry by furnishing the<br>information concerning the employees' identity set forth in section 1507(a)(2) of Public Law<br>110-289, title V.13-10-21. Unique identifier shown. The unique identifier of any person originating aresidential mortgage loan shall be clearly shown on all residential mortgage loan application<br>forms, solicitations, or advertisements, including business cards or websites, and any other<br>documents as established by rule, regulation, or order of the commissioner.Page No. 13Document Outlinechapter 13-10 mortgage loan originators

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State Codes and Statutes

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CHAPTER 13-10MORTGAGE LOAN ORIGINATORS13-10-01.Purpose.The purpose of this chapter is to protect consumers seekingmortgage loans and to ensure that the mortgage lending industry is operating without unfair,<br>deceptive, and fraudulent practices on the part of mortgage loan originators.13-10-02. Definitions. For purposes of this chapter:1.&quot;Depository institution&quot; has the same meaning as is currently defined under<br>section 3 of the Federal Deposit Insurance Act and includes any credit union.2.&quot;Federal banking agencies&quot; means the board of governors of the federal reserve<br>system, the comptroller of the currency, the director of the office of thrift supervision,<br>the national credit union administration, and the federal deposit insurance<br>corporation.3.&quot;Immediate family member&quot; means a spouse, child, sibling, parent, grandparent, or<br>grandchild.This includes stepparents, stepchildren, stepsiblings, and adoptiverelationships.4.&quot;Individual&quot; means a natural person.5.&quot;Loan processor or underwriter&quot; means an individual who performs clerical or<br>support duties as an employee at the direction of and subject to the supervision and<br>instruction of a person licensed, or exempt from licensing, under this chapter.a.For purposes of this subsection, &quot;clerical or support duties&quot; may include<br>subsequent to the receipt of an application:(1)The receipt, collection, distribution, and analysis of information common<br>for the processing or underwriting of a residential mortgage loan; and(2)Communicating with a consumer to obtain the information necessary for<br>the processing or underwriting of a loan, to the extent that such<br>communication does not include offering or negotiating loan rates or<br>terms, or counseling consumers about residential mortgage loan rates or<br>terms.b.An individual engaging solely in loan processor or underwriter activities shall<br>not represent to the public, through advertising or other means of<br>communicating or providing information, including the use of business cards,<br>stationery, brochures, signs, rate lists, or other promotional items, that such<br>individual can or will perform any of the activities of a mortgage loan originator.6.&quot;Mortgage loan originator&quot;:a.Means an individual who for compensation or gain or in the expectation of<br>compensation or gain:(1)Takes a residential mortgage loan application; or(2)Offers or negotiates terms of a residential mortgage loan;b.Does not include an individual engaged solely as a loan processor or<br>underwriter except as otherwise provided in subsection 4 of section 13-10-03;Page No. 1c.Does not include a person or entity that only performs real estate brokerage<br>activities and is licensed or registered in accordance with North Dakota law,<br>unless the person or entity is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator; andd.Does not include a person or entity solely involved in extensions of credit<br>relating to timeshare plans, as that term is defined in 11 U.S.C. 101(53D).7.&quot;Nationwide mortgage licensing system and registry&quot; means a mortgage licensing<br>system developed and maintained by the conference of state bank supervisors and<br>the American association of residential mortgage regulators for the licensing and<br>registration of licensed mortgage loan originators.8.&quot;Nontraditional mortgage product&quot; means any mortgage product other than a<br>thirty-year fixed rate mortgage.9.&quot;Person&quot; means a natural person, corporation, company, limited liability company,<br>partnership, or association.10.&quot;Real estate brokerage activity&quot; means any activity that involves offering or providing<br>real estate brokerage services to the public, including:a.Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or<br>lessee of real property;b.Bringing together parties interested in the sale, purchase, lease, rental, or<br>exchange of real property;c.Negotiating, on behalf of any party, any portion of a contract relating to the sale,<br>purchase, lease, rental, or exchange of real property, other than in connection<br>with providing financing with respect to any such transaction;d.Engaging in any activity for which a person engaged in the activity is required to<br>be registered or licensed as a real estate agent or real estate broker under any<br>applicable law; ande.Offering to engage in any activity, or act in any capacity, described in this<br>subsection.11.&quot;Registered mortgage loan originator&quot; means any individual who:a.Meets the definition of mortgage loan originator and is an employee of:(1)A depository institution;(2)A subsidiary that is:(a)Owned and controlled by a depository institution; and(b)Regulated by a federal banking agency; or(3)An institution regulated by the farm credit administration; andb.Is registered with, and maintains a unique identifier through, the nationwide<br>mortgage licensing system and registry.12.&quot;Residential mortgage loan&quot; means any loan primarily for personal, family, or<br>household use that is secured by a mortgage, deed of trust, or other equivalentPage No. 2consensual security interest on a dwelling, as defined in section 103(v) of the Truth<br>in Lending Act, or residential real estate upon which is constructed or intended to be<br>constructed such a dwelling.13.&quot;Residential real estate&quot; means any real property located in North Dakota, upon<br>which is constructed or intended to be constructed a dwelling.14.&quot;Unique identifier&quot; means a number or other identifier assigned by protocols<br>established by the nationwide mortgage licensing system and registry.13-10-03. License and registration required.1.An individual, unless specifically exempted from this chapter under subsection 3,<br>shall not engage in the business of a mortgage loan originator with respect to any<br>dwelling located in this state without first obtaining and maintaining annually a<br>license under this chapter. Each licensed mortgage loan originator must register<br>with and maintain a valid unique identifier issued by the nationwide mortgage<br>licensing system and registry.2.To facilitate an orderly transition to licensing and minimize disruption in the<br>mortgage marketplace, the effective date for subsection 1 is August 1, 2009, or such<br>later date approved by the secretary of the United States department of housing and<br>urban development, pursuant to the authority granted under Public Law 110-289,<br>section 1508(a).All persons subject to licensing under this section, who arecurrently licensed under chapter 13-04.1, shall continue to be subject to licensure<br>under chapter 13-04.1 until January 1, 2010, when they shall be required to be<br>licensed under this chapter. If at any point before January 1, 2010, a person subject<br>to licensing under this section fails to be licensed under chapter 13-04.1, that person<br>shall be required to be licensed under this chapter.3.The following are exempt from this chapter:a.Registered mortgage loan originators, when acting for an entity described in<br>subdivision a of subsection 11 of section 13-10-02 are exempt from this<br>chapter.b.Any individual who offers or negotiates terms of a residential mortgage loan<br>with or on behalf of an immediate family member of the individual.c.Any individual who offers or negotiates terms of a residential mortgage loan<br>secured by a dwelling that served as the individual's residence.d.A licensed attorney who negotiates the terms of a residential mortgage loan on<br>behalf of a client as an ancillary matter to the attorney's representation of the<br>client, unless the attorney is compensated by a lender, a mortgage broker, or<br>other mortgage loan originator or by any agent of such lender, mortgage<br>broker, or other mortgage loan originator.4.A loan processor or underwriter who is an independent contractor may not engage in<br>the activities of a loan processor or underwriter unless such independent contractor<br>loan processor or underwriter obtains and maintains a license under subsection 1.<br>Each independent contractor loan processor or underwriter licensed as a mortgage<br>loan originator must have and maintain a valid unique identifier issued by the<br>nationwide mortgage licensing system and registry.5.To implement an orderly and efficient licensing process, the commissioner may<br>establish licensing rules or regulations and interim procedures for licensing and<br>acceptance of applications. For previously registered or licensed individuals, the<br>commissioner may establish expedited review and licensing procedures.Page No. 313-10-04. State license and registration application and issuance.1.Applicants for a license shall apply in a form as prescribed by the commissioner.<br>Each such form must contain content as set forth by rule, regulation, instruction, or<br>procedure of the commissioner and may be changed or updated as necessary by<br>the commissioner in order to carry out the purposes of this chapter.2.To fulfill the purposes of this chapter, the commissioner may establish relationships<br>or contracts with the nationwide mortgage licensing system and registry or other<br>entities designated by the nationwide mortgage licensing system and registry to<br>collect and maintain records and process transaction fees or other fees related to<br>licensees or other persons subject to this chapter.3.In connection with an application for licensing as a mortgage loan originator, the<br>applicant shall, at a minimum, furnish to the nationwide mortgage licensing system<br>and registry information concerning the applicant's identity, including:a.Fingerprints for submission to the federal bureau of investigation and any<br>governmental agency or entity authorized to receive such information for a<br>state, national, and international criminal history background check; andb.Personal history and experience in a form prescribed by the nationwide<br>mortgage licensing system and registry, including the submission of<br>authorization for the nationwide mortgage licensing system and registry and the<br>commissioner to obtain:(1)An independent credit report obtained from a consumer reporting agency<br>described in section 603(p) of the Fair Credit Reporting Act; and(2)Information related to any administrative, civil, or criminal findings by any<br>governmental jurisdiction.4.For the purposes of this section and in order to reduce the points of contact which<br>the federal bureau of investigation may have to maintain for purposes of<br>subsection 3, the commissioner may use the nationwide mortgage licensing system<br>and registry as a channeling agent for requesting information from and distributing<br>information to the department of justice or any governmental agency.5.For the purposes of this section and in order to reduce the points of contact which<br>the commissioner may have to maintain for purposes of subsection 3, the<br>commissioner may use the nationwide mortgage licensing system and registry as a<br>channeling agent for requesting and distributing information to and from any source<br>so directed by the commissioner.13-10-05. Issuance of license. The commissioner shall not issue a mortgage loanoriginator 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<br>governmental jurisdiction, except that a subsequent formal vacation of such<br>revocation shall not be deemed a revocation.2.The applicant has not been convicted of, or pled guilty or nolo contendere to, a<br>felony in a domestic, foreign, or military court:a.During the seven-year period preceding the date of the application for licensing<br>and registration; orb.At any time preceding such date of application, if such felony involved an act of<br>fraud, dishonesty, or a breach of trust, or money laundering;Page No. 4c.Provided that any pardon of a conviction shall not be a conviction for purposes<br>of this subsection.3.a.The applicant has demonstrated financial responsibility, character, and general<br>fitness such as to command the confidence of the community and to warrant a<br>determination that the mortgage loan originator will operate honestly, fairly, and<br>efficiently within the purposes of this chapter.b.For purposes of this subsection, a person has shown that that person is not<br>financially responsible when that person has shown a disregard in the<br>management of that person's own financial condition. A determination that an<br>individual has not shown financial responsibility may include:(1)Current outstanding judgments, except judgments solely as a result of<br>medical expenses;(2)Current outstanding tax liens or other government liens and filings;(3)Foreclosures within the past three years; and(4)A pattern of seriously delinquent accounts within the past three years.4.The applicant has completed the prelicensing education requirement described in<br>section 13-10-06.5.The applicant has passed a written test that meets the test requirement described in<br>section 13-10-07.6.The applicant has met the net worth and surety bond requirements under section<br>13-10-13.13-10-06. Prelicensing and relicensing education of loan originators.1.To meet the prelicensing education requirement referred to in subsection 4 of<br>section 13-10-05, a person shall complete at least twenty hours of education<br>approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Three hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, prelicensing education courses must be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards.Review and approval of a prelicensing education coursemust include review and approval of the course provider.3.Nothing in this section precludes any prelicensing education course, as approved by<br>the nationwide mortgage licensing system and registry, which is provided by the<br>employer of the applicant or an entity that is affiliated with the applicant by an<br>agency contract or any subsidiary or affiliate of such employer or entity.4.Prelicensing education may be offered in a classroom, online, or by any other<br>means approved by the nationwide mortgage licensing system and registry.Page No. 55.The prelicensing education requirements approved by the nationwide mortgage<br>licensing system and registry in subsection 1 for any state shall be accepted as<br>credit toward completion of prelicensing education requirements in North Dakota.6.A person previously licensed under this chapter after the effective date of this<br>chapter applying to be licensed again must prove that that person has completed all<br>of the continuing education requirements for the year in which the license was last<br>held.13-10-07. Testing of loan originators.1.In order to meet the written test requirement referred to in subsection 5 of section<br>13-10-05, an individual must pass, in accordance with the standards established<br>under this subsection, a qualified written test developed by the nationwide mortgage<br>licensing system and registry and administered by a test provider approved by the<br>nationwide mortgage licensing system and registry based upon reasonable<br>standards.2.A written test shall not be treated as a qualified written test for purposes of<br>subsection 1 unless the test adequately measures the applicant's knowledge and<br>comprehension in appropriate subject areas, including:a.Ethics;b.Federal law and regulation pertaining to mortgage origination;c.State law and regulation pertaining to mortgage origination; andd.Federal and state law and regulation, including instruction on fraud, consumer<br>protection, the nontraditional mortgage marketplace, and fair lending issues.3.Nothing in this section prohibits a test provider approved by the nationwide mortgage<br>licensing system and registry from providing a test at the location of the employer of<br>the applicant or the location of any subsidiary or affiliate of the employer of the<br>applicant or the location of any entity with which the applicant holds an exclusive<br>arrangement to conduct the business of a mortgage loan originator.4.a.An individual shall not be considered to have passed a qualified written test<br>unless the individual achieves a test score of not less than seventy-five percent<br>correct answers to questions.b.An individual may retake a test three consecutive times, with each consecutive<br>taking occurring at least thirty days after the preceding test.c.After failing three consecutive tests, an individual shall wait at least six months<br>before taking the test again.d.A licensed mortgage loan originator who fails to maintain a valid license for a<br>period of five years or longer shall retake the test, not taking into account any<br>time during which individual is a registered mortgage loan originator.13-10-08. Standards for license renewal.1.The minimum standards for license renewal for mortgage loan originators include<br>the following:a.The mortgage loan originator continues to meet the minimum standards for<br>license issuance under section 13-10-05.Page No. 6b.The mortgage loan originator has satisfied the annual continuing education<br>requirements described in section 13-10-09.c.The mortgage loan originator has paid all required fees for renewal of the<br>license.2.The license of a mortgage loan originator failing to satisfy the minimum standards for<br>license renewal shall expire.The commissioner may adopt procedures for thereinstatement of expired licenses consistent with the standards established by the<br>nationwide mortgage licensing system and registry.13-10-09. Continuing education for mortgage loan originators.1.To meet the annual continuing education requirements referred to in section<br>13-10-08, a licensed mortgage loan originator shall complete at least eight hours of<br>education approved in accordance with subsection 2, which must include at least:a.Three hours of federal law and regulations;b.Two hours of ethics, which shall include instruction on fraud, consumer<br>protection, and fair lending issues; andc.Two hours of training related to lending standards for the nontraditional<br>mortgage product marketplace.2.For purposes of subsection 1, continuing education courses shall be reviewed and<br>approved by the nationwide mortgage licensing system and registry based upon<br>reasonable standards. Review and approval of a continuing education course must<br>include review and approval of the course provider.3.Nothing in this section precludes any education course, as approved by the<br>nationwide mortgage licensing system and registry, which is provided by the<br>employer of the mortgage loan originator or an entity that is affiliated with the<br>mortgage loan originator by an agency contract or any subsidiary or affiliate of such<br>employer or entity.4.Continuing education may be offered in a classroom, online, or by any other means<br>approved by the nationwide mortgage licensing system and registry.5.For a licensed mortgage loan originator:a.Except as allowed by subsection 2 of section 13-10-08 and subsection 9 of this<br>section, an individual may only receive credit for a continuing education course<br>in the year in which the course is taken; andb.An individual may not take the same approved course in the same or<br>successive years to meet the annual requirements for continuing education.6.A licensed mortgage loan originator who is an approved instructor of an approved<br>continuing education course may receive credit for the licensed mortgage loan<br>originator's own annual continuing education requirement at the rate of two hours<br>credit for every one hour taught.7.A person having successfully completed the education requirements approved by<br>the nationwide mortgage licensing system and registry in subsection 1 for any state<br>shall be accepted as credit toward completion of continuing education requirements<br>in North Dakota.Page No. 78.A licensed mortgage loan originator who subsequently becomes unlicensed must<br>complete the continuing education requirements for the last year in which the license<br>was held prior to issuance of a new or renewed license.9.A person meeting the requirements of subdivisions a and c of subsection 1 of<br>section 13-10-08 may make up any deficiency in continuing education as<br>established by rule or regulation of the commissioner.13-10-10. Authority to require license. In addition to any other duties imposed uponthe commissioner by law, the commissioner shall require mortgage loan originators to be<br>licensed and registered through the nationwide mortgage licensing system and registry. To carry<br>out this requirement, the commissioner may participate in the nationwide mortgage licensing<br>system and registry. For this purpose, the commissioner may establish by rule requirements as<br>necessary, including:1.Background checks for:a.Criminal history through fingerprint or other databases;b.Civil or administrative records;c.Credit history; ord.Any other information as deemed necessary by the nationwide mortgage<br>licensing system and registry;2.The payment of fees to apply for or renew licenses through the nationwide mortgage<br>licensing system and registry;3.The setting or resetting as necessary of renewal or reporting dates; and4.Requirements for amending or surrendering a license or any other such activities as<br>the commissioner deems necessary for participation in the nationwide mortgage<br>licensing system and registry.13-10-11.Nationwide mortgage licensing system and registry informationchallenge process.The commissioner shall establish a process by which mortgage loanoriginators may challenge information entered into the nationwide mortgage licensing system and<br>registry by the commissioner.13-10-12. Enforcement authorities, violations, and penalties.1.To ensure the effective supervision and enforcement of this chapter the<br>commissioner may:a.Deny, suspend, revoke, condition, or decline to renew a license for a violation<br>of this chapter, rules or regulations issued under this chapter or order or<br>directive entered under this chapter.b.Deny, suspend, revoke, condition, or decline to renew a license if an applicant<br>or licensee fails at any time to meet the requirements of section 13-10-05 or<br>13-10-08, or withholds information or makes a material misstatement in an<br>application for a license or renewal of a license.c.Order restitution against persons subject to this chapter for violations of this<br>chapter.d.Impose fines on persons subject to this chapter pursuant to subsections 2, 3,<br>and 4.Page No. 8e.Issue orders or directives under this chapter as follows:(1)Order or direct persons subject to this chapter to cease and desist from<br>conducting business, including immediate temporary orders to cease and<br>desist.(2)Order or direct persons subject to this chapter to cease any harmful<br>activities or violations of this chapter, including immediate temporary<br>orders to cease and desist.(3)Enter immediate temporary orders to cease business under a license or<br>interimlicense issued pursuant to the authority grantedundersubsection 5 of section 13-10-03 if the commissioner determines that<br>such license was erroneously granted or the licensee is currently in<br>violation of this chapter.(4)Order or direct such other affirmative action as the commissioner deems<br>necessary.2.The commissioner may impose a civil penalty on a mortgage loan originator or<br>person subject to this chapter, if the commissioner finds, on the record after notice<br>and opportunity for hearing, that such mortgage loan originator or person subject to<br>this chapter has violated or failed to comply with any requirement of this chapter or<br>any regulation prescribed by the commissioner under this chapter or order issued<br>under authority of this chapter.3.The maximum amount of penalty for each act or omission described in subsection 2<br>is twenty-five thousand dollars.4.Each violation or failure to comply with any directive or order of the commissioner is<br>a separate and distinct violation or failure.13-10-13.Surety bond and minimum net worth requirements - Surety bondrequired.1.Each mortgage loan originator must be covered by a surety bond in accordance with<br>this section. If the mortgage loan originator is an employee or exclusive agent of a<br>person subject to this chapter, the surety bond of such person subject to this chapter<br>may be used in lieu of the mortgage loan originator's surety bond requirement.a.The surety bond shall provide coverage for each mortgage loan originator in an<br>amount as prescribed in subsection 2.b.The surety bond must be in a form as prescribed by the commissioner.c.The commissioner may promulgate rules or regulations with respect to the<br>requirements for such surety bonds as are necessary to accomplish the<br>purposes of this chapter.2.The licensee shall maintain a surety bond in the amount as determined by the<br>commissioner by rule. The amount must be reflective of the dollar amount of loans<br>originated as of the previous yearend. However, the commissioner may increase<br>the amount of the surety bond if the commissioner determines that such an increase<br>is necessary to protect the public interests.3.When an action is commenced on a licensee's bond, the commissioner may require<br>the filing of a new bond.Page No. 94.Immediately upon recovery upon any action on the bond, the licensee shall file a<br>new bond.13-10-14. Minimum net worth required. A minimum net worth must be continuouslymaintained for mortgage loan originators in accordance with this section. If the mortgage loan<br>originator is an employee or exclusive agent of a person subject to this chapter, the net worth of<br>such person subject to this chapter may be used in lieu of the mortgage loan originator's<br>minimum net worth requirement.1.Minimum net worth must be maintained in the amount of twenty-five thousand<br>dollars.However, the commissioner may increase the amount of minimum networth if the commissioner determines that such an increase is necessary to protect<br>the public interest.2.The commissioner may promulgate rules or regulations with respect to the<br>requirements for minimum net worth as are necessary to accomplish the purposes<br>of this chapter.13-10-15. Confidentiality. To promote more effective regulation and reduce regulatoryburden through supervisory information sharing:1.Except as otherwise provided in Public Law 110-289, section 1512, the requirements<br>under any federal law or chapter 44-04 regarding the privacy or confidentiality of any<br>information or material provided to the nationwide mortgage licensing system and<br>registry, and any privilege arising under federal or state law, including the rules of<br>any federal or state court, with respect to such information or material, continue to<br>apply to such information or material after the information or material has been<br>disclosed to the nationwide mortgage licensing system and registry.Suchinformation and material may be shared with all state and federal regulatory officials<br>with mortgage industry oversight authority without the loss of privilege or the loss of<br>confidentiality protections provided by federal law or chapter 44-04.2.For these purposes, the commissioner may enter agreements or sharing<br>arrangements with other governmental agencies, the conference of state bank<br>supervisors, the American association of residential mortgage regulators, or other<br>associations representing governmental agencies as established by rule, regulation,<br>or order of the commissioner.3.Information or material that is subject to a privilege or confidentiality under<br>subsection 1 is not subject to:a.Disclosure under any federal or state law governing the disclosure to the public<br>of information held by an officer or an agency of the federal government or the<br>respective state; orb.Subpoena or discovery, or admission into evidence, in any private civil action or<br>administrative process, unless with respect to any privilege held by the<br>nationwide mortgage licensing system and registry with respect to such<br>information or material, the person to whom such information or material<br>pertains waives, in whole or in part, in the discretion of such person, that<br>privilege.4.Application of chapter 44-04 relating to the disclosure of confidential supervisory<br>information or any information or material described in subsection 1 which is<br>inconsistent with subsection 1 shall be superseded by the requirements of this<br>section.5.This section does not apply with respect to the information or material relating to the<br>employment history of, and publicly adjudicated disciplinary and enforcementPage No. 10actions against, mortgage loan originators that is included in the nationwide<br>mortgage licensing system and registry for access by the public.13-10-16.Investigation and examination authority.In addition to any authorityallowed under this chapter, the commissioner may conduct investigations and examinations as<br>follows:1.For purposes of initial licensing, license renewal, license suspension, license<br>conditioning, license revocation or termination, or general or specific inquiry or<br>investigation to determine compliance with this chapter, the commissioner may<br>access, receive, and use any books, accounts, records, files, documents,<br>information, or evidence, including:a.Criminal, civil, and administrative history information, including nonconviction<br>data;b.Personal history and experience information, including independent credit<br>reports obtained from a consumer reporting agency described in section 603(p)<br>of the Fair Credit Reporting Act; andc.Any other documents, information, or evidence the commissioner deems<br>relevant to the inquiry or investigation regardless of the location, possession,<br>control, or custody of such documents, information, or evidence.2.For the purposes of investigating violations or complaints arising under this chapter,<br>or for the purposes of examination, the commissioner may review, investigate, or<br>examine any licensee, individual, or person subject to this chapter, as often as<br>necessary in order to carry out the purposes of this chapter. The commissioner may<br>direct, subpoena, or order the attendance of and examine under oath all persons<br>whose testimony may be required about the loans or the business or subject matter<br>of any such examination or investigation, and may direct, subpoena, or order such<br>person to produce books, accounts, records, files, and any other documents the<br>commissioner deems relevant to the inquiry.3.Each licensee, individual, or person subject to this chapter shall make available to<br>the commissioner upon request the books and records relating to the operations of<br>such licensee, individual, or person subject to this chapter. The commissioner shall<br>have access to such books and records and interview the officers, principals,<br>mortgage loan originators, employees, independent contractors, agents, and<br>customers of the licensee, individual, or person subject to this chapter concerning<br>their business.4.Each licensee, individual, or person subject to this chapter shall make or compile<br>reports or prepare other information as directed by the commissioner in order to<br>carry out the purposes of this section, including:a.Accounting compilations;b.Information lists and data concerning loan transactions in a format prescribed<br>by the commissioner; orc.Such other information deemed necessary to carry out the purposes of this<br>section.5.In making any examination or investigation authorized by this chapter, the<br>commissioner may control access to any documents and records of the licensee or<br>person under examination or investigation. The commissioner may take possession<br>of the documents and records or place a person in exclusive charge of the<br>documents and records in the place where they are usually kept. During the periodPage No. 11of control, no individual or person shall remove or attempt to remove any of the<br>documents and records except pursuant to a court order or with the consent of the<br>commissioner.Unless the commissioner has reasonable grounds to believe thedocuments or records of the licensee have been, or are at risk of being altered or<br>destroyed for purposes of concealing a violation of this chapter, the licensee or<br>owner of the documents and records shall have access to the documents or records<br>as necessary to conduct its ordinary business affairs.6.In order to carry out the purposes of this section, the commissioner may:a.Retain attorneys, accountants, or other professionals and specialists as<br>examiners, auditors, or investigators to conduct or assist in the conduct of<br>examinations or investigations;b.Enter into agreements or relationships with other government officials or<br>regulatory associations in order to improve efficiencies and reduce regulatory<br>burden by sharing resources, standardized or uniform methods or procedures,<br>and documents, records, information, or evidence obtained under this section;c.Use, hire, contract, or employ publicly or privately available analytical systems,<br>methods, or software to examine or investigate the licensee, individual, or<br>person subject to this chapter;d.Accept and rely on examination or investigation reports made by other<br>government officials, within or without this state; ore.Accept audit reports made by an independent certified public accountant for the<br>licensee, individual, or person subject to this chapter in the course of that part<br>of the examination covering the same general subject matter as the audit and<br>may incorporate the audit report in the report of the examination, report of<br>investigation, or other writing of the commissioner.7.The authority of this section remains in effect, whether such a licensee, individual, or<br>person subject to this chapter acts or claims to act under any licensing or registration<br>law of this state or claims to act without such authority.8.No licensee, individual, or person subject to investigation or examination under this<br>section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any<br>books, records, computer records, or other information.13-10-17. Prohibited acts and practices. It is a violation of this chapter for a person orindividual subject to this chapter to:1.Directly or indirectly employ any scheme, device, or artifice to defraud or mislead<br>borrowers or lenders or to defraud any person;2.Engage in any unfair or deceptive practice toward any person;3.Obtain property by fraud or misrepresentation;4.Solicit or enter into a contract with a borrower that provides in substance that the<br>person or individual subject to this chapter may earn a fee or commission through<br>best efforts to obtain a loan even though no loan is actually obtained for the<br>borrower;5.Solicit, advertise, or enter into a contract for specific interest rates, points, or other<br>financing terms unless the terms are actually available at the time of soliciting,<br>advertising, or contracting;Page No. 126.Conduct any business covered by this chapter without holding a valid license as<br>required under this chapter, or assist or aid and abet any person in the conduct of<br>business under this chapter without a valid license as required under this chapter;7.Fail to make disclosures as required by this chapter and any other applicable state<br>or federal law and regulations;8.Fail to comply with this chapter or rules or regulations promulgated under this<br>chapter, or fail to comply with any other state or federal law, including the rules and<br>regulations thereunder, applicable to any business authorized or conducted under<br>this chapter;9.Make, in any manner, any false or deceptive statement or representation, including,<br>with regard to the rates, points, or other financing terms or conditions for a<br>residential mortgage loan or engage in bait and switch advertising;10.Negligently make any false statement or knowingly and willfully make any omission<br>of material fact in connection with any information or reports filed with a<br>governmental agency or the nationwide mortgage licensing system and registry or in<br>connection with any investigation conducted by the commissioner or another<br>governmental agency;11.Make any payment, threat, or promise, directly or indirectly, to any person for the<br>purposes of influencing the independent judgment of the person in connection with a<br>residential mortgage loan or make any payment, threat, or promise, directly or<br>indirectly, to any appraiser of a property, for the purposes of influencing the<br>independent judgment of the appraiser with respect to the value of the property;12.Collect, charge, attempt to collect or charge, or use or propose any agreement<br>purporting to collect or charge any fee prohibited by this chapter;13.Cause or require a borrower to obtain property insurance coverage in an amount<br>that exceeds the replacement cost of the improvements as established by the<br>property insurer; or14.Fail to truthfully account for moneys belonging to a party to a residential mortgage<br>loan transaction.13-10-18.Mortgage call reports.Each mortgage licensee shall submit to thenationwide mortgage licensing system and registry reports of condition, which shall be in such<br>form and shall contain such information as the nationwide mortgage licensing system and<br>registry may require.13-10-19.Report to nationwide mortgage licensing system and registry.Notwithstanding state privacy law, the commissioner is required to report regularly violations of<br>this chapter, as well as enforcement actions and other relevant information, to the nationwide<br>mortgage licensing system and registry subject to the provisions contained in section 13-10-15.13-10-20. Privately insured credit unions. Nonfederally insured credit unions whichemploy loan originators, as defined in Public Law 110-289, title V, the S.A.F.E. Act, shall register<br>such employees with the nationwide mortgage licensing system and registry by furnishing the<br>information concerning the employees' identity set forth in section 1507(a)(2) of Public Law<br>110-289, title V.13-10-21. Unique identifier shown. The unique identifier of any person originating aresidential mortgage loan shall be clearly shown on all residential mortgage loan application<br>forms, solicitations, or advertisements, including business cards or websites, and any other<br>documents as established by rule, regulation, or order of the commissioner.Page No. 13Document Outlinechapter 13-10 mortgage loan originators

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