AN ACT APPROPRIATING FUNDS FOR A PROGRAM OF CONTINUING EDUCATION FOR RESIDENTIAL MORTGAGE BROKERS AND ORIGINATORS.

AN ACT APPROPRIATING FUNDS FOR A PROGRAM OF CONTINUING EDUCATION FOR RESIDENTIAL MORTGAGE BROKERS AND ORIGINATORS.

This bill requires initial and renewal applicants for the first and second mortgage broker and originator license to meet certain education and testing requirements. This information must be submitted with the applicable application. Under the bill, by January 1, 2012, all of these licensees will have submitted to 20 hours of initial education and a test, unless they are exempt from the testing requirement because they have been continuously licensed for 10 years. Renewal applicants will be subject to 10 hours of continuing education. The banking commissioner must adopt any regulations he deems necessary to implement these requirements, including establishing the qualifying criteria for accredited professional education programs and tests and acceptable certificates of education and testing, by January 1, 2009.

Under current law, an applicant must meet certain experience and net worth requirements in order to obtain mortgage broker and originator licenses. The bill contains a blank appropriation section for the Department of Banking from the General Fund for fiscal years 2009 and 2010.

EFFECTIVE DATE: September 30, 2008, except for the appropriation provision, which is effective on July 1, 2008.

Starting on January 1, 2010, all first-time and renewal applicants for the first- and second-mortgage broker and originator license must prove to the commissioner that they have obtained a (1) certificate of education from an accredited professional education program demonstrating at least 20 classroom hours of study and (2) certificate of testing. The 20 hours must include nine hours each in applicable Connecticut and federal lending laws, regulations, and requirements and two hours in applicable ethics laws, regulations, and requirements. For initial applicants, this requirement must be met during the year before they file. For renewal applicants, the requirement must be met after the issuance of the current license but before the renewal application is filed. The bill exempts from the testing portion of these requirements, renewal applicants who have been continuously licensed or, for originators under the current scheme, registered, for a 10-year period. (Under current law, originators are registered with the banking commissioner, but are scheduled to move to a licensing system as of September 30, 2008. )

For renewal applicants, these requirements end on December 31, 2011, when all such applicants will have achieved the initial testing and 20-hour education. Starting on January 1, 2012, the renewal applicants must prove to the commissioner that they have, within the year prior to filing the application, obtained a certificate of education from an accredited professional education program of at least 10 classroom hours, including four hours on applicable federal lending laws, regulations and requirements; four on applicable Connecticut lending laws; and two on applicable professional ethics regulations and requirements, as determined by the commissioner.

Accredited professional education program and test are programs or tests for an applicant that are designed to ensure professional competence in mortgage origination and brokering principles and practices under applicable state and federal lending laws and ethics. The commissioner must approve the program, test, administering agency or organization, and the testing facility.

A certificate of education is a document that certifies that the applicant completed the requisite number of continuing education hours and bears the name of the applicable entity, the title of the program, the dates, the number of hours completed and the signature of the director or authorized agent. A certificate of testing (1) certifies that the applicant has satisfactorily completed an accredited professional test and passed with a score of at least 65% and (2) includes the name of the testing entity, the title of the test, dates, and the signature of the entity's director or authorized agent.

Generally, in order to obtain a mortgage broker license, the applicant (individual, company, or other legal entity) must designate a person with supervisory authority over the location to be licensed. This person will have authority over the brokerage activities at the location and must submit a resume, with the appropriate application, showing that he worked in the mortgage brokerage business for at least three of the last five years immediately preceding the application. Applicants may not substitute any other type of experience or certification. A person may only be the supervisory authority for one licensed location at a time and must also be working at the office to be licensed. The minimum tangible net worth requirement for mortgage brokers is $ 25,000.

sSB 5577, reported favorably by the Banks Committee, includes continuing education requirements for certain mortgage professionals.

Yea

Nay

(03/04/2008)