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[Introduced][Status][Bill Documents][Fiscal Note] [Bills Directory]

H.B. 286 Enrolled

             1     

REGULATION OF LENDING BY THE

             2     
DEPARTMENT OF FINANCIAL

             3     
INSTITUTIONS

             4     
2009 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Chief Sponsor: Kevin S. Garn

             7     
Senate Sponsor: Lyle W. Hillyard

             8     
             9      LONG TITLE
             10      General Description:
             11          This bill modifies the Utah Consumer Credit Code, and mortgage lending and
             12      servicing provisions to address the regulation of consumer and residential mortgage
             13      loans by the Department of Financial Institutions.
             14      Highlighted Provisions:
             15          This bill:
             16          .    clarifies the requirements to file notification with the department under the Utah
             17      Consumer Credit Code;
             18          .    clarifies provisions administered by the department related to a lender, broker, or
             19      servicer of a mortgage loan;
             20          .    enacts the Financial Institution Loan Originator Licensing Act including:
             21              .    providing definitions;
             22              .    establishing the general powers and duties of the commissioner, including
             23      rulemaking authority;
             24              .    establishing when licensure is required;
             25              .    creating qualifications for licensure, including bonding requirements;
             26              .    creating a licensing process;
             27              .    requiring the commissioner to create a process for challenging information in
             28      the nationwide database;
             29              .    addressing education requirements;


             30              .    imposing operational requirements and prohibitions; and
             31              .    providing for enforcement;
             32          .    repeals intent language; and
             33          .    makes technical and conforming amendments.
             34      Monies Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37          None
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          9-4-1202, as last amended by Laws of Utah 2003, Chapter 229
             41          41-1a-506, as last amended by Laws of Utah 2006, Chapter 232
             42          58-56-17, as last amended by Laws of Utah 2003, Chapter 229
             43          59-2-1109, as last amended by Laws of Utah 2003, Chapter 229
             44          59-2-1503, as enacted by Laws of Utah 2004, Chapter 243
             45          61-2c-301, as last amended by Laws of Utah 2007, Chapter 325
             46          70C-1-302, as enacted by Laws of Utah 1985, Chapter 159
             47          70C-8-201, as enacted by Laws of Utah 1985, Chapter 159
             48          70C-8-202, as last amended by Laws of Utah 1991, Chapter 241
             49          70C-8-203, as enacted by Laws of Utah 1985, Chapter 159
             50      ENACTS:
             51          70D-1-101, Utah Code Annotated 1953
             52          70D-3-101, Utah Code Annotated 1953
             53          70D-3-102, Utah Code Annotated 1953
             54          70D-3-103, Utah Code Annotated 1953
             55          70D-3-201, Utah Code Annotated 1953
             56          70D-3-202, Utah Code Annotated 1953
             57          70D-3-203, Utah Code Annotated 1953


             58          70D-3-204, Utah Code Annotated 1953
             59          70D-3-205, Utah Code Annotated 1953
             60          70D-3-206, Utah Code Annotated 1953
             61          70D-3-301, Utah Code Annotated 1953
             62          70D-3-302, Utah Code Annotated 1953
             63          70D-3-303, Utah Code Annotated 1953
             64          70D-3-401, Utah Code Annotated 1953
             65          70D-3-402, Utah Code Annotated 1953
             66          70D-3-501, Utah Code Annotated 1953
             67          70D-3-502, Utah Code Annotated 1953
             68      RENUMBERS AND AMENDS:
             69          70D-1-102, (Renumbered from 70D-1-3, as enacted by Laws of Utah 1990, Chapter
             70      172)
             71          70D-2-101, (Renumbered from 70D-1-2, as enacted by Laws of Utah 1990, Chapter
             72      172)
             73          70D-2-102, (Renumbered from 70D-1-19, as last amended by Laws of Utah 2004,
             74      Chapter 75)
             75          70D-2-103, (Renumbered from 70D-1-4, as enacted by Laws of Utah 1990, Chapter
             76      172)
             77          70D-2-104, (Renumbered from 70D-1-21, as enacted by Laws of Utah 2004, Chapter
             78      252)
             79          70D-2-201, (Renumbered from 70D-1-10, as last amended by Laws of Utah 2004,
             80      Chapter 297)
             81          70D-2-202, (Renumbered from 70D-1-11, as enacted by Laws of Utah 1990, Chapter
             82      172)
             83          70D-2-203, (Renumbered from 70D-1-12, as enacted by Laws of Utah 1990, Chapter
             84      172)
             85          70D-2-301, (Renumbered from 70D-1-9, as enacted by Laws of Utah 1990, Chapter


             86      172)
             87          70D-2-302, (Renumbered from 70D-1-5, as enacted by Laws of Utah 1990, Chapter
             88      172)
             89          70D-2-303, (Renumbered from 70D-1-7, as enacted by Laws of Utah 1990, Chapter
             90      172)
             91          70D-2-304, (Renumbered from 70D-1-8, as enacted by Laws of Utah 1990, Chapter
             92      172)
             93          70D-2-305, (Renumbered from 70D-1-6, as enacted by Laws of Utah 1990, Chapter
             94      172)
             95          70D-2-401, (Renumbered from 70D-1-20, as last amended by Laws of Utah 2004,
             96      Chapter 243)
             97          70D-2-501, (Renumbered from 70D-1-13, as enacted by Laws of Utah 1990, Chapter
             98      172)
             99          70D-2-502, (Renumbered from 70D-1-14, as last amended by Laws of Utah 2008,
             100      Chapter 382)
             101          70D-2-503, (Renumbered from 70D-1-15, as enacted by Laws of Utah 1990, Chapter
             102      172)
             103          70D-2-504, (Renumbered from 70D-1-16, as last amended by Laws of Utah 2008,
             104      Chapter 382)
             105          70D-2-505, (Renumbered from 70D-1-17, as last amended by Laws of Utah 2008,
             106      Chapter 382)
             107          70D-2-506, (Renumbered from 70D-1-18, as enacted by Laws of Utah 1990, Chapter
             108      172)
             109      REPEALS:
             110          70D-1-1, as enacted by Laws of Utah 1990, Chapter 172
             111     
             112      Be it enacted by the Legislature of the state of Utah:
             113          Section 1. Section 9-4-1202 is amended to read:


             114           9-4-1202. Legislative policy and purpose.
             115          (1) It is the policy of the state that to promote the general welfare of its citizens it is
             116      necessary to remedy the unsafe and unsanitary housing conditions and the acute shortage of
             117      decent, safe, and sanitary dwellings for families of medium and low income, in urban and rural
             118      areas. These conditions cause an increase and spread of disease and crime, and constitute a
             119      menace to the health, safety, morals, and welfare of the state.
             120          (2) It is the policy of the state:
             121          (a) to make adequate provision of affordable housing for:
             122          (i) persons of medium or low income who are unable to provide themselves with
             123      decent housing including:
             124          (A) elderly persons;
             125          (B) persons with disabilities;
             126          (C) veterans;
             127          (D) special needs populations;
             128          (E) low income persons living on tribal trust lands;
             129          (F) persons receiving public assistance under self-sufficiency programs; or
             130          (G) low income persons living in mobile homes, as defined in Section [ 70D-1-19 ]
             131      70D-2-102 ; and
             132          (ii) during limited periods, for disaster victims; and
             133          (b) that the provision of safe and sanitary dwelling accommodations at rents or prices
             134      that persons of medium and low income can afford will materially assist in developing more
             135      desirable neighborhoods and alleviating the effects of poverty in this state.
             136          (3) The purposes of this part and Part 6, Housing Authorities, are to meet these
             137      problems by:
             138          (a) providing low-cost housing for medium and low income persons; and
             139          (b) encouraging cooperation between political subdivisions and the nonprofit sector to
             140      make available low-cost housing in all areas of the state.
             141          (4) It is in the public interest to use the broad financial resources and technical


             142      services available to government in cooperation with the ingenuity and expertise of private
             143      enterprise to alleviate this lack of safe and sanitary dwellings while stimulating local industry,
             144      according to the following principles:
             145          (a) The private sector, including nonprofit entities, shall be the primary source of
             146      developing and providing affordable housing with state and local incentives to encourage
             147      housing development.
             148          (b) State money used in the development of housing shall:
             149          (i) be heavily leveraged when possible;
             150          (ii) be primarily invested as loans;
             151          (iii) be primarily spent on housing production; and
             152          (iv) give priority to needs of persons of medium or low income who are unable to
             153      provide themselves with decent housing including:
             154          (A) elderly persons;
             155          (B) persons with disabilities;
             156          (C) veterans;
             157          (D) special needs populations;
             158          (E) low income persons living on tribal trust lands;
             159          (F) persons receiving public assistance under self-sufficiency programs; and
             160          (G) low income persons living in mobile homes, as defined in Section [ 70D-1-19 ]
             161      70D-2-102 .
             162          (c) When possible based on economic feasibility and effectiveness, state housing
             163      programs shall encourage:
             164          (i) mixed income developments;
             165          (ii) socio-economic diversity in neighborhoods; and
             166          (iii) new, multifamily construction.
             167          (d) State resources may be used in partnership with political subdivisions or the
             168      private sector to promote affordable housing.
             169          (e) Within appropriations from the Legislature, the state may provide training and


             170      technical assistance to Utah's political subdivision, quasi-governmental, and nonprofit
             171      housing providers.
             172          Section 2. Section 41-1a-506 is amended to read:
             173           41-1a-506. Exceptions to title requirements for manufactured homes or mobile
             174      homes.
             175          (1) [Each] A manufactured home or mobile home in this state is subject to the titling
             176      provisions of this part except:
             177          (a) a manufactured [homes and] home or mobile [homes] home owned and operated
             178      by the federal government; and
             179          (b) a manufactured [homes and] home or mobile [homes] home that [have] has been
             180      converted to real property under Section [ 70D-1-20 ] 70D-2-401 if:
             181          (i) (A) an Affidavit of Mobile Home Affixture [has been] is issued by the division for
             182      that home; and
             183          (B) the home is permanently affixed to real property; or
             184          (ii) (A) the home is permanently affixed to real property;
             185          (B) the home is not registered with the division;
             186          (C) the home is taxed as an improvement to real estate by the county assessor as
             187      permitted under Section 59-2-1503 ; and
             188          (D) the manufacturer's identification number or numbers are included in the deed or
             189      loan document recorded with the county recorder.
             190          (2) A manufactured home or mobile home previously converted to real property but
             191      that has been separated from the real property is subject to the titling provisions of this part
             192      upon separation.
             193          Section 3. Section 58-56-17 is amended to read:
             194           58-56-17. Fees on sale -- Escrow agents -- Sales tax.
             195          (1) [Each] A dealer shall collect and remit a fee of $75 to the division for each factory
             196      built home the dealer sells that [has not], as of the date of the sale, has not been permanently
             197      affixed to real property and converted to real property as provided in Section [ 70D-1-20 ]


             198      70D-2-401 . The fee shall be payable within 30 days following the close of each calendar
             199      quarter for all units sold during that calendar quarter. The fee shall be deposited in a restricted
             200      account as provided in Section 58-56-17.5 .
             201          (2) [Any] A principal real estate broker, associate broker, or sales agent exempt from
             202      registration as a dealer under Section 58-56-16 who sells a factory built home that has not
             203      been permanently affixed to real property shall close the sale only through a qualified escrow
             204      agent in this state registered with the Insurance Department or the Department of Financial
             205      Institutions.
             206          (3) [Each] An escrow agent through which a sale is closed under Subsection (2) shall
             207      remit all required sales tax to the state.
             208          Section 4. Section 59-2-1109 is amended to read:
             209           59-2-1109. Indigent persons -- Deferral or abatement -- Application -- County
             210      authority to make refunds.
             211          (1) A person under the age of 65 years is not eligible for a deferral or abatement
             212      provided for poor people under Sections 59-2-1107 and 59-2-1108 unless:
             213          (a) the county finds that extreme hardship would prevail if the grants were not made;
             214      or
             215          (b) the person is disabled.
             216          (2) (a) An application for the deferral or abatement shall be filed on or before
             217      September 1 with the county in which the property is located.
             218          (b) The application shall include a signed statement setting forth the eligibility of the
             219      applicant for the deferral or abatement.
             220          (c) Both husband and wife shall sign the application if the husband and wife seek a
             221      deferral or abatement on a residence:
             222          (i) in which they both reside; and
             223          (ii) which they own as joint tenants.
             224          (d) A county may extend the deadline for filing under Subsection (2)(a) until
             225      December 31 if the county finds that good cause exists to extend the deadline.


             226          (3) (a) For purposes of this Subsection (3):
             227          (i) "Property taxes due" means the taxes due on a person's property:
             228          (A) for which an abatement is granted by a county under Section 59-2-1107 ; and
             229          (B) for the calendar year for which the abatement is granted.
             230          (ii) "Property taxes paid" is an amount equal to the sum of:
             231          (A) the amount of the property taxes the person paid for the taxable year for which the
             232      person is applying for the abatement; and
             233          (B) the amount of the abatement the county grants under Section 59-2-1107 .
             234          (b) A county granting an abatement to a person under Section 59-2-1107 shall refund
             235      to that person an amount equal to the amount by which the person's property taxes paid exceed
             236      the person's property taxes due, if that amount is $1 or more.
             237          (4) For purposes of this section:
             238          (a) a poor person is any person:
             239          (i) whose total household income as defined in Section 59-2-1202 is less than the
             240      maximum household income certified to a homeowner's credit under Subsection
             241      59-2-1208 (1);
             242          (ii) who resides for not less than ten months of each year in the residence for which the
             243      tax relief, deferral, or abatement is requested; and
             244          (iii) who is unable to meet the tax assessed on the person's residential property as the
             245      tax becomes due; and
             246          (b) "residence" includes a mobile home as defined under Section [ 70D-1-19 ]
             247      70D-2-401 .
             248          (5) If the claimant is the grantor of a trust holding title to real or tangible personal
             249      property on which an abatement or deferral is claimed, the claimant may claim the portion of
             250      the abatement or deferral under Section 59-2-1107 or 59-2-1108 and be treated as the owner of
             251      that portion of the property held in trust for which the claimant proves to the satisfaction of the
             252      county that:
             253          (a) title to the portion of the trust will revest in the claimant upon the exercise of a


             254      power:
             255          (i) by:
             256          (A) the claimant as grantor of the trust;
             257          (B) a nonadverse party; or
             258          (C) both the claimant and a nonadverse party; and
             259          (ii) regardless of whether the power is a power:
             260          (A) to revoke;
             261          (B) to terminate;
             262          (C) to alter;
             263          (D) to amend; or
             264          (E) to appoint;
             265          (b) the claimant is obligated to pay the taxes on that portion of the trust property
             266      beginning January 1 of the year the claimant claims the abatement or deferral; and
             267          (c) the claimant meets the requirements under this part for the abatement or deferral.
             268          (6) The commission shall adopt rules to implement this section.
             269          (7) Any poor person may qualify for:
             270          (a) the deferral of taxes under Section 59-2-1108 ;
             271          (b) if the person meets the requisites of this section, for the abatement of taxes under
             272      Section 59-2-1107 ; or
             273          (c) both:
             274          (i) the deferral described in Subsection (7)(a); and
             275          (ii) the abatement described in Subsection (7)(b).
             276          Section 5. Section 59-2-1503 is amended to read:
             277           59-2-1503. Property tax treatment of transportable factory-built housing units.
             278          Regardless of whether a transportable factory-built housing unit is considered to be real
             279      property or personal property under Section [ 70D-1-20 ] 70D-2-401 , for purposes of this
             280      chapter:
             281          (1) a transportable factory-built housing unit that is located in a transportable


             282      factory-built housing unit park:
             283          (a) except as provided in Subsection (1)(b), is considered to be personal property; and
             284          (b) notwithstanding Subsection (1)(a), is considered to be real property if the owner of
             285      the transportable factory-built housing unit owns the real property upon which the
             286      transportable factory-built housing unit is located; and
             287          (2) a transportable factory-built housing unit that is not located in a transportable
             288      factory-built housing unit park:
             289          (a) except as provided in Subsection (2)(b), is considered to be personal property; and
             290          (b) notwithstanding Subsection (2)(a), is considered to be real property if the
             291      transportable factory-built housing unit is an improvement.
             292          Section 6. Section 61-2c-301 is amended to read:
             293           61-2c-301. Prohibited conduct -- Violations of the chapter.
             294          (1) An individual or entity transacting the business of residential mortgage loans in
             295      this state may not:
             296          (a) give or receive compensation or anything of value in exchange for a referral of
             297      residential mortgage loan business;
             298          (b) charge a fee in connection with a residential mortgage loan transaction:
             299          (i) that is excessive; or
             300          (ii) if the individual or entity does not comply with Section [ 70D-1-6 ] 70D-2-305 ;
             301          (c) give or receive compensation or anything of value in exchange for a referral of
             302      settlement or loan closing services related to a residential mortgage loan transaction;
             303          (d) do any of the following to induce a lender to extend credit as part of a residential
             304      mortgage loan transaction:
             305          (i) make a false statement or representation;
             306          (ii) cause false documents to be generated; or
             307          (iii) knowingly permit false information to be submitted by any party;
             308          (e) give or receive compensation or anything of value, or withhold or threaten to
             309      withhold payment of an appraiser fee, to influence the independent judgment of an appraiser


             310      in reaching a value conclusion in a residential mortgage loan transaction, except that it is not a
             311      violation of this section for a licensee to withhold payment because of a bona fide dispute
             312      regarding a failure of the appraiser to comply with the licensing law or the Uniform Standards
             313      of Professional Appraisal Practice;
             314          (f) violate or not comply with:
             315          (i) this chapter;
             316          (ii) an order of the commission or division; or
             317          (iii) a rule made by the division;
             318          (g) fail to respond within the required time period to:
             319          (i) a notice or complaint of the division; or
             320          (ii) a request for information from the division;
             321          (h) make false representations to the division, including in a licensure statement;
             322          (i) for any residential mortgage loan transaction beginning on or after January 1, 2004,
             323      engage in the business of residential mortgage loans with respect to the transaction if the
             324      individual or entity also acts in any of the following capacities with respect to the same
             325      residential mortgage loan transaction:
             326          (i) appraiser;
             327          (ii) escrow agent;
             328          (iii) real estate agent;
             329          (iv) general contractor; or
             330          (v) title insurance agent;
             331          (j) order a title insurance report or hold a title insurance policy unless the individual or
             332      entity provides to the title insurer a copy of a valid, current license under this chapter;
             333          (k) engage in unprofessional conduct as defined by rule;
             334          (l) engage in an act or omission in transacting the business of residential mortgage
             335      loans that constitutes dishonesty, fraud, or misrepresentation;
             336          (m) engage in false or misleading advertising;
             337          (n) (i) fail to account for [all funds] monies received in connection with a residential


             338      mortgage loan;
             339          (ii) use [funds] monies for a different purpose from the purpose for which the [funds
             340      were] monies are received; or
             341          (iii) except as provided in Subsection (4), retain [funds] monies paid for services if the
             342      services [were] are not [actually] performed;
             343          (o) fail, within 90 calendar days of a request from a borrower who has paid for an
             344      appraisal, to give a copy of an appraisal ordered and used for a transaction to the borrower;
             345          (p) engage in an act that is performed to:
             346          (i) evade this chapter; or
             347          (ii) assist another person to evade this chapter;
             348          (q) recommend or encourage default [or], delinquency, or continuation of an existing
             349      default or delinquency, by a mortgage applicant on an existing indebtedness prior to the
             350      closing of a residential mortgage loan that will refinance all or part of the indebtedness;
             351          (r) in the case of the principal lending manager of an entity or a branch office of an
             352      entity, fail to exercise reasonable supervision over the activities of:
             353          (i) [any] unlicensed staff; and
             354          (ii) [any mortgage officers who are] a mortgage officer who is licensed with the
             355      principal lending manager;
             356          (s) pay or offer to pay an individual who does not hold a license under this chapter for
             357      work that requires the individual to hold a license under this chapter; or
             358          (t) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
             359          (i) provide a title insurance product or service without the approval required by
             360      Section 31A-2-405 ; or
             361          (ii) knowingly provide false or misleading information in the statement required by
             362      Subsection 31A-2-405 (2).
             363          (2) Whether or not the crime is related to the business of residential mortgage loans, it
             364      is a violation of this chapter for a licensee or a person who is a certified education provider to
             365      do any of the following with respect to a criminal offense which involves moral turpitude:


             366          (a) be convicted;
             367          (b) plead guilty or nolo contendere;
             368          (c) enter a plea in abeyance; or
             369          (d) be subjected to a criminal disposition similar to the ones described in Subsections
             370      (2)(a) through (c).
             371          (3) A principal lending manager does not violate Subsection (1)(r) if:
             372          (a) in contravention of the principal lending manager's written policies and
             373      instructions, an affiliated licensee of the principal lending manager violates:
             374          (i) this chapter; or
             375          (ii) rules made by the division under this chapter;
             376          (b) the principal lending manager established and followed reasonable procedures to
             377      ensure that affiliated licensees receive adequate supervision;
             378          (c) upon learning of a violation by an affiliated licensee, the principal lending manager
             379      attempted to prevent or mitigate the damage;
             380          (d) the principal lending manager did not participate in or ratify the violation by an
             381      affiliated licensee; and
             382          (e) the principal lending manager did not attempt to avoid learning of the violation.
             383          (4) Notwithstanding Subsection (1)(n)(iii), a licensee may, upon compliance with
             384      Section [ 70D-1-6 ] 70D-2-305 , charge a reasonable cancellation fee for work done originating
             385      a mortgage if the mortgage is not closed.
             386          Section 7. Section 70C-1-302 is amended to read:
             387           70C-1-302. Definitions.
             388          As used in this title:
             389          (1) "Agreement" means the bargain of the parties in fact as stated in a written contract
             390      or otherwise as found in the parties' language or by implication from other circumstances,
             391      including[, but not limited to,]:
             392          (a) course of dealing[,];
             393          (b) usage of trade[,]; or


             394          (c) course of performance.
             395          (2) "Contract" means a document containing written terms and conditions of a credit
             396      agreement.
             397          (3) (a) "Creditor" means:
             398          [(a)] (i) a party [(i)]:
             399          (A) who regularly extends consumer credit that is subject to a finance charge or is
             400      payable by written agreement in more than four installments, not including a down payment[,
             401      and (ii)]; and
             402          (B) to whom the obligation is initially payable, either on the face of the note or
             403      contract, or by agreement when there is no note or contract[. For purposes of this definition, a
             404      party is deemed to extend consumer credit regularly only if it extended credit more than 25
             405      times, or more than five times for transactions secured by a dwelling, in the preceding calendar
             406      year. If a person did not meet these numerical standards in the preceding calendar year, the
             407      numerical standards shall be applied to the current calendar year];
             408          [(b) any] (ii) an issuer of a credit [cards] card that extends either open-end credit or
             409      credit that:
             410          (A) is not subject to a finance charge; and
             411          (B) is not payable by written agreement in more than four installments; and
             412          [(c) any credit card issuer]
             413          (iii) an issuer of a credit card that extends closed-end credit that:
             414          (A) is subject to a finance charge; or
             415          (B) is payable by written agreement in more than four installments.
             416          (b) (i) For purposes of this Subsection (3), a party is considered to extend consumer
             417      credit regularly only if the party extends credit in the preceding calendar year:
             418          (A) more than 25 times; or
             419          (B) more than five times for a transaction secured by a dwelling.
             420          (ii) If a person does not meet the numerical standards described in Subsection (3)(b)(i)
             421      in the preceding calendar year, the numerical standards shall be applied to the current calendar


             422      year.
             423          (4) "Dwelling" means a residential structure attached to real property that contains one
             424      to four units including any of the following if used as a residence:
             425          (a) a condominium unit;
             426          (b) a cooperative unit;
             427          (c) a manufactured home; or
             428          (d) a house.
             429          [(4)] (5) "Earnings" means compensation paid or payable to an individual or for [his]
             430      the individual's account for personal services rendered or to be rendered by [him] the
             431      individual whether denominated as wages, salary, commission, bonus, or otherwise, and
             432      includes periodic payments pursuant to a pension, retirement, or disability program.
             433          [(5)] (6) "Installment" means a payment upon a debt that is part of a series of
             434      payments, each of which is less than the original amount of the debt and scheduled as to a
             435      specific amount and due date by agreement of the parties for the purpose of repaying the debt.
             436          [(6)] (7) "Party" means [any] an individual [person] and any other entity legally
             437      capable of entering into a binding contract.
             438          Section 8. Section 70C-8-201 is amended to read:
             439           70C-8-201. Applicability.
             440          [This] (1) Except as provided in Subsection (2), this part applies to [all creditors]:
             441          (a) a creditor that is subject to this title; and [to all parties having]
             442          (b) a party who:
             443          (i) has an office or place of business in this state [which take assignments of and
             444      undertake]; and
             445          (ii) takes an assignment of or undertakes direct collection of [payments] a payment
             446      from or enforcement of [rights against debtors] a right against a debtor arising from a
             447      consumer credit [transactions] transaction.
             448          (2) Except where otherwise indicated, the following are exempt from this part:
             449          (a) a depository [institutions] institution as defined in Section 7-1-103 [which are


             450      regulated as such by the state of Utah or the United States are exempt from this part.] that is
             451      federally insured; and
             452          (b) a wholly owned subsidiary of a depository institution described in Subsection
             453      (2)(a).
             454          Section 9. Section 70C-8-202 is amended to read:
             455           70C-8-202. Notification.
             456          (1) [Parties] (a) A party who is subject to this part shall file notification with the
             457      department at least 30 days before commencing business in this state[, and, thereafter,].
             458          (b) After filing the notification required by Subsection (1)(a), a party shall file a
             459      notification on or before January 31 of each year. [All parties subject to this title which are
             460      extending credit to consumers on July 1, 1985, need not file an initial notification but shall file
             461      notification on or before the next January 31. The notification shall state:]
             462          (c) A notification required by this Subsection (1) shall state:
             463          [(a)] (i) the name of the party;
             464          [(b)] (ii) the name in which the business is transacted if different from that required in
             465      Subsection [(a)](1)(c)(i);
             466          [(c)] (iii) the address of the party's principal office, which may be outside this state;
             467          [(d)] (iv) the address of [all offices or retail stores]:
             468          (A) each office or retail store, if any, in this state at which credit is offered or extended
             469      to [consumers,] a consumer; or
             470          (B) in the case of a party taking [assignments of obligations, the offices or places] an
             471      assignment of an obligation, each office or place of business within this state at which
             472      business is transacted;
             473          [(e)] (v) if credit is extended to [consumers] a consumer other than at an office or
             474      retail store in this state, a brief description of the manner in which the credit [transactions
             475      occur] transaction occurs;
             476          [(f)] (vi) the name and address in this state of a designated agent upon whom service
             477      of process may be made; and


             478          [(g)] (vii) any other information [deemed] considered pertinent by the department.
             479          (2) If information in a notification becomes inaccurate after filing, [no] a party is not
             480      required to file further notification [is required] until [the following January 31] required to
             481      renew the party's notification.
             482          (3) (a) A party [which has not filed the] who fails to file a notification [and paid the
             483      fees] or pay a fee required by this part may not extend [any] credit to [consumers] a consumer
             484      in this state until [it has] the party fully [complied] complies with [the requirements of] this
             485      part. [Any]
             486          (b) A party who willfully violates this Subsection (3) is guilty of a class B
             487      misdemeanor.
             488          Section 10. Section 70C-8-203 is amended to read:
             489           70C-8-203. Fees -- Examinations.
             490          (1) A party required to file notification under Section 70C-8-202 shall, on or before
             491      January 31 of each year, pay to the department an annual fee equal to the sum of:
             492          (a) $25 [plus]; and
             493          (b) $7 for each $100,000 or part thereof in excess of $100,000, of the original
             494      principal balance of all consumer credit [it] the party extended during the preceding calendar
             495      year.
             496          (2) In addition to filing notification, [any] a party subject to this part, and [any] a
             497      depository institution subject to this title[,]:
             498          (a) may be required to make [any or all of its books and records] a book or record
             499      relating to a consumer credit [transactions] transaction available to the department or its
             500      authorized representative for examination[,]; and
             501          (b) shall pay to the department a fee to be set by the department based on an hourly
             502      rate per each examiner.
             503          (3) No portion of [any fees] a fee paid or owed to the department under this part [are]
             504      is refundable because [the] a party voluntarily or involuntarily ceases to extend credit to
             505      consumers:


             506          (a) during the period covered by the fee; or [prior to]
             507          (b) before the time of an examination by the department of [records] a book or record
             508      pertaining to a preceding consumer credit [transactions] transaction.
             509          Section 11. Section 70D-1-101 is enacted to read:
             510     
TITLE 70D. FINANCIAL INSTITUTION MORTGAGE

             511     
FINANCING REGULATION ACT

             512     
CHAPTER 1. GENERAL PROVISIONS

             513          70D-1-101. Title.
             514          This title is known as the "Financial Institution Mortgage Financing Regulation Act."
             515          Section 12. Section 70D-1-102 , which is renumbered from Section 70D-1-3 is
             516      renumbered and amended to read:
             517           [70D-1-3].     70D-1-102. Definitions.
             518          As used in this [chapter] title:
             519          (1) "Commissioner" means the commissioner of the department.
             520          [(1)] (2) "Department" means the Department of Financial Institutions.
             521          (3) "Depository institution" is as defined in Section 7-1-103 .
             522          (4) "Dwelling" means a residential structure attached to real property that contains one
             523      to four units including any of the following if used as a residence:
             524          (a) a condominium unit;
             525          (b) a cooperative unit;
             526          (c) a manufactured home; or
             527          (d) a house.
             528          [(2)] (5) "Mortgage" means a mortgage or deed of trust affecting real property located
             529      in this state.
             530          [(3) "Mortgage lender" or "lender" means any person who in the regular course of
             531      business originates loans secured by mortgages. A person shall not be considered to be a
             532      mortgage lender, however, solely because the person, as seller, receives one or more mortgages
             533      as security for a purchase money obligation, or because the person receives mortgages as


             534      security for an obligation payable on an installment or deferred payment basis and arising out
             535      of materials furnished or services rendered in the improvement of real property.]
             536          [(4)] (6) (a) "Mortgage loan" means [any] a loan [for a term longer than two years]:
             537          (i) secured by a mortgage; and
             538          (ii) made for personal, family, or household purposes.
             539          (b) "Mortgage loan" does not include a loan:
             540          (i) made by an individual to a member of [his] the individual's family; or [a loan]
             541          (ii) subject to Title 70C, Utah Consumer Credit Code.
             542          [(5) "Mortgage loan broker" or "broker" means any person who in the regular course
             543      of business assists a person in obtaining a mortgage loan for a fee or other consideration paid
             544      directly or indirectly. A person shall not be considered to be a mortgage loan broker, however,
             545      solely because of his activities as:]
             546          [(a) a real estate broker or agent who, for a normal and customary real estate sales
             547      commission, assists a buyer in obtaining a mortgage loan in order to buy real property; or]
             548          [(b) an attorney licensed to practice law in this state who, in the course of his practice
             549      as an attorney, assists a person in obtaining a mortgage loan.]
             550          [(6) "Mortgage loan servicer" or "servicer" means any person who in the regular
             551      course of business assumes responsibility for servicing and accepting payments for a mortgage
             552      loan.]
             553          (7) "Mortgagor" means [any] a person who:
             554          (a) executes a mortgage; or
             555          (b) is obligated to pay a mortgage loan.
             556          [(8) "Regular course of business" as used in this chapter does not include a casual
             557      lender who makes less than five mortgage loans per year.]
             558          (8) "Record" means information that is:
             559          (a) inscribed on a tangible medium; or
             560          (b) stored in an electronic or other medium and is retrievable in perceivable form.
             561          (9) "Real estate brokerage activity" means an act that involves offering or providing


             562      real estate brokerage services to the public, including:
             563          (a) acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee
             564      of real property;
             565          (b) bringing together parties interested in the sale, purchase, lease, rental, or exchange
             566      of real property;
             567          (c) negotiating, on behalf of a party, a portion of a contract relating to the sale,
             568      purchase, lease, rental, or exchange of real property, other than in connection with providing
             569      financing with respect to the transaction;
             570          (d) engaging in an act for which a person engaged in the activity is required to be
             571      registered or licensed as a real estate agent or real estate broker under applicable law; and
             572          (e) offering to engage in an activity, or act in a capacity, described in Subsections
             573      (9)(a) through (d).
             574          (10) "State" means:
             575          (a) a state, territory, or possession of the United States;
             576          (b) the District of Columbia; or
             577          (c) the Commonwealth of Puerto Rico.
             578          Section 13. Section 70D-2-101 , which is renumbered from Section 70D-1-2 is
             579      renumbered and amended to read:
             580     
CHAPTER 2. MORTGAGE LENDING AND SERVICING ACT

             581     
Part 1. General Provisions

             582           [70D-1-2].     70D-2-101. Short title.
             583          This chapter is known as the "Mortgage Lending and Servicing Act."
             584          Section 14. Section 70D-2-102 , which is renumbered from Section 70D-1-19 is
             585      renumbered and amended to read:
             586           [70D-1-19].     70D-2-102. Definitions.
             587          As used in this chapter:
             588          (1) (a) Except as provided in Subsection (1)(b), "broker" means a person who in the
             589      regular course of business assists a person in obtaining a mortgage loan for a fee or other


             590      consideration paid directly or indirectly.
             591          (b) "Broker" does not include a person solely because of the person's:
             592          (i) real estate brokerage activities; or
             593          (ii) activities as an attorney licensed to practice law in this state who, in the course of
             594      the attorney's practice as an attorney, assists a person in obtaining a mortgage loan.
             595          (2) "Business as a lender, broker, or servicer" means a person who engages in an act
             596      for compensation or in the expectation of compensation that makes the person a lender,
             597      broker, or servicer.
             598          (3) (a) Except as provided in Subsection (3)(b), "lender" means a person who in the
             599      regular course of business originates a loan secured by a mortgage.
             600          (b) "Lender" does not include a person who:
             601          (i) as a seller only receives one or more mortgages as security for a purchase money
             602      obligation; or
             603          (ii) only receives a mortgage as security for an obligation:
             604          (A) payable on an installment or deferred payment basis; and
             605          (B) arising out of materials furnished or services rendered in the improvement of real
             606      property.
             607          [(1)] (4) "Manufactured home" means a transportable factory built housing unit that:
             608          (a) is constructed:
             609          (i) on or after June 15, 1976, according to the National Manufactured Housing
             610      Construction and Safety Standards Act of 1974[,]; and
             611          (ii) in one or more sections, which[,]:
             612          (A) in the traveling mode, is eight body feet or more in width or 40 body feet or more
             613      in length[,]; or
             614          (B) when erected on site, is 400 or more square feet[, and which];
             615          (b) is built on a permanent chassis [and];
             616          (c) is designed to be used as a dwelling with or without a permanent foundation when
             617      connected to the required utilities[,]; and


             618          (d) includes the plumbing, heating, air-conditioning, and electrical systems.
             619          [(2)] (5) "Mobile home" means a transportable factory built housing unit built [prior
             620      to] before June 15, 1976, in accordance with a state mobile home code [which] that existed
             621      [prior to] before the National Manufactured Housing Construction and Safety Standards Act
             622      of 1974.
             623          [(3)] (6) "Permanently affixed" means anchored to, and supported by, a permanent
             624      foundation or installed in accordance with the manufactured housing installation standard
             625      code referred to in Section 58-56-4 .
             626          (7) "Servicer" means a person who in the regular course of business assumes
             627      responsibility for servicing and accepting payments for a mortgage loan.
             628          Section 15. Section 70D-2-103 , which is renumbered from Section 70D-1-4 is
             629      renumbered and amended to read:
             630           [70D-1-4].     70D-2-103. Exemptions.
             631          [The provisions of this] This chapter [do] does not apply to:
             632          (1) a bona fide nonprofit [corporations granting] corporation that grants a first
             633      mortgage [loans] loan to promote home ownership for low and moderate income borrowers;
             634      [and]
             635          (2) an agency of the following that grants a first mortgage loan under a specific federal
             636      or state law:
             637          [(2) agencies of] (a) the federal government [or of any];
             638          (b) a state, county, or municipal government; or [any]
             639          (c) a quasi-governmental agency [granting first mortgage loans under the specific
             640      authority of the laws of any state or the United States.];
             641          (3) a casual lender that makes less than five mortgage loans a year; or
             642          (4) a mortgage loan of two years or less.
             643          Section 16. Section 70D-2-104 , which is renumbered from Section 70D-1-21 is
             644      renumbered and amended to read:
             645           [70D-1-21].     70D-2-104. Ordinance or law by political subdivision prohibited.


             646          (1) [No] A county subject to Title 17, Counties, and [no] a municipality subject to
             647      Title 10, [shall] Utah Municipal Code, may not enact [any] an ordinance or law that [regulates
             648      the terms of home loans or that]:
             649          (a) regulates a term of a mortgage loan on a dwelling; or
             650          (b) makes the eligibility of [any] a person to do business with the county or
             651      municipality dependent upon [the terms of home loans] a term of a mortgage loan on a
             652      dwelling originated or serviced by [such] the person.
             653          (2) [The prohibition in] Subsection (1) does not apply to [terms of loans] a term or
             654      loan funded in whole or in part with money provided or administered by the county or
             655      municipality.
             656          Section 17. Section 70D-2-201 , which is renumbered from Section 70D-1-10 is
             657      renumbered and amended to read:
             658     
Part 2. Notification to Commissioner

             659           [70D-1-10].     70D-2-201. Notification -- Exemptions.
             660          (1) Except as provided in Subsection (2), [no] a person may not engage in [the
             661      business of making mortgage loans nor may any person engage in the business of being a
             662      mortgage loan broker or servicer, without first filing] business as a lender, broker, or servicer
             663      in this state before the day on which the person:
             664          (a) files written notification with the [department and paying the fees required by this
             665      chapter.] commissioner in accordance with Section 70D-2-202 ; and
             666          (b) pays a fee required by Section 70D-2-203 .
             667          (2) The following persons are exempt from [the notification requirements contained in
             668      this chapter and from the annual fee imposed in Subsection 70D-1-12 (1)] this part, except for
             669      a reimbursement or fee described in Subsection 70D-2-203 (2):
             670          (a) [all persons authorized under Utah law or under federal law to do business as] a
             671      federally insured depository institution in this state;
             672          (b) [all] a wholly owned [subsidiaries] subsidiary of a depository [institutions]
             673      institution described in Subsection (2)(a); and


             674          [(c) all persons that:]
             675          (c) a person who:
             676          (i) [are] is required to [license] be licensed with the [Utah] Division of Real Estate
             677      pursuant to Title 61, Chapter 2c, Utah Residential Mortgage Practices Act; and
             678          [(ii) are not engaged in the business of being a mortgage loan servicer.]
             679          (ii) is not a servicer.
             680          Section 18. Section 70D-2-202 , which is renumbered from Section 70D-1-11 is
             681      renumbered and amended to read:
             682           [70D-1-11].     70D-2-202. Form of notice.
             683          (1) (a) [Persons subject to the notification requirements of Section 70D-1-10 ] A
             684      person required to file notification with the commissioner under Section 70D-2-201 shall file
             685      notification with the [department] commissioner:
             686          (i) at least 30 days before commencing business as a [mortgage] lender, broker, or
             687      servicer in this state[,]; and [thereafter]
             688          (ii) on or before January 31 of each year[. All persons subject to the notification
             689      requirement which are engaged in business as a mortgage lender, broker, or servicer on July 1,
             690      1990, need not file an initial notification but shall file notification on or before January 31,
             691      1991. The] after filing the notification required under Subsection (1)(a)(i).
             692          (b) A notification required by this Subsection (1) shall state:
             693          [(a)] (i) the name of the person;
             694          [(b)] (ii) the name in which the business will be transacted if different from [that
             695      required] the name in Subsection [(a)](1)(b)(i);
             696          [(c)] (iii) the address of the person's principal business office, which may be outside
             697      this state;
             698          [(d)] (iv) the addresses of [all offices] each office in this state at which the person
             699      conducts business as a [mortgage] lender, broker, or servicer;
             700          [(e)] (v) if the person conducts business as a [mortgage] lender, broker, or servicer but
             701      does not maintain an office in this state, a brief description of the manner in which the


             702      business is conducted;
             703          [(f)] (vi) the name and address in this state of a designated agent upon whom service
             704      of process may be made; and
             705          [(g)] (vii) any other information required by the rules of the [department]
             706      commissioner.
             707          (2) If information in a notification becomes inaccurate after filing, [no further
             708      notification is required until January 31 the following year, unless the department] a person is
             709      not required to notify the commissioner until the earlier of when:
             710          (a) the person is required to renew the person's notification; or
             711          (b) the commissioner specifically requests earlier notification.
             712          Section 19. Section 70D-2-203 , which is renumbered from Section 70D-1-12 is
             713      renumbered and amended to read:
             714           [70D-1-12].     70D-2-203. Fees -- Examination.
             715          (1) (a) [Each] A person required to file notification under this part shall pay to the
             716      commissioner:
             717          (i) a fee of $200 [to the department] with [its] the person's initial notification[,]; and
             718      [shall thereafter pay to the department, on or before January 31 of each year,]
             719          (ii) an annual fee, on or before January 31 of each year, in an amount to be set by rule
             720      of the [department] commissioner subject to Subsection (1)(b).
             721          [(b) The department]
             722          (b) The commissioner:
             723          (i) subject to Subsection (1)(b)(ii), shall set the annual renewal fee at an amount
             724      [which will generate] that generates sufficient revenue to cover the department's costs of
             725      administering this chapter[, but in no event shall the fee exceed]; and
             726          (ii) may not set an annual renewal fee that exceeds $100 per renewal.
             727          (2) (a) If the [department] commissioner has probable cause to believe that a
             728      [mortgage] lender, broker, or servicer has violated [the provisions of] this chapter, the
             729      [department] commissioner may require the lender, broker, or servicer to make [any or all of


             730      its books and records] a record of the lender, broker, or servicer relating to its activities as a
             731      lender, broker, or servicer available to the [department or its] commissioner or the
             732      commissioner's authorized representative for examination[, and to].
             733          (b) A lender, broker, or servicer described in Subsection (2)(a) shall:
             734          (i) reimburse the department for [any] travel and other reasonable and necessary costs
             735      incurred in the examination[,] described in Subsection (2)(a); and
             736          (ii) pay to the [department] commissioner a fee set by the [department] commissioner
             737      based on an hourly rate per each examiner, not to exceed [$320 per day per] $55 per hour for
             738      each examiner.
             739          (3) No portion of [any fees] a fee paid or owed to the [department] commissioner
             740      under this section [are] is refundable because a person voluntarily or involuntarily ceases to do
             741      business as a [mortgage] lender, broker, or servicer:
             742          (a) during the period covered by the fee; or [prior to]
             743          (b) before the time of an examination by the [department of records pertaining to
             744      preceding transactions] commissioner of a record pertaining to a transaction preceding the day
             745      on which the person ceases to do business as a lender, broker, or servicer.
             746          Section 20. Section 70D-2-301 , which is renumbered from Section 70D-1-9 is
             747      renumbered and amended to read:
             748     
Part 3. Operational Requirements

             749           [70D-1-9].     70D-2-301. Record retention.
             750          [Every mortgage] A lender, broker, [and] or servicer shall keep and maintain at all
             751      times in its principal place of business the records of [its] a mortgage loan [transactions]
             752      transaction of the lender, broker, or servicer as required by the rules of the [department]
             753      commissioner.
             754          Section 21. Section 70D-2-302 , which is renumbered from Section 70D-1-5 is
             755      renumbered and amended to read:
             756           [70D-1-5].     70D-2-302. Notice required with loan application.
             757          [Every mortgage] (1) If the following is the case, a lender and [mortgage loan] broker


             758      shall [give, to each] notify in writing a person from whom [it] the lender or broker receives or
             759      for whom [it] the lender or broker prepares a written application for a mortgage loan[, a
             760      written notice disclosing, if such is the case,] that:
             761          (a) the mortgage loan applied for may be sold or assigned[, or];
             762          (b) the servicing of the loan may be sold or assigned[,]; and [that]
             763          (c) the mortgage loan will not necessarily be held or serviced by the lender [which]
             764      that originates [it. The] the mortgage loan.
             765          (2) A lender and broker shall provide a written notice required by this section [shall be
             766      provided] at the time of receipt or preparation of the written application for a mortgage loan.
             767          Section 22. Section 70D-2-303 , which is renumbered from Section 70D-1-7 is
             768      renumbered and amended to read:
             769           [70D-1-7].     70D-2-303. Notice upon closing -- Ongoing duty to notify --
             770      Statements required.
             771          (1) At the time of closing of [any] a mortgage loan [the], a lender shall notify the
             772      mortgagor in writing of:
             773          (a) the name of the initial servicer [which will be servicing] that will service the loan;
             774      and
             775          (b) the address at which a loan [payments] payment should be made.
             776          (2) (a) [In the event](i) If the servicing of a mortgage loan is assigned, the servicer
             777      [which assigned] that assigns the servicing and the successor servicer shall each mail, at least
             778      ten days before the due date of the first mortgage payment due after the assignment, a written
             779      notice to the mortgagor[, at his last known address contained in the assigning servicer's
             780      records,] notifying the mortgagor of:
             781          (A) the assignment of servicing; and [of]
             782          (B) the address at which future loan payments should be made.
             783          (ii) A notice required by this Subsection (2)(a) shall be mailed to the mortgagor's last
             784      known address contained in the assigning servicer's records.
             785          (b) Unless [the] an assigning servicer regularly provides the information in a monthly


             786      [statements to mortgagors] statement to a mortgagor, the notice from the assigning servicer
             787      shall [also] include the following information in addition to the information required by
             788      Subsection (2)(a):
             789          (i) the date and amount of [all] the payments credited to the account within the
             790      previous 12-month period;
             791          (ii) the balance in any escrow [accounts] account held by the servicer; and
             792          (iii) the total unpaid balance of the mortgage loan.
             793          (c) The [servicers] servicer that assigns the servicing and the successor servicer may,
             794      at their option, comply with the requirements of this Subsection (2) by both signing one notice
             795      and [causing it to be mailed] mailing the notice to the mortgagor.
             796          (d) [The signatures on any] A signature on a notice required by this section may be
             797      printed, stamped, or [other] in another facsimile [signatures].
             798          (e) [The] A lender and [any] a subsequent servicer of [the] a mortgage loan shall
             799      comply with [the requirements of] Section 7-17-6 .
             800          (3) (a) [Inadvertent errors in the notices] An inadvertent error in a notice required in
             801      Subsection (2) [shall] may not be construed to waive [any payments which] a payment that
             802      would otherwise be due from [the] a mortgagor.
             803          (b) [No] A late payment penalty may not be assessed against a mortgagor with respect
             804      to a payment [which] that is misdirected because of [errors in the notices]:
             805          (i) an error in a notice required in Subsection (2); or
             806          (ii) a failure to timely mail [the notices] a notice required in Subsection (2).
             807          (4) A lender or servicer [of a mortgage loan] must credit to the mortgagor's account
             808      [any] a payment received as of the [date it was received] day on which the payment is received
             809      or by the next banking day, unless:
             810          (a) the payment is insufficient to pay the principal, interest, late charges, and [the]
             811      reserves then due;
             812          (b) the mortgage loan [has been] is referred to an attorney because of default; or
             813          (c) the payment is received at an address other than the address for payment specified


             814      in writing to the mortgagor.
             815          Section 23. Section 70D-2-304 , which is renumbered from Section 70D-1-8 is
             816      renumbered and amended to read:
             817           [70D-1-8].     70D-2-304. Statement to be provided.
             818          (1) Unless a [mortgage loan] servicer regularly provides the information described in
             819      [Subsections (a), (b), and (c) in monthly statements to mortgagors] this Subsection (1) in a
             820      monthly statement to a mortgagor, the servicer shall deliver to a mortgagor, within 15 days
             821      after receipt of a written request, a statement of the mortgagor's account including the
             822      following information:
             823          (a) the date and amount of [all] the payments credited to the account within the
             824      previous 12-month period;
             825          (b) the balance in any escrow [accounts] account held by the servicer; and
             826          (c) the total unpaid balance of the mortgage loan.
             827          (2) [The] A servicer shall provide the first two statements requested for an account in
             828      [any] a 12-month period [shall be provided] without charge. If more than two statements are
             829      requested for the same account in a 12-month period, the servicer may charge a reasonable fee
             830      for [the] an additional [statements] statement.
             831          Section 24. Section 70D-2-305 , which is renumbered from Section 70D-1-6 is
             832      renumbered and amended to read:
             833           [70D-1-6].     70D-2-305. Fee restrictions.
             834          [No mortgage] A lender or broker may not accept [any] a fee or deposit from an
             835      applicant for a mortgage loan unless at the time the lender or broker accepts the fee or deposit
             836      there is a written statement:
             837          (1) signed by the applicant;
             838          (2) stating whether or not the fee or deposit is refundable; and
             839          (3) describing the conditions, if any, under which all or a portion of the fee or deposit
             840      will be refunded to the applicant.
             841          Section 25. Section 70D-2-401 , which is renumbered from Section 70D-1-20 is


             842      renumbered and amended to read:
             843     
Part 4. Manufactured and Mobile Homes

             844           [70D-1-20].     70D-2-401. Qualification of manufactured home or mobile home as
             845      improvement to real property -- Requirements -- Removal from property.
             846          (1) Except as provided in this section, for purposes of this chapter, a manufactured
             847      home or mobile home [shall be] is considered personal property.
             848          (2) Notwithstanding Subsection (1), for purposes of this chapter, if the requirements of
             849      this section are met, a manufactured home or mobile home [shall be] is:
             850          (a) considered to be an improvement to real property; and
             851          (b) considered as real property.
             852          (3) A manufactured home or mobile home [shall be] is considered to be an
             853      improvement to real property if:
             854          (a) the manufactured home or mobile home is permanently affixed to real property;
             855          (b) the person seeking to have the manufactured home or mobile home considered to
             856      be an improvement to real property:
             857          (i) owns the manufactured home or mobile home; [and]
             858          (ii) (A) owns the real property to which the manufactured home or mobile home is
             859      permanently affixed; or
             860          (B) leases the real property to which the manufactured home or mobile home is
             861      permanently affixed and the real property is financed in accordance with Subsection (4); and
             862          (iii) meets the requirements of Subsections (5) and (6); and
             863          (c) in accordance with Subsection (7), the following are recorded by the county
             864      recorder:
             865          (i) the affidavit of affixture described in Subsection (7); and
             866          (ii) the receipt of surrender described in Subsection (7).
             867          (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home
             868      shall be financed in accordance with the guidelines established by:
             869          (a) the Federal Home Loan Mortgage Corporation;


             870          (b) the Federal National Mortgage Association;
             871          (c) the United States Department of Agriculture; or
             872          (d) another entity that requires as part of the entity's financing program restrictions:
             873          (i) on:
             874          (A) ownership; and
             875          (B) actions affecting title and possession; and
             876          (ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions
             877      imposed by one or more of the entities described in Subsections (4)(a) through (c).
             878          (5) (a) An owner of a manufactured home or mobile home seeking to have the
             879      manufactured home or mobile home considered to be an improvement to real property and
             880      considered real property shall complete an affidavit of affixture.
             881          (b) An affidavit of affixture described in Subsection (5)(a) shall contain:
             882          (i) the vehicle identification numbers of the manufactured home or mobile home;
             883          (ii) the legal description of the real property to which the manufactured home or
             884      mobile home is permanently affixed;
             885          (iii) a statement certified by the assessor of the county in which the manufactured
             886      home or mobile home is located that the owner of the manufactured home or mobile home:
             887          (A) is not required to pay personal property tax in this state on the manufactured home
             888      or mobile home; or
             889          (B) if the manufactured home or mobile home is subject to personal property tax in
             890      this state, has paid all current and prior year personal property taxes assessed on the
             891      manufactured home or mobile home;
             892          (iv) a description of any security interests in the manufactured home or mobile home;
             893      and
             894          (v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax
             895      Commission in accordance with Subsection (6).
             896          (6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt
             897      of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to


             898      the Motor Vehicle Division the:
             899          (i) manufacturer's original certificate of origin; or
             900          (ii) title to the manufactured home or mobile home.
             901          (b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle
             902      Division shall maintain a permanent record of:
             903          (i) the receipt of surrender; and
             904          (ii) the certificate or title described in Subsection (6)(a)(ii).
             905          (7) (a) An owner shall present to the county recorder:
             906          (i) the affidavit of affixture described in Subsection (5); and
             907          (ii) the receipt of surrender described in Subsection (6).
             908          (b) A county recorder who receives an affidavit of affixture and receipt of surrender
             909      described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
             910          (c) An owner of property described in Subsection (5) shall provide a copy of the
             911      recorded affidavit of affixture to:
             912          (i) the Motor Vehicle Division of the Tax Commission; and
             913          (ii) the assessor of the county in which the manufactured home or mobile home is
             914      located.
             915          (8) A lien on the manufactured home or mobile home that is considered to be an
             916      improvement to real property shall be perfected in the manner provided for the perfection of a
             917      lien on real property.
             918          (9) If a manufactured home or mobile home owner separates the manufactured home
             919      or mobile home from the real property, the owner may acquire a new title by submitting to the
             920      Motor Vehicle Division of the State Tax Commission:
             921          (a) a recorded affidavit that the manufactured home or mobile home [has been] is
             922      removed from the real property; and
             923          (b) an application for a new title.
             924          (10) The determination of whether a manufactured home or mobile home is
             925      considered real property or personal property under this section may not be considered in


             926      determining whether the manufactured home or mobile home is real property or personal
             927      property for purposes of taxation under Title 59, Chapter 2, Property Tax Act.
             928          Section 26. Section 70D-2-501 , which is renumbered from Section 70D-1-13 is
             929      renumbered and amended to read:
             930     
Part 5. Remedies and Enforcement

             931           [70D-1-13].     70D-2-501. Civil liability -- Misdemeanor.
             932          (1) (a) A [mortgage] lender, broker, or servicer who violates [any of the provisions of]
             933      this chapter is liable to [any] an injured party for actual damages.
             934          (b) In [any] an action filed to determine the liability of a [mortgage] lender, broker, or
             935      servicer for damages under [the provisions of] this chapter, the prevailing party is entitled to
             936      court costs and [attorney's] attorney fees.
             937          (2) [Any] A person who wilfully violates [any of the provisions of] this chapter is
             938      guilty of a class A misdemeanor.
             939          Section 27. Section 70D-2-502 , which is renumbered from Section 70D-1-14 is
             940      renumbered and amended to read:
             941           [70D-1-14].     70D-2-502. Enforcement -- Rulemaking -- Federal law.
             942          [(1) The department has the power, within the limitations provided by]
             943          (1) The commissioner may:
             944          (a) in accordance with Title 63G, Chapter 4, Administrative Procedures Act[, to]:
             945          [(a)] (i) receive and act on [complaints] a complaint;
             946          (ii) take action designed to obtain voluntary compliance with this chapter; or
             947          (iii) commence [proceedings on its] a proceeding on the commissioner's own initiative
             948      to enforce compliance with this chapter;
             949          (b) counsel [persons and groups on their] a person or group on the person's or group's
             950      rights and duties under this chapter;
             951          (c) [adopt, amend, and repeal] make rules in accordance with Title 63G, Chapter 3,
             952      Utah Administrative Rulemaking Act, to:
             953          (i) restrict or prohibit a lending or servicing [practices which are] practice that is


             954      misleading, unfair, or abusive;
             955          (ii) promote or assure fair and full disclosure of the terms and conditions of
             956      [agreements and communications between mortgage lenders or servicers and borrowers; or] an
             957      agreement or communication between:
             958          (A) a lender or servicer; and
             959          (B) a borrower; or
             960          (iii) promote or assure uniform application of or to resolve ambiguities in applicable
             961      state or federal laws or federal regulations; and
             962          (d) employ hearing examiners, clerks, and other employees and agents as necessary to
             963      perform [its] the commissioner's duties under this chapter.
             964          [(2) A rule or any part of a rule adopted by the department pursuant to this chapter
             965      may not be determined by any judicial or other authority to be invalid in whole or in part
             966      unless the judicial or other authority expressly finds that the rule or a part of it:]
             967          [(a) is arbitrary, capricious, constitutes an abuse of discretion;]
             968          [(b) exceeds the authority granted to the department by this chapter; or]
             969          [(c) is otherwise unlawful.]
             970          [(3)] (2) (a) A person subject to this chapter violates this chapter if the person violates
             971      a federal law:
             972          (i) that is applicable to the person because of the activities that make the person
             973      subject to this chapter; and
             974          (ii) pursuant to the terms of the federal law in effect on the day the person violates the
             975      federal law.
             976          (b) The [department] commissioner shall by rule, made in accordance with Title 63G,
             977      Chapter 3, Utah Administrative Rulemaking Act, and consistent with this chapter, designate
             978      which one or more federal laws are applicable to a person described in Subsection [(3)] (2)(a).
             979          (c) (i) Notwithstanding the other provisions of this chapter, only the [department]
             980      commissioner may enforce or bring an action under this chapter for a violation described in
             981      this Subsection [(3)] (2).


             982          (ii) The [department] commissioner may bring an action under this Subsection [(3)]
             983      (2) in state court.
             984          Section 28. Section 70D-2-503 , which is renumbered from Section 70D-1-15 is
             985      renumbered and amended to read:
             986           [70D-1-15].     70D-2-503. Investigation.
             987          (1) (a) If the [department] commissioner has probable cause to believe that a
             988      [mortgage] lender, broker, or servicer has violated [any] a law, rule, or [regulations] federal
             989      regulation relating to its business or [any] an obligation to a mortgagor, [it] the commissioner
             990      may [make an investigation] investigate to determine if a violation has been committed.
             991          (b) To the extent necessary for [this purpose, the department may administer oaths or
             992      affirmations] an investigation under this section, the commissioner may:
             993          (i) administer an oath or affirmation under penalty of perjury[,]; and[,]
             994          (ii) upon [its] the commissioner's own motion or upon request of any person[, may]:
             995          (A) subpoena [witnesses,] a witness;
             996          (B) compel [their] the attendance[,] of a witness;
             997          (C) adduce evidence under penalty of perjury[,]; and
             998          (D) require the production of [any] a matter [which] that is relevant to the
             999      investigation, including:
             1000          (I) the existence, description, nature, custody, condition, and location of [any books,
             1001      documents, or other tangible things] a record or other tangible thing of any kind or nature; and
             1002          (II) the identity and location of [persons] a person having knowledge of a relevant
             1003      [facts] fact, or any other matter reasonably calculated to lead to the discovery of admissible
             1004      evidence.
             1005          (2) (a) If the [department] commissioner requires a person to produce [records which
             1006      are] a record that is located outside this state, the person shall [either]:
             1007          (i) make [them] the record available to the [department] commissioner at a convenient
             1008      location within this state; or
             1009          (ii) pay the reasonable and necessary expenses for the department to examine [them]


             1010      the record at the place where [they are] the record is maintained.
             1011          (b) The [department] commissioner may designate one or more representatives,
             1012      including [officials] an official of the state in which [the records are] a record is located, to
             1013      inspect [them] the record on [its] behalf of the commissioner.
             1014          (3) Upon failure without lawful excuse to obey a subpoena or give testimony, and
             1015      upon reasonable notice to [all] affected persons, the [department] commissioner may apply to
             1016      the Third District Court or to any other district court for an order compelling compliance.
             1017          (4) Unless otherwise required by law, the [department] commissioner may not make
             1018      public:
             1019          (a) the name or identity of a person whose acts or conduct [it] the commissioner
             1020      investigates pursuant to this section; or
             1021          (b) the facts disclosed in the investigation.
             1022          (5) Subsection (4) does not apply to [disclosures] a disclosure in an enforcement
             1023      [proceedings] proceeding conducted pursuant to this chapter.
             1024          Section 29. Section 70D-2-504 , which is renumbered from Section 70D-1-16 is
             1025      renumbered and amended to read:
             1026           [70D-1-16].     70D-2-504. Orders.
             1027          (1) If the [department] commissioner determines that [any] a person engaging in
             1028      business as a [mortgage] lender, broker, or servicer is violating, has violated, or the
             1029      [department] commissioner has reasonable cause to believe is about to violate [any provision
             1030      of] this chapter or [any] a rule of the [department] commissioner made under this chapter, the
             1031      [department] commissioner may:
             1032          (a) order the person to cease and desist from committing [any further violations,] a
             1033      further violation; and
             1034          (b) in the most serious instances may prohibit the person from continuing to engage in
             1035      business as a [mortgage] lender, broker, or servicer.
             1036          [(2) The department shall afford an opportunity for hearing upon request of any person
             1037      alleged to have violated this chapter if the request is filed with the department within 30 days


             1038      after the person requesting the hearing first receives notice of the allegations.]
             1039          [(3)] (2) (a) If the [department] commissioner determines that a practice [which it has
             1040      alleged] that the commissioner alleges is unlawful should be enjoined during the pendency of
             1041      [any proceedings] a proceeding incident to [that] an allegation, [it] the commissioner may
             1042      issue a temporary order in accordance with Section 63G-4-502 :
             1043          (i) at the commencement of the proceedings; or [at any time thereafter which is fully
             1044      binding on the person to whom the temporary order is directed until the proceedings are
             1045      concluded or the temporary order is modified or dissolved by the department.]
             1046          [(b) Any person to whom a temporary order is directed may request a hearing
             1047      concerning the order, which shall be held at the earliest mutually convenient time, but in no
             1048      event more that ten days after the person's request is received by the department unless the
             1049      department and the person requesting the hearing mutually agree to a later time.]
             1050          [(c) Every temporary order shall include findings and conclusions in support of it.]
             1051          (ii) at any time after the proceeding commences.
             1052          [(d)] (b) For purposes of Section 63G-4-502 , an immediate and significant danger to
             1053      the public health, safety, or welfare exists if the [department] commissioner finds from
             1054      specific facts supported by sworn statement or the records of a person subject to the order that
             1055      loan applicants or mortgagors are otherwise likely to suffer immediate and irreparable injury,
             1056      loss, or damage before [proceedings] a proceeding incident to a final order can be completed.
             1057          [(4)] (3) The [department] commissioner may not award damages or penalties under
             1058      this chapter against a [mortgage] lender, broker, or servicer.
             1059          [(5)] (4) (a) [Any] An order issued by the [department] commissioner under [authority
             1060      of] this chapter shall:
             1061          (i) be in writing[,];
             1062          (ii) be delivered to or served upon the person affected[,]; and
             1063          (iii) specify [its] the order's effective date, which may be immediate or at a later date.
             1064          (b) [Orders shall remain] An order remains in effect until:
             1065          (i) withdrawn by the [department] commissioner; or [until]


             1066          (ii) terminated by a court order. [The]
             1067          (c) An order of the [department] commissioner, upon application made on or after [its]
             1068      the order's effective date to the Third District Court, or in any other district court, may be
             1069      enforced ex parte and without notice by an order to comply entered by the court.
             1070          Section 30. Section 70D-2-505 , which is renumbered from Section 70D-1-17 is
             1071      renumbered and amended to read:
             1072           [70D-1-17].     70D-2-505. Relief from order.
             1073          [Any] A person aggrieved by [any] a rule, order, temporary order, decision, ruling, or
             1074      other act or failure to act by the [department] commissioner under this chapter is entitled to
             1075      judicial review as provided under Title 63G, Chapter 4, Administrative Procedures Act.
             1076          Section 31. Section 70D-2-506 , which is renumbered from Section 70D-1-18 is
             1077      renumbered and amended to read:
             1078           [70D-1-18].     70D-2-506. Civil liability.
             1079          Nothing in this chapter [is intended to limit] limits any civil liability [which] that may
             1080      exist against a [mortgage] lender, broker, or servicer for breach of contract or other [wrongs]
             1081      wrong committed against a mortgagor.
             1082          Section 32. Section 70D-3-101 is enacted to read:
             1083     
CHAPTER 3. FINANCIAL INSTITUTION LOAN ORIGINATOR LICENSING     ACT

             1084     
Part 1. General Provisions

             1085          70D-3-101. Title.
             1086          This chapter is known as the "Financial Institution Loan Originator Licensing Act."
             1087          Section 33. Section 70D-3-102 is enacted to read:
             1088          70D-3-102. Definitions.
             1089          As used in this chapter:
             1090          (1) "Administrative or clerical tasks" means:
             1091          (a) the receipt, collection, and distribution of information common for the process or
             1092      underwriting of a loan in the mortgage industry; and
             1093          (b) a communication with a consumer to obtain information necessary for the


             1094      processing or underwriting of a residential mortgage loan.
             1095          (2) "Affiliate" shall be defined by the commissioner by rule made in accordance with
             1096      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             1097          (3) "Applicant" means an individual applying for a license under this chapter.
             1098          (4) "Approved examination provider" means a person approved by the nationwide
             1099      database as an approved test provider.
             1100          (5) "Business as a loan originator" means for compensation or in the expectation of
             1101      compensation to engage in an act that makes an individual a loan originator.
             1102          (6) "Clerical or support duties" includes after the receipt of an application for a
             1103      residential mortgage loan:
             1104          (a) the receipt, collection, distribution, and analysis of information common for the
             1105      processing or underwriting of a residential mortgage loan; and
             1106          (b) communicating with a consumer to obtain the information necessary for the
             1107      processing or underwriting of the residential mortgage loan, to the extent that the
             1108      communication does not include:
             1109          (i) offering or negotiating a residential mortgage loan rate or term; or
             1110          (ii) counseling a consumer about a residential mortgage loan rate or term.
             1111          (7) "Compensation" means anything of economic value that is paid, loaned, granted,
             1112      given, donated, or transferred to an individual or entity for or in consideration of:
             1113          (a) services;
             1114          (b) personal or real property; or
             1115          (c) another thing of value.
             1116          (8) "Continuing education" means education taken by an individual licensed under
             1117      this chapter in order to meet the education requirements imposed by Section 70D-3-303 to
             1118      renew a license under this chapter.
             1119          (9) "Covered subsidiary" means a subsidiary that is:
             1120          (a) owned and controlled by a depository institution; and
             1121          (b) regulated by a federal banking agency.


             1122          (10) "Federal banking agency" means:
             1123          (a) the Board of Governors of the Federal Reserve System;
             1124          (b) the Comptroller of the Currency;
             1125          (c) the Director of the Office of Thrift Supervision;
             1126          (d) the National Credit Union Administration; or
             1127          (e) the Federal Deposit Insurance Corporation.
             1128          (11) "Licensee" means an individual licensed under this chapter.
             1129          (12) (a) Except as provided in Subsection (12)(b), "loan originator" means an
             1130      individual who for compensation or in the expectation of compensation:
             1131          (i) takes a residential mortgage loan application; or
             1132          (ii) offers or negotiates a term of a residential mortgage loan.
             1133          (b) "Loan originator" does not include:
             1134          (i) an individual who is engaged solely as a loan processor or underwriter;
             1135          (ii) unless compensated by a lender, broker, other loan originator, or an agent of a
             1136      lender, broker, or other loan originator, a person who:
             1137          (A) only performs real estate brokerage activities; and
             1138          (B) is licensed under Title 61, Chapter 2, Division of Real Estate;
             1139          (iii) a person who is solely involved in extension of credit relating to a timeshare plan,
             1140      as defined in 11 U.S.C. Sec. 101(53D); or
             1141          (iv) an attorney licensed to practice law in this state who, in the course of the
             1142      attorney's practice as an attorney, assists a person in obtaining a residential mortgage loan.
             1143          (13) "Loan processor or underwriter" means an individual who as an employee
             1144      performs clerical or support duties:
             1145          (a) at the direction of and subject to the supervision and instruction of:
             1146          (i) a licensee; or
             1147          (ii) a registered loan originator; and
             1148          (b) as an employee of:
             1149          (i) the licensee; or


             1150          (ii) a registered loan originator.
             1151          (14) "Nationwide database" means the Nationwide Mortgage Licensing System and
             1152      Registry, authorized under Secure and Fair Enforcement for Mortgage Licensing, 12 U.S.C.
             1153      Sec. 5101, et seq.
             1154          (15) "Nontraditional mortgage product" means a mortgage product other than a
             1155      30-year fixed rate mortgage.
             1156          (16) "Owned and controlled by a depository institution" may be defined by rule made
             1157      by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
             1158      Rulemaking Act.
             1159          (17) "Prelicensing education" means education taken by an individual seeking to be
             1160      licensed under this chapter in order to meet the education requirements imposed by Section
             1161      70D-3-301 for an individual to obtain a license under this chapter.
             1162          (18) "Registered loan originator" means an individual who:
             1163          (a) engages in an act as a loan originator only as an employee of:
             1164          (i) a depository institution;
             1165          (ii) a covered subsidiary; or
             1166          (iii) an institution regulated by the Farm Credit Administration; and
             1167          (b) is registered with, and maintains a unique identifier through, the nationwide
             1168      database.
             1169          (19) (a) Subject to Subsection (19)(b), "residential mortgage loan" means:
             1170          (i) a mortgage loan; or
             1171          (ii) a loan that is:
             1172          (A) secured by a mortgage; and
             1173          (B) subject to Title 70C, Utah Consumer Credit Code.
             1174          (b) A loan described in Subsection (19)(a) is a "residential mortgage loan" only if the
             1175      mortgage securing the loan is on:
             1176          (i) a dwelling located in the state; or
             1177          (ii) real property located in the state, upon which is constructed or intended to be


             1178      constructed a dwelling.
             1179          (20) "Unique identifier" is as defined in 12 U.S.C. Sec. 5102.
             1180          Section 34. Section 70D-3-103 is enacted to read:
             1181          70D-3-103. General powers and duties of commissioner.
             1182          Subject to this chapter:
             1183          (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1184      the commissioner may make rules authorized by this chapter, including:
             1185          (a) providing for an interim procedure for:
             1186          (i) licensing; and
             1187          (ii) acceptance of an application; and
             1188          (b) coordination between filings required under this chapter and:
             1189          (i) Title 70C, Utah Consumer Credit Code; or
             1190          (ii) Chapter 2, Mortgage Lending and Servicing Act.
             1191          (2) The commissioner may enter into a relationship or contract with the nationwide
             1192      database or another entity designated by the nationwide database to do the following related to
             1193      a licensee or other person subject to this chapter:
             1194          (a) collect or maintain a record; and
             1195          (b) process a transaction fee or other fee.
             1196          (3) The commissioner shall regularly report the following to the nationwide database:
             1197          (a) a violation of this chapter;
             1198          (b) disciplinary action under Section 70D-3-501 ; and
             1199          (c) other information relevant to this chapter.
             1200          Section 35. Section 70D-3-201 is enacted to read:
             1201     
Part 2. Licensing Requirements and Procedures

             1202          70D-3-201. Licensing required -- Exemptions.
             1203          (1) (a) On or after January 1, 2011, except as provided in Subsection (2), an individual
             1204      described in Subsection (1)(b) may not engage in the business of a loan originator unless that
             1205      individual:


             1206          (i) is licensed under this chapter; or
             1207          (ii) is a registered loan originator.
             1208          (b) This Subsection (1) applies to an employee or agent of:
             1209          (i) a depository institution;
             1210          (ii) a subsidiary of a depository institution; or
             1211          (iii) an affiliate of a depository institution.
             1212          (2) An individual described in Subsection (1)(b) may engage in the business of a loan
             1213      originator without being licensed under this chapter or a registered loan originator when acting
             1214      as a loan processor or underwriter.
             1215          Section 36. Section 70D-3-202 is enacted to read:
             1216          70D-3-202. Qualifications for licensure.
             1217          To qualify for a license under this chapter an individual shall comply with all of the
             1218      following, the individual:
             1219          (1) shall comply with 12 U.S.C. Sec. 5104 to register with and maintain a unique
             1220      identifier through the nationwide database;
             1221          (2) may not have had a loan originator license revoked in a governmental jurisdiction;
             1222          (3) may not have been convicted of, or pled guilty or no contest to, a felony:
             1223          (a) during the seven years preceding the day on which the individual files an
             1224      application; or
             1225          (b) at any time, if the felony involves an act of:
             1226          (i) fraud;
             1227          (ii) dishonesty;
             1228          (iii) breach of trust; or
             1229          (iv) money laundering;
             1230          (4) shall demonstrate financial responsibility, character, and general fitness such as to:
             1231          (a) command the confidence of the community; and
             1232          (b) warrant a determination that the individual will operate as a loan originator
             1233      honestly, fairly, and efficiently within the purposes of this chapter;


             1234          (5) shall be covered by a surety bond posted in accordance with Section 70D-3-205 ;
             1235          (6) shall complete the prelicensing education required by Section 70D-3-301 ; and
             1236          (7) shall pass the written examination required by Section 70D-3-302 .
             1237          Section 37. Section 70D-3-203 is enacted to read:
             1238          70D-3-203. Initial licensure procedure.
             1239          (1) To apply for licensure under this chapter an individual shall:
             1240          (a) file an application with the commissioner in a form prescribed by the
             1241      commissioner in rule;
             1242          (b) demonstrate that the individual provided the information to the nationwide
             1243      database required by 12 U.S.C. Sec. 5104;
             1244          (c) provide the commissioner the individual's unique identifier;
             1245          (d) consent to the commissioner receiving information obtained by the nationwide
             1246      database under 12 U.S.C. Sec. 5104, including the results of a criminal history background
             1247      check; and
             1248          (e) notwithstanding the requirements applicable to a regulatory fee under Section
             1249      63J-1-303 , pay a fee of $200.
             1250          (2) The commissioner shall grant an individual a license if the commissioner finds that
             1251      the individual complies with:
             1252          (a) Subsection (1); and
             1253          (b) the qualifications for a license under Section 70D-3-202 .
             1254          (3) Subject to this chapter, the commissioner may make rules in accordance with Title
             1255      63G, Chapter 3, Utah Administrative Rulemaking Act, concerning:
             1256          (a) the form of an application under this chapter;
             1257          (b) the content of an application under this chapter; and
             1258          (c) the procedures for filing an application under this chapter.
             1259          Section 38. Section 70D-3-204 is enacted to read:
             1260          70D-3-204. Renewal of license.
             1261          (1) A license issued under this chapter expires on December 31 of each year.


             1262          (2) To qualify to renew a license under this chapter an individual shall:
             1263          (a) meet the requirements of Section 70D-3-202 ; and
             1264          (b) complete the annual continuing education requirements of Section 70D-3-303 .
             1265          (3) To renew a license under this chapter an individual shall:
             1266          (a) file an application with the commissioner in a form prescribed by the
             1267      commissioner in rule;
             1268          (b) demonstrate that the individual continues to meet the requirements related to the
             1269      nationwide database under 12 U.S.C. Sec. 5104;
             1270          (c) demonstrate completion of the continuing education requirements; and
             1271          (d) notwithstanding the requirements applicable to a regulatory fee under Section
             1272      63J-1-303 , pay a fee of $100.
             1273          Section 39. Section 70D-3-205 is enacted to read:
             1274          70D-3-205. Surety bond requirements.
             1275          (1) (a) To be licensed under this chapter an individual shall be covered by a surety
             1276      bond that meets the minimum surety bonding requirements required by rule.
             1277          (b) If an action is brought against a bond under this chapter, the commissioner may
             1278      require that another bond be posted.
             1279          (2) The commissioner shall by rule made in accordance with Title 63G, Chapter 3,
             1280      Utah Administrative Rulemaking Act, establish minimum surety bonding requirements under
             1281      this section, except that the requirements shall:
             1282          (a) reflect the dollar amount of residential mortgage loans originated by a loan
             1283      originator; and
             1284          (b) ensure that if in accordance with this chapter a surety bond is posted by an
             1285      employer or other entity on behalf of an individual, the bond covers the activities of the
             1286      individual regulated by this chapter.
             1287          Section 40. Section 70D-3-206 is enacted to read:
             1288          70D-3-206. Challenging information in the nationwide database.
             1289          The commissioner shall by rule made in accordance with Title 63G, Chapter 3, Utah


             1290      Administrative Rulemaking Act, provide a process under which an individual may challenge
             1291      information contained in the nationwide database.
             1292          Section 41. Section 70D-3-301 is enacted to read:
             1293     
Part 3. Education Requirements

             1294          70D-3-301. Prelicensing education.
             1295          (1) Before an individual may be licensed under this chapter, the individual shall
             1296      complete the number of hours of prelicensing education required by rule made by the
             1297      commissioner.
             1298          (2) (a) The commissioner shall make the rules described in Subsection (1):
             1299          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             1300      and
             1301          (ii) subject to the requirements of this Subsection (2).
             1302          (b) The rules described in Subsection (1) shall require that an individual complete:
             1303          (i) at least 20 hours of prelicensing education approved by the nationwide database;
             1304      and
             1305          (ii) as part of the 20 hours required by Subsection (2)(b)(i):
             1306          (A) 3 hours of federal law and regulations;
             1307          (B) 3 hours of ethics that include instruction on:
             1308          (I) fraud;
             1309          (II) consumer protection; and
             1310          (III) fair lending issues; and
             1311          (C) 2 hours of training related to lending standards for the nontraditional mortgage
             1312      product marketplace.
             1313          Section 42. Section 70D-3-302 is enacted to read:
             1314          70D-3-302. Examination.
             1315          (1) Before an individual may be licensed under this chapter, the individual shall pass a
             1316      written examination that:
             1317          (a) meets the requirements of 12 U.S.C. Sec. 5104(d);


             1318          (b) is developed by the nationwide database; and
             1319          (c) is administered by an approved examination provider.
             1320          (2) The commissioner shall make rules made in accordance with Title 63G, Chapter 3,
             1321      Utah Administrative Rulemaking Act, that:
             1322          (a) require that an individual comply at a minimum with the standards of 12 U.S.C.
             1323      Sec. 5104(d); and
             1324          (b) address:
             1325          (i) what constitutes passing a written examination;
             1326          (ii) the ability of an individual to retake a written examination if the individual fails
             1327      the written examination; and
             1328          (iii) when an individual is required to retake a written examination if an individual
             1329      fails to maintain a valid license under this chapter after taking the written examination.
             1330          Section 43. Section 70D-3-303 is enacted to read:
             1331          70D-3-303. Continuing education.
             1332          (1) A licensee shall annually complete at least the number of hours of continuing
             1333      education required by rule made by the commissioner.
             1334          (2) (a) The commissioner shall make the rules described in Subsection (1):
             1335          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             1336      and
             1337          (ii) subject to the requirements of this Subsection (2).
             1338          (b) The rules described in Subsection (1) shall require that an individual complete
             1339      each calendar year:
             1340          (i) eight hours of continuing education approved by the nationwide database;
             1341          (ii) as part of the eight hours required by Subsection (2)(b)(i):
             1342          (A) three hours of federal law and regulations; and
             1343          (B) two hours of ethics that include instruction on:
             1344          (I) fraud;
             1345          (II) consumer protection; and


             1346          (III) fair lending issues; and
             1347          (iii) two hours of training related to lending standards for the nontraditional mortgage
             1348      product marketplace.
             1349          (3) The commissioner shall by rule made in accordance with Title 63G, Chapter 3,
             1350      Utah Administrative Rulemaking Act, provide for the calculation of continuing education
             1351      hours, except that the rules shall be consistent with 12 U.S.C. Sec. 5105.
             1352          Section 44. Section 70D-3-401 is enacted to read:
             1353     
Part 4. Operational Requirements and Prohibitions

             1354          70D-3-401. Record requirements -- Reports of condition.
             1355          (1) An individual required to be licensed under this chapter shall create a record
             1356      required by rule made by the commissioner in accordance with Title 63G, Chapter 3, Utah
             1357      Administrative Rulemaking Act.
             1358          (2) An individual required to be licensed under this chapter shall maintain and
             1359      produce for inspection a record required to be maintained by a rule made by the commissioner
             1360      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for four years
             1361      from the last to occur of the following:
             1362          (a) the final entry on a residential mortgage loan is made by that licensee;
             1363          (b) if the residential mortgage loan is serviced by the licensee:
             1364          (i) the residential mortgage loan is paid in full; or
             1365          (ii) the licensee ceases to service the residential mortgage loan; or
             1366          (c) if the residential mortgage loan is not serviced by the licensee, the residential
             1367      mortgage loan is closed.
             1368          (3) An individual required to be licensed under this chapter shall maintain and
             1369      produce for inspection by the commissioner a report of condition submitted to the nationwide
             1370      database as required by 12 U.S.C. Sec. 5104(e) for at least four years from the day on which
             1371      the individual submits the report of condition to the nationwide database.
             1372          Section 45. Section 70D-3-402 is enacted to read:
             1373          70D-3-402. Prohibited acts.


             1374          (1) An individual transacting the business of a loan originator in this state may not:
             1375          (a) violate or not comply with:
             1376          (i) this chapter;
             1377          (ii) an order of the commissioner under this chapter;
             1378          (iii) a rule made by the commissioner under this chapter;
             1379          (iv) Title 70C, Utah Consumer Credit Code, if subject to that title; or
             1380          (v) Chapter 2, Mortgage Lending and Servicing Act, if subject to that chapter;
             1381          (b) engage in an act that is performed to:
             1382          (i) evade this chapter; or
             1383          (ii) assist another person to evade this chapter;
             1384          (c) do any of the following to induce a lender to extend credit as part of a residential
             1385      mortgage loan transaction:
             1386          (i) make a false statement or representation;
             1387          (ii) cause a false document to be generated; or
             1388          (iii) knowingly permit false information to be submitted by a person in a transaction;
             1389          (d) fail to respond within the required time period to:
             1390          (i) a notice or complaint of the commissioner; or
             1391          (ii) a request for information from the commissioner;
             1392          (e) make a false representation to the commissioner, including in a licensure
             1393      application;
             1394          (f) engage in the business of a loan originator with respect to a residential mortgage
             1395      loan transaction if the individual also acts in any of the following capacities with respect to the
             1396      same residential mortgage loan transaction:
             1397          (i) appraiser;
             1398          (ii) escrow agent;
             1399          (iii) real estate agent;
             1400          (iv) general contractor; or
             1401          (v) title insurance agent;


             1402          (g) engage in an act or omission in transacting the business of a loan originator that
             1403      constitutes dishonesty, fraud, or misrepresentation;
             1404          (h) engage in false or misleading advertising;
             1405          (i) (i) fail to account for monies received in connection with a residential mortgage
             1406      loan;
             1407          (ii) use monies for a different purpose than the purpose for which the monies are
             1408      received; or
             1409          (iii) subject to Subsection (3), retain monies paid for services if the services are not
             1410      performed;
             1411          (j) fail, within 90 calendar days of a request from a borrower who has paid for an
             1412      appraisal, to give a copy of an appraisal ordered and used for a residential mortgage loan to the
             1413      borrower;
             1414          (k) recommend or encourage default, delinquency, or continuation of an existing
             1415      default or delinquency, by a mortgage applicant on an existing indebtedness before the closing
             1416      of a residential mortgage loan that will refinance all or part of the indebtedness; or
             1417          (l) pay or offer to pay an individual who does not hold a license under this chapter for
             1418      services that require the individual to hold a license under this chapter.
             1419          (2) (a) An individual engaging solely in loan processor or underwriter activities, may
             1420      not represent to the public that the individual can or will perform any act of a loan originator.
             1421          (b) A representation prohibited under this Subsection (2) includes an advertisement or
             1422      other means of communicating or providing information including the use of:
             1423          (i) a business card;
             1424          (ii) stationery;
             1425          (iii) a brochure;
             1426          (iv) a sign;
             1427          (v) a rate list; or
             1428          (vi) another promotional item.
             1429          (3) Notwithstanding Subsection (1)(i)(iii), if a licensee complies with Section


             1430      70D-2-305 , the licensee may charge a reasonable cancellation fee for services completed to
             1431      originate a residential mortgage loan if the residential mortgage loan is not closed.
             1432          Section 46. Section 70D-3-501 is enacted to read:
             1433     
Part 5. Enforcement

             1434          70D-3-501. Disciplinary action.
             1435          (1) The commissioner may through an adjudicative proceeding subject to Title 63G,
             1436      Chapter 4, Administrative Procedures Act, impose a sanction described in Subsection (2)
             1437      against an individual if the individual:
             1438          (a) is licensed or required to be licensed under this chapter; and
             1439          (b) violates this chapter.
             1440          (2) The commissioner may against an individual described in Subsection (1) who
             1441      violates this chapter:
             1442          (a) impose an educational requirement;
             1443          (b) impose a civil penalty against the individual in an amount not to exceed the greater
             1444      of:
             1445          (i) $2,500 for each violation; or
             1446          (ii) the amount equal to any gain or economic benefit derived from each violation;
             1447          (c) deny an application for an initial license;
             1448          (d) do any of the following to a license under this chapter:
             1449          (i) suspend;
             1450          (ii) revoke;
             1451          (iii) place on probation;
             1452          (iv) deny renewal;
             1453          (v) deny reinstatement;
             1454          (vi) in the case of a denial of a license, set a waiting period for an individual to apply
             1455      for a license under this chapter; or
             1456          (vii) issue a cease and desist order; or
             1457          (e) impose a combination of sanctions described in this Subsection (2).


             1458          (3) (a) If the commissioner determines that a practice that the commissioner alleges is
             1459      unlawful should be enjoined during the pendency of a proceeding incident to an allegation, the
             1460      commissioner may issue a temporary order in accordance with Section 63G-4-502 :
             1461          (i) at the commencement of the proceedings; or
             1462          (ii) at any time after the proceeding commences.
             1463          (b) For purposes of Section 63G-4-502 , an immediate and significant danger to the
             1464      public health, safety, or welfare exists if the commissioner finds from specific facts supported
             1465      by sworn statement or the records of a person subject to the order that loan applicants or
             1466      mortgagors are otherwise likely to suffer immediate and irreparable injury, loss, or damage
             1467      before a proceeding incident to a final order can be completed.
             1468          Section 47. Section 70D-3-502 is enacted to read:
             1469          70D-3-502. Investigations.
             1470          (1) The commissioner may investigate the actions of:
             1471          (a) a licensee; or
             1472          (b) an individual required to be licensed under this chapter.
             1473          (2) In conducting an investigation or adjudicative proceeding, the commissioner may:
             1474          (a) administer an oath or affirmation under penalty of perjury;
             1475          (b) subpoena a witness;
             1476          (c) compel the attendance of a witness;
             1477          (d) take evidence;
             1478          (e) require the production of a record or information relevant to an investigation from
             1479      any person including:
             1480          (i) the existence, description, nature, custody, condition, and location of a record or
             1481      other tangible thing of any kind or nature; and
             1482          (ii) the identity and location of a person having knowledge of a relevant fact or any
             1483      other matter reasonably calculated to lead to the discovery of admissible evidence; and
             1484          (f) serve a subpoena.
             1485          (3) A failure to respond to a request by the commissioner in an investigation


             1486      authorized under this chapter is considered as a separate violation of this chapter, including:
             1487          (a) failing to respond to a subpoena;
             1488          (b) withholding evidence; or
             1489          (c) failing to produce a record or other information.
             1490          (4) In conducting an investigation, the commissioner may inspect and copy a record
             1491      related to the business of a loan originator, regardless of whether the record is maintained at a
             1492      business location in Utah.
             1493          (5) Regardless of whether the commissioner takes action pursuant to an investigation
             1494      under this chapter, an individual investigated under this section shall pay to the commissioner
             1495      the amounts that would be assessed to a financial institution for an examination under
             1496      Subsection 7-1-401 (7) including:
             1497          (a) a per diem assessment at the rate calculated under Subsection 7-1-401 (7); and
             1498          (b) if the investigation requires one or more representatives of the commissioner to
             1499      travel out of state, the reasonable travel, lodging, and other expenses incurred by each
             1500      representative while conducting the investigation.
             1501          Section 48. Repealer.
             1502          This bill repeals:
             1503          Section 70D-1-1, Intent statement.


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