Assigned to FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
FACT SHEET FOR S.B. 1204
mortgage brokers; bankers; qualifications
Purpose
Allows an employee of an affiliated entity or parent company to be the designated
responsible individual for a commercial mortgage banker licensee or a mortgage broker or
commercial mortgage broker licensee and removes the state residency requirement for designated
responsible individuals.
Background
A person who brokers only commercial mortgage loans must obtain either a mortgage
broker license or a commercial mortgage broker license. A person who brokers residential
mortgage loans must obtain a mortgage broker license. Current statute prohibits the Deputy
Director of the Department of Insurance and Financial Institutions from granting a mortgage
broker or commercial mortgage broker license to a person, other than a natural person, who is not
registered to do business in Arizona.
A mortgage broker or commercial mortgage broker licensee who is a natural person and
not a resident of Arizona must designate one employee, who is not an independent contractor, as
the individual responsible for the licensee. A responsible individual must be a resident of Arizona,
in active management of the licensee's activities and meet statutory mortgage broker or commercial
mortgage broker licensee qualifications (A.R.S. § 6-903).
A commercial mortgage banker licensee must designate one officer, director, member,
partner, employee or trustee as the individual responsible for the licensee. A responsible individual
for a commercial mortgage banker licensee must be a resident of Arizona, in active management of
the licensee's activities and have at least three years' experience in commercial mortgage banking or
equivalent lending experience in a related business over the last five years (A.R.S. § 6-976).
An affiliate is an entity which directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with the entity specified (A.R.S. § 6-901).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Allows a mortgage broker, commercial mortgage broker or commercial mortgage banker
licensee who is a natural person and nonresident of Arizona to designate an employee of an
affiliated entity or the parent company of the licensee as the responsible individual. FACT SHEET
S.B. 1204
Page 2
2. Removes the Arizona residency requirement for the designated responsible individual for a
mortgage broker, commercial mortgage broker or commercial mortgage banker licensee.
3. Makes technical changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 7, 2022
MG/KJA/slp