SB 1204
Initials PRB/NM Page 1 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fifth Legislature
Second Regular Session
Senate: FIN DPA 9-0-1-0 | 3
rd
Read 26-0-4-0
SB 1204: mortgage brokers; bankers; qualifications
Sponsor: Senator Pace, LD 25
Committee on Commerce
Overview
Permits a responsible individual of mortgage brokers and bankers to reside out-of-state.
History
All mortgage broker, commercial mortgage broker and commercial mortgage banker licenses
must designate a natural person as a responsible individual for the license. If the licensee is
natural person, that person is the responsible individual. If a licensee is a business entity, one
member or employee of that entity must be designated in the license as the individual responsible
for the entity (A.R.S. §§ 6-903; 6-976).
A mortgage broker license may not be given to a person, other than a natural person, who is not
registered to do business in Arizona. If a natural person is not a resident of Arizona, an employee
of that licensee must be designated in the license as the individual responsible for the licensee.
The responsible individual must: 1) be a resident of Arizona; 2) be in active management of the
licensee's activities; and 3) meet statutory broker license qualifications (A.R.S. § 6-903).
Likewise for a commercial mortgage banker, a license may not be given to a person, other than
a natural person, who is not registered to do business in Arizona; and a natural person who is not
resident in Arizona must designate a responsible individual. This responsible individual must: 1)
be a resident of Arizona; 2) be in active management of the licensee's activities; and 3) have at
least three years' experience in commercial mortgage banking (A.R.S. § 6-976).
Provisions
Responsible Individual
1. Permits a mortgage broker, commercial mortgage broker and a commercial mortgage banker
who is a natural person, and not resident in Arizona, to designate as a responsible individual:
a) an employee of an affiliated entity of the licensee; or
b) an employee of the parent company of the licensee. (Sec. 2, 3)
2. Stipulates that the responsible individual for a mortgage broker or commercial mortgage
broker must be resident in Arizona unless the Director of the Department of Insurance and
Financial Institutions (DIFI) grants a Certificate of Exemption. (Sec. 2)
3. Strikes the requirement that the responsible individual for a commercial mortgage banker must
be a resident of Arizona. (Sec. 3)
Certificate of Exemption
4. Permits a parent company to apply for a Certificate of Exemption, on behalf of a mortgage
broker or commercial mortgage broker (entity), to allow a responsible individual to reside
outside of Arizona. (Sec. 1)
5. Requires a responsible individual residing outside of Arizona to:
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Initials PRB/NM Page 2 Commerce
a) be a natural person;
b) receive notification from the parent company that the parent company was granted a
certificate of exemption by the Director of DIFI; and
c) meet all the regular requirements to be a responsible individual. (Sec. 1)
6. Directs the parent company to apply on behalf of the entity and submit an attestation that the
parent company:
a) maintains a physical presence in Arizona;
b) does not have any disciplinary actions by DIFI; and
c) has a class of securities registered with the United States Securities and Exchange
Commission. (Sec. 1)
7. Requires the applying parent company to pay all applicable fees prescribed by DIFI in rule.
(Sec. 1)
8. Specifies that a Certificate of Exemption is continuous during the license's period. (Sec. 1)
9. Allows the Director of DIFI to revoke the Certificate of Exemption if: a) the interests of the
consumer are not met; or b) the responsible individual does not meet statutory requirements.
(Sec. 1)
10. Instructs the Director of DIFI to issue an order outlining the reasons for a denial or revocation
of a Certificate of Exemption. (Sec. 1)
11. Permits the Director of DIFI to prescribe rules to implement the Certificate of Exemption. (Sec.
1)
Miscellaneous
12. Makes technical changes. (Sec. 2, 3)