ENROLLED
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Regular Session, 2011
HOUSE BILL NO. 492
BY REPRESENTATIVES HENDERSON AND ARNOLD
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
AN ACT1
To amend and reenact R.S. 6:1083(16) and 1087(E)(9) and to enact R.S. 6:1087(E)(10) and2
(11) and (F)(11), relative to residential mortgage lenders; to establish an exemption3
from licensure as a residential mortgage loan originator; to delete provisions defining4
an employee of a registered mortgage loan originator; to provide for severability; to5
provide for an effective date; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 6:1083(16) and 1087(E)(9) are hereby amended and reenacted and8
R.S. 6:1087(E)(10) and (11) and (F)(11) are hereby enacted to read as follows: 9
§1083. Definitions10
As used in this Chapter:11
* * *12
(16) "Registered mortgage loan originator" means any individual who meets13
the definition of mortgage loan originator and is an employee of a depository14
institution or a subsidiary that is either owned and controlled by a depository15
institution and regulated by a federal banking agency or an institution regulated by16
the Farm Credit Administration and is registered with, and maintains a unique17
identifier through, the Nationwide Mortgage Licensing System and Registry. For the18
purposes of this Paragraph, "employee" shall include a natural person who is an19
agent of a depository institution or its controlled and regulated subsidiary acting20
under the management and supervision of the depository institution or its controlled21
regulated subsidiary and subject to the oversight of a banking agency, but only if:22 ENROLLEDHB NO. 492
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(a) The natural person enters into a written agreement prohibiting the1
individual from soliciting, processing, negotiating, or placing a mortgage loan with2
a person other than the institution or its controlled and regulated subsidiary.3
(b) The natural person would not be barred from licensure pursuant to R.S.4
6:1088(E)(2), (3), or (4), as determined by the commissioner.5
(c) The natural person acknowledges that he is subject to the authority of the6
commissioner under R.S. 6:1091 and 1092, as applicable.7
(d) A financial institution acceptable to the commissioner shall have:8
(i) Provided an undertaking of accountability supported by a surety bond9
equal to one million dollars, to meet the requirement of R.S. 6:1088(G)(1) and to10
cover all of the natural persons who are considered to be employees under this11
Section, which undertaking includes full and direct financial responsibility for the12
loan origination activities of each such natural person.13
(ii) Paid an annual fee of one half the license fee for a mortgage loan14
originator under R.S. 6:1088.2(A)(4) times the number of natural persons who are15
considered exclusive agents under this Section as of December thirty-first of the16
preceding year, as determined by the commissioner.17
(iii) Provided a business plan acceptable to the commissioner that sets forth18
the education program for the natural persons, the handling of consumer complaints19
related to the natural persons, and the supervision of the loan origination activities20
of the natural persons. The provisions of the business plan shall be the following:21
(aa) The commissioner shall have forty-five days in which to accept or deny22
the business plan from its receipt. If the commissioner does not accept or reject the23
plan within forty-five days, the plan will be deemed accepted. If the plan is rejected24
within forty-five days, the commissioner shall make recommendations in writing to25
the financial institution as to changes in the plan that would render it acceptable.26
(bb) If the plan is rejected, the financial institution shall have forty-five days27
to make recommended changes to the plan and resubmit it to the commissioner for28
reconsideration.29 ENROLLEDHB NO. 492
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(cc) The commissioner shall have fifteen days from the receipt of the1
resubmitted plan to accept or deny the resubmitted plan. If the resubmitted plan is2
not accepted or rejected within fifteen days, the plan shall be deemed accepted.3
(dd) The denial of the plan or dissatisfaction with the substance of the plan4
shall entitle the applicant to a hearing before the division of administrative law,5
provided the applicant has filed notice requesting the hearing with the commissioner6
within fifteen days of the receipt of the commissioner's decision. The commissioner7
shall forward the request and any supporting documents to the division of8
administrative law within ten days. Such hearing shall be scheduled to take place9
within sixty days from the date a request is received by the division of administrative10
law, unless continued by all parties, and a decision shall be rendered as expeditiously11
as possible.12
(ee) Any applicant aggrieved by the division of administrative law's decision13
shall be entitled to judicial review pursuant to R.S. 49:950 et seq. in the Nineteenth14
Judicial District Court, which shall conduct a de novo review. Such action is entitled15
to priority and preference over all other pending civil matters such that a decision16
should be rendered as expeditiously as possible.17
* * *18
§1087. Exemptions; annual registration statement; fees19
* * *20
E. The following shall be exempt from the provisions of this Part applicable21
to persons engaged in residential mortgage lending activities as a residential22
mortgage loan originator:23
* * *24
(9) Any individual who meets all of the following requirements:25
(a) In any calendar year, originates five or fewer residential mortgage loans26
exclusively for a single federally chartered depository institution, and the loans are27
closed.28 ENROLLEDHB NO. 492
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(b) Is contractually prohibited from soliciting, processing, negotiating, or1
placing a residential mortgage loan with a person other than the single federally2
chartered depository institution.3
(c) Enrolls with the Office of Financial Institutions as an individual who4
originates exclusively with a single federal depository institution until the time any5
registration with the Nationwide Mortgage Licensing System and Registry6
(NMLS&R) is required for the individual by federal law or regulation and a suitable7
category is created for that registration with NMLS&R. Enrollment pursuant to this8
Subparagraph must be renewed annually with the Office of Financial Institutions.9
(d) Is not barred from licensure pursuant to R.S. 6:1088(E)(2), (3), or (4), as10
determined by the commissioner of financial institutions.11
(e) Is sponsored by a life insurance company or an affiliate of the company12
which is authorized to engage in business in this state and which is a licensed13
mortgage loan broker or originator, and which sponsorship shall include all of the14
following:15
(i) Providing an undertaking of accountability supported by a surety bond16
equal to one million dollars, to meet the requirement of R.S. 6:1088(G)(1) and to17
cover all of the persons who are exempt pursuant to this Paragraph, which18
undertaking includes full and direct financial responsibility for the loan origination19
activities of each such exempt person.20
(ii) Paying an annual fee on behalf of the individual exempted pursuant to21
this Paragraph in the amount of one-half the license fee for a mortgage loan22
originator pursuant to R.S. 6:1088.2(A)(4) to the Office of Financial Institutions.23
(10) Individuals employed by nonprofit corporations exempt under R.S.24
6:1087(F)(11).25
(11) The commissioner may exempt mortgage Mortgage servicer loss26
mitigation specialists if he specialists, if the commissioner determines that an27
exemption of a mortgage servicer loss mitigation specialist is compliant with the28
minimum standards set forth in P.L. 110-289, Title V.29 ENROLLEDHB NO. 492
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F. The following employers and their employees shall be exempt from the1
provisions of this Part applicable to residential mortgage lenders and residential2
mortgage brokers:3
* * *4
(11) Any nonprofit corporation that is providing financial education and5
counseling to consumers, is exempt from federal taxation under Section 501(c) of the6
Internal Revenue Code, is approved by the United States Department of Housing and7
Urban Development (HUD) to provide housing counseling, and does not originate8
residential mortgage loans.9
* * *10
Section 2. If the secretary of the United States Department of Housing and Urban11
Development or the director of the Consumer Financial Protection Bureau by final12
administrative decision determines that R.S. 6:1087(E)(9) or application of R.S.13
6:1087(E)(9) to any person or circumstance is considered to be in conflict with the federal14
Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (P.L. 110-289), or any15
rules or regulations adopted pursuant to that act, R.S. 6:1087(E)(9) shall be held invalid;16
however, the remainder of Louisiana law implementing the federal act or the application of17
the provisions thereof to other persons or circumstances shall not be affected. In the event18
the provisions of R.S. 6:1087(E)(9) are null and void or otherwise held invalid, and until19
such time, any person acting according to this provision of invalidity shall be deemed in20
compliance with the provisions of Louisiana law implementing the federal act and any21
transactions of any type covered in Louisiana law implementing the federal act are hereby22
deemed to be lawful and in full force and effect. 23
Section 3. Any licensing requirement for any person operating pursuant to the24
exception found in R.S. 6:1087(E)(9), should the provisions of R.S. 6:1087(E)(9) be null and25
void or otherwise held invalid, shall not be effective until one hundred eighty days after the26
secretary of the United States Department of Housing and Urban Development or the27
director of the Consumer Financial Protection Bureau makes such a determination of28
invalidity in writing. This period shall not commence until the commissioner of financial29
institutions has concurred in this determination and posted official notice of this action on30 ENROLLEDHB NO. 492
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the Office of Financial Institution's official website. The commissioner shall also notify in1
writing any individual or sponsoring entity enrolled pursuant to this Chapter or any other2
person requesting notice of such action.3
Section 4. If any provision of R.S. 6:1087(E)(9) or the application thereof is null and4
void, or otherwise held invalid, such invalidity shall not affect other provisions or5
application of R.S. 6:1087 which can be given effect without the invalid provisions or6
application and to this end the provisions of R.S. 6:1087(E)(9) are hereby declared severable.7
Section 5. If the secretary of the United States Department of Housing and Urban8
Development or the director of the Consumer Financial Protection Bureau by final9
administrative decision determines that R.S. 6:1087(E)(10) or (F)(11) or application of R.S.10
6:1087(E)(10) or (F)(11) to any person or circumstance is considered to be in conflict with11
the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (P.L. 110-12
289), or any rules or regulations adopted pursuant to that act, R.S. 6:1087(E)(10) or (F)(11)13
shall be held invalid; however, the remainder of Louisiana law implementing the federal act14
or the application of the provisions thereof to other persons or circumstances shall not be15
affected. In the event the provisions of R.S. 6:1087(E)(10) or (F)(11) are null and void or16
otherwise held invalid, and until such time, any person acting according to this provision of17
invalidity shall be deemed in compliance with the provisions of Louisiana law implementing18
the federal act and any transactions of any type covered in Louisiana law implementing the19
federal act are hereby deemed to be lawful and in full force and effect.20
Section 6. Any licensing requirement for any person operating pursuant to the21
exception found in R.S. 6:1087(E)(10) or (F)(11), should the provisions of R.S.22
6:1087(E)(10) or (F)(11) be null and void or otherwise held invalid, shall not be effective23
until one hundred eighty days after the secretary of the United States Department of Housing24
and Urban Development or the director of the Consumer Financial Protection Bureau makes25
such a determination of invalidity in writing. This period shall not commence until the26
commissioner of financial institutions has concurred in this determination and posted official27
notice of this action on the Office of Financial Institution's official website. 28
Section 7. If any provision of R.S. 6:1087(E)(10) or (F)(11) or the application29
thereof is null and void, or otherwise held invalid, such invalidity shall not affect other30 ENROLLEDHB NO. 492
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provisions or application of R.S. 6:1087 which can be given effect without the invalid1
provisions or application and to this end the provisions of R.S. 6:1087(E)(10) or (F)(11) are2
hereby declared severable.3
Section 8. This Act shall become effective upon signature by the governor or, if not4
signed by the governor, upon expiration of the time for bills to become law without signature5
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If6
vetoed by the governor and subsequently approved by the legislature, this Act shall become7
effective on the day following such approval.8
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: