Louisiana House Bill HB508

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12
• Report Pass: 3/19/12
• Engrossed: 3/27/12
• Refer: 3/28/12
• Report Pass: 4/25/12
• Enrolled: 5/15/12
• Chaptered: 5/22/12
• Passed: 5/22/12

Caption

Provides relative to the La. S.A.F.E. Residential Mortgage Lending Act

Impact

The bill's enactment would have significant implications for state laws governing mortgage licensing. By exempting individuals who do not engage regularly in mortgage activities, the legislation aims to reduce unnecessary regulatory burdens on occasional lenders and those in the business infrequently. However, it emphasizes the need to align with federal standards set by the Consumer Financial Protection Bureau, indicating that state law will need to adapt if federal regulations change.

Summary

House Bill 508 seeks to amend the Louisiana S.A.F.E. Residential Mortgage Lending Act by introducing definitions and provisions regarding the licensure of mortgage loan originators and brokers. Specifically, the bill defines 'regularly engaged' in residential mortgage lending, establishing a threshold of ten loans per year or a principal balance exceeding twenty-five thousand dollars for individuals to be considered as such. This change aims to exempt certain individuals from needing a mortgage licensure, benefiting those who are not actively involved in residential mortgage activities.

Sentiment

The sentiment around HB 508 is generally supportive among those in the real estate and mortgage sectors, who view the bill as a positive adjustment that could stimulate the market by allowing more flexibility for individuals not engaged full-time in lending. Supporters believe that this relief from licensure requirements promotes individual entrepreneurial activity in the housing market, while critics may harbor concerns about the potential for reduced oversight in mortgage lending practices.

Contention

Discussion surrounding the bill may center around the potential risks associated with easing licensure requirements, as some advocates for consumer protection warn that less regulation could lead to predatory lending practices. The bill's proponents likely argue that the defined thresholds for licensure are adequate to maintain a standard of practice while allowing occasional lenders to operate without burdensome licensure requirements. This presents a critical balance between facilitating business and ensuring consumer protection in a heavily regulated sector.