Maryland 2023 Regular Session

Maryland House Bill HB282 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4		[Brackets] indicate matter deleted from existing law.
5		-	Underlining indicates amendments to bill.
6		-	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7		-	amendment.
8	5		hb0282
9	6
10	7		HOUSE BILL 282
11	8		I1 3lr1363
12		-	CF ~~SB 307~~
	9	+	CF 3lr2401
13	10		By: Delegate Queen
14	11		Introduced and read first time: January 25, 2023
15	12		Assigned to: Economic Matters
16		-	Committee Report: Favorable
17		-	House action: Adopted
18		-	Read second time: March 11, 2023
19	13
20		-	~~CHAPTER ______~~
	14	+	A BILL ENTITLED
21	15
22	16		AN ACT concerning 1
23	17
24	18		Financial Institutions – Mortgage Loan Originators – Independent Contractors 2
25	19
26	20		FOR the purpose of altering certain provisions of law relating to the licensing of mortgage 3
27	21		loan originators to provide for the licensing of certain independent contractors as 4
28	22		mortgage loan originators under certain circumstances; requiring licensed mortgage 5
29	23		lenders to supervise certain activities of certain mortgage loan originators in a 6
30	24		certain manner; and generally relating to the financial institutions and the licensing 7
31	25		of mortgage loan originators. 8
32	26
33	27		BY repealing and reenacting, without amendments, 9
34	28		Article – Financial Institutions 10
35	29		Section 11–501(a), 11–601(a), 11–603.1(a) and (b), 11–606(a), and 11–612(a) 11
36	30		Annotated Code of Maryland 12
37	31		(2020 Replacement Volume and 2022 Supplement) 13
38	32
39	33		BY adding to 14
40	34		Article – Financial Institutions 15
41	35		Section 11–501(q), 11–511.2, and 11–601(x) 16
42	36		Annotated Code of Maryland 17
43	37		(2020 Replacement Volume and 2022 Supplement) 18
44	38
45	39		BY repealing and reenacting, with amendments, 19
46	40		Article – Financial Institutions 20
47	41		Section 11–501(q), 11–601(h) and (x), 11–602(a), 11–603, 11–603.1(l) and (m), 21
48		-	11–606(e), 11–606.1(a) and (g), 11–612(g), and 11–618 through 11–621 22 2 HOUSE BILL 282
	42	+	11–606(e), 11–606.1(a) and (g), 11–612(g), and 11–618 through 11–621 22
	43	+	Annotated Code of Maryland 23
	44	+	(2020 Replacement Volume and 2022 Supplement) 24
	45	+
	46	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
	47	+	That the Laws of Maryland read as follows: 26
	48	+	2 HOUSE BILL 282
49	49
50	50
51		-	Annotated Code of Maryland 1
52		-	(2020 Replacement Volume and 2022 Supplement) 2
	51	+	Article – Financial Institutions 1
53	52
54		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
55		-	That the Laws of Maryland read as follows: 4
	53	+	11–501. 2
56	54
57		-	~~Article – Financial Institutions 5~~
	55	+	(a) In this subtitle the following words have the meanings indicated. 3
58	56
59		-	11–~~501~~. 6
	57	+	(Q) “SPONSOR” HAS THE MEANING STATED IN § 11–601 OF THIS TITLE. 4
60	58
61		-	(a) ~~In this subtitle~~ the ~~following words have the meanings indicated~~. 7
	59	+	[(q)] (R) “State” means the State of Maryland. 5
62	60
63		-	~~(Q) “SPONSOR” HAS THE MEANING STAT ED IN §~~ 11–~~601 OF THIS TITLE~~. 8
	61	+	11–511.2. 6
64	62
65		-	[(q)] (R) “State” means the State of Maryland. 9
	63	+	(A) A LICENSEE WHO IS THE SPONSOR OF A MORTGAG E LOAN ORIGINATOR 7
	64	+	SHALL AT ALL TIMES R EASONABLY AND ADEQUA TELY SUPERVISE THE A CTIVITIES 8
	65	+	OF THE MORTGAGE LOAN ORIGINATOR THAT ARE CONDUCTED WITHIN THE SCOPE 9
	66	+	OF THE MORTGAGE LOAN ORIGINATOR’S EMPLOYMENT OR EXCLUS IVE 10
	67	+	ENGAGEMENT . 11
66	68
67		-	11–511.2. 10
	69	+	(B) THE COMMISSIONER SHALL AD OPT REGULATIONS NECE SSARY TO 12
	70	+	CARRY OUT THIS SECTI ON. 13
68	71
69		-	(A) A LICENSEE WHO IS THE SPONSOR OF A MORTGAG E LOAN ORIGINATOR 11
70		-	SHALL AT ALL TIMES R EASONABLY AND ADEQUA TELY SUPERVISE THE A CTIVITIES 12
71		-	OF THE MORTGAGE LOAN ORIGINATOR THAT ARE CONDUCTED WITHIN THE SCOPE 13
72		-	OF THE MORTGAGE LOAN ORIGINATOR’S EMPLOYMENT OR EXCLUS IVE 14
73		-	ENGAGEMENT . 15
	72	+	11–601. 14
74	73
75		-	(B) THE COMMISSIONER SHALL AD OPT REGULATIONS NECE SSARY TO 16
76		-	CARRY OUT THIS SECTI ON. 17
	74	+	(a) In this subtitle the following words have the meanings indicated. 15
77	75
78		-	11–601. 18
	76	+	(h) “Independent contractor” means [a person] AN INDIVIDUAL whose 16
	77	+	compensation is paid without a deduction for federal or State income tax. 17
79	78
80		-	(a) In this subtitle the following words have the meanings indicated. 19
	79	+	(X) “SPONSOR” MEANS A MORTGAGE LEN DER, OR A PERSON EXEMPT F ROM 18
	80	+	LICENSING TO ACT AS A MORTGAGE LENDER , WHO EMPLOYS OR EXCLUSIVE LY 19
	81	+	ENGAGES AN INDIVIDUA L TO ACT AS A MORTGA GE LOAN ORIGINATOR IN THE STATE. 20
81	82
82		-	(h) “~~Independent contractor~~” means [a ~~person] AN INDIVIDUAL whose 20~~
83		-	~~compensation is paid without a deduction for federal or State income tax~~. 21
	83	+	[(x)] (Y) “Unique identifier” means a number or other identifier assigned by 21
	84	+	NMLS. 22
84	85
85		-	(X) “SPONSOR” MEANS A MORTGAGE LEN DER, OR A PERSON EXEMPT F ROM 22
86		-	LICENSING TO ACT AS A MORTGAGE LENDER , WHO EMPLOYS OR EXCLUSIVE LY 23
87		-	ENGAGES AN INDIVIDUA L TO ACT AS A MORTGA GE LOAN ORIGINATOR IN T HE STATE. 24
	86	+	11–602. 23
88	87
89		-	[~~(x)~~] ~~(Y) “Unique~~ ~~identifier” means a number or other identifier assigned by 25~~
90		-	~~NMLS~~. 26
	88	+	(a) (1) The licensing provisions of this subtitle [do not] apply to independent 24
	89	+	contractors. 25
91	90
92		-	11–602. 27
93		-
94		-	(a) (1) The licensing provisions of this subtitle [do not] apply to independent 28
95		-	contractors. 29 HOUSE BILL 282 3
	91	+	(2) [Independent contractors are subject to the licensing provisions of 26
	92	+	Subtitle 5 of this title unless exempt from licensing under that subtitle] AN INDEPENDENT 27
	93	+	CONTRACTOR MAY BE ISSUED A LICENSE AND ACT AS A MORTGAGE LO AN 28
	94	+	ORIGINATOR IF THE INDEPENDENT CONT RACTOR IS NOT ENGAGED BY MORE THAN 29
	95	+	ONE SPONSOR IN THE STATE. 30 HOUSE BILL 282 3
96	96
97	97
98	98
99		-	(2) [Independent contractors are subject to the licensing provisions of 1
100		-	Subtitle 5 of this title unless exempt from licensing under that subtitle] AN INDEPENDENT 2
101		-	CONTRACTOR MAY BE ISSUED A LICENSE AND ACT AS A MORTGAGE LO AN 3
102		-	ORIGINATOR IF THE INDEPENDENT CONT RACTOR IS NOT ENGAGED BY MORE THAN 4
103		-	ONE SPONSOR IN THE STATE. 5
	99	+	11–603. 1
104	100
105		-	11–603. 6
	101	+	(a) A license issued under this subtitle authorizes the licensee to act as a 2
	102	+	mortgage loan originator only when acting within the scope of employment OR EXCLUSIVE 3
	103	+	ENGAGEMENT with: 4
106	104
107		-	(a) A license issued under this subtitle authorizes the licensee to act as a 7
108		-	mortgage loan originator only when acting within the scope of employment OR EXCLUSIVE 8
109		-	ENGAGEMENT with: 9
	105	+	(1) A mortgage lender; or 5
110	106
111		-	(1) A mortgage lender~~; or 10~~
	107	+	(2) A person who is exempt from licensing as a mortgage lender. 6
112	108
113		-	(2) A ~~person who is exempt from licensing as a mortgage lender. 11~~
	109	+	(b) A licensee may not: 7
114	110
115		-	(b) ~~A licensee may not:~~ 12
	111	+	(1) Maintain more than one license under this subtitle; or 8
116	112
117		-	(1) Maintain more than one license under this subtitle; or 13
	113	+	(2) Be employed OR ENGAGED by more than one mortgage lender or 9
	114	+	person who is exempt from licensing as a mortgage lender. 10
118	115
119		-	(2) ~~Be employed OR ENGAGED by more than one mortgage lender or 14~~
120		-	~~person who is exempt from licensing as a mortgage lender. 15~~
	116	+	(c) (1) (i) Each license provided for through NMLS shall include the 11
	117	+	following information: 12
121	118
122		-	(c) (1) (i) Each license provided for through NMLS shall include the 16
123		-	following information: 17
	119	+	1. The name of the licensee; 13
124	120
125		-	1. The name of the licensee; 18
	121	+	2. The name of the licensee’s [employer] SPONSOR; and 14
126	122
127		-	2. The ~~name~~ of the licensee~~’s [employer] SPONSOR; and 19~~
	123	+	3. The unique identifier of the licensee. 15
128	124
129		-	3. The unique identifier of the licensee. 20
	125	+	(ii) The unique identifier of the licensee shall constitute the license 16
	126	+	number for the license. 17
130	127
131		-	(ii) The unique identifier of the licensee shall constitute the license 21
132		-	number for the license. 22
	128	+	(2) An individual may not act as a mortgage loan originator under a name 18
	129	+	or for [an employer] A SPONSOR that is different from the name and [employer] SPONSOR 19
	130	+	that appear on the license unless the licensee: 20
133	131
134		-	(2) ~~An individual may not act as a mortgage loan originator under a name 23~~
135		-	~~or for [an~~ ~~employer]~~ A ~~SPONSOR that is different from~~ the name ~~and [employer] SPONSOR 24~~
136		-	~~that appear on the license unless~~ the licensee~~: 25~~
	132	+	(i) Notifies the Commissioner, in the form and in accordance with 21
	133	+	the process that the Commissioner requires, in advance of a change in the licensee’s name 22
	134	+	or the licensee’s [employer] SPONSOR; 23
137	135
138		-	(i) Notifies the Commissioner, in the form and in accordance with 26
139		-	the process that the Commissioner requires, in advance of a change in the licensee’s name 27
140		-	or the licensee’s [employer] SPONSOR; 28
	136	+	(ii) Pays to the Commissioner a license amendment fee set by the 24
	137	+	Commissioner for each notice provided under this paragraph; and 25
141	138
142		-	(ii) Pays to the Commissioner a license amendment fee set by the 29
143		-	Commissioner for each notice provided under this paragraph; and 30 4 HOUSE BILL 282
	139	+	(iii) In the case of a new [employer] SPONSOR, amends the 26
	140	+	sponsorship information on NMLS by submitting the amendment, in the form required by 27
	141	+	the Commissioner, to indicate that the licensee is an employee OR INDEPENDENT 28
	142	+	CONTRACTOR of the new [employer] SPONSOR. 29
	143	+	4 HOUSE BILL 282
	144	+
	145	+
	146	+	(3) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 1
	147	+	licensed mortgage lender or by a person exempt from licensing as a mortgage lender, the 2
	148	+	licensee shall notify the Commissioner within 10 business days, and the license shall be 3
	149	+	placed into nonactive status through NMLS. 4
	150	+
	151	+	(4) During the time that a license is in nonactive status, it is a violation of 5
	152	+	this subtitle for the licensee to engage in any activity for which a license is required under 6
	153	+	this subtitle. 7
	154	+
	155	+	(5) The license shall remain in nonactive status until the licensee: 8
	156	+
	157	+	(i) Notifies the Commissioner, in the form and in accordance with 9
	158	+	the process that the Commissioner requires, that the licensee has obtained employment OR 10
	159	+	HAS BEEN EXCLUSIVELY ENGAGED with a licensed mortgage lender or with a person 11
	160	+	exempt from licensing as a mortgage lender; and 12
	161	+
	162	+	(ii) Has complied with the requirements set forth in paragraph (2) of 13
	163	+	this subsection. 14
	164	+
	165	+	(d) A license may be issued under this subtitle to an individual who is not 15
	166	+	employed OR EXCLUSIVELY ENGAG ED by a licensed mortgage lender or a person exempt 16
	167	+	from licensing as a mortgage lender provided the license is placed into and remains in 17
	168	+	nonactive status until the licensee: 18
	169	+
	170	+	(1) Notifies the Commissioner, in the form and in accordance with the 19
	171	+	process that the Commissioner requires, that the licensee has obtained employment OR 20
	172	+	EXCLUSIVE ENGAGEMENT with a licensed mortgage lender or with a person exempt from 21
	173	+	licensing as a mortgage lender; and 22
	174	+
	175	+	(2) Has complied with the requirements set forth in subsection (c)(2) of this 23
	176	+	section. 24
	177	+
	178	+	(e) A license may be issued under this subtitle to an individual who is employed 25
	179	+	OR EXCLUSIVELY ENGAGED by a mortgage lender, or a person exempt from licensing as 26
	180	+	a mortgage lender, that has its principal office located outside the State if the mortgage 27
	181	+	lender or the person exempt from licensing as a mortgage lender maintains a resident agent 28
	182	+	within the State. 29
	183	+
	184	+	(f) This section does not apply to an affiliated insurance producer–mortgage loan 30
	185	+	originator licensed under § 11–603.1 of this subtitle. 31
	186	+
	187	+	11–603.1. 32
	188	+
	189	+	(a) In this section, “affiliated insurance producer–mortgage loan originator” 33
	190	+	means an individual who: 34
	191	+	HOUSE BILL 282 5
	192	+
	193	+
	194	+	(1) Originates mortgage loans only on behalf of a single financial 1
	195	+	institution that is: 2
	196	+
	197	+	(i) Described in § 11–502(b)(1) of this title; and 3
	198	+
	199	+	(ii) Approved by the Commissioner under subsection (b) of this 4
	200	+	section; 5
	201	+
	202	+	(2) Is a licensed insurance producer in good standing under § 10–103 of the 6
	203	+	Insurance Article; and 7
	204	+
	205	+	(3) Holds an appointment as an insurance producer for an insurer that 8
	206	+	controls, is controlled by, or is under common control with: 9
	207	+
	208	+	(i) The financial institution described in item (1) of this subsection; 10
	209	+	or 11
	210	+
	211	+	(ii) A mortgage lender licensee that: 12
	212	+
	213	+	1. Is approved by the Commissioner under subsection (c) of 13
	214	+	this section; and 14
	215	+
	216	+	2. Originates loans only on behalf of the financial institution 15
	217	+	described in item (1) of this subsection under an exclusive contract with the financial 16
	218	+	institution. 17
	219	+
	220	+	(b) The Commissioner shall approve a financial institution described in 18
	221	+	subsection (a)(1) of this section based on the following criteria: 19
	222	+
	223	+	(1) The financial institution is in good standing with its primary state or 20
	224	+	federal regulator; and 21
	225	+
	226	+	(2) The financial institution is in material compliance with applicable state 22
	227	+	and federal law. 23
	228	+
	229	+	(l) (1) An individual may not act as an affiliated insurance 24
	230	+	producer–mortgage loan originator under a name or for [an employer] A SPONSOR that is 25
	231	+	different from the name and [employer] SPONSOR that appear on the license unless the 26
	232	+	licensee: 27
	233	+
	234	+	(i) Notifies the Commissioner, in the form and in accordance with 28
	235	+	the process that the Commissioner requires, in advance of a change in the licensee’s name 29
	236	+	or the licensee’s [employer] SPONSOR; 30
	237	+
	238	+	(ii) Pays to the Commissioner a license amendment fee set by the 31
	239	+	Commissioner for each notice provided under item (i) of this paragraph; and 32
	240	+	6 HOUSE BILL 282
	241	+
	242	+
	243	+	(iii) In the case of a new [employer] SPONSOR, amends the 1
	244	+	sponsorship information on NMLS by submitting the amendment in the form required by 2
	245	+	the Commissioner to indicate that the licensee is an employee OR INDEPENDENT 3
	246	+	CONTRACTOR of the new [employer] SPONSOR. 4
	247	+
	248	+	(2) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 5
	249	+	financial institution approved by the Commissioner under subsection (b) of this section, the 6
	250	+	licensee shall notify the Commissioner within 10 business days, and the license shall be 7
	251	+	placed into nonactive status through NMLS. 8
	252	+
	253	+	(3) During the time that a license is in nonactive status, it is a violation of 9
	254	+	this subtitle for the licensee to engage in any activity for which a license is required under 10
	255	+	this subtitle. 11
	256	+
	257	+	(4) The license shall remain in nonactive status until the licensee: 12
	258	+
	259	+	(i) Notifies the Commissioner, in the form and in accordance with 13
	260	+	the process that the Commissioner requires, that the licensee has obtained employment OR 14
	261	+	HAS BEEN EXCLUSIVELY ENGAGED with a financial institution that is approved by the 15
	262	+	Commissioner under subsection (b) of this section; and 16
	263	+
	264	+	(ii) Has complied with the requirements set forth in paragraph (1) of 17
	265	+	this subsection. 18
	266	+
	267	+	(m) The Commissioner may issue a license under this subtitle to an individual 19
	268	+	who is not employed OR EXCLUSIVELY ENGAG ED by a financial institution approved by 20
	269	+	the Commissioner under subsection (b) of this section, provided that the license is placed 21
	270	+	into and remains in nonactive status until the licensee: 22
	271	+
	272	+	(1) Notifies the Commissioner, in the form and in accordance with the 23
	273	+	process that the Commissioner requires, that the licensee has obtained employment OR 24
	274	+	EXCLUSIVE ENGAGEMENT with a financial institution approved by the Commissioner 25
	275	+	under subsection (b) of this section; and 26
	276	+
	277	+	(2) Has complied with the requirements set forth in subsection (l)(1) of this 27
	278	+	section. 28
	279	+
	280	+	11–606. 29
	281	+
	282	+	(a) To qualify for an initial license, an applicant shall complete at least 20 hours 30
	283	+	of prelicensing education that shall include: 31
	284	+
	285	+	(1) 3 hours of instruction on federal law and regulations relating to 32
	286	+	mortgage origination; 33
	287	+	HOUSE BILL 282 7
	288	+
	289	+
	290	+	(2) 3 hours of instruction on ethics, including instruction on fraud, 1
	291	+	consumer protection, and fair lending issues; and 2
	292	+
	293	+	(3) 2 hours of training related to lending standards and loan terms for 3
	294	+	nontraditional mortgage products. 4
	295	+
	296	+	(e) This section does not preclude any prelicensing education course, as approved 5
	297	+	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 6
	298	+	the [employer] SPONSOR of the applicant or an entity that is affiliated with the applicant 7
	299	+	by an agency contract, or any subsidiary or affiliate of the [employer] SPONSOR or 8
	300	+	AFFILIATED entity. 9
	301	+
	302	+	11–606.1. 10
	303	+
	304	+	(a) To qualify for an initial license, an applicant shall pass a qualified written test 11
	305	+	developed by [the Nationwide Mortgage Licensing System and Registry] NMLS and 12
	306	+	administered by a test provider approved by [the Nationwide Mortgage Licensing System 13
	307	+	and Registry] NMLS. 14
	308	+
	309	+	(g) This section does not prohibit a test provider approved by [the Nationwide 15
	310	+	Mortgage Licensing System and Registry] NMLS from providing a test at the location of 16
	311	+	the [employer] SPONSOR of the applicant or any subsidiary or affiliate of the [employer] 17
	312	+	SPONSOR of the applicant, or any entity with which the applicant holds an exclusive 18
	313	+	arrangement to conduct the business of a mortgage loan originator. 19
	314	+
	315	+	11–612. 20
	316	+
	317	+	(a) Before applying for renewal of a license, a licensee shall complete at least 8 21
	318	+	hours of continuing education, which shall include: 22
	319	+
	320	+	(1) 3 hours of instruction on federal law and regulations relating to 23
	321	+	mortgage origination; 24
	322	+
	323	+	(2) 2 hours of instruction on ethics, including instruction on fraud, 25
	324	+	consumer protection, and fair lending issues; and 26
	325	+
	326	+	(3) 2 hours of training related to lending standards for the nontraditional 27
	327	+	mortgage product marketplace. 28
	328	+
	329	+	(g) This section does not preclude any continuing education course, as approved 29
	330	+	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 30
	331	+	the [employer] SPONSOR of the mortgage loan originator or an entity that is affiliated with 31
	332	+	the mortgage loan originator by an agency contract, or any subsidiary or affiliate of the 32
	333	+	[employer] SPONSOR or AFFILIATED entity. 33
	334	+
	335	+	11–618. 34 8 HOUSE BILL 282
144	336
145	337
146	338
147		-	(iii) In the case of a new [employer] SPONSOR, amends the 1
148		-	sponsorship information on NMLS by submitting the amendment, in the form required by 2
149		-	the Commissioner, to indicate that the licensee is an employee OR INDEPENDENT 3
150		-	CONTRACTOR of the new [employer] SPONSOR. 4
	339	+	The employment OR EXCLUSIVE ENGAGEM ENT of a mortgage loan originator 1
	340	+	licensed under this subtitle by a mortgage lender does not relieve the mortgage lender of a 2
	341	+	responsibility under this subtitle or under Subtitle 5 of this title, a rule or regulation 3
	342	+	adopted under this subtitle or under Subtitle 5 of this title, or a law governing mortgage 4
	343	+	lending in the State. 5
151	344
152		-	(3) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 5
153		-	licensed mortgage lender or by a person exempt from licensing as a mortgage lender, the 6
154		-	licensee shall notify the Commissioner within 10 business days, and the license shall be 7
155		-	placed into nonactive status through NMLS. 8
	345	+	11–619. 6
156	346
157		-	(4) During the time that a license is in nonactive status, it is a violation of 9
158		-	this subtitle for the licensee to engage in any activity for which a license is required under 10
159		-	this subtitle. 11
	347	+	(a) Each mortgage loan originator shall be covered by a surety bond in accordance 7
	348	+	with this section. 8
160	349
161		-	(5) The license shall remain in nonactive status until the licensee: 12
	350	+	(b) (1) A mortgage loan originator who is an employee OR INDEPENDENT 9
	351	+	CONTRACTOR of a person subject to licensure under Subtitle 5 of this title may use the 10
	352	+	surety bond of that person to meet the mortgage loan originator’s surety bond requirement. 11
162	353
163		-	(i) Notifies the Commissioner, in the form and in accordance with 13
164		-	the process that the Commissioner requires, that the licensee has obtained employment OR 14
165		-	HAS BEEN EXCLUSIVELY ENGAGED with a licensed mortgage lender or with a person 15
166		-	exempt from licensing as a mortgage lender; and 16
	354	+	(2) A mortgage loan originator who is an employee OR INDEPENDENT 12
	355	+	CONTRACTOR of a person exempt from licensure under Subtitle 5 of this title may use a 13
	356	+	surety bond of the person to meet the mortgage loan originator’s surety bond requirement, 14
	357	+	provided the surety bond meets the requirements, based on mortgage loan volume, under 15
	358	+	§ 11–508 of this title. 16
167	359
168		-	(ii) ~~Has complied with the requirements set forth in paragraph (2) of~~ 17
169		-	this ~~subsection.~~ 18
	360	+	(c) A licensee who is an affiliated insurance producer–mortgage loan originator 17
	361	+	shall be deemed in compliance with this section if the licensee: 18
170	362
171		-	(d) A license may be issued under this subtitle to an individual who is not 19
172		-	employed OR EXCLUSIVELY ENGAG ED by a licensed mortgage lender or a person exempt 20
173		-	from licensing as a mortgage lender provided the license is placed into and remains in 21
174		-	nonactive status until the licensee: 22
	363	+	(1) Holds a surety bond that would satisfy the surety bond requirements 19
	364	+	under § 11–508 of this title if the affiliated insurance producer–mortgage loan originator 20
	365	+	were a licensee under Subtitle 5 of this title; or 21
175	366
176		-	(1) Notifies the Commissioner, in the form and in accordance with the 23
177		-	process that the Commissioner requires, that the licensee has obtained employment OR 24
178		-	EXCLUSIVE ENGAGEMENT with a licensed mortgage lender or with a person exempt from 25
179		-	licensing as a mortgage lender; and 26
	367	+	(2) Is covered under a blanket surety bond held by the financial institution 22
	368	+	or mortgage lender licensee identified in § 11–603.1(a)(3) of this subtitle if the blanket 23
	369	+	surety bond: 24
180	370
181		-	(2) ~~Has complied with the requirements set forth in subsection (c)(2) of this 27~~
182		-	~~section. 28~~
	371	+	(i) Covers all affiliated insurance producer–mortgage loan 25
	372	+	originators; and 26
183	373
184		-	(e) A license may be issued under this subtitle to an individual who is employed 29
185		-	OR EXCLUSIVELY ENGAG ED by a mortgage lender, or a person exempt from licensing as 30
186		-	a mortgage lender, that has its principal office located outside the State if the mortgage 31
187		-	lender or the person exempt from licensing as a mortgage lender maintains a resident agent 32
188		-	within the State. 33
	374	+	(ii) Is in the amount of $1,000,000 or another amount as required by 27
	375	+	the Commissioner by regulation. 28
189	376
190		-	(f) This section does not apply to an affiliated insurance producer–mortgage loan 34
191		-	originator licensed under § 11–603.1 of this subtitle. 35 HOUSE BILL 282 5
	377	+	11–620. 29
	378	+
	379	+	(a) (1) Except as otherwise provided in 12 U.S.C. § 5111, the requirements 30
	380	+	under any federal law and Title 4, Subtitles 1 through 5 of the General Provisions Article 31
	381	+	regarding the privacy or confidentiality of information or material provided to [the 32
	382	+	Nationwide Mortgage Licensing System and Registry] NMLS, and any privilege arising 33
	383	+	under federal or state law, including the rules of any federal or state court with respect to 34 HOUSE BILL 282 9
192	384
193	385
	386	+	that information or material, shall continue to apply to that information or material after 1
	387	+	the information or material has been disclosed to [the Nationwide Mortgage Licensing 2
	388	+	System and Registry] NMLS. 3
194	389
195		-	11–603.1. 1
	390	+	(2) The information and material may be shared with all state and federal 4
	391	+	regulatory officials having mortgage industry oversight authority without the loss of 5
	392	+	privilege or the loss of confidentiality protections provided by federal law or Title 4, 6
	393	+	Subtitles 1 through 5 of the General Provisions Article. 7
196	394
197		-	(a) In this section, “affiliated insurance producer–mortgage loan originator” 2
198		-	means an individual who: 3
	395	+	(b) The Commissioner may enter into information sharing agreements with other 8
	396	+	governmental agencies, the Conference of State Bank Supervisors, the American 9
	397	+	Association of Residential Mortgage Regulators, or other associations representing 10
	398	+	governmental agencies. 11
199	399
200		-	(1) ~~Originates mortgage loans only on behalf of~~ a ~~single financial 4~~
201		-	~~institution that is~~: 5
	400	+	(c) Information or material that is subject to a privilege or confidentiality under 12
	401	+	subsection (a) of this section may not be subject to: 13
202	402
203		-	(i) Described in § 11–502(b)(1) of this title; and 6
	403	+	(1) Disclosure under any federal or state law governing the disclosure to 14
	404	+	the public of information held by an officer or agency of the federal government or a state 15
	405	+	that has received the information or material; or 16
204	406
205		-	(ii) Approved by the Commissioner under subsection (b) of this 7
206		-	section; 8
	407	+	(2) Subpoena, discovery, or admission into evidence, in any private civil 17
	408	+	action or administrative process, unless with respect to any privilege held by [the 18
	409	+	Nationwide Mortgage Licensing System and Registry] NMLS the person to whom the 19
	410	+	information or material pertains waives, in whole or in part, that privilege. 20
207	411
208		-	(2) Is a licensed insurance producer in good standing under § 10–103 of the 9
209		-	Insurance Article; and 10
	412	+	(d) Any provisions of Title 4, Subtitles 1 through 5 of the General Provisions 21
	413	+	Article relating to the disclosure of any information or material described in subsection (a) 22
	414	+	of this section that are inconsistent with subsection (a) of this section shall be superseded 23
	415	+	by the requirements of this section. 24
210	416
211		-	(3) Holds an appointment as an insurance producer for an insurer that 11
212		-	controls, is controlled by, or is under common control with: 12
	417	+	(e) This section does not apply to information or material relating to the 25
	418	+	employment AND ENGAGEMENT history of, and publicly adjudicated disciplinary and 26
	419	+	enforcement actions against, mortgage loan originators that is included in [the Nationwide 27
	420	+	Mortgage Licensing System and Registry] NMLS and designated for access by the public. 28
213	421
214		-	(i) The financial institution described in item (1) of this subsection; 13
215		-	or 14
	422	+	11–621. 29
216	423
217		-	(ii) A mortgage lender licensee that: 15
	424	+	Nonfederally insured credit unions that [employ] SPONSOR mortgage loan 30
	425	+	originators shall register these employees OR INDEPENDENT CONTR ACTORS with [the 31
	426	+	Nationwide Mortgage Licensing System and Registry] NMLS by providing the information 32
	427	+	concerning the employees’ OR INDEPENDENT CONTR ACTORS’ identity set forth in 12 33
	428	+	U.S.C. § 5106(a)(2). 34
218	429
219		-	1. Is approved by the Commissioner under subsection (c) of 16
220		-	this section; and 17
221		-
222		-	2. Originates loans only on behalf of the financial institution 18
223		-	described in item (1) of this subsection under an exclusive contract with the financial 19
224		-	institution. 20
225		-
226		-	(b) The Commissioner shall approve a financial institution described in 21
227		-	subsection (a)(1) of this section based on the following criteria: 22
228		-
229		-	(1) The financial institution is in good standing with its primary state or 23
230		-	federal regulator; and 24
231		-
232		-	(2) The financial institution is in material compliance with applicable state 25
233		-	and federal law. 26
234		-
235		-	(l) (1) An individual may not act as an affiliated insurance 27
236		-	producer–mortgage loan originator under a name or for [an employer] A SPONSOR that is 28
237		-	different from the name and [employer] SPONSOR that appear on the license unless the 29
238		-	licensee: 30
239		-	6 HOUSE BILL 282
	430	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act is not intended to 35
	431	+	conflict with or be interpreted to supersede any provision of the Labor and Employment 36 10 HOUSE BILL 282
240	432
241	433
242		-	(i) Notifies the Commissioner, in the form and in accordance with 1
243		-	the process that the Commissioner requires, in advance of a change in the licensee’s name 2
244		-	or the licensee’s [employer] SPONSOR; 3
	434	+	Article, including any standards established under that article for protecting employees 1
	435	+	from abusive labor practices. 2
245	436
246		-	(ii) Pays to the Commissioner a license amendment fee set by the 4
247		-	Commissioner for each notice provided under item (i) of this paragraph; and 5
248		-
249		-	(iii) In the case of a new [employer] SPONSOR, amends the 6
250		-	sponsorship information on NMLS by submitting the amendment in the form required by 7
251		-	the Commissioner to indicate that the licensee is an employee OR INDEPENDENT 8
252		-	CONTRACTOR of the new [employer] SPONSOR. 9
253		-
254		-	(2) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 10
255		-	financial institution approved by the Commissioner under subsection (b) of this section, the 11
256		-	licensee shall notify the Commissioner within 10 business days, and the license shall be 12
257		-	placed into nonactive status through NMLS. 13
258		-
259		-	(3) During the time that a license is in nonactive status, it is a violation of 14
260		-	this subtitle for the licensee to engage in any activity for which a license is required under 15
261		-	this subtitle. 16
262		-
263		-	(4) The license shall remain in nonactive status until the licensee: 17
264		-
265		-	(i) Notifies the Commissioner, in the form and in accordance with 18
266		-	the process that the Commissioner requires, that the licensee has obtained employment OR 19
267		-	HAS BEEN EXCLUSIVELY ENGAGED with a financial institution that is approved by the 20
268		-	Commissioner under subsection (b) of this section; and 21
269		-
270		-	(ii) Has complied with the requirements set forth in paragraph (1) of 22
271		-	this subsection. 23
272		-
273		-	(m) The Commissioner may issue a license under this subtitle to an individual 24
274		-	who is not employed OR EXCLUSIVELY ENGAG ED by a financial institution approved by 25
275		-	the Commissioner under subsection (b) of this section, provided that the license is placed 26
276		-	into and remains in nonactive status until the licensee: 27
277		-
278		-	(1) Notifies the Commissioner, in the form and in accordance with the 28
279		-	process that the Commissioner requires, that the licensee has obtained employment OR 29
280		-	EXCLUSIVE ENGAGEMENT with a financial institution approved by the Commissioner 30
281		-	under subsection (b) of this section; and 31
282		-
283		-	(2) Has complied with the requirements set forth in subsection (l)(1) of this 32
284		-	section. 33
285		-
286		-	11–606. 34
287		-	HOUSE BILL 282 7
288		-
289		-
290		-	(a) To qualify for an initial license, an applicant shall complete at least 20 hours 1
291		-	of prelicensing education that shall include: 2
292		-
293		-	(1) 3 hours of instruction on federal law and regulations relating to 3
294		-	mortgage origination; 4
295		-
296		-	(2) 3 hours of instruction on ethics, including instruction on fraud, 5
297		-	consumer protection, and fair lending issues; and 6
298		-
299		-	(3) 2 hours of training related to lending standards and loan terms for 7
300		-	nontraditional mortgage products. 8
301		-
302		-	(e) This section does not preclude any prelicensing education course, as approved 9
303		-	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 10
304		-	the [employer] SPONSOR of the applicant or an entity that is affiliated with the applicant 11
305		-	by an agency contract, or any subsidiary or affiliate of the [employer] SPONSOR or 12
306		-	AFFILIATED entity. 13
307		-
308		-	11–606.1. 14
309		-
310		-	(a) To qualify for an initial license, an applicant shall pass a qualified written test 15
311		-	developed by [the Nationwide Mortgage Licensing System and Registry] NMLS and 16
312		-	administered by a test provider approved by [the Nationwide Mortgage Licensing System 17
313		-	and Registry] NMLS. 18
314		-
315		-	(g) This section does not prohibit a test provider approved by [the Nationwide 19
316		-	Mortgage Licensing System and Registry] NMLS from providing a test at the location of 20
317		-	the [employer] SPONSOR of the applicant or any subsidiary or affiliate of the [employer] 21
318		-	SPONSOR of the applicant, or any entity with which the applicant holds an exclusive 22
319		-	arrangement to conduct the business of a mortgage loan originator. 23
320		-
321		-	11–612. 24
322		-
323		-	(a) Before applying for renewal of a license, a licensee shall complete at least 8 25
324		-	hours of continuing education, which shall include: 26
325		-
326		-	(1) 3 hours of instruction on federal law and regulations relating to 27
327		-	mortgage origination; 28
328		-
329		-	(2) 2 hours of instruction on ethics, including instruction on fraud, 29
330		-	consumer protection, and fair lending issues; and 30
331		-
332		-	(3) 2 hours of training related to lending standards for the nontraditional 31
333		-	mortgage product marketplace. 32
334		-	8 HOUSE BILL 282
335		-
336		-
337		-	(g) This section does not preclude any continuing education course, as approved 1
338		-	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 2
339		-	the [employer] SPONSOR of the mortgage loan originator or an entity that is affiliated with 3
340		-	the mortgage loan originator by an agency contract, or any subsidiary or affiliate of the 4
341		-	[employer] SPONSOR or AFFILIATED entity. 5
342		-
343		-	11–618. 6
344		-
345		-	The employment OR EXCLUSIVE ENGAGEM ENT of a mortgage loan originator 7
346		-	licensed under this subtitle by a mortgage lender does not relieve the mortgage lender of a 8
347		-	responsibility under this subtitle or under Subtitle 5 of this title, a rule or regulation 9
348		-	adopted under this subtitle or under Subtitle 5 of this title, or a law governing mortgage 10
349		-	lending in the State. 11
350		-
351		-	11–619. 12
352		-
353		-	(a) Each mortgage loan originator shall be covered by a surety bond in accordance 13
354		-	with this section. 14
355		-
356		-	(b) (1) A mortgage loan originator who is an employee OR INDEPENDENT 15
357		-	CONTRACTOR of a person subject to licensure under Subtitle 5 of this title may use the 16
358		-	surety bond of that person to meet the mortgage loan originator’s surety bond requirement. 17
359		-
360		-	(2) A mortgage loan originator who is an employee OR INDEPENDENT 18
361		-	CONTRACTOR of a person exempt from licensure under Subtitle 5 of this title may use a 19
362		-	surety bond of the person to meet the mortgage loan originator’s surety bond requirement, 20
363		-	provided the surety bond meets the requirements, based on mortgage loan volume, under 21
364		-	§ 11–508 of this title. 22
365		-
366		-	(c) A licensee who is an affiliated insurance producer–mortgage loan originator 23
367		-	shall be deemed in compliance with this section if the licensee: 24
368		-
369		-	(1) Holds a surety bond that would satisfy the surety bond requirements 25
370		-	under § 11–508 of this title if the affiliated insurance producer–mortgage loan originator 26
371		-	were a licensee under Subtitle 5 of this title; or 27
372		-
373		-	(2) Is covered under a blanket surety bond held by the financial institution 28
374		-	or mortgage lender licensee identified in § 11–603.1(a)(3) of this subtitle if the blanket 29
375		-	surety bond: 30
376		-
377		-	(i) Covers all affiliated insurance producer–mortgage loan 31
378		-	originators; and 32
379		-
380		-	(ii) Is in the amount of $1,000,000 or another amount as required by 33
381		-	the Commissioner by regulation. 34
382		-	HOUSE BILL 282 9
383		-
384		-
385		-	11–620. 1
386		-
387		-	(a) (1) Except as otherwise provided in 12 U.S.C. § 5111, the requirements 2
388		-	under any federal law and Title 4, Subtitles 1 through 5 of the General Provisions Article 3
389		-	regarding the privacy or confidentiality of information or material provided to [the 4
390		-	Nationwide Mortgage Licensing System and Registry] NMLS, and any privilege arising 5
391		-	under federal or state law, including the rules of any federal or state court with respect to 6
392		-	that information or material, shall continue to apply to that information or material after 7
393		-	the information or material has been disclosed to [the Nationwide Mortgage Licensing 8
394		-	System and Registry] NMLS. 9
395		-
396		-	(2) The information and material may be shared with all state and federal 10
397		-	regulatory officials having mortgage industry oversight authority without the loss of 11
398		-	privilege or the loss of confidentiality protections provided by federal law or Title 4, 12
399		-	Subtitles 1 through 5 of the General Provisions Article. 13
400		-
401		-	(b) The Commissioner may enter into information sharing agreements with other 14
402		-	governmental agencies, the Conference of State Bank Supervisors, the American 15
403		-	Association of Residential Mortgage Regulators, or other associations representing 16
404		-	governmental agencies. 17
405		-
406		-	(c) Information or material that is subject to a privilege or confidentiality under 18
407		-	subsection (a) of this section may not be subject to: 19
408		-
409		-	(1) Disclosure under any federal or state law governing the disclosure to 20
410		-	the public of information held by an officer or agency of the federal government or a state 21
411		-	that has received the information or material; or 22
412		-
413		-	(2) Subpoena, discovery, or admission into evidence, in any private civil 23
414		-	action or administrative process, unless with respect to any privilege held by [the 24
415		-	Nationwide Mortgage Licensing System and Registry] NMLS the person to whom the 25
416		-	information or material pertains waives, in whole or in part, that privilege. 26
417		-
418		-	(d) Any provisions of Title 4, Subtitles 1 through 5 of the General Provisions 27
419		-	Article relating to the disclosure of any information or material described in subsection (a) 28
420		-	of this section that are inconsistent with subsection (a) of this section shall be superseded 29
421		-	by the requirements of this section. 30
422		-
423		-	(e) This section does not apply to information or material relating to the 31
424		-	employment AND ENGAGEMENT history of, and publicly adjudicated disciplinary and 32
425		-	enforcement actions against, mortgage loan originators that is included in [the Nationwide 33
426		-	Mortgage Licensing System and Registry] NMLS and designated for access by the public. 34
427		-
428		-	11–621. 35
429		-	10 HOUSE BILL 282
430		-
431		-
432		-	Nonfederally insured credit unions that [employ] SPONSOR mortgage loan 1
433		-	originators shall register these employees OR INDEPENDENT CONTR ACTORS with [the 2
434		-	Nationwide Mortgage Licensing System and Registry] NMLS by providing the information 3
435		-	concerning the employees’ OR INDEPENDENT CONTR ACTORS’ identity set forth in 12 4
436		-	U.S.C. § 5106(a)(2). 5
437		-
438		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act is not intended to 6
439		-	conflict with or be interpreted to supersede any provision of the Labor and Employment 7
440		-	Article, including any standards established under that article for protecting employees 8
441		-	from abusive labor practices. 9
442		-
443		-	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 10
444		-	October 1, 2023. 11
445		-
446		-
447		-
448		-	Approved:
449		-	________________________________________________________________________________
450		-	Governor.
451		-	________________________________________________________________________________
452		-	Speaker of the House of Delegates.
453		-	________________________________________________________________________________
454		-	President of the Senate.
	437	+	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
	438	+	October 1, 2023. 4