Maryland 2023 Regular Session

Maryland Senate Bill SB307 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		sb0307
9	6
10	7		SENATE BILL 307
11	8		I1 3lr2401
12	9		CF HB 282
13	10		By: Senator Klausmeier
14	11		Introduced and read first time: January 27, 2023
15	12		Assigned to: Finance
16		-	Committee Report: Favorable with amendments
17		-	Senate action: Adopted
18		-	Read second time: March 24, 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 SENATE BILL 307
	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 SENATE BILL 307
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 STAT ED 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 A RE CONDUCTED WITHIN THE SCOPE 9
	66	+	OF THE MORTGAGE LOAN ORIGINATOR’S EMPLOYMENT OR EXCL USIVE 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 MORTGAGE LOAN ORIGIN ATOR 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 EXCL USIVE 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 EXCLUS IVELY 19
	81	+	ENGAGES AN INDIVIDUA L TO ACT AS A MORTGA GE LOAN ORIGINATOR I N 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 EXCLU SIVELY 23
87		-	ENGAGES AN INDIVIDUA L TO ACT AS A MORTGA GE LOAN ORIGINATOR I N THE 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 SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE~~ 28
95		-	~~licensing provisions of this subtitle [do~~ not~~] apply to independent contractors.~~ 29
96		-	SENATE BILL 307 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 IS SUED A LICENSE AND A CT AS A MORTGAGE LOAN 28
	94	+	ORIGINATOR IF THE IN DEPENDENT CONTRACTOR IS NOT ENGAGED BY MO RE THAN 29
	95	+	ONE SPONSOR IN THE STATE. 30 SENATE BILL 307 3
97	96
98	97
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 IS SUED A LICENSE AND A CT AS A MORTGAGE LOA N 3
102		-	ORIGINATOR IF THE IN DEPENDENT CONTRACTOR IS NOT: 4
103	98
104		-	(I) A LICENSED INSURANCE P RODUCER IN GOOD STAN DING 5
105		-	UNDER § 10–103 OF THE INSURANCE ARTICLE; AND 6
	99	+	11–603. 1
106	100
107		-	(II) NOT ENGAGED BY MORE THAN ONE SPONSOR IN THE STATE. 7
	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
108	104
109		-	~~11–603. 8~~
	105	+	(1) A mortgage lender; or 5
110	106
111		-	(a) A license issued under this subtitle authorizes the licensee to act as a 9
112		-	mortgage loan originator only when acting within the scope of employment OR EXCLUSIVE 10
113		-	ENGAGEMENT with: 11
	107	+	(2) A person who is exempt from licensing as a mortgage lender. 6
114	108
115		-	(1) A ~~mortgage lender;~~ ~~or 12~~
	109	+	(b) A licensee may not: 7
116	110
117		-	(2) ~~A person who is exempt from licensing as a mortgage lender. 13~~
	111	+	(1) Maintain more than one license under this subtitle; or 8
118	112
119		-	(b) A licensee may not: 14
	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
120	115
121		-	(1) Maintain more than one license under this subtitle; or 15
	116	+	(c) (1) (i) Each license provided for through NMLS shall include the 11
	117	+	following information: 12
122	118
123		-	(2) Be employed OR ENGAGED by more than one mortgage lender or 16
124		-	person who is exempt from licensing as a mortgage lender. 17
	119	+	1. The name of the licensee; 13
125	120
126		-	(c) (1) (i) Each license provided for through NMLS shall include the 18
127		-	following information: 19
	121	+	2. The name of the licensee’s [employer] SPONSOR; and 14
128	122
129		-	1. The ~~name~~ of the licensee~~; 20~~
	123	+	3. The unique identifier of the licensee. 15
130	124
131		-	2. The name of the licensee’s [employer] SPONSOR; and 21
	125	+	(ii) The unique identifier of the licensee shall constitute the license 16
	126	+	number for the license. 17
132	127
133		-	3. The unique identifier of the licensee. 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
134	131
135		-	(ii) The unique identifier of the licensee shall constitute the license 23
136		-	number for the license. 24
	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		-	(2) An individual may not act as a mortgage loan originator under a name 25
139		-	or for [an employer] A SPONSOR that is different from the name and [employer] SPONSOR 26
140		-	that appear on the license unless the licensee: 27
	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
	138	+
	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 SENATE BILL 307
	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 ENGAG ED 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	+	SENATE BILL 307 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
141	233
142	234		(i) Notifies the Commissioner, in the form and in accordance with 28
143	235		the process that the Commissioner requires, in advance of a change in the licensee’s name 29
144		-	or the licensee’s [employer] SPONSOR; 30 4 SENATE BILL 307
	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 SENATE BILL 307
	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	+	SENATE BILL 307 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 SENATE BILL 307
145	336
146	337
147	338
148		-	(ii) Pays to the Commissioner a license amendment fee set by the 1
149		-	Commissioner for each notice provided under this paragraph; and 2
	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
150	344
151		-	(iii) In the case of a new [employer] SPONSOR, amends the 3
152		-	sponsorship information on NMLS by submitting the amendment, in the form required by 4
153		-	the Commissioner, to indicate that the licensee is an employee OR INDEPENDENT 5
154		-	CONTRACTOR of the new [employer] SPONSOR. 6
	345	+	11–619. 6
155	346
156		-	(3) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 7
157		-	licensed mortgage lender or by a person exempt from licensing as a mortgage lender, the 8
158		-	licensee shall notify the Commissioner within 10 business days, and the license shall be 9
159		-	placed into nonactive status through NMLS. 10
	347	+	(a) Each mortgage loan originator shall be covered by a surety bond in accordance 7
	348	+	with this section. 8
160	349
161		-	(4) ~~During the time that~~ a ~~license~~ is ~~in nonactive status,~~ ~~it is a violation of 11~~
162		-	~~this~~ subtitle ~~for~~ the ~~licensee to engage in any activity for which a license is required under 12~~
163		-	~~this subtitle~~. 13
	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
164	353
165		-	(5) The license shall remain in nonactive status until the licensee: 14
	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
166	359
167		-	(i) Notifies the Commissioner, in the form and in accordance with 15
168		-	the process that the Commissioner requires, that the licensee has obtained employment OR 16
169		-	HAS BEEN EXCLUSIVELY ENGAGED with a licensed mortgage lender or with a person 17
170		-	exempt from licensing as a mortgage lender; and 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
171	362
172		-	(ii) Has complied with the requirements set forth in paragraph (2) of 19
173		-	this subsection. 20
	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
174	366
175		-	(d) A license may be issued under this subtitle to an individual who is not 21
176		-	employed OR EXCLUSIVE LY ENGAGED by a licensed mortgage lender or a person exempt 22
177		-	from licensing as a mortgage lender provided the license is placed into and remains in 23
178		-	nonactive status until the licensee: 24
	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
179	370
180		-	(1) Notifies the Commissioner, in the form and in accordance with the 25
181		-	process that the Commissioner requires, that the licensee has obtained employment OR 26
182		-	EXCLUSIVE ENGAGEMENT with a licensed mortgage lender or with a person exempt from 27
183		-	licensing as a mortgage lender; and 28
	371	+	(i) Covers all affiliated insurance producer–mortgage loan 25
	372	+	originators; and 26
184	373
185		-	(2) ~~Has complied with~~ the ~~requirements set forth in subsection (c)(2)~~ of ~~this 29~~
186		-	~~section~~. 30
	374	+	(ii) Is in the amount of $1,000,000 or another amount as required by 27
	375	+	the Commissioner by regulation. 28
187	376
188		-	(e) A license may be issued under this subtitle to an individual who is employed 31
189		-	OR EXCLUSIVELY ENGAG ED by a mortgage lender, or a person exempt from licensing as 32
190		-	a mortgage lender, that has its principal office located outside the State if the mortgage 33
191		-	lender or the person exempt from licensing as a mortgage lender maintains a resident agent 34
192		-	within the State. 35 SENATE BILL 307 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 SENATE BILL 307 9
193	384
194	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
195	389
196		-	(f) This section does not apply to an affiliated insurance producer–mortgage loan 1
197		-	originator licensed under § 11–603.1 of this subtitle. 2
	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
198	394
199		-	11–603.1. 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
200	399
201		-	(a) ~~In this section,~~ ~~“affiliated insurance producer–mortgage loan originator”~~ 4
202		-	~~means an individual who~~: 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
203	402
204		-	(1) Originates mortgage loans only on behalf of a single financial 6
205		-	institution that is: 7
	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
206	406
207		-	(i) Described in § 11–502(b)(1) of this title; and 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
208	411
209		-	(ii) Approved by the Commissioner under subsection (b) of this 9
210		-	section; 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
211	416
212		-	(2) Is a licensed insurance producer in good standing under § 10–103 of the 11
213		-	Insurance Article; and 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
214	421
215		-	(3) Holds an appointment as an insurance producer for an insurer that 13
216		-	controls, is controlled by, or is under common control with: 14
	422	+	11–621. 29
217	423
218		-	(i) The financial institution described in item (1) of this subsection; 15
219		-	or 16
	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
220	429
221		-	(ii) A mortgage lender licensee that: 17
222		-
223		-	1. Is approved by the Commissioner under subsection (c) of 18
224		-	this section; and 19
225		-
226		-	2. Originates loans only on behalf of the financial institution 20
227		-	described in item (1) of this subsection under an exclusive contract with the financial 21
228		-	institution. 22
229		-
230		-	(b) The Commissioner shall approve a financial institution described in 23
231		-	subsection (a)(1) of this section based on the following criteria: 24
232		-
233		-	(1) The financial institution is in good standing with its primary state or 25
234		-	federal regulator; and 26
235		-
236		-	(2) The financial institution is in material compliance with applicable state 27
237		-	and federal law. 28
238		-
239		-	(l) (1) An individual may not act as an affiliated insurance 29
240		-	producer–mortgage loan originator under a name or for [an employer] A SPONSOR that is 30 6 SENATE BILL 307
	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 SENATE BILL 307
241	432
242	433
243		-	~~different from the name and [employer] SPONSOR~~ that ~~appear on the license unless the~~ 1
244		-	~~licensee:~~ 2
	434	+	Article, including any standards established under that article for protecting employees 1
	435	+	from abusive labor practices. 2
245	436
246		-	(i) Notifies the Commissioner, in the form and in accordance with 3
247		-	the process that the Commissioner requires, in advance of a change in the licensee’s name 4
248		-	or the licensee’s [employer] SPONSOR; 5
	437	+	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
	438	+	October 1, 2023. 4
249	439
250		-	(ii) Pays to the Commissioner a license amendment fee set by the 6
251		-	Commissioner for each notice provided under item (i) of this paragraph; and 7
252		-
253		-	(iii) In the case of a new [employer] SPONSOR, amends the 8
254		-	sponsorship information on NMLS by submitting the amendment in the form required by 9
255		-	the Commissioner to indicate that the licensee is an employee OR INDEPENDENT 10
256		-	CONTRACTOR of the new [employer] SPONSOR. 11
257		-
258		-	(2) If a licensee ceases to be employed OR EXCLUSIVELY ENGAG ED by a 12
259		-	financial institution approved by the Commissioner under subsection (b) of this section, the 13
260		-	licensee shall notify the Commissioner within 10 business days, and the license shall be 14
261		-	placed into nonactive status through NMLS. 15
262		-
263		-	(3) During the time that a license is in nonactive status, it is a violation of 16
264		-	this subtitle for the licensee to engage in any activity for which a license is required under 17
265		-	this subtitle. 18
266		-
267		-	(4) The license shall remain in nonactive status until the licensee: 19
268		-
269		-	(i) Notifies the Commissioner, in the form and in accordance with 20
270		-	the process that the Commissioner requires, that the licensee has obtained employment OR 21
271		-	HAS BEEN EXCLUSIVELY ENGAGED with a financial institution that is approved by the 22
272		-	Commissioner under subsection (b) of this section; and 23
273		-
274		-	(ii) Has complied with the requirements set forth in paragraph (1) of 24
275		-	this subsection. 25
276		-
277		-	(m) The Commissioner may issue a license under this subtitle to an individual 26
278		-	who is not employed OR EXCLUSIVELY E NGAGED by a financial institution approved by 27
279		-	the Commissioner under subsection (b) of this section, provided that the license is placed 28
280		-	into and remains in nonactive status until the licensee: 29
281		-
282		-	(1) Notifies the Commissioner, in the form and in accordance with the 30
283		-	process that the Commissioner requires, that the licensee has obtained employment OR 31
284		-	EXCLUSIVE ENGAGEMENT with a financial institution approved by the Commissioner 32
285		-	under subsection (b) of this section; and 33
286		-
287		-	(2) Has complied with the requirements set forth in subsection (l)(1) of this 34
288		-	section. 35 SENATE BILL 307 7
289		-
290		-
291		-
292		-	11–606. 1
293		-
294		-	(a) To qualify for an initial license, an applicant shall complete at least 20 hours 2
295		-	of prelicensing education that shall include: 3
296		-
297		-	(1) 3 hours of instruction on federal law and regulations relating to 4
298		-	mortgage origination; 5
299		-
300		-	(2) 3 hours of instruction on ethics, including instruction on fraud, 6
301		-	consumer protection, and fair lending issues; and 7
302		-
303		-	(3) 2 hours of training related to lending standards and loan terms for 8
304		-	nontraditional mortgage products. 9
305		-
306		-	(e) This section does not preclude any prelicensing education course, as approved 10
307		-	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 11
308		-	the [employer] SPONSOR of the applicant or an entity that is affiliated with the applicant 12
309		-	by an agency contract, or any subsidiary or affiliate of the [employer] SPONSOR or 13
310		-	AFFILIATED entity. 14
311		-
312		-	11–606.1. 15
313		-
314		-	(a) To qualify for an initial license, an applicant shall pass a qualified written test 16
315		-	developed by [the Nationwide Mortgage Licensing System and Registry] NMLS and 17
316		-	administered by a test provider approved by [the Nationwide Mortgage Licensing System 18
317		-	and Registry] NMLS. 19
318		-
319		-	(g) This section does not prohibit a test provider approved by [the Nationwide 20
320		-	Mortgage Licensing System and Registry] NMLS from providing a test at the location of 21
321		-	the [employer] SPONSOR of the applicant or any subsidiary or affiliate of the [employer] 22
322		-	SPONSOR of the applicant, or any entity with which the applicant holds an exclusive 23
323		-	arrangement to conduct the business of a mortgage loan originator. 24
324		-
325		-	11–612. 25
326		-
327		-	(a) Before applying for renewal of a license, a licensee shall complete at least 8 26
328		-	hours of continuing education, which shall include: 27
329		-
330		-	(1) 3 hours of instruction on federal law and regulations relating to 28
331		-	mortgage origination; 29
332		-
333		-	(2) 2 hours of instruction on ethics, including instruction on fraud, 30
334		-	consumer protection, and fair lending issues; and 31
335		-	8 SENATE BILL 307
336		-
337		-
338		-	(3) 2 hours of training related to lending standards for the nontraditional 1
339		-	mortgage product marketplace. 2
340		-
341		-	(g) This section does not preclude any continuing education course, as approved 3
342		-	by [the Nationwide Mortgage Licensing System and Registry] NMLS, that is provided by 4
343		-	the [employer] SPONSOR of the mortgage loan originator or an entity that is affiliated with 5
344		-	the mortgage loan originator by an agency contract, or any subsidiary or affiliate of the 6
345		-	[employer] SPONSOR or AFFILIATED entity. 7
346		-
347		-	11–618. 8
348		-
349		-	The employment OR EXCLUSIVE ENGAGEM ENT of a mortgage loan originator 9
350		-	licensed under this subtitle by a mortgage lender does not relieve the mortgage lender of a 10
351		-	responsibility under this subtitle or under Subtitle 5 of this title, a rule or regulation 11
352		-	adopted under this subtitle or under Subtitle 5 of this title, or a law governing mortgage 12
353		-	lending in the State. 13
354		-
355		-	11–619. 14
356		-
357		-	(a) Each mortgage loan originator shall be covered by a surety bond in accordance 15
358		-	with this section. 16
359		-
360		-	(b) (1) A mortgage loan originator who is an employee OR INDEPENDENT 17
361		-	CONTRACTOR of a person subject to licensure under Subtitle 5 of this title may use the 18
362		-	surety bond of that person to meet the mortgage loan originator’s surety bond requirement. 19
363		-
364		-	(2) A mortgage loan originator who is an employee OR INDEPENDENT 20
365		-	CONTRACTOR of a person exempt from licensure under Subtitle 5 of this title may use a 21
366		-	surety bond of the person to meet the mortgage loan originator’s surety bond requirement, 22
367		-	provided the surety bond meets the requirements, based on mortgage loan volume, under 23
368		-	§ 11–508 of this title. 24
369		-
370		-	(c) A licensee who is an affiliated insurance producer–mortgage loan originator 25
371		-	shall be deemed in compliance with this section if the licensee: 26
372		-
373		-	(1) Holds a surety bond that would satisfy the surety bond requirements 27
374		-	under § 11–508 of this title if the affiliated insurance producer–mortgage loan originator 28
375		-	were a licensee under Subtitle 5 of this title; or 29
376		-
377		-	(2) Is covered under a blanket surety bond held by the financial institution 30
378		-	or mortgage lender licensee identified in § 11–603.1(a)(3) of this subtitle if the blanket 31
379		-	surety bond: 32
380		-
381		-	(i) Covers all affiliated insurance producer–mortgage loan 33
382		-	originators; and 34
383		-	SENATE BILL 307 9
384		-
385		-
386		-	(ii) Is in the amount of $1,000,000 or another amount as required by 1
387		-	the Commissioner by regulation. 2
388		-
389		-	11–620. 3
390		-
391		-	(a) (1) Except as otherwise provided in 12 U.S.C. § 5111, the requirements 4
392		-	under any federal law and Title 4, Subtitles 1 through 5 of the General Provisions Article 5
393		-	regarding the privacy or confidentiality of information or material provided to [the 6
394		-	Nationwide Mortgage Licensing System and Registry] NMLS, and any privilege arising 7
395		-	under federal or state law, including the rules of any federal or state court with respect to 8
396		-	that information or material, shall continue to apply to that information or material after 9
397		-	the information or material has been disclosed to [the Nationwide Mortgage Licensing 10
398		-	System and Registry] NMLS. 11
399		-
400		-	(2) The information and material may be shared with all state and federal 12
401		-	regulatory officials having mortgage industry oversight authority without the loss of 13
402		-	privilege or the loss of confidentiality protections provided by federal law or Title 4, 14
403		-	Subtitles 1 through 5 of the General Provisions Article. 15
404		-
405		-	(b) The Commissioner may enter into information sharing agreements with other 16
406		-	governmental agencies, the Conference of State Bank Supervisors, the American 17
407		-	Association of Residential Mortgage Regulators, or other associations representing 18
408		-	governmental agencies. 19
409		-
410		-	(c) Information or material that is subject to a privilege or confidentiality under 20
411		-	subsection (a) of this section may not be subject to: 21
412		-
413		-	(1) Disclosure under any federal or state law governing the disclosure to 22
414		-	the public of information held by an officer or agency of the federal government or a state 23
415		-	that has received the information or material; or 24
416		-
417		-	(2) Subpoena, discovery, or admission into evidence, in any private civil 25
418		-	action or administrative process, unless with respect to any privilege held by [the 26
419		-	Nationwide Mortgage Licensing System and Registry] NMLS the person to whom the 27
420		-	information or material pertains waives, in whole or in part, that privilege. 28
421		-
422		-	(d) Any provisions of Title 4, Subtitles 1 through 5 of the General Provisions 29
423		-	Article relating to the disclosure of any information or material described in subsection (a) 30
424		-	of this section that are inconsistent with subsection (a) of this section shall be superseded 31
425		-	by the requirements of this section. 32
426		-
427		-	(e) This section does not apply to information or material relating to the 33
428		-	employment AND ENGAGEMENT history of, and publicly adjudicated disciplinary and 34
429		-	enforcement actions against, mortgage loan originators that is included in [the Nationwide 35
430		-	Mortgage Licensing System and Registry] NMLS and designated for access by the public. 36
431		-	10 SENATE BILL 307
432		-
433		-
434		-	11–621. 1
435		-
436		-	Nonfederally insured credit unions that [employ] SPONSOR mortgage loan 2
437		-	originators shall register these employees OR INDEPENDENT CONTR ACTORS with [the 3
438		-	Nationwide Mortgage Licensing System and Registry] NMLS by providing the information 4
439		-	concerning the employees’ OR INDEPENDENT CONTR ACTORS’ identity set forth in 12 5
440		-	U.S.C. § 5106(a)(2). 6
441		-
442		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act is not intended to 7
443		-	conflict with or be interpreted to supersede any provision of the Labor and Employment 8
444		-	Article, including any standards established under that article for protecting employees 9
445		-	from abusive labor practices. 10
446		-
447		-	SECTION 3. AND BE IT FURTHER ENACTED, That, on or before December 31, 11
448		-	2024, the Commissioner of Financial Regulation shall submit a report to the Senate 12
449		-	Finance Committee and the House Economic Matters Committee, in accordance with § 13
450		-	2–1257 of the State Government Article, on: 14
451		-
452		-	(1) the number of complaints received by the Office of Financial Regulation 15
453		-	from consumers who receive mortgage loan origination services from independent 16
454		-	contractors between October 1, 2023, and November 1, 2024; and 17
455		-
456		-	(2) the number of violations of law or regulations or other concerns 18
457		-	regarding the supervision by sponsors of mortgage loan originators providing services as 19
458		-	independent contractors cited by Office of Financial Regulation examiners during 20
459		-	examinations of sponsors conducted between October 1, 2023, and November 1, 2024. 21
460		-
461		-	SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 22
462		-	October 1, 2023. 23
463		-
464		-
465		-
466		-
467		-
468		-	Approved:
469		-	________________________________________________________________________________
470		-	Governor.
471		-	________________________________________________________________________________
472		-	President of the Senate.
473		-	________________________________________________________________________________
474		-	Speaker of the House of Delegates.