EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1516*
HOUSE BILL 1516
I1 EMERGENCY BILL 5lr3567
CF SB 1026
By: Delegate Queen
Introduced and read first time: February 17, 2025
Assigned to: Rules and Executive Nominations
A BILL ENTITLED
AN ACT concerning 1
Financial Institutions – Consumer Credit – Application of Licensing 2
Requirements 3
(Maryland Secondary Market Stability Act of 2025) 4
FOR the purpose of providing that certain provisions of law governing the licensing of 5
providers of certain financial services in the State do not apply to a certain person 6
that acquires or is assigned a certain mortgage, mortgage loan, or installment loan 7
under certain circumstances; establishing the Maryland Licensing Workgroup to 8
study and make recommendations on licensing requirements for persons that 9
provide financial services in the State; and generally relating to consumer credit 10
lending licensing requirements and the Maryland Licensing Workgroup. 11
BY repealing and reenacting, without amendments, 12
Article – Financial Institutions 13
Section 1–101(a) and (n), 11–301(a) and (b), and 11–501(a) and (k) through (m) 14
Annotated Code of Maryland 15
(2020 Replacement Volume and 2024 Supplement) 16
BY adding to 17
Article – Financial Institutions 18
Section 11–102 19
Annotated Code of Maryland 20
(2020 Replacement Volume and 2024 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – Financial Institutions 24
1–101. 25
2 HOUSE BILL 1516
(a) In this article, unless the context clearly requires otherwise, the following 1
words have the meanings indicated. 2
(n) “Mortgage” includes a deed of trust that secures a debt or the performance of 3
an obligation. 4
11–102. 5
(A) IN THIS SECTION, “INSTALLMENT LOAN ” HAS THE MEANING STAT ED IN 6
§ 11–301 OF THIS TITLE. 7
(B) EXCEPT FOR § 11–219 OF THIS TITLE, THIS TITLE DOES NOT APPLY TO A 8
PERSON THAT ACQUIRES OR IS ASSIGNED IN WH OLE OR IN PART: 9
(1) A MORTGAGE , IF THE PERSON DOES N OT OTHERWISE MAKE 10
MORTGAGES; 11
(2) A MORTGAGE LOAN , AS DEFINED IN § 11–501 OF THIS TITLE, IF 12
THE PERSON DOES NOT OTHERWISE ENGAGE IN THE MORTGAGE LENDING 13
BUSINESS, AS DEFINED IN § 11–501 OF THIS TITLE; OR 14
(3) AN INSTALLMENT LOAN , IF THE PERSON: 15
(I) RELIES ON ANOTHER PERSON TO SERVICE OR COLLECT ON 16
THE INSTALLMENT LOAN ; AND 17
(II) DOES NOT OTHERWISE MA KE INSTALLMENT LOANS . 18
(C) THIS SECTION MAY NOT BE CONSTRUED TO ALTE R THE DEFINITION OF 19
“STUDENT LOAN SERVICE R”, AS DEFINED IN § 2–104.1 OF THIS ARTICLE. 20
11–301. 21
(a) In this subtitle the following words have the meanings indicated. 22
(b) “Installment loan” means a loan or extension of credit made for consideration 23
under § 12–103(a)(3) or (c) or Title 12, Subtitle 9, or Subtitle 10 of the Commercial Law 24
Article. 25
11–501. 26
(a) In this subtitle the following words have the meanings indicated. 27
(k) (1) “Mortgage lender” means any person who: 28
HOUSE BILL 1516 3
(i) Is a mortgage broker; 1
(ii) Makes a mortgage loan to any person; or 2
(iii) Is a mortgage servicer. 3
(2) “Mortgage lender” does not include: 4
(i) A financial institution that accepts deposits and is regulated 5
under Title 3, Title 4, Title 5, or Title 6 of this article; 6
(ii) The Federal Home Loan Mortgage Corporation; 7
(iii) The Federal National Mortgage Association; 8
(iv) The Government National Mortgage Association; 9
(v) Any person engaged exclusively in the acquisition of all or any 10
portion of a mortgage loan under any federal, State, or local governmental program of 11
mortgage loan purchases; or 12
(vi) An affiliated insurance producer–mortgage loan originator 13
licensed under § 11–603.1 of this title. 14
(l) (1) “Mortgage lending business” means the activities set forth in the 15
definition of “mortgage lender” in subsection (k) of this section which require that person 16
to be licensed under this subtitle. 17
(2) “Mortgage lending business” includes the making or procuring of 18
mortgage loans secured by a dwelling or residential real estate located outside Maryland. 19
(m) (1) “Mortgage loan” means any loan primarily for personal, family, or 20
household use that is secured by a mortgage, deed of trust, or other equivalent consensual 21
security interest on a dwelling or residential real estate on which a dwelling is constructed 22
or intended to be constructed. 23
(2) “Mortgage loan” includes a loan in which funds are advanced through a 24
shared appreciation agreement. 25
SECTION 2. AND BE IT FURTHER ENACTED, That: 26
(a) There is a Maryland Licensing Workgroup. 27
(b) The Workgroup consists of the following members: 28
(1) the Commissioner of Financial Regulation, or the Commissioner’s 29
designee; 30 4 HOUSE BILL 1516
(2) the following members jointly appointed by the President of the Senate 1
and the Speaker of the House: 2
(i) one representative of a consumer advocacy organization with 3
general knowledge about financial services, lending services, capital markets, and 4
structured finance; 5
(ii) one representative of a banking institution operating in the 6
State; 7
(iii) one representative of a credit union operating in the State; 8
(iv) one representative of a nonbank mortgage business operating in 9
the State; and 10
(v) one member with expertise in: 11
1. State laws and regulations that impact the chartering, 12
licensing, and supervision of the lending industry within the State; and 13
2. financial products and practices that impact consumers; 14
and 15
(3) the following members appointed by the Governor: 16
(i) one member who has general knowledge about financial services, 17
lending services, capital markets, and structured finance; and 18
(ii) one member of the public. 19
(c) The Commissioner of Financial Regulation, or the Commissioner’s designee, 20
shall serve as the chair of the Workgroup. 21
(d) The Office of Financial Regulation shall provide staff for the Workgroup. 22
(e) A member of the Workgroup: 23
(1) may not receive compensation as a member of the Workgroup; but 24
(2) is entitled to reimbursement for expenses under the Standard State 25
Travel Regulations, as provided in the State budget. 26
(f) The Workgroup shall: 27
(1) subject to subsection (g) of this section, study: 28
HOUSE BILL 1516 5
(i) all licensing statutes and regulations adopted under those 1
statutes concerning the provision of financial services in the State; 2
(ii) the need for and the efficacy of the existing licensing and 3
registration system for actively licensed persons who provide financial services in the State; 4
and 5
(iii) whether there is any benefit to expanding existing licensing or 6
registration systems to persons not already subject to those licensing requirements; and 7
(2) make recommendations regarding: 8
(i) the licensing and registration system for actively licensed 9
persons who provide financial services in the State; and 10
(ii) the expansion of the existing licensing or registration systems to 11
persons not already subject to those licensing requirements. 12
(g) In conducting the study required under subsection (f) of this section, the 13
Workgroup shall, at a minimum, consider the potential impacts, costs, and benefits of its 14
recommendations on: 15
(1) residents of the State; 16
(2) persons facilitating, brokering, making, servicing, or acquiring loans in 17
the State; 18
(3) the availability of credit in the State; 19
(4) the cost of credit in the State compared to other states; and 20
(5) the capital markets, including the volume of secondary market 21
transactions. 22
(h) On or before December 31, 2025, the Workgroup shall report its findings and 23
recommendations to the Governor and, in accordance with § 2 –1257 of the State 24
Government Article, the General Assembly. 25
SECTION 3. AND BE IT FURTHER ENACTED, That this Act is an emergency 26
measure, is necessary for the immediate preservation of the public health or safety, has 27
been passed by a yea and nay vote supported by three–fifths of all the members elected to 28
each of the two Houses of the General Assembly, and shall take effect from the date it is 29
enacted. Section 2 of this Act shall remain effective through June 30, 2026, and, at the end 30
of June 30, 2026, Section 2 of this Act, with no further action required by the General 31
Assembly, shall be abrogated and of no further force and effect. 32