EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*hb1516*
HOUSE BILL 1516
I1 EMERGENCY BILL (5lr3567)
ENROLLED BILL
— Economic Matters/Finance —
Introduced by Delegate Queen
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
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 trust that acquires or is assigned a certain mortgage 8
loan under certain circumstances; establishing the Maryland Licensing Workgroup 9
to study and make recommendations on licensing requirements for persons that 10
provide financial services in the State; and generally relating to consumer credit 11
lending licensing requirements and the Maryland Licensing Workgroup. 12
BY repealing and reenacting, without amendments, 13
Article – Financial Institutions 14 2 HOUSE BILL 1516
Section 1–101(a) and (n), 11–301(a) and (b), and 11–501(a) and (k) through (m) 1
Annotated Code of Maryland 2
(2020 Replacement Volume and 2024 Supplement) 3
BY adding to 4
Article – Financial Institutions 5
Section 11–102 11–501(p) and (u) 6
Annotated Code of Maryland 7
(2020 Replacement Volume and 2024 Supplement) 8
BY repealing and reenacting, with amendments, 9
Article – Financial Institutions 10
Section 11–302(b), 11–501(p) through (s), and 11–502(b) 11
Annotated Code of Maryland 12
(2020 Replacement Volume and 2024 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Financial Institutions 16
1–101. 17
(a) In this article, unless the context clearly requires otherwise, the following 18
words have the meanings indicated. 19
(n) “Mortgage” includes a deed of trust that secures a debt or the performance of 20
an obligation. 21
11–102. 22
(A) IN THIS SECTION, “INSTALLMENT LOAN ” HAS THE MEANING STAT ED IN 23
§ 11–301 OF THIS TITLE. 24
(B) EXCEPT FOR § 11–219 OF THIS TITLE, THIS TITLE DOES NOT APPLY TO A 25
PERSON THAT ACQUIRES OR IS ASSIGNED IN WH OLE OR IN PART: 26
(1) A MORTGAGE , IF THE PERSON DOES N OT OTHERWISE MAKE 27
MORTGAGES ; 28
(2) A MORTGAGE LOAN , AS DEFINED IN § 11–501 OF THIS TITLE, IF 29
THE PERSON DOES NOT OTHERWISE ENGAGE IN THE MORTGAGE LENDING 30
BUSINESS, AS DEFINED IN § 11–501 OF THIS TITLE; OR 31
(3) AN INSTALLMENT LOAN , IF THE PERSON: 32
HOUSE BILL 1516 3
(I) RELIES ON ANOTHER PER SON TO SERVICE OR CO LLECT ON 1
THE INSTALLMENT LOAN ; AND 2
(II) DOES NOT OTHERWISE MA KE INSTALLMENT LOANS . 3
(C) THIS SECTION MAY NOT BE CONSTRUED TO ALTE R THE DEFINITION OF 4
“STUDENT LOAN SERVICE R”, AS DEFINED IN § 2–104.1 OF THIS ARTICLE. 5
11–301. 6
(a) In this subtitle the following words have the meanings indicated. 7
(b) “Installment loan” means a loan or extension of credit made for consideration 8
under § 12–103(a)(3) or (c) or Title 12, Subtitle 9, or Subtitle 10 of the Commercial Law 9
Article. 10
11–302. 11
(b) The licensing provisions of this subtitle do not apply to any of the following 12
persons, if organized under the laws of this State or otherwise qualified to do business in 13
this State: 14
(1) A banking institution; 15
(2) A national banking association; 16
(3) A federal or State savings and loan association; 17
(4) A federal or State credit union; 18
(5) A licensee under Subtitle 2 of this title; 19
(6) A seller of goods or services or both not engaged in: 20
(i) Making loans; or 21
(ii) Acting as a credit services business as defined under Title 14, 22
Subtitle 19 of the Commercial Law Article; 23
(7) A licensee under Subtitle 5 of this title engaged solely in a mortgage 24
lending business as defined in that subtitle; or 25
(8) An entity exempt from licensing as a mortgage lender under [§ 26
11–502(b)(10)] § 11–502(B)(3), (10), OR (13) of this title. 27
11–501. 28 4 HOUSE BILL 1516
(a) In this subtitle the following words have the meanings indicated. 1
(k) (1) “Mortgage lender” means any person who: 2
(i) Is a mortgage broker; 3
(ii) Makes a mortgage loan to any person; or 4
(iii) Is a mortgage servicer. 5
(2) “Mortgage lender” does not include: 6
(i) A financial institution that accepts deposits and is regulated 7
under Title 3, Title 4, Title 5, or Title 6 of this article; 8
(ii) The Federal Home Loan Mortgage Corporation; 9
(iii) The Federal National Mortgage Association; 10
(iv) The Government National Mortgage Association; 11
(v) Any person engaged exclusively in the acquisition of all or any 12
portion of a mortgage loan under any federal, State, or local governmental program of 13
mortgage loan purchases; or 14
(vi) An affiliated insurance producer–mortgage loan originator 15
licensed under § 11–603.1 of this title. 16
(l) (1) “Mortgage lending business” means the activities set forth in the 17
definition of “mortgage lender” in subsection (k) of this section which require that person 18
to be licensed under this subtitle. 19
(2) “Mortgage lending business” includes the making or procuring of 20
mortgage loans secured by a dwelling or residential real estate located outside Maryland. 21
(m) (1) “Mortgage loan” means any loan primarily for personal, family, or 22
household use that is secured by a mortgage, deed of trust, or other equivalent consensual 23
security interest on a dwelling or residential real estate on which a dwelling is constructed 24
or intended to be constructed. 25
(2) “Mortgage loan” includes a loan in which funds are advanced through a 26
shared appreciation agreement. 27
(P) “PASSIVE TRUST” MEANS A TRUST THAT : 28
HOUSE BILL 1516 5
(1) ACQUIRES OR IS ASSIGN ED MORTGAGE LOANS IN WHOLE OR IN 1
PART; 2
(2) DOES NOT MAKE MORTGAG E LOANS; 3
(3) IS NOT A MORTGAGE BRO KER OR A MORTGAGE SE RVICER; AND 4
(4) IS NOT ENGAGED IN THE SERVICING OF MORTGAG E LOANS, WHICH 5
DOES NOT INCLUDE THE ACT OF TRANSMITTING OR DIRECTING PAYMENT S RECEIVED 6
BY A MORTGAGE SERVIC ER. 7
[(p)] (Q) “Person” means a natural person, corporation, limited liability 8
company, partnership, business trust, statutory trust, or association. 9
[(q)] (R) “Residential real estate” means any owner–occupied real property 10
located in Maryland on which a dwelling is constructed or intended to be constructed. 11
[(r)] (S) “Shared appreciation agreement” means a writing evidencing a 12
transaction or any option, future, or any other derivative between a person and a consumer 13
where the consumer receives money or any other item of value in exchange for an interest or 14
future interest in a dwelling or residential real estate, or a future obligation to repay a sum 15
on the occurrence of an event such as: 16
(1) The transfer of ownership; 17
(2) A repayment maturity date; 18
(3) The death of the consumer; or 19
(4) Any other event contemplated by the writing. 20
[(s)] (T) “State” means the State of Maryland. 21
(U) “TRUST” INCLUDES ANY TRUST E STABLISHED UNDER THE LAWS OF THE 22
STATE OR ANY OTHER ST ATE. 23
11–502. 24
(b) The provisions of this subtitle do not apply to: 25
(1) Any bank, trust company, savings bank, savings and loan association, 26
or credit union incorporated or chartered under the laws of this State or the United States 27
or any other–state bank having a branch in this State; 28
(2) Any insurance company authorized to do business in the State; 29
6 HOUSE BILL 1516
(3) Any corporate instrumentality of the Government of the United States 1
including: 2
(i) The Federal Home Loan Mortgage Corporation; 3
(ii) The Federal National Mortgage Association; [and] 4
(iii) The Government National Mortgage Association; AND 5
(IV) A TRUST ESTABLISHED BY ANY CORPORATE 6
INSTRUMENTALITY OF T HE GOVERNMENT OF THE UNITED STATES FOR THE 7
PURPOSE OF ACQUIRING MORTGAGE LOANS ; 8
(4) Any person who takes back a deferred purchase money mortgage in 9
connection with the sale of: 10
(i) A dwelling or residential real estate owned by, and titled in the 11
name of, that person; or 12
(ii) A new residential dwelling that the person built; 13
(5) A nonprofit charitable organization registered with the Maryland 14
Secretary of State or a nonprofit religious organization; 15
(6) An employer making a mortgage loan to an employee; 16
(7) A person making a mortgage loan to a borrower who is the person’s 17
spouse, child, child’s spouse, parent, sibling, grandparent, grandchild, or grandchild’s 18
spouse; 19
(8) A real estate broker who: 20
(i) Is licensed in the State; and 21
(ii) Makes a mortgage loan providing a repayment schedule of 2 years 22
or less to assist the borrower in the purchase or sale of a dwelling or residential real estate 23
through the broker; 24
(9) A home improvement contractor licensed under the Maryland Home 25
Improvement Law who assigns a mortgage loan without recourse within 30 days after 26
completion of the contract to a person licensed under this subtitle or to an institution that is 27
exempt from this subtitle under item (1), (2), or (10) of this subsection; 28
(10) A subsidiary or affiliate of an institution described in subsection (c) of 29
this section, which subsidiary or affiliate: 30
HOUSE BILL 1516 7
(i) Is subject to audit or examination by a regulatory body or agency 1
of this State or the state where the subsidiary or affiliate maintains its principal office; and 2
(ii) Files with the Commissioner, prior to making mortgage loans, 3
information sufficient to identify: 4
1. The correct corporate name of the subsidiary or affiliate; 5
2. An address and telephone number of a contact person for 6
the subsidiary or affiliate; 7
3. A resident agent; and 8
4. Any additional information considered necessary by the 9
Commissioner for protection of the public; 10
(11) Any employee benefit plan qualified under Internal Revenue Code § 401 11
or persons acting as fiduciaries with respect to such a plan, making mortgage loans solely 12
to plan participants from plan assets; [or] 13
(12) Employees acting within the scope of their employment with: 14
(i) A licensed mortgage lender; or 15
(ii) A person who is exempt from licensure under this subtitle; OR 16
(13) A PASSIVE TRUST . 17
SECTION 2. AND BE IT FURTHER ENACTED, That: 18
(a) There is a Maryland Licensing Workgroup. 19
(b) The Workgroup consists of the following members: 20
(1) the Commissioner of Financial Regulation, or the Commissioner’s 21
designee; 22
(2) the following members jointly appointed by the President of the Senate 23
and the Speaker of the House: 24
(i) one representative three representatives of a consumer advocacy 25
organization with general knowledge about financial services, lending services, capital 26
markets, and structured finance; 27
(ii) one representative of a banking institution operating in the 28
State; 29 8 HOUSE BILL 1516
(iii) one representative of a credit union operating in the State; 1
(iv) one representative of a nonbank mortgage business operating in 2
the State; and 3
(v) one member with expertise in: 4
1. State laws and regulations that impact the chartering, 5
licensing, and supervision of the lending industry within the State; and 6
2. financial products and practices that impact consumers; 7
and 8
(3) the following members appointed by the Governor: 9
(i) one member who has general knowledge about financial services, 10
lending services, capital markets, and structured finance; and 11
(ii) one member of the public. 12
(c) The Commissioner of Financial Regulation, or the Commissioner’s designee, 13
shall serve as the chair of the Workgroup. 14
(d) The Office of Financial Regulation shall provide staff for the Workgroup. 15
(e) A member of the Workgroup: 16
(1) may not receive compensation as a member of the Workgroup; but 17
(2) is entitled to reimbursement for expenses under the Standard State 18
Travel Regulations, as provided in the State budget. 19
(f) The Workgroup shall: 20
(1) subject to subsection (g) of this section, study: 21
(i) all licensing statutes and regulations adopted under those 22
statutes concerning the provision of financial services in the State; 23
(ii) the need for and the efficacy of the existing licensing and 24
registration system for actively licensed persons who provide financial services in the State; 25
and 26
(iii) whether there is any benefit to expanding existing licensing or 27
registration systems to persons not already subject to those licensing requirements; and 28
HOUSE BILL 1516 9
(2) make recommendations regarding: 1
(i) the licensing and registration system for actively licensed 2
persons who provide financial services in the State; and 3
(ii) the expansion of the existing licensing or registration systems to 4
persons not already subject to those licensing requirements. 5
(g) In conducting the study required under subsection (f) of this section, the 6
Workgroup shall, at a minimum, consider the potential impacts, costs, and benefits of its 7
recommendations on: 8
(1) residents of the State; 9
(2) persons facilitating, brokering, making, servicing, or acquiring loans in 10
the State; 11
(3) the availability of credit in the State; 12
(4) the cost of credit in the State compared to other states; and 13
(5) the capital markets, including the volume of secondary market 14
transactions. 15
(h) On or before December 31, 2025, the Workgroup shall report its findings and 16
recommendations to the Governor and, in accordance with § 2 –1257 of the State 17
Government Article, the General Assembly. 18
SECTION 3. AND BE IT FURTHER ENACTED, That the intent of Section 1 of this 19
Act is to clarify existing exemptions under State law. 20
SECTION 4. AND BE IT FURTHER ENACTED, That this Act is an emergency 21
measure, is necessary for the immediate preservation of the public health or safety, has 22
been passed by a yea and nay vote supported by three–fifths of all the members elected to 23
each of the two Houses of the General Assembly, and shall take effect from the date it is 24
enacted. Section 2 of this Act shall remain effective through June 30, 2026, and, at the end 25
of June 30, 2026, Section 2 of this Act, with no further action required by the General 26
Assembly, shall be abrogated and of no further force and effect. 27