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Sponsors
1 Co-sponsor
History
- Referred to correction
- Delivered to assembly
- Passed senateVote 61–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.311
- Referred to banks
- Returned to senate
- Died in assembly
- Referred to banks
- Delivered to assembly
- Passed senateVote 62–0
Show 4 earlier actions
- Advanced to third reading
- 2nd report cal.
- 1st report cal.203
- Referred to banks
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S2896
Title of bill
An act to amend the banking law, in relation to applications for a license to engage in the business of mortgage banking and to register as a mortgage broker
Purpose
To conform the character and fitness standards for mortgage bankers and mortgage brokers to the character and fitness standards for mortgage loan originators.
Read the full memo (610 words)
Summary of provisions
Section 1 of the bill amends Section 592(2) of the Banking Law regarding mortgage bankers, and section 2 of the bill amends Section 592-a(2) of the Banking Law regarding mortgage brokers.
Both sections are amended to provide that the Superintendent shall not issue a mortgage banker license, or a mortgage broker certificate, to a person who has been convicted of a felony in the preceding seven years, or if the person has ever been convicted of a felony involving an act of fraud, dishonesty, or a breach of trust, or money laundering.
The existing restriction on issuing a mortgage banker license or a mortgage broker certificate where the applicant has previously had a license or certificate revoked by the Superintendent of Banks is amended to prohibit the issuance of such license or certificate if the person has had a mortgage banking license, mortgage broker authorization or mortgage loan originator license revoked in any governmental jurisdiction.
Existing law
Sections 592 and 592-a of the Banking Law currently provide that the Superintendent of Banks may refuse to issue a mortgage banker license or a mortgage broker certificate where a person has been convicted of certain felony violations or has had a license or registration revoked by the Superintendent.
Justification
The Banking Law currently provides for the licensing of mortgage bankers and the certification of mortgage brokers. In addition, a 2006 law established registration and education requirements for persons who work for mortgage bankers and mortgage brokers. These persons are known as mortgage loan originators.
In 2008, the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the "SAFE Act") was enacted to foster a uniform system of MLO licensing at the state level. This federal law required certain minimum standards for licensing, including restrictions on approving persons who have felony convictions.
In 2009, New York's law was amended to conform to the federal standards. However, as a result of the 2009 amendments, the approval standards for mortgage loan originators (MLO) are now stricter than the approval standards for mortgage banking and mortgage broker companies which employ such MLOs.
For example, sections 592 and 592-a of the Banking Law provide that the Superintendent may refuse to issue a mortgage banking license or mortgage broker certification when a person has been convicted of certain specified felonies. In contrast, section 599-e of the Banking Law provides that the Superintendent shall not issue a mortgage loan originator license if the person has been convicted of any felony within the preceding seven year period, or if the person has ever been convicted of a felony involving an act of fraud, dishonesty, or a breach of trust, or money laundering.
This situation creates an undesirable inconsistency in the approval standards. A person who is ineligible to be a mortgage loan originator would be able to act in a governing capacity as an officer or director of a mortgage banker or mortgage broker. In order to protect the public, and ensure the integrity of the mortgage lending process, this bill would strengthen the approval standards for mortgage bankers and mortgage brokers so they are consistent with the standards for mortgage loan originators.
Legislative history
S.3832 - passed Senate in 2013 and 2014 S.5144 - passed Senate in 2011 and 2012
Fiscal implications
None
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.