S T A T E   O F   N E W   Y O R K
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                                  2225

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            January 14, 2011
                               ___________

Introduced by M. of A. GIBSON -- read once and referred to the Committee
  on Banks

AN  ACT  to amend the banking law, in relation to requiring all mortgage
  brokers to be licensed, establishes certain  educational  requirements
  through  rules  and  regulations promulgated by the banking board, and
  directs and authorizes the  superintendent  to  establish  a  mortgage
  broker licensing exam

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (a) of subdivision 2 and subdivision 3 of section
590 of the banking law, as amended by chapter 472 of the laws  of  2008,
paragraph  (c)  of  subdivision 3 as added and paragraphs (d) and (e) of
subdivision 3 as relettered by chapter 507 of  the  laws  of  2009,  are
amended to read as follows:
  (a)  No  person, partnership, association, corporation or other entity
shall engage in the business of making [five or more] mortgage loans  in
any  one calendar year without first obtaining a license from the super-
intendent in accordance with the licensing procedure  provided  in  this
article  and such regulations as may be promulgated by the banking board
or prescribed by the superintendent.  The licensing provisions  of  this
subdivision shall not apply to any exempt organization nor to any entity
or  entities  which  shall  be  exempted  in accordance with regulations
promulgated by the banking board hereunder.
  3. Rules and regulations. In addition to such powers as may  otherwise
be  prescribed  by  this chapter, the banking board is hereby authorized
and empowered to promulgate such rules and regulations  as  may  in  the
judgement  of  the banking board be consistent with the purposes of this
article, or appropriate for the effective administration of  this  arti-
cle, including, but not limited to:
  (a)  Such  rules  and regulations in connection with the activities of
mortgage brokers, mortgage bankers, mortgage loan servicers  and  exempt

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06274-01-1
              

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organizations  as may be necessary and appropriate for the protection of
consumers in this state;
  (b)  Such rules and regulations as may be necessary and appropriate to
define improper or fraudulent business practices in connection with  the
activities  of  mortgage brokers, mortgage bankers, mortgage loan servi-
cers and exempt organizations in making mortgage loans;
  (c) Such rules and regulations under this article regarding the origi-
nation, sale or servicing of manufactured home loans as may be necessary
and appropriate for the protection of consumers;
  (d) Such rules and regulations [as may define the terms used  in  this
article  and as may be necessary and appropriate to interpret and imple-
ment the provisions of this article]  ESTABLISHING  MINIMUM  EDUCATIONAL
REQUIREMENTS FOR ALL MORTGAGE BROKERS; and
  (e) Such rules and regulations as may be necessary for the enforcement
of this article.
  The  banking  board  is  hereby  authorized and empowered to make such
specific rulings, demands and findings as it may deem necessary for  the
proper conduct of the mortgage lending industry.
  S  2. Subdivision 1 of section 592-a of the banking law, as amended by
section 18 of part D1 of chapter 109 of the laws of 2006, is amended  to
read as follows:
  1.  Upon  the filing of an application for registration, if the super-
intendent shall find that the APPLICANT HAS MET ALL EDUCATIONAL REQUIRE-
MENTS ESTABLISHED BY THE BANKING BOARD, HAS  FURNISHED  PROOF  THAT  THE
APPLICANT  HAS  PASSED  THE  LICENSING  EXAMINATION FOR MORTGAGE BROKERS
ESTABLISHED BY THIS ARTICLE,  AND  THAT  THE  financial  responsibility,
experience,  character, and general fitness of the applicant, and of the
members thereof if the applicant is a co-partnership or association, and
of the officers and directors thereof if the applicant is a corporation,
are such as to command the confidence of the community  and  to  warrant
belief  that  the  business will be operated honestly, fairly, and effi-
ciently within the purpose of this  article,  the  superintendent  shall
thereupon  register  the  applicant as a mortgage broker on a roll main-
tained for that purpose at the banking department, and issue  a  certif-
icate attesting to such registration in duplicate. If the superintendent
shall not so find, the superintendent shall not register such applicant,
and  shall  notify the applicant of the denial. The superintendent shall
transmit one copy of such certificate to the applicant and file  another
in  the  office  of the banking department. Upon receipt of such certif-
icate a mortgage broker shall be authorized to engage in the business of
placing, processing and negotiating mortgage  loans.  Such  registration
shall  remain  in  full  force and effect until it is surrendered by the
licensee or revoked or suspended as hereinafter  provided,  except  that
such registration, notwithstanding any provisions of subdivision five of
section seventeen of this chapter to the contrary, shall expire upon the
registrant's  failure to pay the required assessment charged pursuant to
such section seventeen thirty days after the date or dates such  payment
or payments are due. If the registrant fails to pay such charged assess-
ment  by  the  date  or dates such payment or payments are due, then the
registrant shall be required to pay, in addition,  a  late  fee  in  the
amount  of one hundred dollars. Such registration shall be reinstated if
the registrant pays such assessment charged and any applicable late fees
and/or interest within sixty days of such expiration. The superintendent
shall approve or deny every application for registration hereunder with-
in ninety days from the  filing  of  a  complete  application  provided,

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however,  that  failure to act within the prescribed period shall not be
deemed approval of any such application.
  S  3. The banking law is amended by adding a new section 592-b to read
as follows:
  S 592-B. MORTGAGE BROKER LICENSING EXAMINATION. THE SUPERINTENDENT  IS
HEREBY  DIRECTED AND AUTHORIZED TO ESTABLISH A MORTGAGE BROKER LICENSING
EXAMINATION AND SHALL PROMULGATE RULES AND  REGULATIONS  REGARDING  SUCH
EXAMINATION,  INCLUDING  BUT NOT LIMITED TO THE TIME, DATE AND MANNER IN
WHICH SUCH EXAMINATION SHALL BE GIVEN.
  S 4. This act shall take effect immediately.