BILL ANALYSIS
SENATE COMMITTEE ON BANKING, FINANCE,
AND INSURANCE
Senator Ronald Calderon, Chair
SB 1137 (Comm. on Banking, Finance & Insurance) Hearing
Date: April 7, 2010
As Introduced: February 18, 2010
Fiscal: No
Urgency: No
SUMMARY Would correct two typographical errors in a statute
enacted last year, to conform California to the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008 (the
SAFE Act).
DIGEST
Existing federal law provides for the SAFE Act, pursuant to
Title V of the provisions of the Housing and Economic Recovery
Act of 2008 (HR 3221; Public Law 110-289). The SAFE Act
required all states to license and register their mortgage loan
originators, as defined, through a nationwide organization
called the Nationwide Mortgage Licensing System and Registry.
Any state that failed to implement a mortgage loan originator
licensing system, in compliance with the SAFE Act, by July 30,
2009 risked direct intervention by the U.S. Department of
Housing and Urban Development (HUD). Under the SAFE Act, HUD is
authorized to establish and maintain a mortgage loan originator
system in any state that fails to voluntarily comply with SAFE.
Existing law, pursuant to SB 36 (Calderon), Chapter 160,
Statutes of 2009, conforms California's Real Estate Law, Finance
Lenders Law, and Residential Mortgage Lending Act to the SAFE
Act, thus preserving California's ability to continue regulating
mortgage loan origination by non-depository institutions
operating in California.
This bill corrects two typographical errors in SB 36.
COMMENTS
SB
1137 (Comm. On B.,F., & I.), Page 2
1. Purpose of the bill To provide a vehicle for any changes
that prove necessary for California to fully implement the
SAFE Act. This is not a spot bill.
2. Background SB 36 was a 72-page bill that significantly
amended three of California's mortgage lending and brokering
laws, and gave the Department of Real Estate and Department
of Corporations significant rulemaking authority to
facilitate California's compliance with the SAFE Act. Both
departments have begun the process of transitioning their
licensees and licensees' employees onto the Nationwide
Mortgage Licensing System and Registry, and expect to enact
emergency and final regulations implementing the SAFE Act
later this year. HUD is also in the process of finalizing
its SAFE Act implementing regulations this year. Given the
length and complexity of SB 36 and the extensive rulemaking
processes underway at both the state and federal levels, it
is likely that additional cleanup changes will be necessary
to SB 36. SB 1137 was introduced to provide a vehicle for
those changes.
3. Support None received.
4. Opposition None received.
5. Prior and Related Legislation
a. SB 36 (Calderon), Chapter 160, Statutes of
2009: Conformed California's mortgage lending and
brokering laws to the SAFE Act.
POSITIONS
Support
None received
Oppose
None received
Consultant: Eileen Newhall (916) 651-4102