BILL ANALYSIS
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THIRD READING
Bill No: SB 1137
Author: Senate Banking, Finance and Insurance Committee
Amended: As introduced
Vote: 21
SENATE BANKING, FINANCE, AND INS. COMM : 11-0, 4/7/10
AYES: Calderon, Cogdill, Correa, Cox, Florez, Kehoe, Liu,
Lowenthal, Padilla, Price, Runner
SUBJECT : Residential mortgage lenders
SOURCE : Author
DIGEST : This bill corrects 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 (SAFE Act).
ANALYSIS : 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
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SB 1137
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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.
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. This bill was introduced to provide a vehicle
for those changes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
JJA:nl 4/14/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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