BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2666
                                                                  Page  1

          Date of Hearing:   May 9, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

             AB 2666 (Committee on Banking and Finance) - As Introduced:  
                                   March 5, 2012 

          Policy Committee:                              Banking and 
          Finance      Vote:                            11-0

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill updates, changes and clarifies portions of the 
          Residential Mortgage Lending Act (RMLA) and the California 
          Finance Lenders Law (CFLL).  Specifically, this bill:  

          1)Provides a definition of "expungement" for purposes of 
            considering expunged or pardoned felony convictions in 
            licensing decisions.

          2)Exempts employees of government agencies and U.S. Housing and 
            Urban Development certified counselors from the requirements 
            to be licensed as mortgage loan originators.

           FISCAL EFFECT  

          Minor and absorbable for the Department of Corporations.

           COMMENTS  

           1)Purpose  .  This bill would amend those portions of the CFLL and 
            the RMLA that implement the federal Secure and Fair 
            Enforcement for Mortgage Licensing (SAFE) Act.  The author 
            states this bill addresses issues that have emerged since 
            California's version of the SAFE Act, SB 36 (Calderon), 
            Chapter 160 of 2009, was enacted.  In particular, changes were 
            needed because HUD published its final rule to implement the 
            SAFE Act.  According to the author, AB 2666 provides mortgage 
            loan providers, such as loan officers and their employer 
            lenders, brokers and servicers with clearer guidance as to 
            what is required under the CFLL and the RMLA.  Moreover, 








                                                                  AB 2666
                                                                  Page  2

            according to the author, clarification of the licensure 
            requirements will assist the Department of Corporations when 
            it reviews mortgage loan originators applications, conducts 
            examinations and brings enforcement actions.

           2)Background.   Title V of the Federal Housing Finance Regulator 
            Reform Act, signed by President Bush on July 30, 2008 
            established the SAFE Act, which established certain 
            requirement for mortgage loan originators and required all 
            states to establish requirements to carry out the SAFE Act 
            licensing and registration.  In California, employees of those 
            organizations licensed under the CFLL and RMLA that meet the 
            definition of mortgage loan originator must obtain licenses 
            from DOC.  Persons licensed by the Department of Real Estate 
            under the Real Estate Law must obtain a mortgage loan 
            originator license endorsement if they meet the mortgage loan 
            originator definition.

           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081