BILL ANALYSIS �
SB 1459
Page 1
Date of Hearing: June 18, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1459 (Committee on Banking & Financial Institutions) - As
Amended: April 21, 2014
Policy Committee: Banking &
FinanceVote: 12-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires an applicant for a mortgage loan originator
(MLO) license issued by the Department of Business Oversight
(DBO) to complete two hours of approved education related to
relevant California law as part of the applicants 20 hours of
pre-license education, and requires a licensed MLO to complete
one hour of continuing education related to relevant California
law as part of that MLO's eight hours of continuing education.
The bill also clarifies the test an MLO license applicant must
complete may be developed by or deemed acceptable by the
Nationwide Mortgage Licensing System and Registry (NMLSR).
FISCAL EFFECT
1)Minor and absorbable costs to DBO to administer the
California-specific education changes.
2)No costs to applicants and licensees as the total number of
pre-license and continuing education hours remains unchanged.
COMMENTS
1) Background. As part of the Housing and Economic Recovery Act
of 2008, Congress passed the Secure and Fair Enforcement for
Mortgage Licensing Act (the SAFE Act), which required all
states to license and register MLOs through the NMLSR. The
SAFE Act and California's implementing legislation generally
require all MLOs to:
SB 1459
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a) Obtain a license from the state to undertake origination
activities, if they work for a nondepository institution
regulated by the state, or
b) Register with the NMLSR, if they work for a state- or
federally-regulated depository institution.
Employees of entities licensed under the California Finance
Lenders Law and California Residential Mortgage Licensing Act
must obtain an MLO license from DBO if they wish to engage in
mortgage loan origination activities. Bureau of Real Estate
(BRE) licensees who engage in mortgage loan origination must
obtain an MLO license endorsement from BRE.
This bill modifies the education requirements for applicants
of DBO-issued MLO licenses only. It does not modify the
education requirements for applicants of BRE-issued MLO
licenses because those licensees also must be licensed as a
real estate salesperson or real estate broker.
2) Purpose. It is anticipated that NMLSR will move toward a
uniform state test that will serve all states and include
uniform state content, and DBO expects to adopt the national
test through regulations submitted sometime this year. The
new NMLSR testing regime will not test applicants on specific
state laws. This bill will require applicants for DBO-issued
MLO licenses and renewals to complete certain education
related to specific California laws.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081