NOTE: The governor signed this measure on 6/5/2013. SENATE BILL 13-156 BY SENATOR(S) Tochtrop; also REPRESENTATIVE(S) Williams, Buckner, Fields, Labuda, Ryden. Concerning continuation of the board of mortgage loan originators in the division of real estate, and, in connection therewith, implementing the recommendations of the 2012 sunset report by the department of regulatory agencies. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 12-61-919, amend (1) as follows: 12-61-919. Repeal of part. (1) This part 9 is repealed, effective July 1, 2013 September 1, 2018. SECTION 2. In Colorado Revised Statutes, 24-34-104, amend (44) introductory portion and (49.5) introductory portion; repeal (44) (p); and add (49.5) (e) as follows: 24-34-104. General assembly review of regulatory agencies and functions for termination, continuation, or reestablishment. (44) The following agencies, functions, or both, shall terminate on July 1, 2013: (p) The licensing of mortgage loan originators and the registration of mortgage companies pursuant to part 9 of article 61 of title 12, C.R.S.; (49.5) The following agencies, functions, or both, shall terminate on September 1, 2018: (e) The licensing of mortgage loan originators and the registration of mortgage companies pursuant to part 9 of article 61 of title 12, C.R.S. SECTION 3. In Colorado Revised Statutes, 12-61-903, amend (1) (a); and repeal (5.7), as follows: 12-61-903. License required - rules. (1) (a) On or after August 5, 2009, unless licensed by the board, an individual shall not originate a mortgage, offer to originate a mortgage, act as a mortgage loan originator, or offer to act as a mortgage loan originator. On or after December 31, 2010, Unless licensed by the board and registered with the nationwide mortgage licensing system and registry as a state-licensed loan originator, an individual shall not originate or offer to originate a mortgage or act or offer to act as a mortgage loan originator. (5.7) Any individual who obtains a license pursuant to this part 9 prior to January 1, 2010, shall furnish at least the following information concerning the individual's identity to the nationwide mortgage licensing system and registry: (a) Fingerprints for submission to the federal bureau of investigation and any government agency or entity authorized to receive fingerprints for a state, national, or international criminal history record check; and (b) Personal history and experience in a form prescribed by the nationwide mortgage licensing system and registry, including submission of authorization for the nationwide mortgage licensing system and registry to obtain: (I) An independent credit report from the consumer reporting agency described in the federal "Fair Credit Reporting Act", 15 U.S.C. sec. 1681a (p); and (II) Information related to any administrative, civil, or criminal findings by a government jurisdiction. SECTION 4. In Colorado Revised Statutes, 12-61-905, repeal (1) (g), (1) (h), and (1) (i); and add (1.5) as follows: 12-61-905. Powers and duties of the board. (1) The board may deny an application for a license, refuse to renew, or revoke the license of an applicant or licensee who has: (g) Had a mortgage loan originator license or similar license revoked in any jurisdiction; except that a revocation that was subsequently formally nullified shall not be deemed a revocation for purposes of this section; (h) At any time preceding the date of application for a license or registration, been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court if the felony involved an act of fraud, dishonesty, breach of trust, or money laundering; except that, if the individual obtains a pardon of the conviction, the individual shall not be deemed convicted for purposes of this paragraph (h); (i) Been convicted of, or pled guilty or nolo contendere to, a felony within the seven years immediately preceding the date of application for a license or registration; (1.5) The board shall deny an application for a license, refuse to renew, or revoke the license of an applicant or licensee who has: (a) (I) Had a mortgage loan originator license or similar license revoked in any jurisdiction. (II) If a revocation is subsequently formally nullified, the license is not revoked for purposes of this paragraph (a). (b) (I) At any time preceding the date of application for a license, been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court if the felony involved an act of fraud, dishonesty, breach of trust, or money laundering. (II) If the individual obtains a pardon of the conviction, the board shall not deem the individual convicted for purposes of this paragraph (b). (c) Been convicted of, or pled guilty or nolo contendere to, a felony within the seven years immediately preceding the date of application for a license. SECTION 5. In Colorado Revised Statutes, 12-61-905.1, amend (1) (c) as follows: 12-61-905.1. Powers and duties of the board over mortgage companies - fines - rules. (1) With respect to mortgage companies, the board may deny an application for registration; refuse to renew, suspend, or revoke the registration; enter cease-and-desist orders; and impose fines as set forth in this section as follows: (c) If the mortgage company employs or acts through contracts with individuals subject to its control who are unlicensed at the time of hire and not in the process of becoming licensed, who are required to be licensed pursuant to this part 9 or if the mortgage company, after notice, continues to employ or act through individuals subject to its control whose required licenses are not valid and who are not either: (I) Licensed; or (II) In the process of becoming licensed; or SECTION 6. In Colorado Revised Statutes, 12-61-911, amend (1) (k) and (1) (l); and repeal (1) (m) as follows: 12-61-911. Prohibited conduct - fraud - misrepresentation - conflict of interest - rules. (1) A mortgage loan originator, including a mortgage loan originator otherwise exempted from this part 9 by section 12-61-904 (1) (b), shall not: (k) Fail to pay a third-party provider, no later than thirty days after the recording of the loan closing documents or ninety days after completion of the third-party service, whichever comes first, unless otherwise agreed or unless the third-party service provider has been notified in writing that a bona fide dispute exists regarding the performance or quality of the third-party service; or (l) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by section 12-61-914 or 12-61-915. or (m) Fail to comply with any provision of this part 9 or any rule adopted pursuant to this part 9. SECTION 7. Effective date. This act takes effect July 1, 2013. SECTION 8. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety. ____________________________ ____________________________ John P. Morse Mark Ferrandino PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________ ____________________________ Cindi L. Markwell Marilyn Eddins SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________ _________________________________________ John W. Hickenlooper GOVERNOR OF THE STATE OF COLORADO