Winter 2019-2020 States In Brief


Alaska adopted amendments to its mortgage loan originator regulations, which, among other things, clarify that prelicensing education courses expire. The regulation was adopted on January 7, 2020 and was effective February 6, 2020.


Colorado adopted Regulation Text 15592, an Emergency Rule regarding Temporary Authority. The Emergency Rule was effective November 24, 2019.


Florida adopted 2019 Regulation Text 46531, regarding the transfer tax imposed on deed transfers between spouses and the applicable exemptions. The amendments to the rule were effective January 1, 2020.


The Georgia Department of Banking and Finance adopted a final rule related to temporary authority. The final rule adds several requirements in connection to loan originators operating under temporary authority. The rules were effective January 9, 2020, with the exception of the disclosure requirement, which is effective April 1, 2020.


Kentucky adopted Regulation Text 23400, concerning surety bonds for mortgage loan companies and mortgage loan originators. The regulations were updated to require submission of an electronic surety bond online rather than submission on a physical form. The amendments also make other minor clarifying changes to the licensing rules. The amendments were effective November 1, 2019.


Massachusetts adopted amendments to its regulations regarding mortgage loan originators. The amendments create new exemptions from licensure as a mortgage loan originator. The amendments were adopted and effective on January 10, 2020.


Michigan presented to the Governor House Bill 5084, which amends the Mortgage Loan Originator Licensing Act to provide temporary authority to operate as a mortgage loan originator. Two other bills, House Bill 5146 (amending the Secondary Mortgage Loan Act) and House Bill 5147 (amending the Mortgage, Brokers, Lenders, and Services Licensing Act), are tie-barred to House Bill 5084 and can take effect only upon enactment of House Bill 5084. The Bill was presented to the Governor on November 25, 2019, and was effective immediately.

Michigan passed House Bill 4306, concerning notice of foreclosure by advertisement. The amendment adds additional information that must be included on the notice. The Bill was effective January 11, 2020.

New Jersey

The New Jersey Department of Banking and Insurance issued Bulletin No. 19-13, addressing licensing and registration under the Mortgage Servicers Licensing Act. The Bulletin provides guidance to entities conducting mortgage servicing business in New Jersey, pending adoption of rules, and requires registration of entities licensed under the Residential Mortgage Lending Act.

The New Jersey Department of Banking and Insurance signed Bulletin No. 20-01 adjusting the maximum principal amount for a loan to be considered “high cost” under New Jersey’s Home Ownership Security Act of 2002. The adjustment is effective for all completed applications on loans received by the lender on or after January 1, 2020. For 2020, the amount is $506,059.40. Thus, the maximum principal amount of a loan that may be considered “high cost” in New Jersey is $506,059.40.

New York

The New York Department of Financial Services adopted mortgage servicing Business Conduct Final Rules (“Final Rules”), after operating under Emergency Rules for nearly ten years. The Final Rules were adopted on December 18, 2019. Mortgage servicers have until March 17, 2020 (a 90-day transition period) to comply with the Final Rules. These Final Rules apply to persons engaged in the servicing of a mortgage loan, which includes those exempt from licensing and registration. The Final Rules contain deviations from both the Emergency Rules and from federal mortgage servicing requirements.

On December 23, 2019, the New York Department of Financial Services (“Department”) announced that New York regulated entities must submit their plan to address London Interbank Offered Rate (“LIBOR”) cessation and transition risk by February 7, 2020. The Department has issued a 45-day extension, making the new deadline March 23, 2020.


Oregon adopted Regulation Text 43535, concerning the display of mortgage lender and mortgage servicer licenses. The rule intends to reduce the burden on licensees by only requiring an initial completion of a form, rather than require the licensee replace the paper license provided each year. The amendments apply to licenses issued or renewed through NMLS on or after January 1, 2020.


The Utah Division of Real Estate adopted Utah Regulation Text 44011, which updated its regulation concerning continuing education requirements for mortgage loan originators. The updates do not impose a new requirement on mortgage loan originators, but rather amends the timing applicable to the continuing education course for new loan originators. The regulation was effective November 6, 2019.


Wisconsin presented to the Governor Senate Bill 457, which provides temporary authority to operate as a loan originator. The Wisconsin provisions are similar to those of other states. The Bill was effective November 28, 2019.

Multi-State Legislation

Fintech Regulatory Sandbox

There is a new legislative trend known as the Financial Technology Sandbox. Three states have passed this type of legislation (Arizona, Utah and Wyoming) with bills pending in Georgia and perhaps other states. The laws are detailed and different, but the goal is similar – to provide a waiver from the application of certain laws to those developing and testing innovative financial products or services.

Posted in Newsletters, States In Brief


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