Chapter 0036 - 502R - S Ver of SB1014

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 6-126, Arizona Revised Statutes, is amended to read:

START_STATUTE6-126. Application fees for financial institutions and enterprises

A. The following nonrefundable fees are payable to the department with the filing of the following applications:

1. To apply for a banking permit, ten thousand dollars.

2. To apply for an amendment to a banking or savings and loan association permit, one thousand dollars.

3. To establish each banking branch office, one thousand five hundred dollars.

4. To move a banking office to other than an established office of a bank, one thousand dollars.

5. To apply for a savings and loan association permit, ten thousand dollars.

6. To establish each savings and loan association branch office, one thousand five hundred dollars.

7. To move an office of a savings and loan association to other than an established office, one thousand dollars.

8. To organize and establish a credit union, one hundred dollars.

9. To establish each credit union branch or to move a credit union office to other than an established office of a credit union, two hundred fifty dollars.

10. To organize and establish any other financial institutions for which an application or investigation fee is not otherwise provided by law, two thousand five hundred dollars.

11. To acquire control of a financial institution, other than a consumer lender, five thousand dollars.

12. To apply for a trust company license, five thousand dollars.

13. To apply for a commercial mortgage banker, mortgage banker, escrow agent or consumer lender license, one thousand five hundred dollars.

14. To apply for a mortgage broker, commercial mortgage broker, sales finance company or debt management company license, eight hundred dollars.

15. To apply for a collection agency license, one thousand five hundred dollars.

16. To apply for a deferred presentment company license, one thousand dollars.

17. To apply for a motor vehicle dealer license, three hundred dollars.

18. To apply for a branch office of an escrow agent, consumer lender, commercial mortgage banker, mortgage banker, trust company, money transmitter, collection agency or deferred presentment company, five hundred dollars.

19. To apply for a branch office of a mortgage broker, commercial mortgage broker, debt management company or sales finance company, two hundred fifty dollars.

20. To apply for approval of the articles of incorporation of a business development corporation, five hundred dollars.

21. To apply for approval for the merger or consolidation of two or more financial institutions, five thousand dollars per institution.

22. To apply for approval to convert from a national bank or federal savings and loan charter to a state chartered institution, five thousand dollars.

23. To apply for approval to convert from a federal credit union to a state chartered credit union, one thousand dollars.

24. To apply for approval to merge or consolidate two or more credit unions, five hundred dollars per credit union.

25. To move an established office of an enterprise to other than an established office, fifty dollars.

26. To issue a duplicate or replace a lost enterprise's license, one hundred dollars.

27. To change a responsible person on a mortgage broker's, commercial mortgage broker's, commercial mortgage banker's or a mortgage banker's license, two hundred fifty dollars.

28. To change an active manager on a collection agency license or a manager of a money transmitter branch office license, two hundred fifty dollars.

29. To change the licensee name on a financial institution or enterprise license, not more than two hundred fifty dollars.

30. To apply for a money transmitter license, one thousand five hundred dollars plus twenty‑five dollars for each branch office and authorized delegate to a maximum of four thousand five hundred dollars.

31. To acquire control of any money transmitter or controlling person pursuant to chapter 12 of this title, two thousand five hundred dollars.

32. To receive the following publications:

(a) Quarterly bank and savings and loan statement of condition, not more than ten dollars per copy.

(b) Monthly summary of actions report, not more than five dollars per copy.

(c) A list of licensees, a monthly pending actions report and all other in‑house prepared reports or listings made available to the public, not more than one dollar per page.

33. To apply for a loan originator license, an amount to be determined by the superintendent.

34. To apply for a loan originator license transfer, an amount to be determined by the superintendent.

35. To apply for a conversion from a mortgage banker license to a mortgage broker license, an amount to be determined by the superintendent.

B. On issuance of a license or permit for a financial institution or enterprise, the superintendent shall collect the first year's annual assessment or renewal fee for the financial institution or enterprise prorated according to the number of quarters remaining until the date of the next annual assessment or renewal.

C. The following annual renewal fees shall be paid each year:

1. For an escrow agent, or trust company, one thousand dollars plus two hundred fifty dollars for each branch office.

2. For a debt management company or sales finance company, five hundred dollars plus two hundred dollars for each branch office.

3. For a collection agency, six hundred dollars plus two hundred dollars for each branch office.

4. For a motor vehicle dealer, one hundred fifty dollars.

5. For an inactive mortgage broker or commercial mortgage broker, two hundred fifty dollars.

6. For a mortgage banker that negotiates or closes in the aggregate one hundred loans or less in the immediately preceding calendar year, seven hundred fifty dollars, and for a mortgage banker that negotiates or closes in the aggregate over one hundred loans in the immediately preceding calendar year, one thousand two hundred fifty dollars. In addition, a mortgage banker shall pay two hundred fifty dollars for each branch office.

7. For a commercial mortgage banker, one thousand two hundred fifty dollars. In addition, a commercial mortgage banker shall pay two hundred fifty dollars for each branch office.

8. For a mortgage broker or commercial mortgage broker that negotiates or closes in the aggregate fifty loans or less in the immediately preceding calendar year, two hundred fifty dollars and for a mortgage broker or commercial mortgage broker that negotiates or closes in the aggregate more than fifty loans in the immediately preceding calendar year, five hundred dollars. In addition, a mortgage broker or commercial mortgage broker shall pay two hundred dollars for each branch office.

9. For a consumer lender, one thousand dollars plus two hundred dollars for each branch office.

10. For a money transmitter, five hundred dollars plus twenty‑five dollars for each branch office and each authorized delegate to a maximum of two thousand five hundred dollars.

11. For a deferred presentment company, four hundred dollars. In addition, a deferred presentment company shall pay two hundred dollars for each branch office.

12. For a loan originator, an amount to be determined by the superintendent.

13. For an inactive status loan originator, an amount to be determined by the superintendent.

D. The license, renewal or branch office permit fee for a premium finance company for each calendar year or part thereof shall not be less than one hundred dollars or more than three hundred dollars as set by the superintendent. If the license is issued or the branch office is opened after June 30 in any year, the fees shall not be less than fifty dollars or more than one hundred fifty dollars for that year. END_STATUTE

Sec. 2. Section 6-991, Arizona Revised Statutes, is amended to read:

START_STATUTE6-991. Definitions

In this article, unless the context otherwise requires:

1. "Affiliate" means an entity that directly or indirectly, through intermediaries, controls, is controlled by or is under common control with the entity specified.

2. "Clerical or support duties" means duties subsequent to the receipt of a residential mortgage loan application, including both of the following:

(a) The receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan.

(b) The communication with a consumer to obtain the information necessary for the processing or underwriting of a loan if the communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms.

3. "Consumer lender" means a person who is licensed pursuant to chapter 5 of this title.

4. "Continuing education unit" means a fifty minute period of time in a continuing education course that relates to the mortgage industry or to mortgage transactions, including courses taken to maintain recognized industry designations.

5. "Depository institution" has the same meaning prescribed in the federal deposit insurance act (12 United States Code section 1813) and includes credit unions.

6. "Federal banking agency" means the board of governors of the federal reserve system, the comptroller of the currency, the director of the office of thrift supervision, the national credit union administration or the federal deposit insurance corporation.

7. "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild or stepsibling whether related by adoption or blood.

8. "Judgment" means either:

(a) A final judgment in a court of competent jurisdiction.

(b) A criminal restitution order issued pursuant to section 13‑603 or 18 United States Code section 3663 .

(c) An arbitration award that includes findings of fact and conclusions of law, that has been confirmed and reduced to judgment pursuant to section 12‑133 and that was rendered according to title 12 and the rules of the American arbitration association or another recognized arbitration body.

9. "Judgment debtor" means any defendant under this article who is the subject of a judgment.

10. "License" means a license issued under this article.

11. "Licensee" means a person licensed under this article.

12. "Loan originator":

(a) Means a natural person who for compensation or gain or in the expectation of compensation or gain does any of the following:

(i) Takes a residential mortgage loan application.

(ii) Offers or negotiates terms of a residential mortgage loan.

(iii) On behalf of a borrower, negotiates with a lender or noteholder to obtain a temporary or permanent modification in an existing residential mortgage loan agreement.

(b) Does not include:

(i) An individual engaged solely as a loan processor or underwriter except as provided in section 6‑991.02.

(ii) A person who only performs real estate brokerage activities and who is licensed in accordance with title 32, chapter 20, unless the person is compensated by a lender, a mortgage broker or any other loan originator or by an agent of the lender, mortgage broker or other loan originator.

(iii) A person solely involved in extensions of credit relating to a timeshare plan as defined in 11 United States Code section 101(53D).

(iv) A person who makes originates five or fewer mortgage loans per calendar year if the source of the prospective financing also makes five or fewer mortgage loans per calendar year.

(v) A person who takes back a purchase money mortgage in connection with the sale of residential real estate.

(vi) An employer making a mortgage loan to an employee.

13. "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person who is licensed or who is exempt from licensure under article 1 or 2 of this chapter.

14. "Mortgage banker" means a person who is licensed pursuant to article 2 of this chapter.

15. "Mortgage broker" means a person who is licensed pursuant to article 1 of this chapter.

16. "Mortgage loan" or "residential mortgage loan" means a loan for personal family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling, as defined in the truth in lending act (15 United States Code section 1602(v)), or residential real estate on which a dwelling is constructed or intended to be constructed.

17. "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including:

(a) Acting as a real estate salesperson or real estate broker for a buyer, seller, lessor or lessee of real property.

(b) Bringing together parties interested in the sale, purchase, lease, rental or exchange of real property.

(c) Negotiating on behalf of any party any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property other than in connection with providing financing with respect to any transaction.

(d) Engaging in any activity for which a person is required to be licensed as a real estate salesperson or real estate broker under title 32, chapter 20.

(e) Offering to engage in any activity or act in any capacity described in subdivision (a), (b), (c) or (d) of this paragraph.

18. "Registered loan originator" means any individual who is both of the following:

(a) A loan originator who is registered with and maintains a unique identifier through the nationwide mortgage licensing system and registry established by the secure and fair enforcement for mortgage licensing act of 2008 (P.L. 110‑289; 122 Stat. 2810; 12 United States Code sections 5101 through 5116) or its successor.

(b) An employee of one of the following:

(i) A depository institution.

(ii) A subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency.

(iii) An institution regulated by the farm credit administration.

19. "Residential mortgage loan servicer" means any person who does either of the following:

(a) On behalf of the noteholder, collects or receives payments, including payments of principal, interest, escrow monies and other monies due, on obligations due and owing to the noteholder pursuant to a residential mortgage loan.

(b) When the borrower is in default or in foreseeable likelihood of default, works on behalf of the noteholder with the borrower to modify the obligations either temporarily or permanently in order to avoid foreclosure or otherwise to finalize collection through the foreclosure process.

20. "Residential real estate" means any property that is located in this state and on which a dwelling is constructed or intended to be constructed.

21. "Unique identifier" means the number assigned to the loan originator by the nationwide mortgage licensing system and registry or its successor or as the term is used under the secure and fair enforcement for mortgage licensing act of 2008 (P.L. 110‑289; 122 Stat. 2810; 12 United States Code sections 5101 through 5116). END_STATUTE

Sec. 3. Section 6-991.05, Arizona Revised Statutes, is amended to read:

START_STATUTE6-991.05. Denial, suspension or revocation of licenses

A. The superintendent may deny a license to a person or suspend or revoke a license if the superintendent finds that an applicant or licensee:

1. Is not a person of honesty, truthfulness or good character.

2. Does not have the financial responsibility, experience or competence to adequately serve the public or to warrant the belief that the applicant or licensee will act lawfully, honestly and fairly pursuant to this article.

3. 2. Has violated any law, rule or order.

4. Has been convicted of a felony during the seven year period immediately preceding the date of the application or any crime of breach of trust or dishonesty, fraud or money laundering at any time preceding the date of application.

3. Has been convicted of or pled guilty or nolo contendere to a misdemeanor if it involved an act of fraud, dishonesty or breach of trust or money laundering at any time preceding the date of application.

5. 4. Has had a final judgment entered against the applicant or licensee in a civil action on grounds of fraud, deceit or misrepresentation, and the conduct on which the judgment is based indicates that it would be contrary to the interest of the public to permit the person to be licensed.

6. 5. Has had an administrative agency of this state, the federal government or any other state or territory of the United States enter an order against the applicant or licensee involving fraud, deceit or misrepresentation, and the facts relating to the order indicate that it would be contrary to the interest of the public to permit the person to be licensed.

7. 6. Has made a material misstatement or suppressed or withheld information on the application for a license or any document required to be filed with the superintendent.

8. 7. Has had a loan originator license, consumer lender license, mortgage broker license or mortgage banker license revoked or denied in this state or any other state.

B. The superintendent shall deny a license to a person or suspend or revoke a license if the superintendent finds that either of the following applies:

1. The applicant or licensee has been convicted of or pled guilty or nolo contendere to a felony in a domestic, foreign or military court during the seven year period immediately preceding the date of the application or at any time preceding the date of application if the felony involved an act of fraud, dishonesty or a breach of trust or money laundering.

2. The applicant or licensee does not have the financial responsibility, experience or competence to adequately serve the public or to warrant the belief that the applicant or licensee will act lawfully, honestly and fairly pursuant to this article.

B. c. If a licensee or applicant under this article is indicted or informed against for forgery, embezzlement, obtaining money under false pretenses, extortion, criminal conspiracy to defraud or a similar offense, and a certified copy of the indictment or information or other proper evidence of the indictment or information is filed with the superintendent, the superintendent may suspend the license or refuse to grant a license to an applicant pending trial on the indictment. END_STATUTE