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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
mortgage brokers; bankers; qualifications
Purpose
Allows an employee of an affiliated entity or parent company to be the designated responsible individual for a commercial mortgage banker licensee or a mortgage broker or commercial mortgage broker licensee and removes the state residency requirement for designated responsible individuals.
Background
A person who brokers only commercial mortgage loans must obtain either a mortgage broker license or a commercial mortgage broker license. A person who brokers residential mortgage loans must obtain a mortgage broker license. Current statute prohibits the Deputy Director of the Department of Insurance and Financial Institutions from granting a mortgage broker or commercial mortgage broker license to a person, other than a natural person, who is not registered to do business in Arizona.
A mortgage broker or commercial mortgage broker licensee who is a natural person and not a resident of Arizona must designate one employee, who is not an independent contractor, as the individual responsible for the licensee. A responsible individual must be a resident of Arizona, in active management of the licensee's activities and meet statutory mortgage broker or commercial mortgage broker licensee qualifications (A.R.S. § 6-903).
A commercial mortgage banker licensee must designate one officer, director, member, partner, employee or trustee as the individual responsible for the licensee. A responsible individual for a commercial mortgage banker licensee must be a resident of Arizona, in active management of the licensee's activities and have at least three years' experience in commercial mortgage banking or equivalent lending experience in a related business over the last five years (A.R.S. § 6-976).
An affiliate is an entity which directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the entity specified (A.R.S. § 6-901).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows a mortgage broker, commercial mortgage broker or commercial mortgage banker licensee who is a natural person and nonresident of Arizona to designate an employee of an affiliated entity or the parent company of the licensee as the responsible individual.
2. Removes the Arizona residency requirement for the designated responsible individual for a mortgage broker, commercial mortgage broker or commercial mortgage banker licensee.
3. Makes technical changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 7, 2022
MG/KJA/slp