Kentucky Statutes 286.8-255 – Registration with department required for mortgage loan originator — Renewals — Continuing education requirement — Background checks — Originators subject to other laws — Minimum standards for registration — Mortga…
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(1) (a) No natural person shall transact business in Kentucky, either directly or indirectly, as a mortgage loan originator unless such mortgage loan originator:
1. Is registered with the department;
2. Complies with all applicable requirements of this subtitle; and
3. Maintains a valid unique identifier issued by the Nationwide Multistate
Licensing System and Registry.
(b) The department shall maintain a database of all mortgage loan originators originating mortgage loans on residential real property in Kentucky.
(2) The application for registration shall:
(a) Be on a form prescribed by the commissioner;
(b) Be accompanied by a registration fee in the amount of fifty dollars ($50), which shall be used solely by the department to establish and maintain a database of all mortgage loan originators and any excess funds shall be retained by the department and shall not lapse to the general fund; and
(c) Contain such information as the commissioner deems necessary to carry out the purposes of this subtitle.
(3) (a) Applications for initial registrations of mortgage loan originators shall be accompanied by satisfactory evidence that the applicant has successfully completed twenty (20) hours of prelicensing education courses related directly to the mortgage lending process, as approved and designated by the commissioner.
(b) For the purposes of paragraph (a) of this subsection:
1. The prelicensing education courses approved and designated by the commissioner shall:
a. Meet the minimum requirements set forth in Section 1505(c) of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. sec. 5104(c), and amendments thereto; and
b. Be reviewed and approved by the Nationwide Multistate Licensing
System and Registry; and
2. The commissioner may accept as credit towards the completion of the prelicensing education requirements in this state, the completion of prelicensing education requirements in any other state so long as the education has met the requirements set forth in this subsection.
(4) (a) Applications for renewals of registration by registered mortgage loan originators shall be accompanied by satisfactory evidence that the individual has successfully met the continuing education requirements of KRS § 286.8-260
and by payment of a renewal fee in the amount of fifty dollars ($50).
(b) The renewal fee shall be used solely by the department to establish and maintain a database of all mortgage loan originators and any excess funds shall be retained by the department and shall not lapse to the general fund.
(5) (a) A registration issued between January 1 and October 31 of the same calendar year shall expire on December 31 of the same calendar year.
(b) A registration issued between November 1 and December 31 of the same calendar year shall expire on December 31 of the following calendar year.
(c) Any registration that has expired may be reinstated by the commissioner upon payment of the annual renewal fee, and a reinstatement fee of two hundred fifty dollars ($250), within thirty (30) days of the expiration of the registration.
(6) All mortgage loan originators subject to the registration requirements of this section shall also be subject to and comply with all applicable provisions of this subtitle.
(7) (a) The commissioner shall require, as part of an application or renewal application filed under this subtitle, including but not limited to applications or renewals for mortgage loan originators, the submission of:
1. Background records checks, including but not limited to checks for state, federal, and international criminal histories, civil or administrative records, and any other information as deemed necessary to comply with the minimum requirements set forth in Section 1505 of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. § 5104, and amendments thereto; and
2. An independent credit report obtained from a consumer reporting agency described in the Fair Credit Reporting Act, 15 U.S.C. § 1681a.
(b) The cost of the background records checks and credit report shall be borne by the applicant.
(8) No mortgage loan originator shall be granted or shall be entitled to maintain a registration unless he or she satisfies the following minimum standards for registration:
(a) The applicant has never had a loan originator’s license or registration revoked in any governmental jurisdiction, except revocations that have been formally vacated or set aside shall not be deemed a revocation for the purposes of this section;
(b) The applicant has not been convicted of, pled guilty to, or pled nolo contendere to a felony in any domestic, foreign, or military court:
1. During the seven (7) year period preceding the date of the application for registration or renewal of registration; or
2. At any time preceding such date of application for registration or renewal of registration, if such felony involved an act of fraud or dishonesty, a breach of trust, or money laundering;
(c) The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a
determination that the loan originator will operate honestly, fairly, lawfully, and efficiently within the purposes of the subtitle;
(d) The applicant has completed the prelicensing education requirement set forth in subsection (3) of this section;
(e) The applicant has passed a qualified written test which satisfies the minimum requirements set forth in Section 1505(d) of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. § 5104(d), and amendments thereto; and
(f) The applicant holds or is covered by a surety bond which satisfies the minimum requirements set forth in KRS § 286.8-060.
(9) (a) A mortgage loan processor shall not be required to maintain a registration, but the processor’s supervising mortgage loan company or mortgage loan broker shall be required to:
1. Provide the mortgage loan processor with the continuing education required under KRS § 286.8-260; and
2. Prior to hiring an applicant as a processor, perform an employee background check in accordance with uniform standards established by the commissioner.
(b) A mortgage loan company or mortgage loan broker shall provide proof of compliance with this subsection to the commissioner upon demand, demonstrating that:
1. The applicant has not been convicted of, pled guilty to, or pled nolo contendere to a felony in any domestic, foreign, or military court:
a. During the seven (7) year period preceding the date of the application; or
b. At any time preceding the date of application, if the felony involved an act of fraud or dishonesty, a breach of trust, or money laundering; and
2. The applicant has demonstrated financial responsibility, character, and general fitness sufficient to command the confidence of the community and to warrant a determination that the loan processor will operate honestly, fairly, lawfully, and efficiently within the purposes of this subtitle.
(10) No mortgage loan originator shall be granted a registration renewal unless he or she satisfies the following minimum standards for renewal:
(a) The applicant has met and continues to meet the minimum standards set forth in subsection (8) of this section; and
(b) The applicant has satisfied the annual continuing education requirements set forth in KRS § 286.8-260.
(11) (a) The registration of any mortgage loan originator that fails to comply with the minimum standards for registration renewal set forth in this section shall expire and shall promptly be deemed surrendered to the commissioner without demand.
(b) The commissioner may adopt procedures and requirements for the reinstatement of expired registrations consistent with the standards established by the Nationwide Multistate Licensing System and Registry.
(12) Mortgage loan originators engaging in any of the activities set forth in KRS § 286.8-
010(18)(a) shall provide loan origination services to not more than one (1) mortgage loan company or mortgage loan broker at a time.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 11, effective July 14, 2022. — Amended
2016 Ky. Acts ch. 129, sec. 8, effective July 15, 2016. — Amended 2010 Ky. Acts ch.
24, sec. 790, effective July 15, 2010. — Amended 2009 Ky. Acts ch. 104, sec. 18, effective June 25, 2009. — Amended 2008 Ky. Acts ch. 175, sec. 17, effective April
24, 2008. — Amended 2006 Ky. Acts ch. 218, sec. 7, effective July 12, 2006. — Created 2003 Ky. Acts ch. 64, sec. 6, effective June 24, 2003.
Formerly codified as KRS § 294.255.
Legislative Research Commission Note (7/12/2006). This section was amended in
2006 Ky. Acts ch. 218. In that same session, 2006 Ky. Acts ch. 247, sec. 38, required that all sections of KRS Chapters 287, 288, 290, 291, 294, 366, 366A, and 368 be renumbered as sections of a single KRS chapter entitled the “Kentucky Financial Services Code.” Therefore, the Statute Reviser, acting under KRS § 7.136(1), has changed the number of this section and codified it as a section of KRS Chapter 286. In addition, KRS references have been adjusted to conform with the renumbering.
1. Is registered with the department;
Terms Used In Kentucky Statutes 286.8-255
- any other state: includes any state, territory, outlying possession, the District of Columbia, and any foreign government or country. See Kentucky Statutes 446.010
- Commissioner: means the commissioner of the Department of Financial
Institutions. See Kentucky Statutes 286.1-010 - Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
- Department: means the Department of Financial Institutions. See Kentucky Statutes 286.1-010
- Domestic: when applied to a corporation, partnership, business trust, or limited liability company, means all those incorporated or formed by authority of this state. See Kentucky Statutes 446.010
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fair Credit Reporting Act: A federal law, established in 1971 and revised in 1997, that gives consumers the right to see their credit records and correct any mistakes. Source: OCC
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Foreign: when applied to a corporation, partnership, limited partnership, business trust, statutory trust, or limited liability company, includes all those incorporated or formed by authority of any other state. See Kentucky Statutes 446.010
- Fraud: Intentional deception resulting in injury to another.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgage loan: means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on residential real property or any loan primarily for personal, family, or household use that is secured by collateral that has a mortgage lien interest in residential real property. See Kentucky Statutes 286.8-010
- Mortgage loan broker: means any person who for compensation or gain, or in the expectation of compensation or other gain, received directly or indirectly, serves as an agent for any borrower in an attempt to obtain a mortgage loan, or holds oneself out as being able to do so. See Kentucky Statutes 286.8-010
- Mortgage loan company: means any person who directly or indirectly:
(a) Makes, purchases, or sells mortgage loans, or holds oneself out as being able to do so. See Kentucky Statutes 286.8-010 - Mortgage loan originator: means a natural person who:
(a) 1. See Kentucky Statutes 286.8-010 - Mortgage loan processor: means a natural person who performs only clerical or support duties at the direction of and subject to the supervision and instruction of a mortgage loan originator. See Kentucky Statutes 286.8-010
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Person: means a natural person, or any type or form of corporation, company, partnership, proprietorship, association, or other legal entity. See Kentucky Statutes 286.1-010
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
- Unique identifier: means a number or other identifier assigned by protocols established by the Nationwide Multistate Licensing System and Registry. See Kentucky Statutes 286.8-010
- Year: means calendar year. See Kentucky Statutes 446.010
2. Complies with all applicable requirements of this subtitle; and
3. Maintains a valid unique identifier issued by the Nationwide Multistate
Licensing System and Registry.
(b) The department shall maintain a database of all mortgage loan originators originating mortgage loans on residential real property in Kentucky.
(2) The application for registration shall:
(a) Be on a form prescribed by the commissioner;
(b) Be accompanied by a registration fee in the amount of fifty dollars ($50), which shall be used solely by the department to establish and maintain a database of all mortgage loan originators and any excess funds shall be retained by the department and shall not lapse to the general fund; and
(c) Contain such information as the commissioner deems necessary to carry out the purposes of this subtitle.
(3) (a) Applications for initial registrations of mortgage loan originators shall be accompanied by satisfactory evidence that the applicant has successfully completed twenty (20) hours of prelicensing education courses related directly to the mortgage lending process, as approved and designated by the commissioner.
(b) For the purposes of paragraph (a) of this subsection:
1. The prelicensing education courses approved and designated by the commissioner shall:
a. Meet the minimum requirements set forth in Section 1505(c) of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. sec. 5104(c), and amendments thereto; and
b. Be reviewed and approved by the Nationwide Multistate Licensing
System and Registry; and
2. The commissioner may accept as credit towards the completion of the prelicensing education requirements in this state, the completion of prelicensing education requirements in any other state so long as the education has met the requirements set forth in this subsection.
(4) (a) Applications for renewals of registration by registered mortgage loan originators shall be accompanied by satisfactory evidence that the individual has successfully met the continuing education requirements of KRS § 286.8-260
and by payment of a renewal fee in the amount of fifty dollars ($50).
(b) The renewal fee shall be used solely by the department to establish and maintain a database of all mortgage loan originators and any excess funds shall be retained by the department and shall not lapse to the general fund.
(5) (a) A registration issued between January 1 and October 31 of the same calendar year shall expire on December 31 of the same calendar year.
(b) A registration issued between November 1 and December 31 of the same calendar year shall expire on December 31 of the following calendar year.
(c) Any registration that has expired may be reinstated by the commissioner upon payment of the annual renewal fee, and a reinstatement fee of two hundred fifty dollars ($250), within thirty (30) days of the expiration of the registration.
(6) All mortgage loan originators subject to the registration requirements of this section shall also be subject to and comply with all applicable provisions of this subtitle.
(7) (a) The commissioner shall require, as part of an application or renewal application filed under this subtitle, including but not limited to applications or renewals for mortgage loan originators, the submission of:
1. Background records checks, including but not limited to checks for state, federal, and international criminal histories, civil or administrative records, and any other information as deemed necessary to comply with the minimum requirements set forth in Section 1505 of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. § 5104, and amendments thereto; and
2. An independent credit report obtained from a consumer reporting agency described in the Fair Credit Reporting Act, 15 U.S.C. § 1681a.
(b) The cost of the background records checks and credit report shall be borne by the applicant.
(8) No mortgage loan originator shall be granted or shall be entitled to maintain a registration unless he or she satisfies the following minimum standards for registration:
(a) The applicant has never had a loan originator’s license or registration revoked in any governmental jurisdiction, except revocations that have been formally vacated or set aside shall not be deemed a revocation for the purposes of this section;
(b) The applicant has not been convicted of, pled guilty to, or pled nolo contendere to a felony in any domestic, foreign, or military court:
1. During the seven (7) year period preceding the date of the application for registration or renewal of registration; or
2. At any time preceding such date of application for registration or renewal of registration, if such felony involved an act of fraud or dishonesty, a breach of trust, or money laundering;
(c) The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a
determination that the loan originator will operate honestly, fairly, lawfully, and efficiently within the purposes of the subtitle;
(d) The applicant has completed the prelicensing education requirement set forth in subsection (3) of this section;
(e) The applicant has passed a qualified written test which satisfies the minimum requirements set forth in Section 1505(d) of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. § 5104(d), and amendments thereto; and
(f) The applicant holds or is covered by a surety bond which satisfies the minimum requirements set forth in KRS § 286.8-060.
(9) (a) A mortgage loan processor shall not be required to maintain a registration, but the processor’s supervising mortgage loan company or mortgage loan broker shall be required to:
1. Provide the mortgage loan processor with the continuing education required under KRS § 286.8-260; and
2. Prior to hiring an applicant as a processor, perform an employee background check in accordance with uniform standards established by the commissioner.
(b) A mortgage loan company or mortgage loan broker shall provide proof of compliance with this subsection to the commissioner upon demand, demonstrating that:
1. The applicant has not been convicted of, pled guilty to, or pled nolo contendere to a felony in any domestic, foreign, or military court:
a. During the seven (7) year period preceding the date of the application; or
b. At any time preceding the date of application, if the felony involved an act of fraud or dishonesty, a breach of trust, or money laundering; and
2. The applicant has demonstrated financial responsibility, character, and general fitness sufficient to command the confidence of the community and to warrant a determination that the loan processor will operate honestly, fairly, lawfully, and efficiently within the purposes of this subtitle.
(10) No mortgage loan originator shall be granted a registration renewal unless he or she satisfies the following minimum standards for renewal:
(a) The applicant has met and continues to meet the minimum standards set forth in subsection (8) of this section; and
(b) The applicant has satisfied the annual continuing education requirements set forth in KRS § 286.8-260.
(11) (a) The registration of any mortgage loan originator that fails to comply with the minimum standards for registration renewal set forth in this section shall expire and shall promptly be deemed surrendered to the commissioner without demand.
(b) The commissioner may adopt procedures and requirements for the reinstatement of expired registrations consistent with the standards established by the Nationwide Multistate Licensing System and Registry.
(12) Mortgage loan originators engaging in any of the activities set forth in KRS § 286.8-
010(18)(a) shall provide loan origination services to not more than one (1) mortgage loan company or mortgage loan broker at a time.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 11, effective July 14, 2022. — Amended
2016 Ky. Acts ch. 129, sec. 8, effective July 15, 2016. — Amended 2010 Ky. Acts ch.
24, sec. 790, effective July 15, 2010. — Amended 2009 Ky. Acts ch. 104, sec. 18, effective June 25, 2009. — Amended 2008 Ky. Acts ch. 175, sec. 17, effective April
24, 2008. — Amended 2006 Ky. Acts ch. 218, sec. 7, effective July 12, 2006. — Created 2003 Ky. Acts ch. 64, sec. 6, effective June 24, 2003.
Formerly codified as KRS § 294.255.
Legislative Research Commission Note (7/12/2006). This section was amended in
2006 Ky. Acts ch. 218. In that same session, 2006 Ky. Acts ch. 247, sec. 38, required that all sections of KRS Chapters 287, 288, 290, 291, 294, 366, 366A, and 368 be renumbered as sections of a single KRS chapter entitled the “Kentucky Financial Services Code.” Therefore, the Statute Reviser, acting under KRS § 7.136(1), has changed the number of this section and codified it as a section of KRS Chapter 286. In addition, KRS references have been adjusted to conform with the renumbering.