Regulatory Updates

The Alaska legislature amended its laws related to mortgage loan originator licensing exemptions.  The Nebraska legislature amended provisions related to its Installment Sales Act (“act”) which includes the purchase of mobile homes with an installment contract.  All the legislation discussed is effective January 1, 2020.

ALASKA HOUSE BILL 104

An employee of a bona fide nonprofit organization is exempt from mortgage loan originator licensing requirements if the employee acts as a mortgage loan originator only with respect to:

• The employee's duties to the bona fide nonprofit organization; and
• Residential mortgage loans that have terms that are favorable to the borrower by being consistent with mortgage loan origination for a public or charitable purpose rather than in a commercial context.

For a nonprofit organization to qualify as a bona fide nonprofit organization, the Department of Commerce, Community, and Economic Development must determine that the nonprofit organization:

• Has and maintains the status of a tax-exempt organization under federal law;
• Promotes affordable housing or provides home ownership education or similar services;
• Conducts its activities in a manner that serves a public or charitable purpose, rather than a commercial purpose, by offering mortgages that are not readily available from other lenders;
• Receives funding, receives revenue, and charges fees in a manner that does not provide an incentive for the organization or its employees to act other than in the best interests of its clients;
• Compensates its employees in a manner that does not provide an incentive to its employees to act other than in the best interests of its clients;
• Provides or identifies for a borrower residential mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs; for residential mortgage loans to have terms that are favorable to the borrower, the terms must be consistent with mortgage loan origination for a public or charitable purpose, rather than in a commercial context, and provide for interest rates that are less than the current market rate; and
• Meets other standards that the department determines are appropriate.

The department may establish by regulation the information that an organization must provide to qualify as a bona fide nonprofit organization. 

NEBRASKA LEGISLATIVE BILL 355

A license issued under the act is nontransferable and non-assignable. The same person may obtain additional licenses for each place of business operating as a sales finance company in Nebraska upon compliance with the act as to each license, except that on or after January 1, 2020, a person is no longer required to obtain a new license for each place of business and may maintain a branch office or offices.

A licensee under the act must notify the Director of Banking and Finance through the Nationwide Mortgage Licensing System and Registry at least 30 days prior to the occurrence of any of the following:

• The establishment of a new branch office (notice of each such establishment must be accompanied by a fee of $100 and any processing fee required);
• The relocation or closing of an existing branch office; or
• A change of name, trade name, or doing business as designation.