KRS 286.8-170: Places where records required to be kept -- Examination by

commissioner -- Fee -- Access to records -- Reports.

(1) As used in this section, "control records" means all records relating to the operation

of a branch that are necessary to exercise control and supervision over the branch.

(2) (a) Every mortgage loan company and mortgage loan broker shall keep at its

principal office correct and complete records of its business transactions,

books of accounts, and minutes of proceedings of its d irectors, principals, or

partners.

(b) Complete records of all business transactions at the principal office shall be

maintained at the principal office.

(c) Each branch shall:

1. Keep detailed records of all transactions at the branch; and

2. Furnish full control records to the principal office.

(d) 1. Any record of a mortgage loan company's or mortgage loan broker's

business transactions, book of accounts, or minutes of proceedings of its

directors, principals, or partners generated prior to the company's or

broker's previous examination may be stored at a third -party secure

storage facility.

2. The mortgage loan company or mortgage loan broker, as applicable,

shall:

a. Notify the commissioner, in writing, thirty (30) days prior to

engaging with any third-party secure storage facility; and

b. Receive approval from the commissioner for use of the third -party

secure storage facility.

(3) No mortgage loan company or mortgage loan broker by any system of accounting or

any device of bookkeeping shall, either directly or indirectly, enter any of its assets

upon its books in the name of any person, partnership, association, or corporation or

under any title, designation, or value that is not thoroughly descriptive of any assets.

(4) The affairs of every mortgage loan company, mortgage loan broker, and mortgage

loan originator, and the records required to be maintained by KRS 286.8 -160, shall

be subject at any time or from time to time to such periodic, special, or other

examinations by the commissioner or an examiner of the commissioner within or

without this state and with or without notice to the person being examined, as the

commissioner deems necessary or appropriate in the public interest. All records of

the person being examined shall be subject to the commissioner's inspection.

(5) The examiner shall:

(a) Make a thorough examination into the condition, workings, and affairs of the

person being examined; and

(b) Report, as he or she may find, to the commissioner any:

1. Violation of law;

2. Unauthorized unsafe practices; or

3. Failure to keep and have correct any required books and records.

(6) For the purpose of avoiding unnecessary duplicat ion of examinations, the

commissioner, insofar as he or she deems it practicable in administering this

section, may:

(a) Cooperate and exchange information with:

1. Any agency of the state or federal government;

2. Other states;

3. The Nationwide Multistate Licensing System and Registry; or

4. The federal National Mortgage Association, Government National

Mortgage Association, and Federal Home Loan Mortgage Corporation;

and

(b) Accept examinations from the entities described in paragraph (a) of this

subsection, in whole or in part, in lieu of an examination by the commissioner.

(7) The commissioner or the commissioner's examiners or designated representative

shall have access to all records of a mortgage loan company, mortgage loan broker,

and mortgage loan originator which relate to their business, and records kept by any

officers, agents, or employees, relating to or upon which any record of its business

is kept.

(8) (a) A mortgage loan originator shall make available and grant access to the

commissioner, or an examiner of the commissioner, the records relating to its

operations.

(b) A mortgage loan company or mortgage loan broker shall make available and

grant access to all records of its current and former employees and contractors

relating to its operations.

(9) Any person subject to this subtitle shall make or compile reports or prepare other

information as directed by the commissioner or an examiner of the commissioner to

include:

(a) Accounting compilations;

(b) Information lists and data concerning loa n transactions in a format prescribed

by the commissioner or an examiner of the commissioner; and

(c) Such other information deemed necessary to carry out the purposes of this

section.

(10) No mortgage loan company, mortgage loan broker, or mortgage loan o riginator

shall impede the commissioner or an examiner of the commissioner from

interviewing its officers, principals, members, employees, independent contractors,

agents, or customers.

(11) (a) In making any examination or investigation authorized by this subtitle, the

commissioner may control access to any documents and records of the

licensee or person under examination or investigation.

(b) The commissioner may take possession of the documents and records, or

place a person in exclusive charge of the documents and records in the place

where they are usually kept.

(c) During the period of control under this subsection, no individual or person

shall remove or attempt to remove any of the documents and records except

pursuant to a court order or with the consent of the commissioner.

(d) Unless the commissioner has reasonable grounds to believe the documents or

records of the licensee have been, o r are at risk of being, altered or destroyed

for purposes of concealing a violation of this subtitle, the licensee or owner of

the documents and records shall have access to the documents or records as

necessary to conduct its ordinary business affairs.

(12) No person subject to investigation or examination under this subtitle shall

knowingly withhold, abstract, alter, remove, mutilate, destroy, or secrete any books,

records, or other information.

(13) In order to carry out the purposes of this subtitle, the commissioner may:

(a) Retain attorneys, accountants, or other professionals and specialists as

examiners, auditors, or investigators to conduct or assist in the conduct of

examinations or investigations;

(b) Enter into agreements or relationships with ot her government officials or

regulatory associations in order to improve efficiencies and reduce regulatory

burden by sharing resources, standardized or uniform methods or procedures,

and documents, records, information, or evidence obtained under this subt itle;

and

(c) Use, hire, contract, or employ public or privately available analytical systems,

methods, or software to examine or investigate the persons subject to this

subtitle.

(14) The authority of this section shall remain in effect whether a person a cts, or claims

to act, under any licensing or registration law of this subtitle, or acts, or claims to

act, without such authority.