KRS 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 --

Mortgage loan processors not required to register -- Continuing education and

standards for processors -- Renewal of originator registration -- Limitation of

loan origination services.

(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 s atisfactory 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 commis sioner 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. sec. 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. sec. 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 registrati on 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 commu nity 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. sec. 5104(d), and amendments thereto; and

(f) The applicant holds o r 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 br oker

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 subsecti on 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 t he

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.