N.Y. Banking Law § 599-n: Enforcement authority; grounds for suspension or revocation of a mortgage loan originator license; restitution

§ 599-n. Enforcement authority; grounds for suspension or revocation

of a mortgage loan originator license; restitution. 1. Licensee

revocation. In addition to the authority set forth in subdivision three

of this section, the superintendent may revoke a license to engage in

business as a mortgage loan originator pursuant to this article if he or

she finds, after notice and a hearing, that:

(a) Through a course of conduct, the licensee has violated any

provisions of this article, or any rule or regulation promulgated by the

superintendent thereunder, or any rule or regulation promulgated by the

superintendent under article twelve-D of this chapter or of any other

applicable law, rule or regulation of this state or the federal

government pertaining to mortgage banking, brokering or loan

originating; or

(b) Any fact or condition exists which, if it had existed at the time

of the original application for such license, would have warranted the

superintendent to refuse to issue such initial license.

2. Restitution. The superintendent may order a mortgage loan

originator or any other person to pay restitution for violations of this

article or any rules of the superintendent promulgated hereunder.

3. Suspension; termination. (a) The superintendent may, for good

cause, or where there is a substantial risk of public harm, without

notice or a hearing, issue an order suspending the license of any

mortgage loan originator for a period not to exceed ninety days for

investigation. "Good cause", as used in this subdivision, shall exist

only when the mortgage loan originator has engaged or engages in

dishonest or inequitable practices or practices which demonstrate

incompetent mortgage loan originating, which practices may cause

substantial harm to the persons afforded the protection of article

twelve-D of this chapter, or the license of the mortgage loan originator

was revoked in another state or jurisdiction participating in the NMLSR.

(b) The superintendent may, without notice or a hearing, issue an

order suspending any license: (i) thirty days after the date the

mortgage loan originator fails to file any report required to be filed

with the superintendent pursuant to the authority provided by this

article; or (ii) immediately upon notice that any required surety bond

with respect to the licensee is no longer in effect.

(c) If the superintendent has issued an order suspending a license

pursuant to paragraph (a) of this subdivision, such license may be

reinstated if the superintendent determines, in his or her sole

discretion after investigation, that good cause therefor did not exist

or no longer exists. If the superintendent has issued an order

suspending a license pursuant to paragraph (b) of this subdivision, such

license may be reinstated, if the superintendent determines, in his or

her sole discretion, that the licensee has cured all deficiencies set

forth in such order by the close of business ninety days after the date

of such suspension order. Otherwise, in case of a suspension pursuant to

paragraph (b) of this subdivision, unless the superintendent has, in his

or her sole discretion, extended such suspension, the license of such

mortgage loan originator shall be deemed to be automatically terminated

by operation of law at the close of business on such ninetieth day.

4. Requirement for a hearing. Except as provided in subdivision three

of this section, no license shall be revoked or suspended except after

notice and a hearing thereon. Any order of suspension issued after

notice and a hearing may include as a condition of reinstatement that

restitution be made to consumers of fees or other charges which have

been improperly charged or collected as determined by the

superintendent.

5. Surrender of license. With the prior consent of the superintendent,

any mortgage loan originator may surrender any license by delivering to

the superintendent written notice that he or she thereby surrenders such

license, but such surrender shall not affect such mortgage loan

originator's civil or criminal liability for acts committed prior to

such surrender or its obligations to the superintendent for assessments,

fees or administrative actions with respect to the periods before such

surrender.

6. Continuation of liability. A suspension, revocation or termination

of a license in accordance with this article shall not affect such

mortgage loan originator's civil or criminal liability for acts

committed prior to such suspension, revocation or termination or its

obligations to the superintendent for assessments, fees or

administrative actions with respect to the periods before such

suspension, revocation or termination.

7. Continuation of contracts. No revocation, suspension, surrender or

termination of any license under this article shall impair or affect the

obligation of any preexisting lawful contract between any licensee under

article twelve-D of this chapter and any person.

8. Continuation of license. Every license issued pursuant to this

article shall remain in force and effect until the same shall have been

surrendered, revoked, terminated or suspended in accordance with any

provision of this article, but the superintendent shall have authority

in his or her sole discretion to reinstate a suspended license or to

issue a new license to a mortgage loan originator whose license shall

have been revoked or terminated if no fact or condition then exists

which would have warranted the superintendent to refuse to issue such

initial authorization under this article.

9. Notice of revocation or suspension; review. Whenever the

superintendent shall revoke or suspend a license issued pursuant to this

article, he or she shall forthwith execute multiple copies of a written

order to that effect. The superintendent shall file one copy of such

order in the office of the department and shall forthwith serve a copy

upon the mortgage loan originator and any affected originating entity.

Any such order may be reviewed in the manner provided by article

seventy-eight of the civil practice law and rules. Such application for

review as authorized by this section must be made within thirty days

from the date of such order of suspension or revocation.

10. Notice of termination. Whenever a license shall have terminated in

accordance with this article, the superintendent shall notify the

mortgage loan originator and any affected originating entity that the

license has terminated and that the mortgage loan originator may not

engage in the business of soliciting, processing, placing or negotiating

a mortgage loan or offering to solicit, process, place or negotiate a

mortgage loan in this state.

11. Hearing requirements. Any hearing held pursuant to the provisions

of this section shall be subject to the provisions of the state

administrative procedure act.