Department of Financial Institutions
House Bill 106 Will Improve Mortgage Regulation
FRANKFORT, KY (Tuesday, March 31, 2009) – The Kentucky Department of Financial Institutions (DFI) stands ready to implement the changes called for in House Bill 106, which was signed by Gov. Steven L. Beshear on Friday.
The bill will become law in June – 90 days after the end of the 2009 General Assembly session.
The agency legislation, sponsored by Rep. Tommy Thompson, amends Kentucky’s mortgage statutes to comply with the requirements set forth in the S.A.F.E. Mortgage Licensing Act, federal legislation passed and signed into law on July 30, 2008.
“DFI is very pleased that the bill passed. This legislation will ensure that Kentucky complies with the S.A.F.E. Act and will allow our department to maintain regulatory oversight of mortgage loan originators in Kentucky,” said DFI Commissioner Charles Vice.
In fact, Kentucky already complies with several of the requirements, putting our state ahead of others. The Act requires states to participate in the Nationwide Mortgage Licensing System (NMLS), which Kentucky was one of the first to join.
Additionally, HB 106 complies with S.A.F.E. by setting forth stringent licensing requirements for those who originate mortgage loans. This includes increasing the required pre-licensing education, adding a competency test and requiring originators to be covered by or post a surety bond. The Act also requires background checks to be conducted on mortgage individuals, which Kentucky has been doing since 2004.
Since the NMLS is mandated by the Act to implement a competency test and education courses for mortgage originators, HB 106 repeals similar requirements that were set forth in last year’s changes to the mortgage law.
Kentucky is the ninth state to pass legislation that brings laws into compliance with the Act.
To learn more about HB 106, visit www.lrc.ky.gov/record/09RS/HB106.htm. For more about the S.A.F.E. Act, visit www.csbs.org/AM/Template.cfm?Section=SAFE_Act. Information for the industry regarding changes in regulation soon will be posted on DFI’s Web site at www.kfi.ky.gov.
DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.