N.Y. Comp. Codes R. & Regs. tit. 3 § 420.4

Current through Register Vol. 46, No. 45, November 2, 2024

Section 420.4 - Application procedure for initial license as an MLO

(a)Effective date.

Effective July 11, 2009, no individual, unless exempt or permitted in accordance with the rules in subdivision (c) and subdivision (d) of this section, shall engage in mortgage loan originating without first being licensed by the superintendent as an MLO pursuant to article 12-E of the Banking Law. In order to facilitate an orderly transition to licensing and minimize disruption in the mortgage marketplace:

(1) each individual required under article 12-E to be licensed as an MLO, other than an individual described in paragraph (2) or (3) of this subdivision, shall be licensed pursuant to this Part not later than July 31, 2010, or such later date approved for mortgage loan originators in this State by the secretary of the U.S. Department of Housing and Urban Development, pursuant to the authority granted under Public Law 110-289, section 1508 (a) and approved by the superintendent;

(2) each individual authorized as a mortgage loan originator under prior law not later than July 11, 2009, shall be licensed pursuant to this Part not later than January 1, 2011, or such later date approved for mortgage loan originators in this State by the secretary of the U.S. Department of Housing and Urban Development, pursuant to the authority granted under Public Law 110-289, section 1508 (a) and approved by the superintendent; and

(3) notwithstanding paragraphs (1) and (2) of this subdivision, effective July 11, 2009, no individual shall act as a mortgage loan originator if such individual has been convicted of, or pled guilty or nolo contendere to, a felony of the types and during the time periods described in section 599-e(1)(b) of article 12-E.

(b) Submission of application.

Each applicant to become a licensed mortgage loan originator shall file an application in such form as shall then be required by the superintendent.

(c) Transition rules.

Each applicant described in this subdivision shall file an application as follows:

(1) an individual who was engaged in mortgage loan origination activities as of July 11, 2009, who filed an application pursuant to the prior version of article 12-E prior to such date, and whose application had not been approved, denied or withdrawn by the superintendent, shall file with the superintendent by November 30, 2009 all such additional information as the superintendent may reasonably require to comply with the informational requirements of article 12-E and shall satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E by May 31, 2010;

(2) an individual who was engaged in mortgage loan origination activities with respect to manufactured homes as of July 11, 2009 shall file with the superintendent by December 31, 2009 an application to be licensed as an MLO under article 12-E and shall satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E by May 31, 2010; and

(3) an individual authorized to act as an MLO as of July 11, 2009 shall file with the superintendent by November 30, 2009 all such additional information as the superintendent may reasonably require to comply with the informational requirements of article 12-E and shall satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E by August 31, 2010.

Unless precluded by paragraph (a)(3) of this section, all individuals covered by this subdivision may continue to engage in the activities of an MLO until the earlier of the date he or she receives notice that his or her license application under this Part has been denied or July 31, 2010 in the case of individuals covered by paragraphs (1) and (2) of this subdivision or January 1, 2011 in the case of individuals covered by paragraph (3) of this subdivision.

(d) New applications.

All individuals not covered by subdivision (c) of this section, but who are required to be licensed hereunder, shall file an application under this subdivision. Each applicant described in this subdivision shall file an application as follows:

(1) any new applicant who was engaged in the business of a mortgage loan originator as of July 11, 2009 as an employee or independent contractor of a bank, trust company, private banker, bank holding company, savings bank, savings and loan association, thrift holding company or credit union organized under the laws of this State, another state or the United States, or a subsidiary or affiliate of such a bank, trust company, private banker, bank holding company, savings bank, savings and loan association, thrift holding company or credit union and was not required to be authorized under the prior version of article 12-E, but who must be licensed under the new article 12-E, shall file with the superintendent by November 30, 2009 an application to be licensed as an MLO under article 12-E and shall satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E by May 31, 2010;

(2) any new applicant not covered by the paragraph (1) of this subdivision shall file with the superintendent an application to be licensed as an MLO under article 12-E at least 120 days prior to the date such person expects to engage in such activities and shall, if such application is filed before January 31, 2010, satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E by May 31, 2010; and

(3) all other applicants not covered by the paragraph (1) of this subdivision shall file with the superintendent an application to be licensed as an MLO under article 12-E at least 120 days prior to the date such person expects to engage in such activities, shall satisfy the pre-licensing testing and educational requirements and bonding requirements of article 12-E and shall be licensed hereunder prior to engaging in any MLO activities.

Any individual who applies prior to January 31, 2010, unless precluded by paragraph (a)(3) of this section, may engage in MLO activities when notified in writing by the superintendent that his or her application was informationally complete and had been accepted for processing. All such individuals must complete the pre-licensing testing and educational requirements and bonding requirements of article 12-E by the earlier of May 31, 2010 and be licensed by July 31, 2010.

(e) The application for initial license as an MLO under this Part shall be affirmed by the applicant and submitted electronically in such form and in such manner as may be prescribed by the superintendent. Instructions for submission of applications shall be available on the Department of Financial Services' (formerly the Banking Department) website (www.dfs.ny.gov).

(f) Fees.

Except for individuals covered by paragraphs (c)(1) and (3) of this section, a completed application shall be accompanied by payment of the following fees:

(1) an investigation and initial license fee;

(2) such fees as may be required for processing fingerprints; and

(3) a processing fee, all as described in section 420.17 of this Part.

No such fee will be refunded if the application is withdrawn or not approved. The schedule of fees shall be posted on the department's website (www.dfs.ny.gov). For individuals covered by subdivision (c) of this section, if the NMLS develops the capacity to process fingerprints through the FBI, the superintendent may require the applicant to submit a new set of fingerprints in the form required by the NMLS and to pay any processing fees required by the FBI and the NMLS.

(g) Fingerprints and fingerprint certification.

An applicant shall provide two sets of fingerprints in such form as shall be acceptable to the New York State Division of Criminal Justice Services, together with a fingerprint certification in the form prescribed by the superintendent. When required by the superintendent, an applicant also shall submit his or her fingerprints through the NMLS, in which case the applicant shall provide the superintendent with only one set of prints.

(h) Information and documents required.

The application shall include the information and documents required by Supervisory Procedure MB 107 of this Title as well as such additional information and documents as the superintendent deems necessary to determine whether the applicant satisfies the standards set forth in section 599-e of the Banking Law. Nothing contained herein shall limit the superintendent's authority to consider all relevant factors set forth in article 12-E in determining whether to approve a license application under this Part.

(i) In-person conferences.

In the absence of a showing of undue hardship, the superintendent may also require that the applicant and any officers, directors and/or representatives of the originating entity with which the applicant is employed or an independent contractor of to appear at the department to present information about the qualifications of the applicant.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 420.4

Adopted, New York State Register October 1, 2014/Volume XXXVI, Issue 39, eff.10/1/2014