Governor Mark Parkinson signed Senate Bill 240 into law on March 27, 2009.  The bill makes changes to both the Uniform Consumer Credit Code (UCCC) and the Kansas Mortgage Business Act (KMBA) in order to establish standards for the regulation of mortgage loan originators in the state of Kansas.

The new law gives the Consumer Credit Commissioner the authority to promulgate regulations that will allow for its participation in the Nationwide Mortgage Licensing System (NMLS).  Kansas is currently scheduled to enter the registry in early 2010.  After that time, new and renewal individual mortgage loan originator registration applications will be submitted to Kansas via the registry.

The legislation requires that on and after July 1, 2009, all Supervised Lender licensees who engage in mortgage loan activities ensure individuals who originate mortgage loans on their behalf be properly registered as Mortgage Loan Originators with the office of the State Bank Commissioner (OSBC). Once the state has been transitioned to the NMLS, each loan originator will be required to maintain a valid unique identifier issued by the registry.  The supervised lenders will also be held responsible for all mortgage loan origination conducted on their behalf by residential mortgage loan originators or other employees.

The new law gives the OSBC the authority to create rules that will require all applicants for a mortgage loan originator’s license to complete a minimum number of pre-licensing education hours prior to registration as well as a minimum number of continuing education hours prior to annual license renewal.  The Commissioner has been given the authority to promulgate rules in order to set the educational standards.

All applicants, licensees, registrants or other persons must successfully pass a standardized examination designed to establish that person’s knowledge of residential mortgage loan origination transactions and all applicable state and federal law prior to licensure.

Additionally, all licenses and registrations will expire annually and must be renewed 30 days prior to expiration.  The law previously allowed for biennial renewal of licenses.

Finally, the act gives the commissioner the power to increase the amount of surety bonds that are required if he deems it necessary.  Currently, each applicant or licensee who maintains a bona fide office must file a surety bond in the amount of $50,000 with the Commissioner.  Applicants who do not maintain a bona fide office must provide a surety bond in the amount of $100,000.

TrainingPro’s governmental affairs team will continue to follow the actions of the commissioner as it pertains to the implementation of this law.