SB-0290, As Passed Senate, March 14, 2007

SENATE BILL No. 290

February 28, 2007, Introduced by Senators RICHARDVILLE, HARDIMAN, HUNTER, CHERRY, GLEASON, STAMAS, ALLEN, THOMAS, OLSHOVE, KUIPERS, McMANUS, CASSIS, VAN WOERKOM, GARCIA and BARCIA and referred to the Committee on Banking and Financial Institutions.

     A bill to amend 1981 PA 125, entitled

"The secondary mortgage loan act,"

by amending section 2 (MCL 493.52), as amended by 1997 PA 91.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2. (1) Except for a person licensed under the consumer

financial services act, 1988 PA 161, MCL 487.2051 to 487.2072, a

depository financial institution, or an exclusive broker, a A

person shall not act as a broker, lender, or servicer without first

obtaining a license or registration as provided by this act.

     (2) A person is acting as a broker if the person acts as a

broker in connection with 1 or more secondary mortgage loans.

     (3) A person is acting as a lender if the person registering

under this act, unless 1 or more of the following apply:

Senate Bill No. 290 as amended March 13, 2007

     (a) The person is solely performing services as an employee of

only 1 broker, lender, or servicer.

     <<(b) The person is an exclusive broker.>>

<<(C)>> The person is licensed under the consumer financial

services act, 1988 PA 161, MCL 487.2051 to 487.2072.

<<(D)>> The person acts as a lender but makes or negotiates more

than 2 or fewer secondary mortgage loans in a calendar year.

<<(E)>> (4) A person is acting as a servicer if the The person

acts as a servicer but services more than 10 or fewer secondary

mortgage loans in a calendar year.

<<(F)>> The person is an individual and an employee of a

professional employer organization, as that term is defined in

section 4 of the single business tax act, 1975 PA 228, MCL 208.4,

solely acting as a secondary mortgage loan originator of only 1

broker or lender. The broker or lender shall do all of the

following:

     (i) Direct and control the activities of the individual under

this act.

     (ii) Be responsible for all activities of the individual and

assume responsibility for the individual’s actions that are covered

by the proof of financial responsibility deposit required under

section 6.

(2) (5) Within 90 days after the effective date of the

amendatory act that added this subsection By October 31, 1997, a

servicer that was exempt from regulation under this act shall

either file with the commissioner an application for a license or

registration under section 3 or discontinue all activities subject

to this act.

     (6) A natural person who is an employee of only 1 licensee or

registrant is not required to obtain a license or be registered

under this act.

(3) (7) Except for a state or nationally chartered bank,

savings bank, or an affiliate of a bank or savings bank, a person

subject to this act shall not include in its name or assumed name

the words "bank", "banker", "banc", "bankcorp", "bancorp", or any

other words or phrases that would imply that the person is a bank,

is engaged in the business of banking, or is affiliated with a bank

or savings bank. It is not a violation of this subsection for a

licensee to use the term "mortgage banker" or "mortgage banking" in

its name or assumed name.

(4) (8) A person subject to this act whose name or assumed

name on January 1, 1997 contained a word prohibited by subsection

(7) (3) may continue to use that name or assumed name.