§1088. Application for licensure; surety bond

A. An application for a license under this Chapter shall be made under oath and on a form prescribed by the commissioner. The commissioner may grant restricted or conditional licenses. Each license shall expire on December thirty-first of the year in which the license was issued.

B. In addition to any other duties imposed upon the commissioner by law, the commissioner shall require mortgage loan originators, mortgage lenders, and mortgage brokers to be licensed and registered through the NMLS&R and for this purpose the commissioner may establish such application information requirements and any other information as he deems necessary to participate in the NMLS&R. For the purposes of participating in the NMLS&R, the commissioner may waive or modify in whole or in part by rule, any requirements set forth in this Chapter and set forth such new requirements as he deems reasonably necessary to participate in the NMLS&R. In order to facilitate an orderly transition to the licensing requirements of this Chapter and to ensure timely receipt and consideration, the commissioner may direct that certain information, documents, or other items required pursuant to this Chapter be furnished to the commissioner or to the NMLS&R, and may be furnished periodically and separately from an application.

C. In addition to any other application information requirements of the commissioner, an applicant for licensure pursuant to this Chapter shall, in connection with an application for licensing, furnish to the commissioner, or if application procedures permit, to the Nationwide Mortgage Licensing System and Registry, each of the following:

(1) Fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, or international criminal history background check; provided however, that any person licensed on July 30, 2009, may satisfy this requirement by complying with the provisions of R.S.6:121.2, until the earlier of being directed otherwise by the commissioner, or until December 31, 2010. For purposes of this Paragraph and Paragraph (3) of this Subsection, the commission may use the NMLS&R as a channeling agent for requesting and distributing information to and from any source as directed by the commissioner.

(2) Personal history and experience in a form prescribed by the NMLS&R, and when available through the NMLS&R.

(3) Authorization for the NMLS&R and the commissioner to obtain:

(a) An independent credit report obtained from a consumer reporting agency described in the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.

(b) Information related to any administrative, civil, or criminal findings by any governmental jurisdiction; provided however, that persons licensed on July 30, 2009, need not furnish such authorization until directed to do so by the commissioner, but in any event no later than December 31, 2010.

D. To comply with the requirements of this Section, an applicant for a mortgage lender, mortgage broker, or mortgage servicer license shall furnish the required information as to each owner and member if the applicant is a partnership or limited liability company, each officer, director, and direct or indirect owner of ten percent or more of applicant's outstanding shares if the applicant is a corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.

E. Notwithstanding any other law to the contrary, the commissioner may not issue a mortgage loan originator license, unless the commissioner finds that the applicant has the following minimum requirements:

(1) Paid all fees due to the office of financial institutions.

(2) Never had a mortgage loan originator license, mortgage lender license, or mortgage broker license revoked in any governmental jurisdiction unless such revocation is subsequently formally vacated.

(3) Has not been convicted of, pleaded guilty, or nolo contendere to a felony in a domestic, foreign, or military court during the seven-year period preceding the date of application for licensing and registration or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering; provided however that any conviction for which an individual has received a pardon, the effect of which, according to the law of the jurisdiction granting the pardon, is to void the fact of the conviction, shall not be deemed a conviction for the purposes of this Subsection.

(4) Demonstrates financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator, mortgage lender, or mortgage broker will operate honestly, fairly, and efficiently within the purposes of this Chapter.

(5) Has completed the pre-licensing education requirement described in this Chapter.

(6) Has passed a written test that meets the test requirement described in this Chapter.

(7) Has obtained and maintains a surety bond in the amount required by this Section.

F. Notwithstanding any other law to the contrary, the commissioner may not issue a mortgage lender license, mortgage broker license, or mortgage servicer license unless the commissioner makes the minimum findings provided in Paragraphs (E)(1), (2), (3), and (4) of this Section, and as to each owner, partner, and member if the applicant is a partnership or a limited liability company, each officer, director, and direct or indirect owner of ten percent or more of the outstanding shares if the applicant is a corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.

G.(1) Each applicant for any license governed by this Chapter shall, at the time of application for licensure or any renewal of a license, provide evidence of obtaining and maintaining a surety bond as provided for in this Section. Notwithstanding any other law to the contrary, or any other provision of this Chapter, a person who was licensed and met the financial responsibility requirements in whatever manner permitted by this Chapter on July 30, 2009, and who thereafter continuously meets those requirements in a manner permitted by this Chapter on July 30, 2009, shall be deemed in compliance with the requirements of this Subsection until December 31, 2009.

(2) The applicant shall furnish a surety bond authorized by a surety insurer licensed to do business in this state. The surety bond shall name the office of financial institutions and shall be submitted as prescribed by the commissioner in connection with the application or renewal application.

(3) The required amount of the surety bond shall be determined by information in a report submitted by an applicant or licensee as prescribed by the commissioner. The total dollar amount of the original outstanding principal balance of all residential mortgage loans serviced or originated by the applicant secured by immovable property located in this state, including all such loans originated by mortgage loan originators employed by the applicant during the previous calendar year and reported pursuant to this Subsection shall be used to determine the amount of the bond. The required amount of the bond shall be determined by information in a report of total loan volume submitted by the applicant as prescribed by the commissioner. Total loan volume of the applicant shall be calculated by adding all of the following:

(a) The total dollar volume of loans which were originated by an applicant or licensee and funded by a mortgage lender.

(b) Total dollar volume of loans originated and funded by same applicant or licensee.

(c) The total dollar volume of loans funded by an applicant which were originated by a mortgage broker.

(d) The total outstanding principal balance as of the end of the previous calendar year for all residential mortgage loans serviced.

(4) The total dollar loan volume reported for the previous year shall be used to determine the amount of the surety bond required in accordance with the following:

Dollar Amount of Total Loan

Required Amount of Surety Bond

Volume in Previous Calendar Years

Lenders, Brokers, and Originators

$0 - $99,999,999

$25,000

$100,000,000 or greater

$50,000

H. All persons licensed by the commissioner pursuant to this Part shall maintain a surety bond, according to the provisions of this Section, at all times during licensure and at all times that they are required to be licensed, as determined by the commissioner.

I. Notwithstanding any other law to the contrary, in lieu of obtaining a surety bond, all applicants may meet the requirements of this Section by depositing in a federally insured depository institution located in Louisiana, designated by the applicant and approved by the commissioner, an amount equal to the amount of the surety bond otherwise required by the provisions of this Section, provided that the title of any such deposit account must include the words "for the benefit of" or "f/b/o the Louisiana Office of Financial Institutions", and require such other evidence of and information regarding such account as he may deem appropriate, provided that interest earned on such account shall be payable to person or entity making the deposit.

J. An applicant for a mortgage originator license who is employed by, or is an exclusive agent for, a juridical person engaging in residential mortgage lending activities as a licensed mortgage broker, mortgage lender, or mortgage servicer may satisfy the requirement of furnishing a surety bond by submitting evidence in a form and manner satisfactory to the commissioner that his employer or principal has obtained a surety bond which satisfies the requirements of this Section. Notwithstanding any provision of law to the contrary, a mortgage originator whose license remains in a status of inactive or any other status which would not allow them to originate mortgage loans shall not be required to maintain the surety bond as required by this Section until such time as their license is returned to a status which allows them to originate mortgage loans.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §§1 and 3, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2006, No. 237, §1; Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2008, No. 225, §1, eff. June 15, 2008; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2010, No. 36, §1; Acts 2014, No. 260, §1, eff. June 30, 2104.