(a) Condition to Authorizations. Each MLO shall, as a condition of initial and subsequent annual authorization:
(1) Satisfactorily complete education requirements as prescribed pursuant to section 599-d of the Banking Law and specified in this Part; and
(2) Submit to the Originating Entity proof of completion of the required number of Hours of Education Courses by providing certificates of course completion in the form required by the Superintendent.
(b) Proof that MLO has Completed Education Requirements. No Originating Entity shall permit any MLO who is required to have completed education requirements pursuant to Article 12-E of the Banking Law to engage in Mortgage Loan Originating until it has received acceptable proof of completion of such requirements.
(c) Credit for Education Courses. An MLO shall receive credit for satisfactorily completing an Education Course if such course is presented by a course provider described in section 420.12(a) of this Part.
(d) MLOs Employed Before January 1, 2008. Any person employed by or affiliated with an Originating Entity prior to January 1, 2008, who engages in Mortgage Loan Originating on or after such date shall comply with the following:
(1) Complete the initial eighteen Hours of Education Courses prescribed by Article 12-E of the Banking Law no later than January 1, 2010.
(2) Complete a minimum of eighteen hours of Education Courses every two years during the next succeeding six years).
(3) If by the end of such six-year period, such MLO has acquired ten or more years of experience actively engaged in Mortgage Loan Originating, the MLO shall thereafter complete eight Hours of Education Courses every four years.
(4) If by the end of such six-year period, such MLO has not acquired ten or more years of experience actively engaged in Mortgage Loan Originating, the MLO shall complete eighteen Hours of Education Courses during the next succeeding two years and eight Hours of Education Courses every four years thereafter.
(e) MLOs First Employed After January 1, 2008. Any person who was not employed by or affiliated with an Originating Entity prior to January 1, 2008, who engages in Mortgage Loan Originating on or after such date, shall comply with the following:
(1) Within the last five years prior to approval or by the Annual Expiration Date in the year in which the first anniversary of the MLO’s authorization occurs, such person shall have completed eighteen Hours of Education Courses.
(2) Beginning on the second anniversary of initial authorization, such MLO shall complete a minimum of eighteen Hours of Education Courses every two years during the next succeeding eight years, provided that such requirements must be completed by the Annual Expiration Date of the MLO’s authorization during the year in which completion of such requirement is due.
(3) Upon acquiring ten or more years of experience actively engaged in Mortgage Loan Originating, such MLO shall complete eight Hours of Education Courses every four years, provided that such requirements must be completed by the Annual Expiration Date of the MLO’s authorization during the year in which completion of such requirement is due.
(f) Course Content. During each biennial and quadrennial education period under clause (d) or (e) of this section, the MLO shall take a mix of Education Courses that relate to the then current business of Mortgage Loan Originating, including the subjects listed in paragraph (g) of this section. Three Hours of such instruction shall consist of instruction in ethical conduct in the area of Mortgage Loan Originating or lending practices. The content of Education Courses, and the depth in which it is covered may vary depending on the prior Mortgage Loan Originating experience of the MLO and other factors as determined by the Superintendent pursuant to Article 12-E of the Banking Law.
(g) Course requirements for Inexperienced MLOs. Education courses offered to Mortgage Loan Originators with less than 4 years industry experience shall emphasize the fundamental tasks performed by Mortgage Loan Originators and must provide students with basic knowledge and competency in areas of Mortgage Loan Origination and lending including but not limited to:
(1) Loan procedures and processes;
(2) Real property sales transactions;
(3) Relevant New York State laws and legal developments governing mortgages, lending, credit, real property and proceedings, consumer protection, fraudulent and deceptive business practices, advertising of mortgage products, predatory lending, fair lending and privacy;
(4) Relevant federal laws and legal developments governing mortgages, lending, credit, real property, consumer protection, fraudulent and deceptive business practices, advertising, predatory lending, fair lending and privacy, including the Equal Credit Opportunity Act (ECOA); Fair and Accurate Transaction Act (FACTA), Fair Credit Reporting Act (FCRA), Home Mortgage Disclosure Act (HMDA), Home Ownership and Equity Protection Act (HOEPA), Gramm-Leach Bliley Act (with respect to privacy of customer information), Federal Trade Commission Safeguard Rules, Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act, and Federal Trade Commission Act relating to deceptive practices and false advertising;
(5) Ethical Business Practices in the Mortgage Industry;
(6) Detection and Elimination of Fraud in the Mortgage Industry; and
(7) Such other areas and subjects as the Superintendent may prescribe or approve.
(h) Course Requirements for Experienced MLOs. Education Courses offered to Mortgage Loan Originators with more than four years of experience shall reflect the activities performed by experienced Mortgage Loan Originators and provide the MLO with advanced knowledge of the laws and business practices applicable to the mortgage industry. Subjects may include, but are not limited to, those set forth in section 420.11(g) but the level of instruction should be geared to those who have already mastered the basics of the subject.
(j) Failure to timely complete education requirements. Notwithstanding section 599-g of the Banking Law, an MLO’s failure to timely complete any education requirement shall cause the authorization of the MLO to be suspended immediately irrespective of whether the MLO has made satisfactory payment of the annual authorization fee.
(k) Variances and extensions. Variances to, or extensions of, the education requirements prescribed pursuant to Article 12-E of the Banking Law may be granted by the Superintendent
(1) For reasons of health certified by an appropriate health care professional;
(2) For extended active duty with the armed forces of the United States; or
(3) For other good cause deemed acceptable by the Superintendent, in his or her sole discretion, which may prevent satisfactory or timely completion of such requirements.
(l) Education Programs for Exempt MLOs Employed by or Affiliated with Certain Affiliates of Banking Institutions. For purposes of Section 599-e and Sections 420.2(a) (ii) and (b)(ii) of this Part, an educational program is substantially equivalent to the requirements for non-exempt MLOs if:
(i) The program requires each MLO to complete the number of Hours of Education Courses required under Sections 599-d (1), (2) and (3) of the Banking Law;
(ii) The Education Courses required by the Program cover the subjects required under Section 420.11(f), (g) and (h) of this Part; and
(iii) The educational background of instructors and quality of course materials evidence standards that are consistent with the purposes of Article 12-E, as determined by the Superintendent.
The educational program may be provided by the entity registered under Section 12-D or by its affiliated financial institution, or may give credit for courses provided by an Authorized Provider or Approved Provider as described in Section 420.12 of this Part.
§ 420.12 Approved education providers and courses.
(a) Providers. The Education Courses required by Article 12-E of the Banking Law may be offered by
(1) national, New York state or other state associations that are controlled by and whose membership comprises, but is not necessarily restricted to, mortgage bankers, mortgage brokers, or banking institutions (hereinafter, “trade associations”); provided, however, that any such trade association shall maintain supervision of such education courses satisfactory to the Superintendent;
(2) Degree and non-degree granting institutions of post-secondary education chartered, approved or licensed by the New York Board of Regents (hereinafter, “education institutions” and, collectively with trade associations, “Authorized Providers”); or
(3) Any other persons or entities as may be approved by the Superintendent (hereinafter, “Approved Providers”). Such approval shall remain in effect so long as the Education Courses offered by the Approved Provider evidences standards that are consistent with the purposes of Article 12-E of the Banking Law, as determined by the Superintendent.
(b) Application for Approved Provider status. Application by persons or entities seeking to become Approved Providers pursuant to section 420.12(a)(3) of this Part shall be made in the form prescribed by the Superintendent, a copy of which form shall be posted on the Banking Department’s website (www.banking.state.ny.us). In determining whether to approve such application the Superintendent may consider factors as he or she shall deem relevant, including but not limited to, educational background, financial responsibility, and employment, regulatory and criminal history, attendance verification procedures, method of course delivery, and instructors’ educational background and relevant teaching experience.
(c) Notification of Acting as an Authorized Provider. Each trade association that meets the requirements of section 420.12(a) and each education institution that meets the requirements of Section 420.12(b) and that proposes to offer Education Courses to Mortgage Loan Originators authorized by the Superintendent shall notify the Superintendent of its intention to offer such courses and shall provide the Superintendent with information about such Education Courses, including, without limitation, the course name, subject matter, offering dates and credit Hours to be awarded.
(d) Application for course approval. (i) Prior approval of the Superintendent is not required for any Education Course offered by an Authorized Provider identified in section 420.12(a)(1) or (2), provided that the Authorized Provider has determined that such Education Course is consistent with the purpose of Article 12-E of the Banking Law, and, provided further, that, at the discretion of an Authorized Provider, the Authorized Provider may apply for prior approval of any Education Course. Application for course approval shall be made in the form prescribed by the Superintendent, a copy of which form shall be posted on the Banking Department’s website (www.banking.state.ny.us). (ii) An Approved Provider shall not give any Education Course unless the Superintendent has first approved such course. Application for course approval shall be made in the form prescribed by the Superintendent, a copy of which shall be posted on the Banking Department’s website (www.banking.state.ny.us).
(e) Advertisement of Education Courses. No person or entity shall advertise or publish any material indicating that an Education Courses offered by such entity has been approved by the Superintendent unless such person or entity has received the prior approval of the Superintendent pursuant to the provisions of Article 12-E and section 420.12(a)(3) or 420.12(c) of this Part. A trade association or education association that has complied with paragraph (c) of this Part may include a statement in its advertising for any Education Course to the effect that “This course meets the requirements of the New York State Banking Department with respect to education courses for MLOs.”
(f) Listing of Approved and Authorized Providers and Education Courses. The Banking Department will post on its website (www.banking.state.ny.us) a listing of (i) Approved Providers, (ii) approved Education Courses, (iii) each trade association and education institution that has notified the Superintendent under paragraph (c) above that it intends to offer Education Courses to MLOs authorized in New York, and (iv) additional information regarding approval requirements.
(g) Reciprocity. The Superintendent may approve Education Courses taken by an MLO pursuant to the education requirements of another jurisdiction if the Superintendent is satisfied that the continuing education requirements of such jurisdiction meet the standards of Article 12-E. A list of such approved jurisdictions shall be posted on the Banking Department’s website (www.banking.state.ny.us).
(h) Reports by Authorized and Approved Providers. Each year beginning in 2009, no later than February 28 of the year, each Authorized Provider and each Approved Provider shall provide a report to the Superintendent with respect to the Education Courses given by it for which it has granted a certificate of satisfactory completion to any MLO authorized in New York. Such report shall include such information as may be required by the Superintendent.
(i) Suspension or revocation of authority. The Superintendent may from time to time examine providers of Education Courses to determine the effectiveness of their Education Courses in meeting the purposes of Article 12-E, including reviewing course programs, materials, instructors and evaluation forms. If the Superintendent determines that one or more Education Courses provided by an Approved Provider do not meet the purposes of Article 12-E, or that a trade association’s supervision of its Education Courses is not satisfactory to achieve the purposes of Article 12-E, the Superintendent shall notify the provider of the deficiencies. If the provider does not rectify such deficiencies, the Superintendent may revoke the authorization of such provider.
§ 420.13 Calculation and collection of fees.
(a) Under section 599-c of the Banking Law, each applicant to be an MLO must pay the following fees determined by the Superintendent:
(i) an investigation fee determined in the reasonable estimate of the Superintendent to be the actual cost to the Banking Department to investigate the applicant,
(ii) an initial authorization fee,
(iii) the fingerprint processing fee charged by the State Division of Criminal Justice Services and established pursuant to Article 35 of the Executive Law,
(iv) an annual authorization fee determined by the Superintendent, which shall be fixed for the state fiscal years ending March 31, 2009 and March 31, 2010, and may thereafter vary based on the actual cost to the Banking Department of administering Article 12-E of the Banking Law for the state fiscal year prior to the year in which such fee applies, and
(v) a processing fee that may be charged and collected by an entity with which the Superintendent has entered into a written contract or a memorandum of understanding to process applications or the annual authorization of MLOs.
All fees may be collected by an entity with which the Superintendent has contracted to process MLO applications or renewals. With respect to initial applications, the fees in clauses (i), (ii), (iii) and (v) must be filed with the application.
(b) The Superintendent has determined the following initial fees:
(i) an investigation fee of $125;
(ii) an initial authorization fee of $50;
(iii) an annual authorization fee of $50;
(iv) the fingerprint processing fee charged by the State Division of Criminal Justice Services and established pursuant to section Article 35 of the Executive Law, and
(v) any processing fee that may be charged and collected by the entity that processes the application.
(c) The schedule of fees in effect from time to time in accordance with Article 12-E shall be posted on the Banking Department’s website (www.banking.state.ny.us).
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