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New Regulations under the Virginia Mortgage Lender and Broker Act

Effective August 10, 2008, the Virginia State Corporation Commission adopted the following regulations to implement certain amendments in HB 1487 to the Mortgage Lender and Broker Act (the "Act").

10VAC5-160-80 – Required Employee Training

Licensees will now be responsible for providing their "covered employees" with initial and continuing education about federal and Virginia laws and regulations (collectively, "laws") applicable to the mortgage loan business. "Applicable laws" includes, without limitation, RESPA, the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, federal and Virginia privacy protection laws, federal and Virginia laws relating to mortgage fraud, the Virginia Mortgage Lender and Broker Act, and all other Virginia laws applicable to a licensee’s business.

"Covered employees" means all employees involved in originating, marketing, underwriting, closing or performing compliance or quality control functions in connection with mortgage loan transactions.

"Initial education" means at least twelve hours relating to federal laws, at least four hours relating to Virginia laws, and at least two hours relating to mortgage fraud prevention, including penalties for participating in mortgage fraud. This is a total of 18 hours. Initial education must be completed by covered employees (who were hired by July 1, 2008) on or before May 1, 2009. Individuals who become covered employees (i.e. hired) after July 1, 2008 at Company must receive initial education within 90 days of their hire date.

"Continuing education" means annual training of at least four hours related to federal laws, at least two hours related to Virginia laws, and at least one hour relating to mortgage fraud prevention.

Licensees must maintain a training manual and documentation available for examination demonstrating successful completion by covered employees of the required education. Licensees must retain the names of education providers, the names and descriptions of educational courses, the dates of attendance, and the number of hours completed by each covered employee. Licensees must also provide any additional information relating to such education as may be required by the Bureau.

Training in the sale or marketing of mortgage loans does not count toward the required education. Education that a covered employee has received about federal laws pursuant to like educational requirements in other states may be used to fulfill these requirements. This does not apply to Virginia laws or mortgage fraud training. A licensee that hires a covered employee who has received initial or continuing education while previously employed by another licensee is not required to provide that employee with such education. In such cases, however, the licensee must maintain adequate documentation showing that the employee has completed the course.

Adopted Regulations from the Commonwealth of Virginia, State Corporation Commission: http://www.scc.virginia.gov/bfi/files/10VAC5-160.pdf