THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DALEY, HESS, BELFANTI, BOYD, CALTAGIRONE, FAIRCHILD, GEIST, GODSHALL, HARRIS, KORTZ, LONGIETTI, MAHONEY, MOUL, OBERLANDER, PETRARCA, SCAVELLO, SIPTROTH, SOLOBAY, SWANGER, KULA AND METZGAR, MAY 27, 2010

REFERRED TO COMMITTEE ON COMMERCE, MAY 27, 2010  

AN ACT

Amending Title 7 (Banks and Banking) of the Pennsylvania

Consolidated Statutes, further providing for definitions and

for exceptions to license requirements.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 6102 of Title 7 of the Pennsylvania

Consolidated Statutes is amended by adding definitions to read:

§ 6102.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Holder."  As defined in section 3 of the act of June 28,

1947 (P.L.1110, No.476), known as the Motor Vehicle Sales

Finance Act.

* * *

"Installment seller."  As defined in section 3 of the act of

June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle

Sales Finance Act.

* * *

"Manufactured home."  Both of the following:

(1)  A manufactured home as defined in section 603(6) of

the National Manufactured Housing Construction and Safety

Standards Act of 1974 (Public Law 93-383, 42 U.S.C. §

5402(6)).

(2)  A mobile home as defined in 75 Pa.C.S. § 102

(relating to definitions).

* * *

"Purchase-money mortgage loan."  A mortgage loan that is a

residential mortgage transaction as defined in 12 CFR 226.2(a)

(24) (relating to definitions and rules of construction).

* * *

Section 2.  Section 6112(4), (5), (7), (11) and (12) of Title

7 are amended and the section is amended by adding a paragraph

to read:

§ 6112.  Exceptions to license requirements.

The following persons shall not be required to be licensed

under this chapter in order to conduct the mortgage loan

business:

* * *

(4)  Any agency or instrumentality of the Federal

Government or a corporation otherwise created by an act of

the United States Congress, including the Federal National

Mortgage Association, the Government National Mortgage

Association, the Veterans' Administration, the Federal Home

Loan Mortgage Corporation and the Federal Housing

Administration. To qualify for the exception under this

paragraph, the agency or instrumentality must ensure

employees required to be licensed as mortgage originators

have completed the requirements under section 6131.1

(relating to prelicensing and continuing education), have

obtained the required mortgage originator license and:

(i)  in the same manner as a mortgage lender, obtain

and maintain bond coverage for mortgage originators

consistent with section 6131(c)(5) (relating to

application for license) and file an annual report

consistent with section 6135(a)(3) (relating to licensee

requirements); or

(ii)  annually, in a form acceptable to the

department, demonstrate to the department that all of the

mortgage originators employed by the agency or

instrumentality have obtained and maintained the bond

coverage required by section 6131(f)(4).

(5)  Any agency or instrumentality of a state or local

government, the District of Columbia or any territory of the

United States, including the Pennsylvania Housing Finance

Agency and other government housing finance agencies. To

qualify for the exception under this paragraph, the agency or

instrumentality must ensure employees required to be licensed

as mortgage originators have completed the requirements under

section 6131.1, have obtained the required mortgage

originator license and:

(i)  in the same manner as a mortgage lender, obtain

and maintain bond coverage for mortgage originators

consistent with section 6131(c)(5) and file an annual

report consistent with section 6135(a)(3); or

(ii)  annually, in a form acceptable to the

department, demonstrate to the department that all of the

mortgage originators employed by the agency or

instrumentality have obtained and maintained the bond

coverage required by section 6131(f)(4).

* * *

(7)  Affiliates of banking institutions and subsidiaries

and affiliates of federally chartered or State-chartered

credit unions. The exception under this paragraph does not

apply to consumer discount companies. Notwithstanding the

exception under this paragraph, subsidiaries and affiliates

of federally chartered or State-chartered credit unions and

affiliates of banking institutions shall:

(i)  be subject to the provisions of Subchapter C and

sections 6135(a)(2), (3) and (4), (b) and (c), 6138 and

6140(b);

(ii)  deliver as required to the department annually

copies of financial reports made to all supervisory

agencies; 

(iii)  be registered with the department; [and]

(iv)  [with the exception of subsidiaries of

federally chartered or State-chartered credit unions,] in

the same manner as a mortgage lender, obtain and maintain

bond coverage for mortgage originators consistent with

section 6131(c)(5)[.]; and

(v)  ensure employees required to be licensed as

mortgage originators have completed the requirements

under section 6131.1 and have obtained the required

mortgage originator license.

* * *

(11)  Nonprofit corporations not otherwise engaged in or

holding themselves out to the public as being engaged in the

mortgage loan business making mortgage loans to promote home

ownership or improvements for the disadvantaged. To qualify

for the exception under this paragraph, the nonprofit

corporation must ensure employees required to be licensed as

mortgage originators have completed the requirements under

section 6131.1, have obtained the required mortgage

originator license and:

(i)  in the same manner as a mortgage lender, obtain

and maintain bond coverage for mortgage originators

consistent with section 6131(c)(5) and file an annual

report consistent with section 6135(a)(3); or

(ii)  annually, in a form acceptable to the

department, demonstrate to the department that all of the

mortgage originators employed by the nonprofit

corporation have obtained and maintained the bond

coverage required by section 6131(f)(4).

(12)  A nonprofit corporation not otherwise engaged in or

holding itself out to the public as being engaged in the

mortgage loan business which meets all of the following

subparagraphs:

(i)  Does not make more than 12 mortgage loans in a

calendar year with its own funds, not including funds

borrowed through warehouse lines of credit or other

sources for the purpose of making mortgage loans.

(ii)  Makes mortgage loans which are retained in the

corporation's own portfolios and not regularly sold to

others and are made to promote and advance the cultural

traditions and lifestyles of bona fide religious

organizations.

(iii)  Does either of the following:

(A)  In the same manner as a mortgage lender,

obtains and maintains bond coverage for mortgage

originators consistent with section 6131(c)(5) and

files an annual report consistent with section

6135(a)(3).

(B)  Annually, in a form acceptable to the

department, demonstrates to the department that all

of the mortgage originators employed by the nonprofit

corporation have obtained and maintained the bond

coverage required by section 6131(f)(4).

(iv)  Ensures employees required to be licensed as

mortgage originators have completed the requirements

under section 6131.1 and have obtained the required

mortgage originator license.

(13)  An installment seller of, or holder of installment

sales contracts secured by, manufactured homes who is

licensed under the act of June 28, 1947 (P.L.1110, No.476),

known as the Motor Vehicle Sales Finance Act, provided the

installment seller or holder only engages in the mortgage

loan business regarding installment sales contracts secured

by manufactured homes that are purchase-money mortgage loans.

To qualify for the exception under this paragraph, the

installment seller or holder must:

(i)  Obtain a license as a mortgage originator, if

licensed as an individual under the Motor Vehicle Sales

Finance Act.

(ii)  Be registered with the department.

(iii)  Do either of the following:

(A)  In the same manner as a mortgage lender or

mortgage broker, as applicable depending upon whether

the installment seller or holder makes or brokers

installment sales contracts secured by manufactured

homes that are purchase-money mortgage loans, obtain

and maintain bond coverage for mortgage originators

consistent with section 6131(c)(5) or (e)(3) and file

an annual report consistent with section 6135(a)(3);

or

(B)  Annually demonstrate to the department that

the mortgage originators employed by the installment

seller or holder have obtained and maintained the

bond coverage required by section 6131(f)(4) in a

form acceptable to the department.

(iv)  Ensure employees required to be licensed as

mortgage originators have completed the requirements

under section 6131.1 and have obtained the required

mortgage originator license.

Section 3.  This act shall take effect immediately.