Z-1079.3  _______________________________________________

 

                         SENATE BILL 6617

          _______________________________________________

 

State of Washington      54th Legislature     1996 Regular Session

 

By Senators Prentice, Sellar and Fraser; by request of Department of Financial Institutions

 

Read first time 01/19/96.  Referred to Committee on Financial Institutions & Housing.

 

Imposing fines or sanctions against mortgage brokers.



    AN ACT Relating to the powers of the director to impose fines or sanctions against mortgage brokers; amending RCW 19.146.220; and providing an effective date.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

    Sec. 1.  RCW 19.146.220 and 1994 c 33 s 12 are each amended to read as follows:

    (1) The director shall enforce all laws and rules relating to the licensing of mortgage brokers, grant or deny licenses to mortgage brokers, and hold hearings.

    (2) The director may impose ((any one or more of)) the following sanctions:

    (a) ((Suspend or revoke licenses,)) Deny applications for licenses((, or impose penalties upon violators of)) for:  (i) Violations of orders, including cease and desist orders issued under this chapter((.  The director may)); or (ii) any violation of RCW 19.146.050 or 19.146.0201(1) through (9);

    (b) Suspend or revoke licenses for:

    (i) False statements or omission of material information on the application that, if known, would have allowed the director to deny the application for the original license;

    (ii) Failure to pay a fee required by the director or maintain the required bond;

    (iii) Failure to comply with any directive or order of the director; or

    (iv) Any violation of RCW 19.146.050, 19.146.0201 (1) through (9) or (13), 19.146.205(3), or 19.146.265;

    (c) Impose fines((, as established by rule by the director,)) on the licensee, employee or loan originator of the licensee, or other person subject to this chapter for:

    (i) Any violations of ((or failure to comply with)) RCW 19.146.0201 (1) through (9) or (13), 19.146.030 through 19.146.090, 19.146.200, 19.146.205(3), or 19.146.265; or

    (ii) Failure to comply with any ((lawful)) directive((, order, or requirement)) or order of the director((.  Each day's continuance of the violation or failure to comply is a separate and distinct violation or failure));

    (((b))) (d) Issue ((an)) orders directing a licensee, its employee or loan originator, or other person subject to this chapter to:

    (i) Cease and desist from conducting business in a manner that is injurious to the public or violates any provision of this chapter((,)); or ((to))

    (ii) Pay restitution to an injured borrower; or

    (((c))) (e) Issue ((an)) orders removing from office or prohibiting from participation in the conduct of the affairs of a licensed mortgage broker, or both, any officer, principal, employee, or loan originator((, as the case may be,)) of any licensed mortgage broker or any person subject to licensing under this chapter for:

    (i) Any violation of 19.146.0201 (1) through (9) or (13), 19.146.030 through 19.146.090, 19.146.200, 19.146.205(3), or 19.146.265; or

    (ii) False statements or omission of material information on the application that, if known, would have allowed the director to deny the application for the original license;

    (iii) Conviction of a gross misdemeanor involving dishonesty or financial misconduct or a felony after obtaining a license; or

    (iv) Failure to comply with any directive or order of the director.

    (((2) The director may take those actions specified in subsection (1) of this section if the director finds any of the following:

    (a) The licensee has failed to pay a fee due the state of Washington under this chapter or, to maintain in effect the bond or approved alternative required under this chapter; or

    (b) The licensee, employee or loan originator of the licensee, or person subject to the license requirements or prohibited practices of this chapter has failed to comply with any specific order or demand of the director lawfully made and directed to the licensee, employee, or loan originator of the licensee in accordance with this chapter; or

    (c) The licensee, its employee or loan originator, or other person subject to this chapter has violated any provision of this chapter or a rule adopted under this chapter; or

    (d) The licensee made false statements on the application or omitted material information that, if known, would have allowed the director to deny the application for the original license.))

    (3) Each day's continuance of a violation or failure to comply with any directive or order of the director is a separate and distinct violation or failure.

    (4) The director shall establish by rule standards for licensure of applicants licensed in other jurisdictions.  Every licensed mortgage broker that does not maintain a physical office within the state must maintain a registered agent within the state to receive service of any lawful process in any judicial or administrative noncriminal suit, action, or proceeding, against the licensed mortgage broker which arises under this chapter or any rule or order under this chapter, with the same force and validity as if served personally on the licensed mortgage broker.  Service upon the registered agent shall be effective if the plaintiff, who may be the director in a suit, action, or proceeding instituted by him or her, sends notice of the service and a copy of the process by registered mail to the defendant or respondent at the last address of the respondent or defendant on file with the director.  In any judicial action, suit, or proceeding arising under this chapter or any rule or order adopted under this chapter between the department or director and a licensed mortgage broker who does not maintain a physical office in this state, venue shall be exclusively in the superior court of Thurston county.

 

    NEW SECTION.  Sec. 2.  This act shall take effect July 1, 1996.

 


                            --- END ---