WSR 13-01-086

PROPOSED RULES

DEPARTMENT OF

FINANCIAL INSTITUTIONS
(Division of Consumer Services)

[ Filed December 18, 2012, 5:29 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 12-21-120.

Title of Rule and Other Identifying Information: Amending the rules (chapter 208-660 WAC) that implement the Mortgage Broker Practices Act (MBPA) (chapter 19.146 RCW) to increase the number of required prelicensing education hours specific to Washington law for mortgage loan originator (MLO) applicants.

Hearing Location(s): Department of Financial Institutions, 150 Israel Road S.W., Room 319, Tumwater, WA 98501, on January 24, 2013, at 1-3 p.m.

Date of Intended Adoption: February 20, 2013.

Submit Written Comments to: Sara Rietcheck, P.O. Box 41200, 150 Israel Road S.W., Olympia, WA 98504-1200, e-mail sara.rietcheck@dfi.wa.gov, by January 24, 2013.

Assistance for Persons with Disabilities: Contact Sara Rietcheck by January 17, 2013, TTY (360) 664-8126 or (360) 902-8786.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of the proposed rules is to increase the number of required prelicensing education hours specific to Washington law in order to ensure that Washington MLO applicants are properly educated about Washington law prior to licensing. In the spring of 2013, a uniform state test section will be added to the national SAFE test and if a state adopts the uniform state test, the state's separate test may be eliminated. Washington expects to adopt the use of the uniform state test along with a large majority of other states and the Washington specific component test will be phased out. The elimination of the separate Washington component test will cause a decrease in the number of test questions specific to Washington law.

Reasons Supporting Proposal: Because there will be fewer test questions specific to Washington law, mortgage loan originators must use prelicensing education as a tool to gain knowledge of Washington law prior to licensure.

This rule making is proposed under OFM Guideline 3.d.

Statutory Authority for Adoption: Chapter 43.320 RCW, RCW 19.146.223.

Statute Being Implemented: Chapter 19.146 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Department of financial institutions, governmental.

Name of Agency Personnel Responsible for Drafting: Cindy Fazio, 150 Israel Road, Olympia, WA, (360) 902-8800; Implementation and Enforcement: Deborah Bortner, 150 Israel Road, Olympia, WA, (360) 902-8800.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule amendments will not impose more than minor costs on the businesses impacted by the proposed rules.

A cost-benefit analysis is not required under RCW 34.05.328. Not applicable to the proposed rules.

December 18, 2012

Deborah Bortner, Director

Division of Consumer Services


AMENDATORY SECTION(Amending WSR 12-18-048, filed 8/29/12, effective 11/1/12)

WAC 208-660-355   Loan originators -- Prelicensing education.   (1) Must I obtain prelicensing education before I will be given a license? Yes. You must ((take)) complete at least ((20)) twenty two hours of prelicensing education from an NMLS approved provider. The prelicensing education must include at least three hours of federal law and regulations; three hours of ethics, which must include instruction on fraud, consumer protection, and fair lending issues; two hours related to lending standards for the nontraditional mortgage product marketplace; and at least ((two)) four hours of training specifically related to Washington law.

(2) Who provides prelicensing education? The NMLS approves course providers and courses for prelicensing education. See the NMLS Resource Center for a list of approved providers and courses.

(3) Must I take continuing education in the year I complete the prelicensing education? No. You will not have a continuing education requirement in the year in which you complete the core twenty hours of prelicensing education.

[Statutory Authority: Chapter 43.320 RCW and RCW 19.146.223. 12-18-048, 208-660-355, filed 8/29/12, effective 11/1/12. Statutory Authority: RCW 43.320.040, 19.146.223, and 2009 c 528. 09-24-091, 208-660-355, filed 12/1/09, effective 1/1/10.]


AMENDATORY SECTION(Amending WSR 12-18-048, filed 8/29/12, effective 11/1/12)

WAC 208-660-360   Loan originators -- Testing.   (1) Must I pass a test prior to becoming a loan originator? Yes. You must take and pass the NMLS ((national and state tests prior to becoming a)) sponsored loan originator test. The test has two parts; one on federal law and regulation and one on uniform state law and regulation. You must receive a score of seventy-five percent or higher to pass the test.

(2) Where may I find information about the loan originator test? The NMLS contracts for its test provider. You will find information on the test provider on the NMLS web site at www.stateregulatoryregistry.org.

(3) How much does the loan originator test cost? Testing costs are set by contract between the test provider and the NMLS and may be modified from time to time. The department will publish the current testing fee on its web site or you may find it on the NMLS web site at www.stateregulatoryregistry.org.

(4) How do I register to take the loan originator test? The department will provide a link to the NMLS test provider on its web site.

(5) What topics may be covered in the loan originator test? At a minimum, the test topics will include ethics, federal and state law and regulation pertaining to mortgage origination, federal and state law and regulation on fraud, consumer protection, nontraditional mortgage products, and fair lending.

(6) After passing the loan originator test, will I have to take it again? You must retake the loan originator test if you have not been a loan originator within the past five years.

(7) How soon after failing the loan originator test may I take it again? You may retake a test three consecutive times with each consecutive taking occurring at least thirty days after the preceding test. After failing three consecutive tests, you must wait at least six months before taking the test again.

[Statutory Authority: Chapter 43.320 RCW and RCW 19.146.223. 12-18-048, 208-660-360, filed 8/29/12, effective 11/1/12. Statutory Authority: RCW 43.320.040, 19.146.223, and 2009 c 528. 09-24-091, 208-660-360, filed 12/1/09, effective 1/1/10. Statutory Authority: RCW 43.320.040, 19.144.070, 2008 c 109. 09-01-156, 208-660-360, filed 12/23/08, effective 1/23/09. Statutory Authority: RCW 43.320.040, 19.146.223, 2006 c 19. 06-23-137, 208-660-360, filed 11/21/06, effective 1/1/07.]