During the 103rd General Assembly, the Department of Financial Institutions proposed certain legislation, in the form of Senate Bill No. 3455, for the purpose of, among other things, amending the Tennessee Residential Lending, Brokerage and Servicing Act of 1988, Tenn. Code Ann. §§ 45-13-101, et seq. (the "Act"), to require that all mortgage loan originators be registered with the Commissioner. Senate Bill No. 3455 was passed by the General Assembly on May 10, 2004, was signed by the Governor on May 24, 2004, and was assigned Public Chapter No. 747 of the Acts of 2004. Except for the purpose of rulemaking, Public Chapter 747 of the Acts of 2004 became effective on January 1, 2005.
Tenn. Code Ann. § 45-13-126(a), which was added to the Act by Public Chapter 747 of the Acts of 2004, provides in pertinent part that, before an individual may provide services as a mortgage loan originator for a licensee or registrant, that individual shall be registered with the Commissioner in affiliation with that licensee or registrant (emphasis added).
On several occasions prior to the effective date of Public Chapter 747 of the Acts of 2004, the Department mailed written notices to all licensees and registrants under the Act, which notices contained information about the more significant amendments to the Act resulting from the enactment of Public Chapter 747, including the requirement that mortgage loan originators be registered with the Commissioner. Despite such notices, and despite the amount of time that has passed since the effective date of Public Chapter 747, the Department continues to find licensees and registrants that allow individuals to provide services as mortgage loan originators without first complying with the registration requirements imposed by Tenn. Code Ann. § 45-13-126.
The purposes of this Bulletin are: (1) to remind all licensees and registrants that an individual must be registered with the Commissioner before the individual may provide any services as a mortgage loan originator for a licensee or registrant; (2) to remind all licensees and registrants that allowing an individual to provide services as a mortgage loan originator without first complying with the registration requirements of the Act is a violation of the Act, and may, depending on the nature and extent of the services provided, result in multiple violations of the Act; and (3) to emphasize the actions that the Commissioner may take against licensees and registrants for violations of the Act.
Pursuant to Tenn. Code Ann. § 45-13-116, if, after notice and opportunity for a hearing, the Commissioner finds that a person has violated the Act, or administrative rule issued pursuant to the Act, the Commissioner may take any or all of the following actions:
- Order the person to cease and desist violating the Act or any administrative rule issued pursuant to the Act;
- Require the refund of any interest, fees, or charges collected by such person in violation of the Act or any administrative rule issued pursuant to the Act; or
- Order the person to pay the Commissioner a civil monetary penalty of not more than ten thousand dollars ($10,000) for each violation of the Act or administrative rule issued pursuant to the Act.
Any questions regarding this Bulletin may be directed to the Department's Compliance Division at telephone number (615) 741-3186.