S.Amdt. 5028

SA 5028. Mr. DURBIN submitted an amendment intended to be proposed to
amendment SA 4983 proposed by Mr. Reid (for Mr. Dodd (for himself and
Mr. Shelby)) to the bill H.R. 3221, moving the United States toward
greater energy independence and security, developing innovative new
technologies, reducing carbon emissions, creating green jobs,
protecting consumers, increasing clean renewable energy production, and
modernizing our energy infrastructure, and to amend the Internal
Revenue Code of 1986 to provide tax incentives for the production of
renewable energy and energy conservation; which was ordered to lie on
the table; as follows:

On page 410, strike line 22 and all that follows through
page 423, line 5, and insert the following:
(7) Registered loan originator.--The term ``registered loan
originator'' means any individual who--
(A) meets the definition of a--
(i) loan originator and is an employee of--

(I) a depository institution;
(II) a subsidiary that is--

(aa) owned and controlled by a depository institution; and
(bb) regulated by a Federal banking agency; or

(III) an institution regulated by the Farm Credit
Administration; or

(ii) loan originator and is an exclusive agent who shall
have entered into a written agreement with only one national
bank or one Federal savings association, and is subject to
regulation and examination by the Office of the Comptroller
of the Currency or the Office of Thrift Supervision, as
applicable, pursuant to a program providing for the use of
such exclusive agents which has been approved by such agency,
respectively; and
(B) is registered with, and maintains a unique identifier
through, the Nationwide Mortgage Licensing System and
Registry.
(8) Residential mortgage loan.--The term ``residential
mortgage loan'' means any loan primarily for personal,
family, or household use that is secured by a mortgage, deed
of trust, or other equivalent consensual security interest on
a dwelling (as defined in section 103(v) of the Truth in
Lending Act) or residential real estate upon which is
constructed or intended to be constructed a dwelling (as so
defined).
(9) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(10) State-licensed loan originator.--The term ``State-
licensed loan originator'' means any individual who--
(A) is a loan originator other than a ``registered loan
originator''; and
(B) is licensed by a State or by the Secretary under
section 1508 and is registered as a loan originator with, and
maintains a unique identifier through, the Nationwide
Mortgage Licensing System and Registry.
(11) Unique identifier.--
(A) In general.--The term ``unique identifier'' means a
number or other identifier that--
(i) permanently identifies a loan originator;
(ii) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the Federal
banking agencies to facilitate electronic tracking of loan
originators and uniform identification of, and public access
to, the employment history of and the publicly adjudicated
disciplinary and enforcement actions against loan
originators; and
(iii) shall not be used for purposes other than those set
forth under this title.
(B) Responsibility of states.--To the greatest extent
possible and to accomplish the purpose of this title, States
shall use unique identifiers in lieu of social security
numbers.

SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

(a) In General.--An individual may not engage in the
business of a loan originator without first--
(1) obtaining, and maintaining annually--
(A) a registration as a registered loan originator; or
(B) a license and registration as a State-licensed loan
originator; and
(2) obtaining a unique identifier.
(b) Loan Processors and Underwriters.--
(1) Supervised loan processors and underwriters.--A loan
processor or underwriter who does not represent to the
public, through advertising or other means of communicating
or providing information (including the use of business
cards, stationery, brochures, signs, rate lists, or other
promotional items), that such individual can or will perform
any of the activities of a loan originator shall not be
required to be a State-licensed loan originator.
(2) Independent contractors.--An independent contractor may
not engage in residential mortgage loan origination
activities as a loan processor or underwriter unless such
independent contractor is a State-licensed loan originator.

SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND
ISSUANCE.

(a) Background Checks.--In connection with an application
to any State for licensing and registration as a State-
licensed loan originator, the applicant shall, at a minimum,
furnish to the Nationwide Mortgage Licensing System and
Registry information concerning the applicant's identity,
including--
(1) fingerprints for submission to the Federal Bureau of
Investigation, and any governmental agency or entity
authorized to receive such information for a State and
national criminal history background check; and
(2) personal history and experience, including
authorization for the System to obtain--
(A) an independent credit report obtained from a consumer
reporting agency described in section 603(p) of the Fair
Credit Reporting Act; and
(B) information related to any administrative, civil or
criminal findings by any governmental jurisdiction.
(b) Issuance of License.--The minimum standards for
licensing and registration as a State-licensed loan
originator shall include the following:
(1) The applicant has never had a loan originator license
revoked in any governmental jurisdiction.
(2) The applicant has not been convicted of, or pled guilty
or nolo contendere to, a felony in a domestic, foreign, or
military court--
(A) during the 7-year period preceding the date of the
application for licensing and registration; or
(B) at any time preceding such date of application, if such
felony involved an act of fraud, dishonesty, or a breach of
trust, or money laundering.
(3) The applicant has demonstrated financial
responsibility, character, and general fitness such as to
command the confidence of the community and to warrant a
determination that the loan originator will operate honestly,
fairly, and efficiently within the purposes of this title.
(4) The applicant has completed the pre-licensing education
requirement described in subsection (c).
(5) The applicant has passed a written test that meets the
test requirement described in subsection (d).
(6) The applicant has met either a net worth or surety bond
requirement, as required by the State pursuant to section
1508(d)(6).
(c) Pre-Licensing Education of Loan Originators.--
(1) Minimum educational requirements.--In order to meet the
pre-licensing education requirement referred to in subsection
(b)(4), a person shall complete at least 20 hours of
education approved in accordance with paragraph (2), which
shall include at least--
(A) 3 hours of Federal law and regulations;
(B) 3 hours of ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues; and
(C) 2 hours of training related to lending standards for
the nontraditional mortgage product marketplace.
(2) Approved educational courses.--For purposes of
paragraph (1), pre-licensing education courses shall be
reviewed, and approved by the Nationwide Mortgage Licensing
System and Registry.
(3) Limitation and standards.--
(A) Limitation.--To maintain the independence of the
approval process, the Nationwide Mortgage Licensing System
and Registry shall not directly or indirectly offer pre-
licensure educational courses for loan originators.
(B) Standards.--In approving courses under this section,
the Nationwide Mortgage Licensing System and Registry shall
apply reasonable standards in the review and approval of
courses.
(d) Testing of Loan Originators.--
(1) In general.--In order to meet the written test
requirement referred to in subsection (b)(5), an individual
shall pass, in accordance with the standards established
under this subsection, a qualified written test developed by
the Nationwide Mortgage Licensing System and Registry and
administered by an approved test provider.
(2) Qualified test.--A written test shall not be treated as
a qualified written test for purposes of paragraph (1) unless
the test adequately measures the applicant's knowledge and
comprehension in appropriate subject areas, including--
(A) ethics;
(B) Federal law and regulation pertaining to mortgage
origination;
(C) State law and regulation pertaining to mortgage
origination;
(D) Federal and State law and regulation, including
instruction on fraud, consumer protection, the nontraditional
mortgage marketplace, and fair lending issues.
(3) Minimum competence.--
(A) Passing score.--An individual shall not be considered
to have passed a qualified written test unless the individual
achieves a test score of not less than 75 percent correct
answers to questions.
(B) Initial retests.--An individual may retake a test 3
consecutive times with each consecutive taking occurring at
least 30 days after the preceding test.
(C) Subsequent retests.--After failing 3 consecutive tests,
an individual shall wait at least 6 months before taking the
test again.
(D) Retest after lapse of license.--A State-licensed loan
originator who fails to maintain a valid license for a period
of 5 years or longer shall retake the test, not taking into
account any time during which such individual is a registered
loan originator.
(e) Mortgage Call Reports.--Each mortgage licensee shall
submit to the Nationwide Mortgage Licensing System and
Registry reports of condition, which shall be in such form
and shall contain such information as

[[Page S5969]]

the Nationwide Mortgage Licensing System and Registry may
require.

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

(a) In General.--The minimum standards for license renewal
for State-licensed loan originators shall include the
following:
(1) The loan originator continues to meet the minimum
standards for license issuance.
(2) The loan originator has satisfied the annual continuing
education requirements described in subsection (b).
(b) Continuing Education for State-Licensed Loan
Originators.--
(1) In general.--In order to meet the annual continuing
education requirements referred to in subsection (a)(2), a
State-licensed loan originator shall complete at least 8
hours of education approved in accordance with paragraph (2),
which shall include at least--
(A) 3 hours of Federal law and regulations;
(B) 2 hours of ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues; and
(C) 2 hours of training related to lending standards for
the nontraditional mortgage product marketplace.
(2) Approved educational courses.--For purposes of
paragraph (1), continuing education courses shall be
reviewed, and approved by the Nationwide Mortgage Licensing
System and Registry.
(3) Calculation of continuing education credits.--A State-
licensed loan originator--
(A) may only receive credit for a continuing education
course in the year in which the course is taken; and
(B) may not take the same approved course in the same or
successive years to meet the annual requirements for
continuing education.
(4) Instructor credit.--A State-licensed loan originator
who is approved as an instructor of an approved continuing
education course may receive credit for the originator's own
annual continuing education requirement at the rate of 2
hours credit for every 1 hour taught.
(5) Limitation and standards.--
(A) Limitation.--To maintain the independence of the
approval process, the Nationwide Mortgage Licensing System
and Registry shall not directly or indirectly offer any
continuing education courses for loan originators.
(B) Standards.--In approving courses under this section,
the Nationwide Mortgage Licensing System and Registry shall
apply reasonable standards in the review and approval of
courses.

SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL
AGENCIES.

(a) Development.--
(1) In general.--The Federal banking agencies shall
jointly, through the Federal Financial Institutions
Examination Council, and together with the Farm Credit
Administration, develop and maintain a system for registering
employees of a depository institution, employees of a
subsidiary that is owned and controlled by a depository
institution and regulated by a Federal banking agency, or
employees of an institution regulated by the Farm Credit
Administration, or exclusive agents of a national bank or
Federal savings association as registered loan originators
with the Nationwide Mortgage Licensing System and Registry.
The system shall be implemented before the end of the 1-year
period beginning on the date of enactment of this title.
(2) Registration requirements.--In connection with the
registration of any loan originator under this subsection,
the appropriate Federal banking agency and the Farm Credit
Administration shall, at a minimum, furnish or cause to be
furnished to the Nationwide Mortgage Licensing System and
Registry information concerning the employees's or exclusive
agent's identity, including--
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