(A)
For purposes of
division (AA)(2)(h) of section
1322.01 of the Revised Code,
"loan processing or underwriting company" means an entity that performs only
clerical or support duties for one or more unaffiliated registrants or
qualified exempt entities.
(B)
For purposes of
division (AA)(2)(h) of section
1322.01 of the Revised Code,
"employee" means an individual for whom the loan processing or underwriting
company, in addition to providing a wage or salary, pays social security and
unemployment taxes, provides workers' compensation coverage, and withholds
local, state, and federal income taxes. Nothing herein prohibits a loan
processing or underwriting company from entering into an agreement with a
professional employer organization as that term is defined in division (D) of
section 4125.01 of the Revised Code,
provided the loan processing or underwriting company retains all direction and
control over its shared employees' performance of clerical or support
duties.
(A) In accordance with 12 U.S.C.
5103(b)(2), as in effect on January 12, 2014, an independent contractor shall
not perform the clerical or support duties as defined in 12 U.S.C. 5102(5)(B),
as in effect on January 12, 2014, of a loan processor or underwriter for
residential mortgage loans involving property in this state without first
having obtained a loan originator license issued pursuant to Chapter 1322. of
the Revised Code.
(B) An individual who performs only
clerical or support duties as defined in 12 U.S.C. 5102(5)(B) is not required
to obtain a loan originator license if both of the following
apply:
(1) The individual is an employee of
a registrant, qualified exempt entity, depository institution, or loan
processing or underwriting company that holds a valid letter of exemption
issued pursuant to this rule;
(2) The individual performs such
clerical or support duties at the direction of and subject to the supervision
and instruction of a either a licensee employed by or associated with the same
registrant, qualified exempt entity, or loan processing or underwriting
company, or a registered loan originator employed by the same depository
institution.
(C)
The
A loan
processing or underwriting company seeking a letter
of exemption from registration
pursuant to division (AA)(2)(h) of section
1322.01 of the Revised
Code shall be responsible for paying any
applicable fees and
submit
submitting an application for a letter of exemption
via the NMLS for its main office location before engaging in the activities of
a loan processor or underwriter for residential mortgage loans involving
property in this state. The applicant shall be
responsible for any fee required by the NMLS.
(D) The application shall be in a form
prescribed by the superintendent and shall include all of the following:
(1) The loan processing or underwriting
company's business name and state of incorporation or business
registration;
(2) The names of the
owners, officers, members, or partners having control of the loan processing or
underwriting company;
(3) The names
of all licensees employed by the the loan processing or underwriting
company;
(4) An attestation stating
all of the following:
(a) All employees who
perform clerical or support duties are either licensees or
they perform only clerical or support
duties at the direction of and subject to the supervision and instruction of a
licensee employed by the same loan processing or underwriting
company.
(b) The licensees assign,
authorize, and monitor every loan processor or underwriter employee's
performance of clerical or support duties.
(c) The licensees exercise traditional
supervisory responsibilities, including, but not
limited to, training, mentoring, and evaluation of every loan
processor or underwriter employee.
(d) The loan processing or underwriting
company always performs clerical or support duties for others pursuant to a
written contract.
(e) No licensee
or employee of the loan processing or underwriting company is also a licensee
or employee of any entity for whom it performs clerical or support
duties.
(5) A surety bond
for all licensees which may be issued in the same manner as is permitted for
registrants;
(6) An acknowledgment
of understanding that the loan processing or underwriting company is subject to
the regulatory authority of the division of financial institutions;
(7) Any further reasonable information that
the superintendent may require.
(E) If the superintendent determines that the
loan processing or underwriting company fully and
honestly made the attestation required under
paragraph (D)(4) of this rule
completed the
application process and otherwise qualifies for exemption, the
superintendent shall issue a letter of exemption which shall expire on the
thirty- first day of December and may be renewed on or before that date by
submitting an application that meets the requirements of paragraph (D) of this
rule.
(F) The burden of proving the
exemption is on the loan processing or underwriting company.
(G) The loan processing or underwriting
company shall keep and maintain records of all residential mortgage loan
transactions for the portion of the transaction it conducts in the same manner
as is required of registrants
, as provided in division
(B) of section 1322.34 of the Revised Code and
rule 1301:8-7-06 of the
Administrative Code.
(H) The
superintendent may
, in accordance with rule
1301:8-7-13 of the
Administrative Code, examine the books and records of the loan processing
or underwriting company as often as the superintendent deems necessary for the
purpose of substantiating the loan processing or underwriting company's exempt
status.
Examinations shall be conducted in
accordance with rule 1301:8-7-13 of the Administrative Code.
(I) If the superintendent determines
that the loan processing or underwriting company does not qualify for the
exemption, the loan processing or underwriting company shall immediately cease
engaging in loan processing or underwriting activities for residential mortgage
loans involving property in this state. Failure to cease engaging in loan
processing or underwriting activities without a valid letter of exemption is a
violation of Chapter 1322. of the Revised Code and may be subject to
administrative, civil or criminal actions.
(J)(I) An
employee of a loan processing or underwriting company that holds a valid letter
of exemption may perform clerical or support duties from any location provided
a licensee of the same loan processing or underwriting company maintains
adequate supervision of the loan processor's or underwriter's performance,
including, but not limited to, training,
mentoring, and evaluation of the loan processor or underwriter.
(K)(J) An
employee of loan processing or underwriting company that holds a valid letter
of exemption is exempt from having to obtain a mortgage loan originator license
only with respect to the clerical or support duties performed for such
independent contractor or loan processing
or underwriting company.
(L)(K)
An independent contractor, or a licensee
or
An employee of a loan processing or
underwriting company shall not also be employed by or associated with any
entity for whom it
the loan processing or underwriting company performs
clerical or support duties.
(M)(L)
In order to reduce the risk of consumer fraud and
related harms, including identity theft, independent contractors and
A loan processing or underwriting
companies
company performing clerical or support duties shall
be required to comply with
section 216 of the "Fair and Accurate Credit
Transactions Act of 2003," 117 Stat. 1952 (amended 2010),
rules promulgated under
15 U.S.C.
1681w
, as in
effect on January 12, 2014, section 501 of the "Gramm Leach Bliley Act," 113
Stat. 1338 (1999) (amended 2010),
and
15 U.S.C.
6801,
as in effect
on January 12, 2014, and the rules promulgated pursuant to those federal
acts, including
16 C.F.R. part
Part 313 and
16 C.F.R. part
Part 682, as
those rules are in effect
January 12, 2014, pertaining to the maintenance,
security, and disposal of consumer information and records
May 1, 2024.
(N) "At the direction of and subject
to the supervision and instruction of" means all of the
following:
(1) The individual performing
clerical or support duties meets the definition of "employee" set forth in
paragraph (O) of this rule.
(2) The supervisory individual
directing, supervising and instructing the loan processor or underwriter
employee shall be an individual listed in paragraph (P)(1) to (P)(5) of this
rule;
(3) The supervisory individual
assigns, authorizes, and monitors the loan processor or underwriter employee's
performance of clerical or support duties;
(4) The supervisory individual
exercises traditional supervisory responsibilities, including, but not limited
to, the training, mentoring, and evaluation of the loan processor or
underwriter employee.
(O) For purposes of this exemption,
"employee" means an individual for whom the loan processing or underwriting
company, in addition to providing a wage or salary, pays social security and
unemployment taxes, provides workers' compensation coverage, and withholds
local, state, and federal income taxes. Nothing herein prohibits a loan
processing or underwriting company from entering into an agreement with a
professional employer organization as that term is defined in division (D) of
section 4125.01 of the Revised Code, provided the loan processing or
underwriting company retains all direction and control over its shared
employees' performance of clerical or support duties.
(P) "Independent contractor" means
an individual who performs the clerical or support duties as defined in 12
U.S.C. 5102(5)(B), as in effect on January 12, 2014, of a loan processor or
underwriter other than at the direction of and subject to the supervision and
instruction of any of the following individuals:
(1) An individual licensed as a loan
originator pursuant to Chapter 1322. of the Revised Code;
(2) An individual licensed as a
mortgage loan originator pursuant to sections 1321.51 to 1321.60 of the Revised
Code;
(3) An individual licensed as a
registered loan originator as defined in division (I) of section 1322.01 of the
Revised Code;
(4) An individual licensed as a
registered mortgage loan originator as defined in division (S) of section
1321.51 of the Revised Code;
(5) An individual who is not
required to be licensed pursuant to paragraph (I)(2)(a) of this rule
1301:8-7-01 (government employees exclusion) or paragraph (H) of rule
1301:8-7-31 (nonprofit exclusion) of the Administrative Code.
(Q) "Loan processing or underwriting
company" means a person, other than an independent contractor, registrant, or
qualified exempt entity, who performs only clerical or support duties as
defined in 12 U.S.C. 5102(5)(B), as in effect on January 12, 2014, of a loan
processor or underwriter for one or more unaffiliated registrants, qualified
exempt entities, or entities exempt from registration pursuant to division
(G)(2)(b) of section 1322.01 of the Revised Code.
