Recently, Arkansas passed legislation amending the state’s Fair Mortgage Lending Act to comply with changes in federal law regarding transitional mortgage loan originator authority, as well as making modifications for other purposes.
The legislation amended the Act by adding provisions to address authority for certain individuals to act in the state as a loan officer subject to a “transitional loan officer license,” which is a license that is: (i) issued to an individual employed by a licensed mortgage banker or broker; (ii) limited to a 120 day term; and (iii) not able to be renewed or extended. This particular amendment is in response to the Economic Growth, Regulatory Relief and Consumer Protection Act which, among other things, provided 120 days of transitional authority for mortgage loan originators to originate in certain circumstances. Additionally, the legislation added and amended various other provisions of the Act to provide for the concept of transitional loan officers, e.g., changes to the definition of “applicant” and “licensee.”
Finally, the amendment, among other things: (i) changed an element in the definition of “control” of a company to the direct or indirect right to vote, or the power to sell or direct the sale of, 25% or more (up from 10% or more) of a class of a voting security of a company; (ii) expounded upon the treatment of “manufactured or modular home retailers” under the broad category of “exempt persons”; and (iii) added the International Financial Reporting Standards Foundation and the International Accounting Standards Board to the list of approved accounting standards for purposes of a mortgage banker or mortgage servicer license applicant’s audited financial statements requirement.