On April 13, 2016, Kentucky adopted 2016 Senate Bill 97 (“the bill”), which amends provisions under the Mortgage Licensing and Regulation Act (“MLRA”) including, in part, provisions relating to registration requirements for mortgage loan processors. Notably, the bill removes the requirement for registration of mortgage loan processors who are directed and supervised by a mortgage loan originator. These provisions are effective on July 14, 2016 (or 90 days following adjournment of the legislative session).
While the bill removes the requirement for registration of mortgage loan processors who are directed and supervised by a mortgage loan originator, note that the bill retains registration requirements for mortgage loan processors who engage in the mortgage lending process as an independent contractor.
Moreover, the bill prohibits a mortgage loan processor from representing that he or she can or will perform any activities of a mortgage loan originator or underwriter if he or she is not registered or authorized to act as a mortgage loan originator.
The bill’s provisions also require a supervising mortgage loan company or broker to conduct an employee background check prior to hiring a mortgage loan processor and provide proof to the commissioner.
Finally, the bill amends additional provisions under the MLRA including, but not limited to, provisions governing definitions, fees, recordkeeping and record retention requirements, office requirements, and continuing education requirements.