The Ohio Department of Commerce’s Division of Financial Institutions recently published guidance to assist mortgage licensees and registrants with implementing the newly-effective Ohio House Bill 199, also known as the Ohio Residential Mortgage Lending Act (RMLA). House Bill 199 became effective March 23, 2018. The legislation aims to: (1) regulate all non-depository lending secured by residential real estate, (2) limit the application of the current mortgage loan law (formerly the Ohio Mortgage Loan Act (OMLA) and now the Ohio General Loan Law (GLL)) to unsecured loans and loans secured by other than residential real estate or a dwelling, and (3) modify an exemption to the Ohio Consumer Installment Loan Act. We recently published an article alerting of the licensing and naming changes that the bill effected.
The Division’s recently issued guidance on the major licensing and registration changes made by House Bill 199 provides information in “question and answer” format. The guidance covers various topics—including necessary actions for companies and individuals which hold certain licenses, registrations, and exemptions, as well as potential changes to existing compliance, administrative, and disclosure rules.
All companies and individuals with an active license, registration, or letter of exemption issued by the Division on or before March 23, 2018, will continue to be licensed and able to do business through the end of the year. In general, all companies and individuals holding active licenses and registrations under the Ohio Mortgage Broker Act (OMBA) (renamed as the Ohio RMLA) or OMLA and/or Mortgage Broker Mortgage Banker (MBMB) Letters of Exemption may conduct business under the new law until the end of 2018 without any additional filing. However, all licensees, registrants, or exempt persons should review the changes made by House Bill 199 to ensure that they understand whether they need to take future action.
As briefly summarized below, the names of certain licenses, registrations, or exemptions which previously existed under the OMBA and OMLA have changed (though neither the state license number nor NMLS ID number will change). For instance:
- The OMBA Certificate of Registration has been renamed as the “RMLA Certificate of Registration”;
- All individual licenses, the OMLA Mortgage Loan Originator License, and the OMBA Loan Originator License, have been renamed as the “RMLA Mortgage Loan Originator License,” since these authorities have been consolidated under the new law;
- The OMBA MBMB Letter of Exemption has been renamed as the “RMLA Certificate of Registration,” since the MBMB exemption was eliminated by the recent statutory revisions; and
- The Credit Union Service Organization Letter of Exemption, under both the OMLA and OMBA, has been renamed as the “RMLA Letter of Exemption.”
These name changes took place automatically in the NMLS on March 23, 2018.
The Division issued the following guidance for the actions various companies may/must take between now and the end of the year:
- Companies that hold the OMLA Certificate of Registration and an OMBA Registration or Exemption that wish to keep engaging in the mortgage business: These companies do not need to take any further action. The name of these companies’ OMLA registration changed to “GLL Certificate of Registration,” and the name of their OMBA registration or exemption changed to “RMLA Certificate of Registration.” Moving forward, these companies will only need the RMLA Certificate of Registration to engage in any residential mortgage business, and they may choose to surrender or not renew their GLL Certificate of Registration.
- Companies that hold the OMLA Certificate of Registration that wish to keep engaging in mortgage lending (but not to engage in non-mortgage consumer lending): These companies may continue to originate mortgages under their existing registration until the end of 2018. After March 23, 2018, the registration name changed to “GLL Certificate of Registration.” In order to keep engaging in mortgage lending after 2018, each company and branch must obtain an RMLA Certificate of Registration through use of a transition process in the NMLS before renewing. Transition applications for the companies must be completed before the branches of those companies. The FAQ provides specific company and branch license numbers for companies to use during the process. There are NMLS fees but no Division fees for this process.
- Companies that hold the OMLA Certificate of Registration that wish to keep engaging in non-mortgage consumer lending (but not to engage in mortgage lending): These companies do not need to take any further action. After March 23, 2018, the registration name changed to “GLL Certificate of Registration.” These companies will renew in NMLS as usual under the new registration name.
- Companies that hold a Credit Union Service Organization (CUSO) Letter of Exemption: These companies do not need to take any further action. After March 23, 2018, the CUSO Letter of Exemption name changed to “RMLA Letter of Exemption.” These companies will renew as usual. More detail is provided in the FAQs for CUSOs that held letters of exemption under both OMBA and OMLA.
- Companies that have an application pending with the Division under the OMBA or OMLA: These companies will have their application reviewed under the new standards created by House Bill 199 and issued under the new law, and they do not need to refile their applications. Applications made under the OMBA or OMLA will automatically be treated as applications under the RMLA or GLL, respectively.
The FAQs include the above-summarized information, and much more, including guidance for individual mortgage loan originators as well. The Division recommends that all entities and individuals affected by the aforementioned changes review all the questions and answers provided in the implementation guidance.