Division of Banking

HB 1060 was enacted into law on July 1, 2009 in order to bring the mortgage licensing laws of the State of South Dakota into compliance with the federal Secure and Fair Enforcement for Mortgage Lending Act of 2008 (“SAFE Act”). The SAFE Act requires all states to pass mortgage licensing laws and regulations that meet or exceed certain national standards. More information about the SAFE Act and the Professional Requirements listed below can be found here.

All individuals meeting the definition of a mortgage loan originator (MLO) must meet new licensing requirements that are in compliance with the SAFE Act.

In order to comply with the new law, all individuals acting as mortgage loan originators must do the following:

The SAFE Mortgage Loan Originator Test
All mortgage loan originators must pass the SAFE Mortgage Loan Originator Test, which is comprised of two components: a National Component and a State Component. MLOs must pass each Component with a score of 75% or higher prior to renewal for 2011.

To find a test center and schedule a testing appointment, please see the NMLS website.

New applicants will need to have passed both the State and National components of the test prior to receiving a license beginning January 1, 2010.

**Pass rates as of November 30th were 69% for the National Test Component and 73% for the aggregate State Test Components.

Pre-Licensure Education Requirements
Mortgage loan originators licensed as of December 31, 2009 who have completed 20 or more hours of SDDOB approved education (pre-licensure and/or continuing education) by December 31, 2009 may be certified by SD DOB as having fulfilled the pre-licensure requirements.

Current licensees not eligible for Certification are required to complete 20 hours of NMLS approved pre-licensure education prior to renewal for 2011.

New applicants will need to complete the pre-license education requirement prior to receiving a license beginning January 1, 2010.

Criminal Background Check
All individuals acting as Mortgage Loan Originators must authorize a fingerprint background check through NMLS for the purpose of conducting a national criminal history background check through the Federal Bureau of Investigation prior to renewal for 2011. This requirement applies to all individuals, regardless of whether you are currently licensed in the state or if you have previously submitted fingerprints for licensure.

NMLS has implemented a comprehensive process which includes electronic fingerprint capture with locations throughout the nation. Details can be found on the NMLS Resource Center website.

Credit Report
All mortgage loan originators must provide authorization to obtain a credit report through NMLS. SDDOB will review the credit report provided as part of its determination of financial responsibility for each mortgage loan originator.

NMLS will implement a comprehensive process to obtain the required authorization.

The details will be added here as they become available.

Continuing Education Requirements
In order to renew a license for 2011 all mortgage loan originators must complete 8 hours of NMLS approved Continuing Education during calendar year 2010.

CE must include:
3 hours of Federal law and regulations;
2 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues; and
2 hours of training related to lending standards for the nontraditional mortgage product market.

Consumer Access
As required by the S.A.F.E. Act, NMLS has created a Consumer Access portal which will provide information about state licensed and federally registered mortgage loan originators licensed through NMLS to the public.

www.nmlsconsumeraccess.org

Company Sponsorship of MLO Licenses
The license status of all Mortgage Loan Originators will be considered “inactive” until the licensed MLO is sponsored by a licensed company. Sponsorship requests are submitted by the company through NMLS.

Surety Bond
Every Mortgage Loan Originator (MLO) must be covered under a surety bond that reflects the dollar amount of loans originated on an annual basis.

Satisfaction of this requirement can be met by one of the following:

Companies sponsoring state-licensed mortgage loan originators must provide evidence of a surety bond meeting South Dakota requirements as part of their company license.
Mortgage Loan Originators who are not employed by a state licensed company must provide an individual surety bond at the time of submitting their Form MU4 through NMLS

The surety bond requirement is currently a flat $25,000 and will remain a flat amount until guidance is received from HUD regarding the tiered bond amounts. This section will be updated as details become available.

NMLS Call Report For Companies

HB 1060 requires that every company employing state-licensed MLOs must file a NMLS Mortgage Call Report through the NMLS. The NMLS Mortgage Call Report is a statement of condition on the company and its operations including financial statements and production activity volumes reported on a per state basis. Additional information concerning the NMLS Mortgage Call Report will be provided at a later date.


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	HB 1060 was enacted into law on July 1, 2009 in order to bring the mortgage licensing laws of the State of South Dakota into compliance with the federal Secure and Fair Enforcement for Mortgage Lending Act of 2008 (“SAFE Act”). The SAFE Act requires all states to pass mortgage licensing laws and regulations that meet or exceed certain national standards. More information about the SAFE Act and the Professional Requirements listed below can be found here. All individuals meeting the definition of a mortgage loan originator (MLO) must meet new licensing requirements that are in compliance with the SAFE Act. In order to comply with the new law, all individuals acting as mortgage loan originators must do the following: The SAFE Mortgage Loan Originator Test All mortgage loan originators must pass the SAFE Mortgage Loan Originator Test, which is comprised of two components: a National Component and a State Component. MLOs must pass each Component with a score of 75% or higher prior to renewal for 2011. To find a test center and schedule a testing appointment, please see the NMLS website. New applicants will need to have passed both the State and National components of the test prior to receiving a license beginning January 1, 2010. Pass rates as of November 30th were 69% for the National Test Component and 73% for the aggregate State Test Components. Pre-Licensure Education Requirements Mortgage loan originators licensed as of December 31, 2009 who have completed 20 or more hours of SDDOB approved education (pre-licensure and/or continuing education) by December 31, 2009 may be certified by SD DOB as having fulfilled the pre-licensure requirements. Current licensees not eligible for Certification are required to complete 20 hours of NMLS approved pre-licensure education prior to renewal for 2011. New applicants will need to complete the pre-license education requirement prior to receiving a license beginning January 1, 2010. Criminal Background Check All individuals acting as Mortgage Loan Originators must authorize a fingerprint background check through NMLS for the purpose of conducting a national criminal history background check through the Federal Bureau of Investigation prior to renewal for 2011. This requirement applies to all individuals, regardless of whether you are currently licensed in the state or if you have previously submitted fingerprints for licensure. NMLS has implemented a comprehensive process which includes electronic fingerprint capture with locations throughout the nation. Details can be found on the NMLS Resource Center website. Credit Report All mortgage loan originators must provide authorization to obtain a credit report through NMLS. SDDOB will review the credit report provided as part of its determination of financial responsibility for each mortgage loan originator. NMLS will implement a comprehensive process to obtain the required authorization. The details will be added here as they become available. Continuing Education Requirements In order to renew a license for 2011 all mortgage loan originators must complete 8 hours of NMLS approved Continuing Education during calendar year 2010. CE must include: 3 hours of Federal law and regulations; 2 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues; and 2 hours of training related to lending standards for the nontraditional mortgage product market. Consumer Access As required by the S.A.F.E. Act, NMLS has created a Consumer Access portal which will provide information about state licensed and federally registered mortgage loan originators licensed through NMLS to the public. www.nmlsconsumeraccess.org Company Sponsorship of MLO Licenses The license status of all Mortgage Loan Originators will be considered “inactive” until the licensed MLO is sponsored by a licensed company. Sponsorship requests are submitted by the company through NMLS. Surety Bond Every Mortgage Loan Originator (MLO) must be covered under a surety bond that reflects the dollar amount of loans originated on an annual basis. Satisfaction of this requirement can be met by one of the following: Companies sponsoring state-licensed mortgage loan originators must provide evidence of a surety bond meeting South Dakota requirements as part of their company license. Mortgage Loan Originators who are not employed by a state licensed company must provide an individual surety bond at the time of submitting their Form MU4 through NMLS The surety bond requirement is currently a flat $25,000 and will remain a flat amount until guidance is received from HUD regarding the tiered bond amounts. This section will be updated as details become available. NMLS Call Report For Companies** HB 1060 requires that every company employing state-licensed MLOs must file a NMLS Mortgage Call Report through the NMLS. The NMLS Mortgage Call Report is a statement of condition on the company and its operations including financial statements and production activity volumes reported on a per state basis. Additional information concerning the NMLS Mortgage Call Report will be provided at a later date.
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