THOMAS J. CURRY
Reducing regulatory burden
With the commencement of a new year and a fresh Legislature sitting on Beacon Hill, the Division of Banks wasted no time filing proposals for 12 legislative issues to be considered in the 2003-2004 session.
The DOB recommendations would amend various laws that affect mortgage lenders and brokers, as well as the general banking and financial services industry.
One of the new legislative recommendations filed includes acts relative to the conversions of Massachusetts-chartered banks or credit unions to a federal or other charter. Proposals include establishing a notice, meeting and required vote of the institution for a bank or credit union to convert its charter.
An anticipated act relative to the licensing and supervision of financing companies seeks to combine the provisions of four different statutes guiding licensing by the division into one new chapter of the Massachusetts General Laws all governing finance companies.
The DOB also is recommending actions that will directly affect the mortgage industry, including expanding the coverage of the prepayment penalty law so that it would apply to both subordinate mortgage loans and to mortgage loans on one- to four-family, owner-occupied properties. The current prepayment penalty law applies to a first-lien loan on a one- to three-family, owner-occupied property.
The division seeks to amend the prepayment penalty law currently in place to state that no additional amounts may be required to be paid by the mortgagor if the note is paid in full after 36 months and that no additional amounts may be required for making additional payments toward principal during the loan term.
“The division’s overall goal is to ensure a responsive statutory system of regulations while streamlining and reducing any unnecessary regulatory burden and ensuring consumers are protected,” said Thomas J. Curry, commissioner of banks in Massachusetts.
After recent license revocations by the DOB, clarification that any person who sells or agrees to sell goods or services must obtain a mortgage lender license if the sale is to be secured by a mortgage on a one- to four-family, owner-occupied property, has been established.
The DOB is amending the mortgage lender and mortgage broker licensing law to provide for examinations of mortgage lenders that made 50 or more loans in the last calendar year for compliance with fair lending laws, including the federal Home Mortgage Disclosure Act and the federal Equal Credit Opportunity Act.
Also, the division requests amending the debt collection agency licensing law and requiring third-party loan servicers to register with the Massachusetts Division of Banks.
Two bills proposed during the last session relative to the banking and financial community of Massachusetts include an act aimed at establishing the confidentiality of examination reports and other information of licenses of the division, and another relieving the regulatory burden on the division by eliminating the requirement to collect certain information from regulated entities and to publish the information collected in the form of reports. Both bills were passed by the Legislature on Dec. 31, 2002, and are currently pending the governor’s signature.
