BEFORE THE DEPARTMENT OF ADMINISTRATION

                                       OF THE STATE OF MONTANA 

 

In the matter of the amendment of ARM   2.59.1738 pertaining to renewal fees of  mortgage brokers, mortgage lenders,  mortgage servicers, and mortgage loan  originators

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NOTICE OF PROPOSED AMENDMENT   NO PUBLIC HEARING CONTEMPLATED

 

TO: All Concerned Persons

 

1. On September 23, 2023, the Department of Administration proposes to amend the above-stated rule.

 

2. The Department of Administration will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Administration no later than 5:00 p.m. on July 19, 2023, to advise us of the nature of the accommodation that you need. Please contact Heather Hardman, Division of Banking and Financial Institutions, P.O. Box 200546, Helena, Montana 59620-0546; telephone (406) 841-2922; Montana Relay Service 711; facsimile (406) 841-2930; or email to [email protected].

 

3. The rule as proposed to be amended provides as follows, new matter underlined, deleted matter interlined:

 

2.59.1738 RENEWAL FEES (1) Licenses issued under Title 32, chapter 9, part 1, MCA, expire December 31. Licensees shall submit their renewal applications by December 1 of each year to ensure issuance of the license to qualified renewal applicants by January 1 of the following year. The renewal fees for the license period after January 1, 2022, are:

(a) Mortgage Broker Entity, $125.00;

(b) Mortgage Broker Branch, $62.50;

(c) Mortgage Lender Entity, $187.50 $750.00;

(d) Mortgage Lender Branch, $62.50;

(e) Mortgage Loan Originator, $100.00;

(f) Mortgage Servicer Entity, $187.50 $750.00;

(g) Mortgage Servicer Branch, $62.50.

 

AUTH: 32-9-117, 32-9-130, 32-9-134, MCA

IMP: 32-9-117, 32-9-130, 32-9-134, MCA

 

STATEMENT OF REASONABLE NECESSITY: The Division of Banking and Financial Institutions (division) is funded through assessments and licensing fees and strives to keep these fees consistent with each program's expenditures. The mortgage program is currently not generating enough revenue to keep up with its expenditures.

 

           Pursuant to 32-9-117, MCA, renewal fees must be commensurate with program costs. The division has not seen an increase in workload from individual mortgage loan originators or mortgage brokers. In fact, due to increases in interest rates, the number of mortgage loan originators has declined by 26% since May 15, 2022.

 

The majority of the division's time regulating the mortgage industry is allocated to the supervision of lenders and servicers.  Therefore, the division is proposing to increase the renewal fees for mortgage lender and mortgage servicer entities to 100% of the initial license fee for these entity types. These rates were last utilized by the division for the 2015 renewal fees. All other mortgage renewal fees will remain the same as last year.

 

In Montana, there are currently 288 mortgage lender entities and 207 mortgage servicer entities. The division expects that not all the current licensees will renew their licenses for 2024.  Based on prior years' renewals, the division predicts approximately 90% of mortgage companies will renew their licenses for 2024. Therefore, 259 lenders and 186 servicers are expected to renew their licenses.

 

The license renewal fee will be increased by $562.50 which raises the entity fees from $187.50 to $750 for both lenders and servicers. Projected additional revenue is expected to be $252,312 (259 lender licenses x $562.50 + 186 servicers x $562.50). This increase will be adequate to cover the projected deficit in the mortgage program.

 

4. Concerned persons may present their data, views, or arguments concerning the proposed action to the person listed in paragraph two above. Comments must be received no later than 5:00 p.m., August 4, 2023.

 

5. If persons who are directly affected by the proposed action wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request along with any written comments to the person listed in paragraph two above no later than 5:00 p.m., July 19, 2023.

 

6. If the division receives requests for a public hearing on the proposed action from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date. Notice of the hearing will be published in the Montana Administrative Register. Ten percent of those directly affected has been determined to be 49 persons based on the 288 mortgage lenders and 207 mortgage servicers.

 

7. An electronic copy of this proposal notice is available through the department's website at doa.mt.gov/administrativerules. The department strives to make its online version of the notice conform to the official published version, but advises all concerned persons that if a discrepancy exists between the official version and the department's online version, only the official text will be considered. In addition, although the department works to keep its website accessible at all times, concerned persons should be aware that the website may be unavailable during some periods, due to system maintenance or technical problems.

 

8. The division maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this division. Persons who wish to have their name added to the mailing list shall make a written request that includes the name, mailing address, and e-mail address of the person to receive notices and specifies that the person wishes to receive notices regarding division rulemaking actions. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written requests may be mailed or delivered to the person listed in paragraph two above or may be made by completing a request form at any rules hearing held by the department.

 

9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

10. The department has determined that under 2-4-111, MCA, the proposed amendment of the above-stated rule will not significantly and directly impact small businesses.

 

 

         /s/ Misty Ann Giles                                             /s/ Don Harris                             

 Misty Ann Giles, Director                                   Don Harris, Rule Reviewer

 Department of Administration                            Department of Administration

 

Certified to the Secretary of State June 27, 2023.