Skip to main content
Menu Icon Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations

Kansas Governor Signs Bill Amending State Mortgage Law, Safeguarding Personal Financial Information

State Issues

On March 27, Kansas Governor Kathleen Sebelius signed SB 240, a bill that amends Kansas state mortgage law to reflect compliance with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and to impose requirements regarding the protection of personal consumer financial information. The bill implements the mandate of the SAFE Act by providing for the licensing of all mortgage loan originators under the Nationwide Mortgage Licensing System. The bill also prohibits certain conduct, including (i) earning a fee or commission through “best efforts” to obtain a loan when no loan is actually obtained, (ii) the solicitation, advertisement, or entering into a contract for specific rates, points, or other financing terms that are not actually available at the time of the offer, and (iii) making any payment, threat or promise to influence to any person in connection with a residential mortgage loan, including an appraiser. The bill further provides for data security measures to protect against the potential misuse of personal consumer financial information. To this effect, (i) every licensee and any assignee or servicer of a consumer credit transaction, and every person required to file notification, must have written policies and procedures “reasonably designed” to protect against the misuse of personal information, (ii) before discontinuing business, a licensee must arrange for the keeping of required books and records for a specified period, and (iii) any records required to be retained may be electronically preserved. Such electronic records must (i) permit “immediate” location of the record, (ii) be able to be copied, printed, or faxed, and (iii) be maintained using policies and procedures to “reasonably safeguard” the records from loss or alteration. The bill becomes effective upon its publication in the Kansas Statute Book.

Share page with AddThis