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Financial Services Law Insights and Observations

Additional States Implement SAFE Act

State Issues

Several states recently amended applicable state law to reflect compliance with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act); namely, (i) on April 22, Nebraska Governor Dave Heineman signed LB 328, (ii) on April 15, Iowa Governor Chet Culver signed SF 355, (iii) on April 15, Mississippi Governor Haley Barbour signed SB 2983, (iv) on April 14, Maryland Governor Martin O’Malley signed SB 269, (v) on April 17, Washington Governor Christine Gregoire signed HB 1621, (vi) on April 3, Idaho Governor Butch Otter signed HB 169, (vii) on March 12, Wyoming Governor Dave Freudenthal signed HB 169, and (viii) on February 19, Wisconsin Governor Jim Doyle signed SB 62 (an omnibus bill containing provisions regarding the SAFE Act). The bills implement the mandate of the SAFE Act by providing for the licensing of all mortgage loan originators under the Nationwide Mortgage Licensing System. In addition to technical amendments, the bills prescribe loan originator requirements regarding, among other things, licensing, prior and continuing education, testing, minimum net worth, and surety bonds. Most of the bills become effective July 1, 2009, except (i) Nebraska LB 328 (effective July 31, 2009), (ii) Washington HB 1621 (effective July 1, 2010, with certain provisions becoming effective January 1, 2010), (iii) Mississippi SB 2983 (effective July 31, 2009), and (iv) Wisconsin SB 62 (effective January 1, 2010).