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Financial Services Law Insights and Observations

Additional States Enact SAFE Act Legislation

State Issues

Arizona, Delaware, and Hawaii each recently passed bills reflecting compliance with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which requires states to implement a sufficient regulatory system for licensing and supervising mortgage loan originators. Arizona HB 2143, Delaware SB 73, and Hawaii SB 1218 (which was enacted over the veto of Hawaii Governor Linda Lingle) each require mortgage loan originators to (i) submit to fingerprinting for the purpose of a criminal history background check, (ii) complete at least twenty hours of pre-licensing education, (iii) receive a passing score on a qualified written test developed by the Nationwide Mortgage Licensing System, and (iv) complete at least eight hours of annual continuing education. Arizona HB 2143 also amends certain definitions and exemptions applicable to the licensing of mortgage loan originators. Licensure under all three bills is required as early as July 31, 2010.