InfoBytes Blog
Arkansas modifies Fair Mortgage Lending Act
On February 26, the Arkansas Governor signed SB 188, which amends certain provisions of the state’s Fair Mortgage Lending Act (the Act) to comply with recent developments in federal law. Among other things, the amendments, which take effect 90 days after adjournment, include (i) modifying the Act’s definition of an “applicant” and “licensee” to now include transitional loan officers; (ii) specifying that an “exempt person” must comply with outlined compensation limits, mortgage banker affiliation disclosures, and loan term negotiation restrictions; (iii) defining a “transitional loan officer” to mean “an individual who, in exchange for compensation as an employee of, or who otherwise receives compensation or remuneration from, a mortgage broker or mortgage banker, is authorized to act as a loan officer subject to a transitional loan officer license,” with term limits of no more greater than 120 days and is not subject to commissioner reapplication, renewal, or extension requirements; and (iv) outlining transitional loan officer termination conditions and employment restrictions. The amendments also address audited financial statement requirements for mortgage bankers and servicers, and state that transitional loan officers may now be subject to criminal background investigations should the state join a multistate automated licensing system.