BEFORE THE DEPARTMENT OF ADMINISTRATION

OF THE STATE OF MONTANA

 

In the matter of the adoption of New Rule I pertaining to activities requiring a license

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NOTICE OF PROPOSED ADOPTION   NO PUBLIC HEARING CONTEMPLATED

 

TO: All Concerned Persons

 

1. On September 24, 2022, the Department of Administration proposes to adopt the above-stated rule.

 

2. The department 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 no later than 5:00 p.m. on August 17, 2022, to advise us of the nature of the accommodation that you need. Please contact Julie James, Department of Administration, P.O. Box 200101, Helena, Montana 59620-0101; telephone (406) 444-2460; Montana Relay Service 711; facsimile (406) 444-6194; or e-mail to Julie.James2@mt.gov.

 

3. The rule proposed to be adopted provides as follows:

 

NEW RULE I ACTIVITIES REQUIRING A LICENSE (1)  For purposes of 32-9-124(1)(h), MCA, the department adopts by reference Appendices A through D of 12 CFR 1008 (Regulation H) (July 1, 2022).  The appendices may be found on the department's website at banking.mt.gov.

 

AUTH: 32-9-130 MCA

IMP: 32-9-124, MCA

 

STATEMENT OF REASONABLE NECESSITY: Section 32-9-124(1)(h), MCA provides that the conduct of any business covered by the provisions of the Secure and Fair Enforcement of Mortgage Licensing Act without holding a valid license as required by the Montana Mortgage Act is prohibited.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) was enacted on July 30, 2008. 12 USC 5101-16, Title V of the Housing and Economic Recovery Act of 2008 (Pub. L. 110–289, 122 Stat. 2654, 12 USC 5101, et seq.) The SAFE Act required all states to enact state laws that complied with the SAFE Act within two years. Montana enacted the Montana Mortgage Act in 2009 which is modeled on and compliant with the SAFE Act. Mont. Code Ann. 32-9-101, et seq.  The Department of Housing and Urban Development (HUD) initially adopted rules interpreting the SAFE Act on June 30, 2011. 24 CFR 3400.

On July 21, 2010, the Dodd-Frank Act transferred rulemaking authority for the SAFE Act from HUD to the Consumer Financial Protection Bureau (CFPB). Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Consumer Financial Protection Act of 2010) (Pub. L. No. 111–203, 124 Stat. 1376). On December 19, 2011, the CFPB adopted 12 CFR 1008 (Regulation H). The rules adopted by the CFPB substantially duplicated the HUD rules. 76 Fed. Reg. 78487.

The department has referenced and utilized the federal rules to interpret and implement the Montana Mortgage Act since HUD initially adopted the rules. Specifically, the department has referenced Appendices A through D of Regulation H in interpreting what actions do or do not constitute acting as a mortgage loan originator and acting as a loan processor or underwriter since HUD initially adopted the rules. The department is formalizing longstanding practice by adopting by reference Appendices A through D of Regulation H.

 

4. Concerned persons may present their data, views, or arguments concerning the proposed action to the person listed in paragraph 2 above. Comments must be received no later than 5:00 p.m., September 2, 2022.

 

5. If persons who are directly affected by the proposed actions 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 2 above no later than 5:00 p.m., August 17, 2022.

 

6. If the department 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 greater than 25 persons based on the combined total of 297 mortgage brokers, 289 mortgage lenders, 210 mortgage servicers, and 7,038 mortgage loan originators licensed in this state.

 

7. The department 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 2 above or may be made by completing a request form at any rules hearing held by the department.

 

8. An electronic copy of this proposal notice is available through the department's website at http://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.

 

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 adoption of the above-stated rule will not significantly and directly impact small businesses.

 

 

By:      /s/ Misty Ann Giles                                 By:      /s/ Don Harris                                   

            Misty Ann Giles, Director                                  Don Harris, Rule Reviewer

            Department of Administration                           Department of Administration

 

Certified to the Secretary of State July 26, 2022.