Georgia Makes Revisions to Chapter 80 Regulations
by: Zachary Pearlstein
Effective immediately, the Georgia Department of Banking and Insurance has issued final revisions to Chapter 80, which seeks to promote safe and fair mortgage lending. These revisions relate principally to branch manager qualifications, loan processors acting as brokers, and fees and charges.
Branch Manager Qualifications:
A branch manager is defined as an individual who, regardless of job title, supervises daily activities in Georgia of a licensee, whether at a main or branch location. A branch manager must be licensed as a loan originator.
No individual may serve as the branch manager of more than one location of a licensee unless the licensee can demonstrate that the proposed branch manager will be able to effectively manage these locations to ensure that they operate in compliance with state and federal law, and that the manager can adequately supervise the daily functions performed by the employees at all of the locations.
Loan Processors as Brokers:
A mortgage broker includes anyone who directly or indirectly solicits, processes, places, negotiates or offers mortgage loans for others. A loan processor is a mortgage broker and will require a mortgage broker license to process loans on Georgia real property that meet the definition of “mortgage loan” in O.C.G.A. § 7-1-1000(21). Generally, to process a loan means to collect and/or verify from a borrower or other person, information that is necessary to underwrite or to submit for underwriting, a mortgage loan application package.
A loan processor who works as an independent contractor or who owns or controls a company that does loan processing is required to have a license. However, a loan processor employed as a W-2 employee of a Georgia Residential Mortgage Act licensee who meets all of the qualifications for exemption under O.C.G.A. § 7-1-1001 does not require a license.
Fees and Charges:
The revisions regarding fees and charges state that the management fees and other charges payable to a bank holding company (or an affiliate thereof) may be paid by the banking or trust subsidiary- provided these fees do not exceed the subsidiary’s pro rata share of the administrative overhead of the bank holding company, plus any direct expenses attributable to the subsidiary. In addition, it must be shown that the subsidiary has received direct benefit from its relationship with the holding company.
The proration may be based on any reasonable formula provided such formula is justified by appropriate memorandum in the files of the bank or trust company and approved by the Board of Directors of the bank or trust company. Administrative overhead shall include only those expenses incurred in general support of all holding company activities and not specifically allocable to a particular subsidiary or activity.
About the Author
Zachary Pearlstein, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk Law School. He is admitted to the Massachusetts Bar. Zachary can be reached at zachary@bankersadvisory.com
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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