Kansas Modifies Licensing Provisions under Mortgage Business Act
Kansas amended multiple provisions under its Mortgage Business Act that includes application for a mortgage license, surety bond, and reporting requirements. These provisions are effective on July 1, 2017.
Application for Mortgage License
Sec. 6. K.S.A. 2016 Supp. 9-509 is hereby amended to read as follows:
9-509.
(a) No person shall engage in the business of selling, issuing or delivering its payment instrument, check, draft, money order, personal money order, bill of exchange, evidence of indebtedness or other instrument for the transmission or payment of money or otherwise engage in the business of money transmission with a resident of this state, or, except as provided in K.S.A. 9-510, and amendments thereto, act as agent for another in the transmission of money as a service or for a fee or other consideration, unless such person files a complete application and obtains a license from the commissioner.
(b) Each license shall expire December 31 of each year. A license shall be renewed by filing with the commissioner a complete application and nonrefundable application fee at least 30 days prior to expiration of the license. Renewal applications received between December 1 and December 31 of each year and incomplete renewal applications as of December 1 of each year shall be assessed a late fee. Expired licenses may be reinstated through the last day of February of each year by filing a reinstatement application and paying the appropriate application and late fees.
(d)(2) An application shall be accompanied by nonrefundable fees established by the commissioner for the license. The commissioner shall determine the amount of such fees to provide sufficient funds to meet the budget requirements of administering and enforcing the act for each fiscal year. Any person using the multi-state licensing system shall pay all associated costs.
(f) The commissioner has the discretion to determine the completeness of any application submitted pursuant to this act. In making the determination, the commissioner shall take into consideration compliance with all requirements set out in this section and any other facts and circumstances that the commissioner deems appropriate.
(1) If the applicant fails to complete the application for a new license or for a change of control of a license within 60 days after the commissioner provides written notice of the incomplete application, the application will be considered abandoned and the application fee will not be refunded. An applicant whose application is abandoned under this section may reapply to obtain a license.
(2) If the applicant fails to file a complete renewal application on or before December 31 of the year, the license will be deemed to expire on December 31 of the year.
Surety Bond
Sec. 15. K.S.A. 50-1119 is hereby amended to read as follows:
50-1119.
Each applicant licensee shall file with the commissioner a surety bond in a form acceptable to the commissioner. The surety bond shall be issued by a surety or insurance company authorized to conduct business in this state, securing the applicant’s or licensee’s faithful performance of all duties and obligations of a licensee. The surety bond shall:
(a) Be payable to the office of the state bank commissioner;
(b) Provide that the bond may not be terminated without 30 days prior written notice to the commissioner, and that such termination shall not affect the surety’s liability for violations of the Kansas credit services organization act occurring prior to the effective date of cancellation, and principal and surety shall be and remain liable for a period of two years from the date of any action or inaction of principal that gives rise to a claim under the bond;
(c) Provide that the bond shall not expire for two years after the date of surrender, revocation or expiration of the applicant’s or licensee’s license, whichever shall first occur;
(d) Ne available for:
(1) The recovery of expenses, fines and fees levied by the commissioner under this act; and
(2) Payment of losses or damages which are determined by the commissioner to have been incurred by any consumer as a result of the applicant’s or licensee’s failure to comply with the requirements of this act; and
(e) The amount of the bond shall be $25,000. The amount of the bond may be increased up to $1,000,000, as further defined by rules and regulations adopted by the commissioner.
Reporting Requirements
Sec. 19. K.S.A. 50-1123 is hereby amended to read as follows:
50-1123.
A licensee shall provide a report at least once every three months to each consumer who has entered into a debt management services agreement with the licensee. The report shall include:
(a) Total amount received from the consumer to date;
(b) Total amount paid to each creditor to date;
(c) Total payoff amount or an estimated balance due to each creditor on any debt owed by the consumer;
(d) Fees paid to the licensee by the consumer; and
(e) Amount held in the trust account on behalf of the consumer, or statement that no amount is currently held.
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