borrower and a lender, or arranges for a loan commitment from a lender. The term,
mortgage loan originator, does not include an employee of a licensee whose job
responsibilities are limited to clerical tasks that do not include processing of mortgage
Division of Banking may require a state and federal criminal background check for any licensee who
is the subject of a disciplinary investigation by the division. Failure to submit or cooperate with the
criminal background investigation is grounds for denial of an application or may result in revocation
of a license. The applicant shall pay for any fees charged for the cost of fingerprinting or the criminal
background investigation. Any applicant who has previously completed a background check in
another jurisdiction in anticipation of receiving a license or registration in that jurisdiction may have
the results of such a background check forwarded to the division in satisfaction of this requirement.
However, no background check in another jurisdiction may be used if it was completed more than
one year prior to application.
Section 5. The applicant for an initial license shall submit a fee in the amount of not more than five hundred dollars for a mortgage broker license, and not more than one thousand dollars for a mortgage lender license. The applicant for initial registration shall submit a fee in the amount of not more than two hundred fifty dollars for mortgage loan originator registration. The director shall establish the fees by rules promulgated pursuant to chapter 1-26.
Section 6. No license or registration granted pursuant to this Act is assignable.
Section 7. Any license or registration granted under this Act expires on the following December thirty-first after its issuance.
Section 8. Any application for renewal of a license or registration under this Act must be postmarked to the director by December first and shall be accompanied by a fee to be established by the director by rules promulgated pursuant to chapter 1-26. Any license granted by the division prior to the implementation of this Act is valid until December 31, 2007. However, no mortgage loan originator is required to be licensed prior to December 31, 2007. The fee to transact business as a mortgage broker may not exceed five hundred dollars. The fee to transact business as a mortgage lender may not exceed one thousand dollars. The fee to register as a mortgage loan originator may
not exceed two hundred fifty dollars. Any licensee or registrant that files for renewal after December
first and before January first of the next calendar year shall pay a late fee in addition to the renewal
fee. The late fee, not to exceed twenty-five percent of the renewal fee, shall be established by the
director by rules promulgated pursuant to chapter 1-26. After January first no license may be issued
unless an application is filed pursuant to sections 2 to 5, inclusive, of this Act.
Section 9. The State of South Dakota, any political subdivision of the state, and any quasi- governmental organization created by an executive order of the State of South Dakota and any subsidiary of such organization; any nonprofit corporation formed pursuant to chapter 47-22; any nonprofit United States Treasury Community Development Financial Institution, Small Business Administration Certified Development Company, or Regional Revolving Loan Fund; or any commercial club, chamber of commerce, or industrial development corporation formed pursuant to § 9-12-11 or 9-27-37 is subject to this Act but exempt from initial license fees, renewal fees, and surety bond requirements under this Act.
Section 10. The following entities and their employees and exclusive agents are exempt from the provisions of this Act:
two years of service under the supervision and direction of a licensed mortgage broker or mortgage
lender, or another jurisdiction's equivalent thereof, before that person is eligible to apply for a
mortgage broker's or mortgage lender's license. No mortgage broker, mortgage lender, or mortgage
loan originator is eligible for a license without such training and experience. The director may
promulgate rules pursuant to chapter 1-26 with regard to such training and experience. Any person
licensed as a mortgage broker or mortgage lender with the director prior to July 1, 2007, is exempt
from this requirement.
Section 12. Any mortgage broker or mortgage lender licensed to practice in the State of South Dakota may use the services of a mortgage loan originator that operates under direct control and supervision of the mortgage broker or mortgage lender. The mortgage loan originator shall be registered by the director and while registered and employed by a mortgage broker or mortgage lender may not be deemed to be operating as a mortgage broker or mortgage lender.
Section 13. Any applicant for a license shall submit with the application a bond in the amount of twenty-five thousand dollars. The bond shall be issued by a surety company qualified to do business as a surety in this state. The bond shall be in favor of this state for the use of this state and any person who has a cause of action under this Act against the licensee. The bond shall be conditioned on:
thirty days notice to the licensee and the director, and the surety's liability on the bond shall also
terminate upon the effective date of any suspension or revocation of the license.
Section 14. Any person, who without first obtaining a license or registration under this Act, engages in the business or occupation of, or advertises or holds the person out as, or claims to be, or temporarily acts as, a mortgage broker, mortgage lender, or mortgage loan originator in this state is guilty of a Class 2 misdemeanor and may be held responsible for all costs of prosecution, including restitution.
Section 15. Any licensee or registrant is subject to examination and investigation by the director. The director shall promulgate rules pursuant to chapter 1- 26 that specify the process by which examinations and investigations will be performed.
Section 16. The director may suspend, not to exceed six months, or revoke a license or registration if the director finds:
Dakota, any political subdivision of the state, and any quasi-governmental organization created by
an executive order of the State of South Dakota and any subsidiary of such organization; any
nonprofit United States Treasury Community Development Financial Institution, Small Business
Administration Certified Development Company, or Regional Revolving Loan Fund; or any
commercial club, chamber of commerce, or industrial development corporation formed pursuant to
9-12-11 or 9-27-37 is exempt from the payment of this tax.
Section 20. The director may promulgate rules pursuant to chapter 1-26 for the continuing education of mortgage brokers, mortgage lenders, and mortgage loan originators, and for the management and administration of licenses and registrations issued pursuant to this Act.
Section 21. That § § 54-14-1 to 54-14-11 , inclusive, be repealed.
Section 22. Fees collected pursuant to this Act shall be deposited with the state treasurer in the banking special revenue fund created in § 51A-2-30. Expenditures from the fund shall be appropriated through the normal budget process.
I certify that the attached Act originated in the
Secretary of the Senate
President of the Senate
Secretary of the Senate
Senate Bill No. 165
File No. ____
Chapter No. ______
Received at this Executive Office this _____ day of _____________ ,
20____ at ____________ M.
for the Governor
The attached Act is hereby
approved this ________ day of
______________ , A.D., 20___
STATE OF SOUTH DAKOTA,
Office of the Secretary of State
Filed ____________ , 20___
Secretary of State