20:07:19:01.  Laws applicable to mortgage bankers. Repealed.

          Source: 21 SDR 194, effective May 18, 1995; repealed, 33 SDR 226, effective July 1, 2007.

          20:07:19:02.  Licensing fees. The original, non-refundable, license fee for a mortgage lender is seven hundred fifty dollars, the original, non-refundable, license fee for a mortgage broker or mortgage brokerage is five hundred dollars and the original, non-refundable, registration fee for a mortgage loan originator is one hundred fifty dollars.

          Source: 24 SDR 180, effective June 30, 1998; 30 SDR 193, effective June 15, 2004; 31 SDR 165, effective May 11, 2005; 33 SDR 226, effective July 1, 2007; 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-16.

          Law Implemented: SDCL 54-14-16.

          20:07:19:03.  Renewal fees. The annual renewal fee for a mortgage lender is five hundred dollars, the annual renewal fee for a mortgage broker or mortgage brokerage is three hundred fifty dollars, and the annual renewal fee for a mortgage loan originator is seventy-five dollars. Any licensee or registrant that files for renewal after December first but before January first will pay a late fee, equal to twenty percent of the renewal fee, in addition to the renewal fee.

          Source: 33 SDR 266, effective July 1, 2007; 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-19.

          Law Implemented: SDCL 54-14-18, 54-14-19.

          20:07:19:03.01.  Nationwide mortgage licensing system and registry fees. An initial set-up fee of one hundred dollars for a company license, twenty dollars for each company branch location, and thirty dollars for each mortgage loan originator shall be paid to the nationwide mortgage licensing system and registry at the time of transition for existing licensees or at the time of application for a new licensee.

          An annual processing fee shall be paid to renew each company, company branch, and mortgage loan originator license in the same amounts as described above.

          A mortgage loan originator transfer fee of thirty dollars shall be paid each time a company requests to have a mortgage loan originator associated with its license through the nationwide mortgage licensing system and registry. This fee applies to the transfer of employment of a mortgage loan originator who is licensed through the system but employed by a different company.

          The fees in this section are in addition to those established in §§ 20:07:19:02 and 20:07:19:03.

          Source: 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-31.

          20:07:19:04.  Application -- Prescribed form and required information. Any application for licensure or registration shall be provided by the division. An applicant must provide the following information as applicable:

          (1)  The applicant's name, address, date of birth, and social security number or taxpayer identification number as applicable;

          (2)  The proposed location of the business;

          (3)  The applicant's form and place of incorporation or organization, if applicable;

          (4)  The name and address of the sole proprietor; the name and address of each partner, member, officer, director, or any person performing similar functions; or the name and address of any person that owns 10 percent or more of a mortgage entity that is other than a sole proprietorship or partnership;

          (5)  Evidence of a surety bond;

          (6)  The qualifications and business history of the applicant and, if applicable, the business history of any partner, member, officer, director, shareholder or any person performing similar functions;

          (7)  A statement as to whether the applicant or, to the best of the applicant's knowledge, any shareholder, member, partner, officer, director, or any person performing similar functions, or employee of the applicant is currently under investigation, has been convicted of or has pleaded guilty to any felony or criminal offense involving fraud or dishonesty, or has been subject to any adverse civil judgment for any conduct involving fraudulent or dishonest dealing;

          (8)  The applicant's consent to a state and federal background investigation and two sets of the applicant's fingerprints on forms provided by the division. In the case of an applicant that is a corporation, partnership, limited liability company, association, or trust, each individual who has control of or involvement in the day to day operations of the applicant entity or who is the principal or manager shall consent to a state and federal background investigation and submit two sets of that individual's fingerprints on forms provided by the division. Refusal to consent to a background investigation constitutes grounds for the division to deny licensure to the applicant.

          Source: 33 SDR 226, effective July 1, 2007; 34 SDR 200, effective January 29, 2008; 34 SDR 322, effective June 30, 2008.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-14, 54-14-15, 54-14-22, 54-14-24.

          20:07:19:04.01.  Change of control -- Application required. If there is a change of control of a licensee, the individual or entity assuming control of the licensee shall file an application with the division, on forms provided by the division and comply with the requirements and qualifications of an applicant as set forth in SDCL chapter 54-14 and the provisions of this chapter. Any change of control application shall be accompanied by a fee equal to the amount required for a renewal application as established in § 20:07:19:03.

          For purposes of this section, change of control is defined as ownership of, or the power to vote, twenty-five percent or more of the outstanding voting shares of a licensee or controlling person.

          Source: 34 SDR 322, effective June 30, 2008.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-14, 54-14-19.

          20:07:19:05.  Application -- Grounds for denial. In addition to the grounds for denial contained in § 20:07:19:04, the division may deny an application if the applicant has been convicted of forgery, embezzlement, obtaining money under false pretenses, theft, extortion, conspiracy to defraud, or other similar offenses, or of any crime involving moral turpitude in a court of competent jurisdiction in this state, or in any other state, territory, or district of the United States, or in any foreign jurisdiction.

          Any applicant aggrieved by a denial issued by the director pursuant to this chapter may, at any time within thirty days from the date of written notice of the denial, request a hearing pursuant to SDCL chapter 1-26. Any request for hearing must be made in writing and postmarked within the thirty-day time period if sent via United States mail or must be received by the division within the thirty-day time period if sent via electronic mail or facsimile.

          Source: 33 SDR 226, effective July 1, 2007; 34 SDR 200, effective January 29, 2008.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-14, 54-14-15.

          20:07:19:06.  Background investigations. Repealed.

          Source: 33 SDR 226, effective July 1, 2007; repealed, 36 SDR 208, effective June 30, 2010.

          20:07:19:07.  Surety bonds. The amount of the surety bond required in SDCL 54-14-24 shall be established according to the following scale based upon the dollar amount of the mortgage loans originated, brokered, or serviced, as the case may be, with respect to property in South Dakota during the preceding calendar year. The numbers preceding the colon represent the dollar amount of the loans and the numbers after the colon represent the amount of bond required.

                      Less than           $  25,000,000:            $25,000

                      $25,000,001 to $100,000,000:            $35,000

                      Over                 $100,000,000:            $50,000

          Source: 33 SDR 226, effective July 1, 2007; 34 SDR 200, effective January 29, 2008; 34 SDR 322, effective June 30, 2008; 36 SDR 208, effective June 30, 2010.

          General Authority: SDCL 54-14-24.

          Law Implemented: SDCL 54-14-24.

          20:07:19:08.  Records required to be kept -- Duration. The following records shall be kept for a period of at least five years, and shall be available for inspection, examination, and copying by the division:

          (1)  A record of all cash, checks, or other monetary instruments received in connection with each mortgage loan application showing the identity of the payor, date received, amount, and purpose;

          (2)  A record showing a sequential listing of checks written for each bank account relating to the licensee's business as a mortgage broker or mortgage lender, showing at least the payee, amount, date, and purpose of payment, including identification of the loan to which it relates, if any. The licensee shall reconcile the bank accounts monthly;

          (3)  A file for each mortgage loan application that contains, as applicable, the applicant's name, date of application, name of person taking the application, HUD-1 Settlement Statement, copies of all agreements or contracts with the applicant, including any commitment and lock-in agreements, copies of any appraisals conducted, and all disclosures required by state and federal law signed by the borrower;

          (4)  Copies of all contracts, agreements, and escrow instructions to or with any depository;

          (5)  A record of any contact between the mortgage broker or mortgage loan originator and the borrower relating to the rate, terms, or conditions of the loan; and

          (6)  A list of all mortgage loan originators, as defined in SDCL 54-14-1(7), along with documentation for each loan originator indicating each state in which the originator works and makes loans.

          Any records required by this section may be maintained in the form of electronically encoded data available for examination on the basis of computer printed reproduction, video display, or other medium that is readily convertible by the division into legible, tangible documents.

          Any record required by this section shall be prepared in accordance with generally accepted accounting principles, if applicable.

          Source: 33 SDR 226, effective July 1, 2007; 34 SDR 322, effective June 30, 2008; 36 SDR 208, effective June 30, 2010.

          General Authority: SDCL 54-14-26, 54-14-31.

          Law Implemented: SDCL 54-14-26, 54-14-27.

          20:07:19:09.  Examination of licensees. The division may annually, or as often as the director considers necessary, conduct an examination of business records, accounts, and any other documents required to be kept by § 20:07:19:08, of any licensee licensed pursuant to SDCL chapter 54-14. The director may charge back to the licensee any cost associated with an on-site examination. The director may waive an on-site examination and only require an annual self-examination. If a licensee conducts a self-examination, the licensee shall provide any information requested under oath and on forms provided by the division by order or rule. The provisions of SDCL 51A-2-35 apply to records and examination reports required under this chapter.

          Source: 33 SDR 226, effective July 1, 2007.

          General Authority: SDCL 54-14-26.

          Law Implemented: SDCL 54-14-26.

          20:07:19:11.  Continuing education for mortgage loan originators. In order to meet the annual continuing education requirements referred to in SDCL 54-14-13.2, a licensed mortgage loan originator shall complete at least eight hours of education approved according to the standards established in 12 U.S.C. 5105(b) as of January 1, 2009.

          Source: 33 SDR 226, effective July 1, 2007; 34 SDR 322, effective June 30, 2008; 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-13.2.

          20:07:19:13.  Testing of mortgage loan originators. In order to meet the written test requirement referred to in SDCL 54-14-13.1(5), an individual shall pass a qualified written test in accordance with the standards established in 12 U.S.C. 5104(d) as of January 1, 2009.

          Source: 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-31.

          Law Implemented: SDCL 54-14-13.1(5).

          20:07:19:14.  Challenge process. A mortgage licensee may challenge information entered into the nationwide mortgage licensing system and registry by the division. Any challenge must be in writing and identify the information being challenged and provide documentation to support the challenge. The division shall respond to any challenge in writing within 30 days from the date a challenge was received. A licensee may request a hearing pursuant to SDCL chapter 1-26 to further challenge information entered by the division.

          A challenge filed in response to the denial of a license application or renewal shall be filed under the procedure established in § 20:07:19:05.

          Source: 36 SDR 99, effective December 10, 2009.

          General Authority: SDCL 54-14-34.

          Law Implemented: SDCL 54-14-34.

          20:07:19:15.  Reports of condition. Each licensee required to submit a report of condition pursuant to SDCL 54-14-36 shall provide to the nationwide mortgage licensing system and registry, loan activity data for the licensee's operations in South Dakota, to include loan activity performed by any licensed mortgage loan originator employed by a mortgage lender or mortgage brokerage licensee.

          Any information provided by a licensee pursuant to this section is confidential subject to the information sharing provisions in SDCL 54-14-35.

          Source: 36 SDR 208, effective June 30, 2010.

          General Authority: SDCL 54-14-36.

          Law Implemented: SDCL 54-14-36.