| TO: | Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB10 by Solomons (Relating to the regulation of mortgage loan originators; providing a penalty.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
| 2013 | $0 |
| 2014 | $0 |
| Fiscal Year | Probable Savings/(Cost) from General Revenue Fund 1 |
Probable Revenue Gain from General Revenue Fund 1 |
Change in Number of State Employees from FY 2009 |
|---|---|---|---|
| 2010 | ($4,157,826) | $4,157,826 | 27.0 |
| 2011 | ($2,099,426) | $2,099,426 | 27.0 |
| 2012 | ($2,117,483) | $2,117,483 | 27.0 |
| 2013 | ($2,119,483) | $2,119,483 | 27.0 |
| 2014 | ($2,191,754) | $2,191,754 | 27.0 |
The bill would amend the Finance Code by adding a chapter that requires mortgage loan originators to register with the Nationwide Mortgage Licensing System and Registry (NMLSR) based on the Federal Secure and Fair Enforcement of Mortgage Licensing Act (S.A.F.E.) of 2008.
The bill would take effect September 1, 2009, and would require individuals authorized to engage in mortgage loan origination activites before July 31, 2009, to comply by July 31, 2011. Individuals who are authorized after July 31, 2009, must register immediately.
The analysis is based on information provided by the Department of Savings and Mortgage Lending, the Office of Consumer Credit Commissioner, the Credit Union Department, and the Department of Banking and includes the following assumptions:
The Department of Savings and Mortgage Lending would require 14.0 additional positions, including 8.0 examiners, 2.0 investigators, and 4.0 administrative at the salary and benefit costs of $1,056,948 in each fiscal year from 2010-2015 to respond to an estimated increase of 8,000 licensees. The Department of Savings and Mortgage Lending would also be required to pay $500,000 as a one-time buy-in fee for use of the NMLSR. Additional technology costs of $78,400 in fiscal year 2010 and $17,000 each fiscal year from 2011-2015 are for computers and software for new positions and programming to make the current system compatible with the NMLSR system.
The Office of Consumer Credit Commissioner would require 10.0 additional positions, including 2.0 administrative assistants, 1.0 accounting technician, 1.0 attorney, and 6.0 financial examiners at the salary and benefit costs of $768,194 in each fiscal year from 2010-2015 to respond to an estimated increase of 6,000 licensees. The Office of Consumer Credit Commissioner would also be required to pay $172,000 as a one-time buy-in fee for the use of the NMLSR. Additional technology costs of $800,000 in fiscal year 2010 and $25,000 in fiscal year 2014 include computers and software for new positions and a new database system that is NMLSR compatible and can handle the increase in licenses.
The Credit Union Department would require a total of 3.0 additional positions, including 1.0 programmer, 1.0 investigator, and 1.0 administrative assistant at the salary and benefit costs of $207,284 in fiscal year 2010 and 2011, $220,341 in fiscal year 2012, $234,212 in fiscal year 2013, and $234,212 in fiscal years 2014 and 2015 to respond to an estimated increase of 100 licensees. Currently, the Credit Union Department only charters Credit Unions. The bill would require the Credit Union Department to license mortgage loan originators employed by credit union subsidiary organizations. The agency will also be required to pay a one-time buy-in fee of $50,000 for use of the NMLSR. Additional technology costs of $525,000 in fiscal year 2010 and $50,000 in 2011, $55,000 in fiscal year 2012 and 2013, $70,000 in fiscal year 2014 and 2015 include computers and software for new FTEs and a new database system that is NMLSR compatible.
Duties and responsibilities associated with implementing the provisions of the bill for the Department of Banking could be accomplished by utilizing existing resources.
The Department of Banking, Department of Savings and Mortgage Lending, Office of Consumer Credit Commissioner, and the Credit Union Department are self-leveling agencies and are statutorily required to generate revenues sufficient to cover all of the agency's direct and indirect costs.
The bill would require new computers and software for additional 27.0 FTEs, 1 database upgrade, 2 new databases, and a contract developer for an initial total cost of $1,550,400 in fiscal year 2010, and a total of $495,000 spread over fiscal years 2011-2015 for technology maintence.
| Source Agencies: | 304 Comptroller of Public Accounts, 450 Department of Savings and Mortgage Lending, 451 Department of Banking, 466 Office of Consumer Credit Commissioner, 469 Credit Union Department
|
| LBB Staff: | JOB, JRO, MW, ACa
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