Idaho Department of Finance Amends Residential Mortgage Practices Act, Other Laws

BOISE, Idaho – Director Gavin Gee of the Idaho Department of Finance announced changes to the Residential Mortgage Practices Act and Bank Act effective July 1, and to the Uniform Securities Act effective Sept. 1, “that will significantly affect how members of those industries conduct business in Idaho.” Effective July 1, the home office surety bond requirement for Idaho mortgage brokers/lenders increases from $10,000 to $25,000, the license application fee increases from $200 to $350, and the annual license renewal fee increases from $100 to $150. The former $10,000 net worth requirement of license applicants was repealed. In addition, after July 1, mortgage brokers/lenders in the state are required to conspicuously display their license certificates at all business locations; record retention requirements for mortgage brokers/lenders have been decreased from five to three years; mortgage brokers/lenders have increased responsibility over the mortgage-related conduct of their loan originations; and mortgage brokers/lenders are required to notify the DoF within three days of closing a license business location. The 2004 changes also include licensing requirements for mortgage loan originators. This goes into effect the earliest January 2006. The Idaho Bank Act was amended to eliminate the limitation on real estate loans and construction loans, although all banks remain governed by certain FDIC rules on these loans. The old limits were set in 1979 and hadn’t been amended since. DoF said the changes “are intended to make the loan limitations on Idaho state-chartered banks more consistent with those applicable to national banks and banks in other states.” Concerning loans to one person, the amendments maintain the current percentage limits of 20% of capital, but it now applies to “capital structure” in order to be consistent with federal regulations. The balance of the federal regulations governing limits on loans to one person was also adopted to allow Idaho’s Bank Act “to provide consistent clarification on issues relating to the limit,” a DoF releases stated. Lastly, beginning Sept. 1, 2004, Idaho will have a new law governing investment professionals and securities activities. The Uniform Securities Act 2004 modernizes the state’s securities laws and provides better coordination between state and federal law. It updates three key areas of state securities regulation: registration and notice filing of securities offerings; registration of securities professionals; and fraud enforcement.