AN ACT REQUESTING AN INTERIM STUDY OF MORTGAGE LENDING AND THE ADVISABILITY OF REQUIRING LICENSURE FOR MORTGAGE LENDERS; AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, the activities of lenders and brokers and the offering of financing for residential real property have a direct and immediate impact upon the housing industry, the neighborhoods and communities of this state, homeowners, and potential homeowners; and

WHEREAS, the Legislature finds that, for the protection of the citizens of this state and the stability of the Montana economy, reasonable standards governing the business practices of residential mortgage lenders and mortgage brokers are prudent public policy; and

WHEREAS, the Legislature also finds that the obligations of lenders and mortgage brokers to consumers in connection with making, soliciting, processing, placing, or negotiating a residential mortgage loan warrant minimal but mindful regulation of the residential mortgage lending process, including the solicitation, application, and making of a residential mortgage loan; and

WHEREAS, the Legislature also finds that it needs to develop greater expertise and understanding of the practices and safeguards that exist within the residential mortgage lending industry, particularly in the context of the needs of mortgage borrowers for clear, accurate, and complete information regarding residential mortgage transactions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Study of mortgage lending. (1) The legislative council is requested to assign to the appropriate interim committee a study of residential mortgage lending. The study must focus on:

(a) necessary protections for consumers seeking residential mortgage loans;

(b) determining if the residential mortgage lending industry is operating fairly, honestly, and efficiently and free from deceptive and anticompetitive practices;

(c) the current regulation of the residential mortgage lending industry and how current regulations:

(i) benefit Montana citizens by ensuring the availability of residential mortgage funding;

(ii) benefit responsible providers of residential mortgage loans and services; and

(iii) avoid or, at least, minimize requirements inconsistent with legitimate and responsible business practices in the residential mortgage lending industry;

(d) the advisability of legislatively imposing additional, clearer, fewer, or different requirements or restrictions on the mortgage lending industry; and

(e) the advisability of imposing or revising the licensure of residential mortgage lenders.

(2) If the study described in subsection (1) is assigned to an interim committee, the interim committee assigned to conduct the study shall complete its work on the study no later than September 15, 2000, and shall have prepared and distributed, as provided in 5-11-210, a report of its findings and conclusions. The report may include options for further legislative consideration, which may include recommendations in the form of proposed legislation.

Section 2. Authority to accept donation -- appropriations. (1) The legislative council may accept gifts, grants, or other donations for the purpose of conducting the study provided for in [section 1].

(2) All gifts, grants, or donations received under subsection (1) must be deposited in a separate account and must be accounted for separately from other funds.

(3) There is appropriated $40,000 from the account established in subsection (2) to the legislative council for the purposes of conducting the study provided for in [section 1]. This appropriation is biennial.

(4) Any funds remaining in the account on June 30, 2001, that are not obligated for the purposes of the study provided for in [section 1], must be refunded to the donors of the funds in the proportion that each donor's donation bears to the total donations received.

Section 3. Effective date. [This act] is effective July 1, 1999.

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I hereby certify that the within bill,

SB 0482, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 482

INTRODUCED BY K. MESAROS

AN ACT REQUESTING AN INTERIM STUDY OF MORTGAGE LENDING AND THE ADVISABILITY OF REQUIRING LICENSURE FOR MORTGAGE LENDERS; AND PROVIDING AN EFFECTIVE DATE.