2010 Pennsylvania Code
Title 7 - BANKS AND BANKING
Chapter 61 - Mortgage Loan Industry Licensing and Consumer Protection
6131.1 - Prelicensing and continuing education.

     § 6131.1.  Prelicensing and continuing education.
        (a)  General requirements.--
            (1)  Applicants shall complete prelicensing education
        required under subsection (b) and pass a written test
        regarding the education under subsection (c) in order to
        obtain a license under this chapter.
            (2)  Licensees shall complete continuing education
        required under subsection (d) in order to renew a license
        under this chapter.
        (b)  Prelicensing education.--
            (1)  A mortgage originator applicant and at least one
        partner or ultimate equitable owner of 10% or more of an
        applicant other than a mortgage originator applicant shall
        complete at least 20 hours of education programs approved in
        accordance with paragraph (2), which shall include all of the
        following:
                (i)  Three hours of Federal law and regulations.
                (ii)  Three hours of ethics, which shall include
            instruction on fraud, consumer protection and fair
            lending issues.
                (iii)  Two hours of training related to lending
            standards for the nontraditional mortgage loan
            marketplace.
                (iv)  Three hours of Pennsylvania law and
            regulations, including this chapter, the act of December
            3, 1959 (P.L.1688, No.621), known as the Housing Finance
            Agency Law, and the act of January 30, 1974 (P.L.13,
            No.6), referred to as the Loan Interest and Protection
            Law.
            (2)  Prelicensing education programs shall be reviewed
        and approved by the Nationwide Mortgage Licensing System and
        Registry or as otherwise determined by the department based
        upon reasonable standards. Review and approval of a
        prelicensing education program shall include review and
        approval of the program provider.
            (3)  A prelicensing education program approved by the
        Nationwide Mortgage Licensing System and Registry or as
        otherwise determined by the department may be provided by the
        employer of the applicant or an entity which is affiliated
        with the applicant by an agency contract, or any subsidiary
        or affiliate of such employer or entity.
            (4)  Prelicensing education programs may be offered
        either in a classroom, online or by any other means approved
        by the Nationwide Mortgage Licensing System and Registry or
        as otherwise determined by the department.
            (5)  Except for prelicensing education programs under
        paragraph (1)(iv), prelicensing education programs approved
        by the Nationwide Mortgage Licensing System and Registry or
        as otherwise determined by the department and completed for
        another State license application shall be accepted as credit
        toward completion of the prelicensing education requirements
        of this chapter if the education programs have been
        successfully completed within the 12 months immediately
        preceding the date of the submission of the applicant's
        license application.
            (6)  An applicant that was previously licensed under this
        chapter that is applying to become licensed again under this
        chapter must demonstrate that the applicant has completed all
        of the continuing education requirements for the year in
        which the applicant was last licensed under this chapter.
        (c)  Prelicensing written test.--
            (1)  A mortgage originator applicant and at least one
        partner or ultimate equitable owner of 10% or more of an
        applicant other than a mortgage originator applicant shall
        pass, in accordance with the standards established under this
        subsection, a qualified written test developed by the
        Nationwide Mortgage Licensing System and Registry and
        administered by a test provider approved by the Nationwide
        Mortgage Licensing System and Registry based upon reasonable
        standards. The portion of the test regarding Pennsylvania-
        specific law shall be administered by a test provider
        approved by the department or as otherwise determined by the
        department under subsection (e).
            (2)  A written test shall not be treated as a qualified
        written test for purposes of paragraph (1) unless the test
        adequately measures the applicant's knowledge and
        comprehension in appropriate subject areas, including:
                (i)  Ethics.
                (ii)  Federal law and regulation pertaining to
            mortgage origination.
                (iii)  Pennsylvania law and regulation pertaining to
            mortgage origination.
                (iv)  Federal and Pennsylvania law and regulation
            related to fraud, consumer protection, the nontraditional
            mortgage marketplace and fair lending issues.
            (3)  A test provider approved by the Nationwide Mortgage
        Licensing System and Registry or as otherwise determined by
        the department may provide a test at the location of the
        employer of the applicant or an entity which is affiliated
        with the applicant by an agency contract, or any subsidiary
        or affiliate of the employer or entity.
            (4)  (i)  An applicant shall not be considered to have
            passed a qualified written test unless the individual
            achieves a test score of not less than 75% correct
            answers to questions.
                (ii)  An applicant may retake a test three
            consecutive times with each consecutive taking occurring
            at least 30 days after the preceding test.
                (iii)  After failing three consecutive tests, an
            applicant shall wait at least six months before taking
            the test again.
                (iv)  A formerly licensed mortgage originator
            applicant who has been unlicensed for five continuous
            years or longer shall retake a test. Any time during
            which the individual is a registered mortgage loan
            originator shall not be counted toward the five-year
            continuous period.
        (d)  Continuing education.--
            (1)  A licensee who is a mortgage originator and one
        individual from each licensed office of a mortgage broker,
        mortgage lender or mortgage loan correspondent that is not a
        mortgage originator, unless all of the nonclerical staff of a
        particular licensed office are licensed as mortgage
        originators, shall complete at least eight hours of education
        programs in accordance with paragraph (2), which shall
        include all of the following:
                (i)  Three hours of Federal law and regulations.
                (ii)  Two hours of ethics, which shall include
            instruction on fraud, consumer protection and fair
            lending issues.
                (iii)  Two hours of training related to lending
            standards for the nontraditional mortgage loan
            marketplace.
                (iv)  One hour of Pennsylvania law, including this
            chapter, the act of December 3, 1959 (P.L.1688, No.621),
            known as the Housing Finance Agency Law, and the act of
            January 30, 1974 (P.L.13, No.6), referred to as the Loan
            Interest and Protection Law.
            (2)  Continuing education programs shall be reviewed and
        approved by the Nationwide Mortgage Licensing System and
        Registry or as otherwise determined by the department based
        upon reasonable standards. Review and approval of a
        continuing education program shall include review and
        approval of the program provider.
            (3)  A continuing education program approved by the
        Nationwide Mortgage Licensing System and Registry or as
        otherwise determined by the department may be provided by the
        employer of the licensee or an entity which is affiliated
        with the licensee by an agency contract, or any subsidiary or
        affiliate of the employer or entity.
            (4)  Continuing education programs may be offered either
        in a classroom, online or by any other means approved by the
        Nationwide Mortgage Licensing System and Registry or as
        otherwise determined by the department.
            (5)  A licensee may only receive credit for a continuing
        education program in the year in which the program is taken
        and may not take the same continuing education program in the
        same or successive years to meet the requirements of this
        subsection.
            (6)  A licensed mortgage originator who is an instructor
        of an approved continuing education program may receive
        credit for the licensed mortgage loan originator's own
        continuing education requirement at the rate of two hours
        credit for every one hour taught.
            (7)  Except for the continuing education program under
        paragraph (1)(iv), continuing education programs approved by
        the Nationwide Mortgage Licensing System and Registry or as
        otherwise determined by the department and completed for
        another state shall be accepted as credit toward completion
        of the continuing education requirements of this chapter.
        (e)  Pennsylvania-specific education and testing programs.--
            (1)  Pennsylvania-specific education and testing programs
        shall be approved by the department, unless otherwise
        determined by the department. The department may charge
        education and testing providers a fee, to be determined by
        the department, for department review of Pennsylvania-
        specific education and testing programs.
            (2)  An education provider may apply for education and
        testing program approval on a form prescribed and provided by
        the department. The application shall be submitted to the
        department at least 60 days prior to the first date that the
        education is proposed to be offered. The application shall
        include:
                (i)  An outline of the proposed education and testing
            program, and the method of instruction and testing,
            whether in a classroom, online or by any other means.
                (ii)  A resume detailing each proposed instructor's
            qualifications. The following individuals shall not be
            qualified to be instructors, unless the department
            determines otherwise:
                    (A)  An individual who has had his license
                denied, not renewed, suspended or revoked by the
                department or any other state.
                    (B)  An individual who has been the director,
                officer, partner, employee, agent or ultimate
                equitable owner of 10% or more of a licensee that has
                had its license denied, not renewed, suspended or
                revoked by the department or another state.
                    (C)  An individual who has been subject to a
                department order or agreement prohibiting the
                individual from engaging in the mortgage loan
                business in this Commonwealth or acting in any other
                capacity related to activities regulated by the
                department or similar order or agreement issued by
                another state.
                    (D)  An individual who has pleaded guilty, been
                convicted of or pleaded nolo contendere to a crime of
                moral turpitude or felony.
                (iii)  Other information that the department may
            require.
            (3)  The department shall be notified in writing at least
        10 days prior to any change in instructors. A new instructor
        shall be subject to the criteria under paragraph (2)(ii).
            (4)  Education programs offered solely to satisfy the
        requirements of subsection (d) shall not be required to
        include a written testing component.
            (5)  The department shall have 45 days from receipt of a
        completed application to approve or deny the proposed
        education and testing program. An application shall be deemed
        completed when the requirements of this subsection have been
        fulfilled. If the department fails to approve or deny an
        application submitted by a prospective education provider
        within 45 days of its receipt, the education program shall be
        deemed approved by the department. The department may deny an
        application submitted by an education provider if the
        education and testing program or education provider fails to
        satisfy any of the conditions or requirements contained under
        this chapter.
            (6)  Approval of an education program by the department
        shall be valid for one licensing year and shall not
        constitute permanent approval of the education program.
            (7)  Education providers shall provide free access to the
        department to monitor education programs. In order to ensure
        the department's access to education programs, education
        providers shall provide the department with notification of
        the date, time and location of each education program that is
        offered by the education provider.
            (8)  Education providers shall retain original records of
        attendance for each education and testing program conducted
        by the education provider for four years and shall provide
        the department free access to the records upon request.
            (9)  The department may revoke its approval of an
        education provider's education and testing programs if the
        education provider fails to comply with any requirement of
        this chapter.
     (Aug. 5, 2009, P.L.117, No.31, eff. imd.)

        2009 Amendment.  Act 31 added section 6131.1.
        Cross References.  Section 6131.1 is referred to in section
     6139 of this title.