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Public Hearing Notice Notice of Public Hearing: Amendments to 209 CMR 42.00: The Licensing of Mortgage Lenders and Mortgage Brokers
Overview of Notice of Public Hearing: Amendments to 209 CMR 42.00: The Licensing of Mortgage Lenders and Mortgage Brokers
Pursuant to the provisions of M.G.L. c. 255E and in accordance with the provisions of Massachusetts General Laws chapter 30A, section 2, a public hearing will be held on Wednesday, March 16, 2022 at 10:00 a.m. at which comments will be received by the Division of Banks (Division) relative to amendments to 209 CMR 42.00 et seq.
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While it is not necessary to pre-register to provide oral testimony, anyone who emails their intention to provide oral testimony at the hearing in advance will receive preference in the order of testimony provided. Such optional notice must include the person’s name, telephone number, and email address and should be sent to email@example.com via email by Tuesday, March 15, 2022 by 5:00 p.m. In addition, written testimony can also be provided in advance via email to firstname.lastname@example.org. If there are any questions, please contact the Division’s Legal Unit at 617-956-1525.
The purpose of 209 CMR 42.00 is to establish procedures and requirements for the licensing and supervision of mortgage lenders and mortgage brokers under the provisions of M.G.L. c. 255E. The purpose of the proposed amendments to 209 CMR 42.00 is as follows: (1) to update the definition of “mortgage broker” to provide clarity regarding which activities by entities that provide information regarding prospective borrowers, known as lead generators, would require licensure; (2) to add a new section regarding licensure exemptions; and (3) to add two definitions set forth in Chapter 228 of the Acts of 2018 (Act), as discussed below.
Clarification of Lead Generator Activities that Would Trigger Mortgage Broker Licensure:
The proposed amendments update the definition of “mortgage broker” in 209 CMR 42.02 to specify certain activities that would require an individual to obtain a mortgage broker license. The proposed amendments would also update the definition of “mortgage broker” to provide clarity as to what prospective borrower information, if collected and/or transmitted to a third party, rises to the level of mortgage brokering activity, and what is merely lead generation activity that does not necessitate a mortgage broker license.
The Division currently does not have any official guidance on this topic and this has resulted in industry confusion. In addition, with the advancements in technology utilized by certain lead generators, the Division believes that providing this guidance is timely and necessary, and will help offer clarity to the industry.
Licensing Exemptions for Mortgage Lenders and Mortgage Brokers:
The proposed amendments also add a new section, 209 CMR 42.02A, which sets forth exemptions from licensure as a mortgage lender or mortgage broker, and also adds provisions relative to lead generation. This section is being added to incorporate all mortgage lender and mortgage broker licensing exemptions that are included in M.G.L. c. 255E, § 2, but which had not previously been set forth in the regulation, with additional new provisions relative to lead generation activities.
Two other definitions, “Bona Fide Nonprofit Affordable Homeownership Organization” and “Instrumentality Created by the United States or Any State” are added to 209 CMR 42.02. These definitions reflect amendments to M.G.L. c. 255E in the Act, which added a new mortgage licensing exemption for the bona fide nonprofit affordable homeownership organizations, and also clarified the existing mortgage licensing exemption for instrumentalities of the United States or any state.
There are other technical updates to the regulation as well.
Other amendments to the regulation may be made based on testimony at the public hearing or received during the comment period.
Written comments may be submitted to the Division on the proposed amendments until Wednesday, March 23, 2022 at 5:00 p.m. Copies of the amendments are available at, and copies may be obtained from, the Massachusetts Division of Banks, at www.mass.gov/dob/.