MBA State Relations Committee Update State Highlights

Advocacy News and Information From the Latest Issue of the MBA State Relations Committee Update

MAA Issues Call to Action in Maryland to Oppose Changes to State Licensing Law
The Mortgage Action Alliance (MAA) this week issued a Call to Action to its members in Maryland encouraging Annapolis legislators to oppose HB-593/SB-485. These companion bills would revise the implementation of the Maryland Collection Agency Licensing Act (MCALA) and require statutory trusts to become licensed debt collection agencies. The bill would also reverse the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018), where the court held that statutory trusts created for the purpose of purchasing and holding mortgage-backed securities did not require licensure. The bills have been the subject of hearings in both legislative chambers, and MBA and state associations submitted testimony in recent weeks opposing them. MBA and members of the Maryland Mortgage Bankers and Brokers Association have also met with staff of key committee leaders to express the problematic nature of this legislation. 

North Dakota and South Dakota Pass Remote Online Notarization; Momentum for RON Continues in Other States
North Dakota (HB 1110) and South Dakota (HB 1272) enacted legislation that allows them to join Ohio, Michigan, Minnesota, Tennessee, Indiana, Virginia, Montana, Texas, Nevada, and Vermont in permitting remote online notarization (RON). North Dakota and South Dakota became the first two states of 2019 to enact RON into law. The language of the North Dakota and South Dakota bills follows the contours of the MBA-ALTA model, which can be found on the MBA Remote Online Notarization Resource Center. In addition, the legislatures for Kentucky (SB 114) and Idaho (SB 1111) transmitted RON legislation to their respective governors for signature. Both bills comport to the MBA-ALTA model and the building industry consensus around RON implementation.

MBA and State Associations Submit Testimony to Oppose Changes to Maryland Licensing Law
MBA was joined by the Maryland Mortgage Bankers and Brokers Association, the Maryland Bankers Association, and the Maryland Realtors in testimony opposing legislation (SB 485), which would revise the implementation of the Maryland Collection Agency Licensing Act (MCALA) and require statutory trusts to become licensed debt collection agencies. SB 485 and its companion in the Maryland House (HB 593) would reverse the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018) where the court held that statutory trusts created for the purpose purchasing and holding mortgage backed securities did not require licensure. Moreover, the legislation would not address perceived servicing issues that were described by the proponents of the legislation in the House and Senate Committee hearings and would negatively affect the ability to originate, sell, hold and enforce mortgages in the state. MBA staff recently met with the offices of Senator Brian Feldman (Vice Chair of Senate Finance) and Representative Dereck Davis (Chair of House Economic Matters) to discuss the risk to lending in Maryland and the potential harm to consumers by requiring statutory trusts to be licensed.

Flawed New Mexico Remote Online Notarization Bill Withdrawn; Law Enacted in North Dakota and Progress Being Made in Other States
Following a second industry coalition letter and a Mortgage Action Alliance Call to Action opposing well-intentioned but flawed remote online notarization (RON) legislation (HB-470) in New Mexico, the bill was withdrawn by its sponsor ahead of the legislature's anticipated adjournment this week. Coalition partners - MBA, the New Mexico Mortgage Lenders Association, the American Land Title Association, and the New Mexico Land Title Association - gave assurances that they would help develop a bill for 2020 that would better conform to the emerging national consensus regarding RON and that would embrace the industry's core RON principles including: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. The MBA-ALTA RON principles have been embraced in adopted and proposed legislation in several states, including North Dakota, which this week enacted HB-1110 to authorize RON. Bills continue to progress in several others states including South Dakota and Utah, where bills are awaiting gubernatorial consideration.