N.Y. Comp. Codes R. & Regs. tit. 3 § 420.21

Current through Register Vol. 46, No. 43, October 23, 2024

Section 420.21 - Administrative action and penalties

(a)Revocation of License.

Pursuant to section 599-n of the Banking Law, the superintendent, in addition to the authority provided by subdivision (b) of this section, may revoke any license as a mortgage loan originator if he or she finds that:

(1) the licensee has violated any provisions of article 12-E or any rule or regulation prescribed by the superintendent under and within the authority of article 12-D or 12-E or of any other applicable law, rule or regulation of this State or the Federal government pertaining to mortgage banking, brokering or loan originating; or

(2) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the superintendent to refuse to issue such initial license.

(b)Good cause suspension.

(1) The superintendent may, for good cause, or where there is a substantial risk of public harm, without notice or a hearing, issue an order suspending the license of any mortgage loan originator for a period not to exceed 90 days for investigation. "Good cause," as used in this subdivision, shall exist only when the mortgage loan originator has engaged or engages in dishonest or inequitable practices or practices which demonstrate incompetent mortgage loan originating, which practices may cause substantial harm to the persons afforded the protection of article 12-D or 12-E of the Banking Law, or the license of the mortgage loan originator was revoked in another state or jurisdiction participating in the NMLS.

(2) If the superintendent has issued an order suspending a license pursuant to this subdivision, such license maybe reinstated if the superintendent determines, in his or her sole discretion after investigation, that good cause therefor did not exist or no longer exists.

(c)Disciplinary action requiring a hearing.

Except as provided in subdivision (b) of this section or section 420.8 of this Part, a license may be revoked or suspended only after notice and a hearing as provided in Supervisory Procedure G111 of this Title.

(d)Notification of suspension or revocation.

Whenever a license shall have been revoked or suspended in accordance with this section, the superintendent shall notify the MLO and the affected originating entity that the license has been revoked and that the MLO may not engage in the business of mortgage loan originating in this State.

(e)Restitution.

The superintendent may order a mortgage loan originator or any other person to pay restitution for violations of article 12-E or any rules of the superintendent promulgated hereunder.

(f)Civil and criminal liability.

A revocation of a license in accordance with this Part shall not affect the civil or criminal liability of an MLO or his or her originating entity for acts committed prior to such suspension or termination or its obligations to the superintendent for assessments, fees or administrative actions with respect to the periods before such suspension, revocation or termination.

(g)Fines.

Pursuant to section 44 of the Banking Law, the superintendent may impose a fine against an MLO for any violation of the Banking Law, any regulation promulgated thereunder, any final or temporary order issued pursuant to section 39 of the Banking Law, any condition imposed by the superintendent in connection with the grant of any application or request or any written agreement entered into with the superintendent.

(h)Grounds for disciplinary action.

An MLO may be subject to such disciplinary action as may be determined appropriate by the superintendent after notice and hearing, except as otherwise provided for in article 12-E, subject but not limited to the following grounds:

(1) fraud or bribery in securing a license;

(2) making false statements in an application for license, which false statements would have been grounds for rejection of the application;

(3) making of false statement on any form or document requested by the superintendent for examination or review pursuant to Banking Law and regulations promulgated thereunder;

(4) a pattern of conduct indicating incompetence or untrustworthiness;

(5) conviction of any crime which would have a bearing on the fitness or ability of an MLO to engage in mortgage loan originating activities; or

(6) failure to perform his or her duties and responsibilities in an honest, fair and reasonable manner.

(i)Administrative hearings.

Administrative hearings shall be conducted in accordance with Supervisory Procedure G111 of this Title.

(j)Examinations and investigations.

For the purpose of discovering violations of article 12-E or securing information lawfully required by him or her hereunder, the superintendent may at any time, and as often as he or she may determine, investigate the business and examine the books, accounts, records, and files of every licensee under article 12-E and any originating entity with which such individual is associated as an employee or independent contractor. For that purpose the superintendent shall have free access to the offices and places of business, books, accounts, papers, records, files, safes and vaults of all such entities. The superintendent shall have authority to require the attendance of and to examine under oath all persons whose testimony he or she may deem necessary or desirable relative to such business. The expenses incurred in making any examination pursuant to this section shall be assessed against and paid by the licensee so examined or his or her originating entity. Upon written notice by the superintendent of the total amount of such assessment, the licensee shall become liable for and shall pay such assessment to the superintendent.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 420.21

Adopted, New York State Register October 1, 2014/Volume XXXVI, Issue 39, eff.10/1/2014