A number of years ago, the NCAMP Legislative Committee formed a licensing bill task force, which began addressing the issue of recommending amendments to change or overhaul the existing registration law for mortgage brokers and bankers. Because of the increasing number of reported abuses and complaints by consumers, NCAMP initiated and led the way to deal with those alleged abuses. After many hours of debate, the initial draft of the licensing law was developed in 1996 by the legislative task force.

The Legislative Committee spent the next couple of years in various meetings with representatives from the mortgage bankers and the Commissioner of Banks' office. The initial licensing draft went through numerous changes and modifications, as each party weighed in their ideas and opinions.

In February 1999, there were 2 bills introduced into the N.C. General Assembly addressing these issues. One bill was the "Predatory Lending Act", which set out to define "high cost loans" and create limitations and restrictions on all loans made by any lender in North Carolina for loans that fall under this new definition. The other bill, S.B. 866 introduced by Senator Wib Gulley, was a licensing bill. It is important to note that the Gulley bill was not part of the original draft that NCAMP and the mortgage bankers had been working together on over the past several years. Rather, it was the consumer advocates' attempt to impose their ideas of regulation over the mortgage brokerage industry in our state.

The Gulley licensing bill, S.B. 866, died in committee, as it was considered extremely controversial and had virtually no support by the lending industry or the Commissioner of Banks. The predatory lending bill, however, passed overwhelmingly, and was signed into law by the Governor.

The NCAMP Legislative Committee recognized the need to take our version of the licensing bill that we had previously drafted, and seek our own sponsor to introduce it. We formed a "working group" that included our lobbyists, representatives from the Commissioner of Banks office, Mortgage Bankers Association of the Carolinas, the North Carolina bankers, and several other parties. After many hours and many meetings, we reached a consensus bill and secured a bill sponsor in both the house and the senate. On April 5, 2001, the industry-supported bills were introduced in the N.C. General Assembly.

Simultaneous to our bills, the consumer advocates had their competing bills introduced in the senate and the house. As time moved forward in the Spring of 2001, it became clear that the overwhelming support appeared to be in favor of the industry supported bill.

On August 29, 2001, Governor Easley signed into law the "Mortgage Lending Act". This Act repealed Article 19 of Chapter 53 of the N.C. General Statutes, which was the law that required mortgage brokers and bankers to register with the Commissioner of Banks.

This underscores the need and acceptance of responsible legislation designed to outline clear boundaries for conducting business in the mortgage business in our state. This need was created by a loose set of rules and regulations in our industry that invited unscrupulous operators to enter the business. These unscrupulous operators took advantage of these loose rules and limited enforcement authority for the Commissioner of Banks. NCAMP led the effort to develop an industry response to these needs, while preserving the freedom to conduct business in a responsible and professional manner.

The NCAMP Board of Directors wishes to thank the hundreds of mortgage brokers who sent in letters and made phone calls to their representatives and senators asking for support of our bill. We also want to thank the many volunteers in our Legislative Committee who invested many hours of their time to work on this important task. Finally, we want to thank and applaud the incredible efforts and leadership of our lobbyists, Bill Bost and John McMillan, who garnered the necessary support of the other parties in the working group and pushed through our bill.

• Although there are other provisions included in this legislation, the following are some of the highlights:
• The Commissioner of Banks will be responsible for the regulation of the industry.
• Requires a license, from the Commissioner of Banks, in order to engage in mortgage lending or mortgage brokering in North Carolina.
• Requires persons soliciting and accepting applications for mortgage loans, as an employee of another, to be licensed.
• Sets out qualifications for licensing.
• Sets fees for applying for and renewing licensing.
• Requires mortgage brokers and mortgage bankers to be licensed.
• Gives rule-making authority under the licensing program to the Commissioner.
• Gives disciplinary power over licensees to the Commissioner.
• Sets out activities that are prohibited by licensees.
• Provides that a violation of the chapter does not invalidate any mortgage loan.
• Provides automatic license
• Elimination of prepayment penalties on loans under $150,000