SENATE BILL NO. 700
AN ACT TO AMEND TITLE 5, DELAWARE CODE, BY ADDING A NEW CHAPTER ENTITLED MORTGAGE BANKING.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 5, Delaware Code, by adding thereto a new Chapter 30 to read as follows:
"CHAPTER 30. MORTGAGE BANKING §3001. Doing Business Without License Prohibited
(a) On or after January First, Nineteen Hundred Seventy-Nine, no person, co-partnership, association, corporation or other entity shall engage in the business of making loans secured by mortgages on residential real property located in this State or secured by certificates of stock or other evidence of ownership interests in, and proprietary leases from, corporations or partnerships formed for the purpose of cooperative ownership of real estate in this State without first obtaining a license from the State Bank Commissioner. The provisions of this section shall not apply to any banking institution, savings bank, savings and loan association, federal credit union, insurance company, or any other financial institution which is subject to any other law of this State or of the United States, regulating the power of such institution to engage in mortgage loan transactions.
(b) For purposes of subsection (a) of this section:
(1) No person, co-partnership, association, corporation or other entity shall be deemed to be engaging in the business described in that subdivision if within any twelve month period it shall make fewer than five loans of the type described in that subsection; and
(2) The term residential real property shall mean improved real property used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more persons, (including single-family homes, multi-family dwellings and individual units of condominiums) but shall not refer to real property upon which such dwellings are to be constructed; and
from this section such additional entities or classes of entities as he shall find inappropriate to include to effectuate the purposes of this Chapter.
§3002. Application for License; Fees
(a) The application for such license shall be in writing, under oath, and in the form prescribed by the Commissioner and shall contain the name and complete address or addresses where the business of the applicant is located, and if the applicant be a partnership, association, corporation or other form of business organization, the names and complete addresses of each member, director and principal officer thereof. Such application shall also include a description of the activities of the applicant, in such detail and for such periods, as the Commissioner may require, as well as such further information as the Commissioner may require. Such applicant, at the time of making such application shall pay to the Commissioner as an investigation fee the sum of Five Hundred Dollars ($500.00) which shall not be refundable.
(b) Upon approval, the applicant shall pay an annual license fee of Five Hundred Dollars ($500.00) which shall be payable annually thereafter.
§3003. Issuance or Refusal of License
Upon the filing of an application for a license, if the Commissioner shall find that the financial responsibility, experience, character, and general fitness of the applicant and of the members thereof if the applicant be a co-partner-ship or association, and of the officers and directors thereof, if the applicant be a corporation, are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly, and efficiently within the purpose of this Chapter, he shall thereupon issue a license to engage in the business described in 63001 of this Chapter in accordance with provisions of this Chapter. If the Commissioner shall not so find, he shall not issue such license and he shall notify the applicant of the denial, give notice of the grounds for refusal and notify the applicant of his right to request a hearing. If the applicant requests a hearing, the Commissioner shall hold such hearing under the provisions of Chapter 64, Title 29, Delaware Code. The Commissioner shall approve or deny every application for license thereunder within ninety (90) days from the filing thereof, provided, however, that failure to act within the prescribed period shall not be deemed approval of any such application.
§3004. License Provisions
Each license issued under this Chapter shall state the
address or addresses at which the business is to be conducted and shall state fully the name of the licensee, and the date and place of its incorporation, if applicable. A copy of such license shall be prominently posted in each place of business of the licensee. Such license shall not be transferrable or assignable. No licensee shall transact the business provided for by this Chapter under any other name or maintain an office at any other location than that designated in the license.
§3005. Changes in Officers or Directors of Licensee
In the event that there shall be any change among the officers, partners or directors of any licensee, the licensee shall forthwith notify the Commissioner of the name, address and occupation of each new officer, partner or director, and provide such other information as the Commissioner may require.
§3006. Grounds for Suspension or Revocation of License; Procedure
(a) The Commissioner may revoke any license issued hereunder if he shall find that:
(1) The licensee has violated any provisions of this Chapter, or any rule or regulation made by the Commissioner under and within the authority of this Chapter or of any other law, rule or regulation of this State.
(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 Commissioner in refusing originally to issue such license.
(b) The Commissioner may on good cause shown, suspend any license for a period not exceeding thirty (30) days, pending investigation.
(c) Except as provided in subsection (b) of this section, no license shall be revoked or suspended except after notice and a hearing thereon.
(d) Any licensee may surrender any license by delivering to the Commissioner written notice that it thereby surrenders such license, but such surrender shall not affect such licensee's civil or criminal liability for acts committed prior to such surrender.
(e) No revocation, suspension or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any person.
(f) Every license issued hereunder shall remain in force and effect until the same shall have been surrendered, revoked or suspended in accordance with the provision of this Chapter, but the Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the Commissioner in refusing originally to issue such license under this Chapter.
(g) Whenever the Commissioner shall revoke or suspend a license issued pursuant to this Chapter, he shall forthwith execute a written order to that effect. The Commissioner shall forthwith serve the written order upon the licensee. Any such order may be re*iewed in the manner provided by Chapter 64, Title 29, Delaware Code. Such application for review as authorized by this section must be made within thirty (30) days from the date of such order of suspension or revocation.
13007. Commissioner Authorized to Examine
For the purpose of discovering violations of this Chapter or securing information lawfully required by him hereunder, the Commissioner may at any time, and as often as he may determine, either personally or by a person duly designated by him, investigate the business and examine the books, accounts, records, and files used therein of every licensee hereunder. For that purpose the Commissioner and his duly designated representative shall have free access to the offices and places of business, books, accounts, papers, records, files, safes and vaults of all such licensees.
The Commissioner and any person duly designated by him shall have authority to require the attendance of and to examine under oath all persons whose testimony he may require relative to such business.
§3008. Licensee's Books and Records; Reports
The licensee shall keep and use in its business such books, accounts and records as will enable the Commissioner to determine whether such licensee is complying with the provisions of this Chapter and with the rules and regulations lawfully made by the Commissioner. Every licensee shall preserve such books, accounts, and records for such period of time as the Commissioner may require; provided, however, that preservation by photographic reproduction thereof or records in photographic form shall constitute compliance with the requirements of this section.
Each licensee shall annually, on or before a date to be determined by the Commissioner, file a report with the Commissioner giving such information as the Commissioner may require concerning the business and operations during the preceding calendar year of such licensee under authority of this Chapter. Such report shall be subscribed and affirmed as true by the licensee under the penalties of perjury and shall be in the form prescribed by the Commissioner. In addition to annual reports, the Commissioner may require such additional regular or special reports as he may deem necessary to the proper supervision of licensees under this Chapter. Such additional reports shall be in the form prescribed by the Commissioner and shall be subscribed and affirmed as true under the penalties of perjury.
If any provision of this Chapter, or the application of such provision to any person, co-partnership, association, corporation or circumstance, shall be held invalid, the remainder of the Chapter, and the application of such provision to persons, co-partnerships, associations, corporations or circumstances other than those as to which it is held invalid, shall not be affected thereby.
§3010. Exclusion of Certain Institutions from Operation of Chapter
Nothing contained in this Chapter shall be deemed to have any effect whatever upon the existing powers of any banking institution, savings bank, federal savings and loan association, or insurance company, or other financial institutions which is subject to any other law of this State, or of the United States, regulating the power of such institution to engage in mortgage loan transactions, or upon the conditions and limitations imposed by any such law upon the exercise of such powers."
Approved July 11, 1978.