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90_SB0497ham001
LRB9001616JSgcam03
1 AMENDMENT TO SENATE BILL 497
2 AMENDMENT NO. . Amend Senate Bill 497 on page 1,
3 line 2, by replacing "Section 1-4" with "Sections 1-4, 3-2,
4 3-4, and 6-2 and repealing Section 3-10"; and
5 on page 1 by replacing line 6 with the following:
6 "is amended by changing Sections 1-4, 3-2, 3-4, and 6-2 as
7 follows:"; and
8 on page 9 by inserting immediately below line 16 the
9 following:
10 "(205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
11 Sec. 3-2. Annual audit.
12 (a) At the licensee's fiscal year-end, but in no case
13 more than 12 months after the last audit conducted pursuant
14 to this Section, except as otherwise provided in this
15 Section, it shall be mandatory for each residential mortgage
16 licensee to cause its books and accounts to be audited by a
17 certified public accountant not connected with such licensee.
18 The books and records of all licensees under this Act shall
19 be maintained on an accrual basis. The audit must be
20 sufficiently comprehensive in scope to permit the expression
21 of an opinion on the financial statements, which must be
22 prepared in accordance with generally accepted accounting
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1 principles, and must be performed in accordance with
2 generally accepted auditing standards. Notwithstanding the
3 requirements of this subsection, a licensee that is a first
4 tier subsidiary may submit audited consolidated financial
5 statements of its parent as long as the consolidated
6 statements are supported by consolidating statements. The
7 licensee's chief financial officer shall attest to the
8 licensee's financial statements disclosed in the
9 consolidating statements.
10 (b) As used herein, the term "expression of opinion"
11 includes either (1) an unqualified opinion, (2) a qualified
12 opinion, (3) a disclaimer of opinion, or (4) an adverse
13 opinion.
14 (c) If a qualified or adverse opinion is expressed or if
15 an opinion is disclaimed, the reasons therefore must be fully
16 explained. An opinion, qualified as to a scope limitation,
17 shall not be acceptable.
18 (d) The most recent audit report shall be filed with the
19 Commissioner at the time of the annual license renewal
20 payment within 90 days of the audit date. The report filed
21 with the Commissioner shall be certified by the certified
22 public accountant conducting the audit. The Commissioner may
23 promulgate rules regarding late audit reports.
24 (e) If any licensee required to make an audit shall fail
25 to cause an audit to be made, the Commissioner shall cause
26 the same to be made by a certified public accountant at the
27 licensee's expense. The Commissioner shall select such
28 certified public accountant by advertising for bids or by
29 such other fair and impartial means as he or she establishes
30 by regulation.
31 (f) In lieu of the audit required by this Section, the
32 Commissioner may accept any audit made in conformance with
33 the audit requirements of the U.S. Department of Housing and
34 Urban Development.
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1 (g) With respect to licensees who solely broker
2 residential mortgage loans, instead of the audit required by
3 this Section, the Commissioner may accept compilation
4 financial statements prepared at least every 12 months, and
5 the compilation financial statement shall be submitted at the
6 time of the annual license renewal payment no later than 90
7 days after the compilation date. If a licensee under this
8 Section fails to file a compilation as required, the
9 Commissioner shall cause an audit of the licensee's books and
10 accounts to be made by a certified public accountant at the
11 licensee's expense. The Commissioner shall select the
12 certified public accountant by advertising for bids or by
13 such other fair and impartial means as he or she establishes
14 by rule. A licensee who files false or misleading
15 compilation financial statements is guilty of a business
16 offense and shall be fined not less than $5,000.
17 (h) The workpapers of the certified public accountants
18 employed by each licensee for purposes of this Section are to
19 be made available to the Commissioner or the Commissioner's
20 designee upon request and may be reproduced by the
21 Commissioner or the Commissioner's designee to enable to the
22 Commissioner to carry out the purposes of this Act.
23 (i) Notwithstanding any other provision of this Section,
24 if a licensee relying on subsection (g) of this Section
25 causes its books to be audited at any other time or causes
26 its financial statements to be reviewed, a complete copy of
27 the audited or reviewed financial statements shall be
28 delivered to the Commissioner at the time of the annual
29 license renewal payment following receipt by the licensee of
30 the audited or reviewed financial statements within 10 days
31 of the date on which the financial statements were delivered
32 to the licensee. All workpapers shall be made available to
33 the Commissioner upon request. The financial statements and
34 workpapers may be reproduced by the Commissioner or the
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1 Commissioner's designee to carry out the purposes of this
2 Act.
3 (Source: P.A. 89-74, eff. 6-30-95; 89-355, eff. 8-17-95.)
4 (205 ILCS 635/3-4) (from Ch. 17, par. 2323-4)
5 Sec. 3-4. Office and staff within the State.
6 (a) A licensee whose principal place of business is
7 located in the State of Illinois shall maintain, in the State
8 of Illinois, at least one full service office with staff
9 reasonably adequate to handle efficiently communications,
10 questions, and all other matters relating to any application
11 for a home mortgage or an existing home mortgage with respect
12 to which such licensee is performing services, regardless of
13 kind, for any borrower or lender, note owner or holder, or
14 for himself or herself while engaged in the residential
15 mortgage business.
16 (b) In lieu of maintaining a full service office in the
17 State of Illinois, a licensee whose principal place of
18 business is located outside the State of Illinois must submit
19 a certified audit as required in Section 3-2 of this Act
20 evidencing a minimum net worth of $100,000, which must be
21 maintained at all times, and shall submit and maintain a
22 fidelity bond in the amount of $100,000. Notwithstanding the
23 requirements of subsection (a) of this Section, upon
24 application of the licensee, the Commissioner may waive the
25 requirements of subsection (a) upon receipt of a notarized
26 affidavit stating that:
27 (1) the licensee does not solicit, with respect to
28 activity licensable under this Act, in any manner or
29 amount, Illinois consumers seeking residential mortgages;
30 (2) the licensee does not originate or broker
31 residential mortgage loans;
32 (3) the licensee has no unresolved complaints under
33 Section 4-6 of this Act;
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1 (4) the licensee's principal place of business is
2 not within this State; and
3 (5) the licensee is in compliance with this Act.
4 (c) No waiver granted under subsection (b) of this
5 Section shall run longer than the term of the license in
6 effect when the waiver was granted. Upon renewal of the
7 license, the waiver may be renewed upon application as
8 provided in subsection (b).
9 (Source: P.A. 89-355, eff. 8-17-95; 90-301, eff. 8-1-97.)
10 (205 ILCS 635/6-2) (from Ch. 17, par. 2326-2)
11 Sec. 6-2. Removal and prohibition. Upon making any one or
12 more of the following findings, the Commissioner may issue a
13 notice of intent to issue an order of removal or prohibition,
14 or an order of removal and prohibition, which order may
15 remove a named person, persons, or entity or entities from
16 participating in the affairs of one or more licensees and may
17 be permanent or for a specific shorter period of time. The
18 findings required under this Section may be any one or more
19 of the following:
20 (1) A finding that the party or entity subject to
21 the order has been convicted of a crime involving
22 material financial loss to a licensee, a federally
23 insured depository institution, a government sponsored
24 enterprise, a Federal Home Loan Bank, a Federal Reserve
25 Bank, or any other person.
26 (2) A finding that the person or entity subject to
27 the order has submitted or caused to be submitted any
28 document that contains multiple willful and material
29 misstatements of facts, and that includes the signature
30 of the person or entity specified in the Commissioner's
31 order, or that is notarized, certified, verified or is in
32 any other way attested to, as to its veracity. An
33 application for licensure or license renewal may be
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1 considered such a document.
2 (3) Conviction of a business offense under
3 subsection (e) of Section 1-3 or subsection (g) of
4 Section 3-2.
5 (4) A finding prepared by a hearing officer
6 pursuant to a hearing held under Section 4-1(n) of this
7 Act that the person subject to the order, while an
8 employee of a licensee, has knowingly submitted or caused
9 to be submitted any document that contains willful and
10 material misstatement of facts and which is used in
11 connection with any licensable activity as defined in
12 Section 1-3(a) of this Act.
13 This Section is prospective and shall apply to actions or
14 conduct performed or commenced by a person or entity on or
15 after September 15, 1992.
16 Any notice of intent or order issued under this Section
17 is subject to administrative and judicial review under
18 Section 4-12.
19 (Source: P.A. 89-355, eff. 8-17-95.)
20 (205 ILCS 635/3-10 rep)
21 Section 10. The Residential Mortgage License Act of 1987
22 is amended by repealing Section 3-10.".