Regulators

Commissioner:  Carole C. Wells
Department of Consumer Affairs
3600 Forest Drive, 3rd Floor 
P.O. Box 5757 Columbia, SC 29250 
Telephone:  (803) 734-4200 or (800) 922-1594 (toll free in S.C.) 
Fax:  (803) 734-4286
http://www.state.sc.us/consumer/

South Carolina State Board of Financial Institutions
Consumer Finance Division 
3rd Floor, Edgar Brown Building 
1205 Pendleton St.
Columbia, SC 29201 
PO Box 11905, Columbia, SC 29211 
Telephone:  (803) 734-2020 
http://www.bofi.sc.gov/

OVERVIEW

The SC Department of Consumer Affairs (DCA) was established by the S.C. Consumer Protection Code, the state law which governs consumer credit transactions and provides for consumer protection in South Carolina. The law, which was signed by the Governor on August 13, 1974, became effective on January 1, 1975.

• The DCA issues Mortgage Broker licenses, Mortgage Broker Branch licenses, and Mortgage Broker Loan Originator licenses.

The SC State Board of Financial Institutions (BFI) Consumer Finance Division licenses and regulates consumer finance deferred presentment, check cashing, and mortgage lending companies.

• The BFI issues Mortgage Lender/Servicer licenses, Mortgage Lender/Servicer Branch Licenses, and Mortgage Loan Originator Licenses.

On April 29, 2008 Senate Bill 1090 passed. The following outlines the licensing and education requirements effective January 1, 2009. For a copy of the bill click here.

SB 673 became law on June 3, 2009 without the Governor and is known as Act No. 67. This bill brings the state into compliance with the SAFE Act of 2009 and the various licensing requirements are summarized in this document. However, for complete details please contact the appropriate state department above. This bill contains:

• Chapter 22: Mortgage Lending (Section 37)
• Chapter 58: Licensing of Mortgage Brokers (Section 40)

IMPORTANT UPDATE!

• The SC BFI is extending its processing deadline to October 1, 2010…this means that as long as MLO’s have filed their application in full and paid their fees by July 31, 2010 they may continue to operate until then while their application is being processed, which will be based on the tier they fall into.
  • Applications received before April 30, 2010 are in tier 1
  • Applications received from April 30, 2010 to July 31, 2010 are in tier 2
  • Applications received after July 31, 2010 will be processed on a first come first serve basis

HIGHLIGHTS

Required Participants

Mortgage Lenders, Mortgage Brokers, and Mortgage Loan Originators

Registered and/or Licensed with the State

Yes

Brick and Mortar State

Yes

Experience

BFI Mortgage Lender applicants must meet the following experience requirements:

• If the applicant is a sole proprietor – at least 3 years experience in financial services or a related business
• If the applicant is a general or limited partnership – at least one of it’s general partners must have this experience
• If the applicant is a corporation – at least one of its principal officers must have this experience
• If the applicant is a limited liability company – at least one of its members or managers must have this experience

DCA Mortgage Broker applicants must have at least 3 years experience in financial services or financial services business.

• If the applicant is a partnership, LLC, or corporation at least one partner, member-manager, or principal officer must meet this experience requirement.
• Each applicant will identify this person to serve as the applicants managing principal.
• Each Mortgage Broker Branch Manager must have at least three years experience in financial services or financial services related business.

Note: If a BFI or DCA applicant can show proof of 3 years employment with a federally insured depository institution or a VA, FHA, or a HUD-approved mortgagee then this will count towards the above experience requirement.

Note: Both BFI and DCA applicants must identify one person meeting this experience requirement to serve as their managing principal.

Licensing

Mortgage Broker Loan Originator Requirements and Timeline

• New Mortgage Broker Loan Originators applicants beginning January 4, 2010 are required to use the NMLS to apply for licensure and approval will be issued on an “Approved-Conditional” status. To receive full “Approval” status, they must meet the requirements below by July 31, 2010.
• Transitional Mortgage Broker Loan Originators licensed prior to 7/30/09 must meet the additional requirements below by December 31. 2010.
• Transitional Mortgage Broker Loan Originators licensed after 7/30/09 must meet the additional requirements below by July 30, 2010.
• Transition approval will be issued in an “Approved-Conditional” status once your MU4 filing is satisfactorily reviewed by the South Carolina Department of Consumer Affairs. To receive full “Approval” status, Mortgage Loan Originators must meet the following requirements:
• Certification that 20 hours of pre-licensure education courses have been completed
• Passing score on both National and State components of the SAFE Test
• Fingerprints for an FBI and South Carolina criminal history background check
• Authorization for a credit report
• License sponsored by company

Recap of fingerprint and credit report deadlines

BFI:

• All BFI licensees must have submitted fingerprints through NMLS for a criminal background check by July 30, 2010
• The BFI will require a credit bureau dated within 30 days of application. This policy will be in place until the functionality is established through NMLS.
• Once available all licensees are required to authorize a credit report through NMLS between October 2010 and March 1, 2011

DCA:

• All new DCA applicants on or after July 30, 2009 must have submitted fingerprints through NMLS for a criminal background check by July 30, 2010
• Existing DCA licensees on or before July 30, 2009 must submit fingerprints through NMLS by December 31, 2010
• All DCA licensees will be required to authorize a credit report through the NMLS between October 2010 and March 1, 2011

DCA NOTES:

• Any individual covered by state law who does not hold an approved license issued before July 30, 2009 with the state through NMLS or has not completed 20 hours of pre-licensure education, passed the SAFE MLO Test (both national and state components) and has not had a criminal background check reviewed through NMLS may not originate mortgage loans on or after December 31, 2010. Individuals who had an approved license prior to this date but have not completed the above requirements will have their license status in NMLS changed to Suspended.
• Any individual covered by state law who does not hold an approved license issued after July 30, 2009 with the state through NMLS or has not completed 20 hours of pre-licensure education, passed the SAFE MLO Test (both national and state components) and has not had a criminal background check reviewed through NMLS may not originate mortgage loans on or after October 1, 2010. Individuals who had an approved license prior to this date but have not completed the above requirements will have their license status in NMLS changed to Suspended.

License Expiration

Effective January 1, 2009: All licenses issued will expire on December 31st annually following the date of issuance.

The renewal period is from November 1 – December 1, annually.

Education

Initial

BFI and DCA applicants must complete at least 20 hours of pre-licensing education (PE), which must include contain at least:

• 3 hours of instruction on relevant federal law and regulations
• 3 hours of ethics, including fraud prevention, consumer protection and fair lending issues
• 2 hours of lending standards for the non-traditional mortgage marketplace

Important Dates!

• All new BFI applicants on or after July 30, 2010 must have completed 20 hours of NMLS approved PE
• All new DCA applicants on or after July 30, 2009 must have completed 20 hours of PE by July 30, 2010
• Existing DCA licensees before July 30, 2009 must complete 20 hours of NMLS approved PE by December 31, 2010 – UNLESS the licensee completed at least 20 hours of state approved education prior to March 31, 2010
• State approved courses will no longer be accepted after March 31, 2010
• Certification: Currently DCA licensed MLO’s who completed at least 20 hours of SC-DCA state approved education on or before March 31, 2010 may be eligible to participate in the PE certification process and may not need to take the NMLS approved PE. Refer to your state agency for more information

Testing

BFI and DCA applicants are also required to pass a qualified written test administered by an NMLS approved test provider. The test is separated into a national and a state specific component. To pass, applicants:

• must achieve a score of 75% or greater on both components
• may take the test 3 consecutive times at least 30 days apart
• must wait at least 6 months to retake the test if they do not pass on the third attempt

Important Dates!

• All BFI licensees must pass both components of the SAFE MLO test by July 30, 2010
• Due to late arrival of the SC State component an extension date of 10/1/2010 is allowed
• All new DCA applicants on or after July 30, 2009 must pass both components by July 30, 2010
• Existing DCA licensees before July 30, 2009 must pass both components by December 31, 2010

Continuing

BFI and DCA licensees must complete 8 hours of continuing education (CE) annually consisting of at least:

• 3 hours of instruction on relevant federal law and regulations
• 2 hours of ethics, including fraud prevention, consumer protection and fair lending issues
• 2 hours of lending standards for the non-traditional mortgage marketplace

Important Dates!

• All BFI AND DCA licensees must take 8 hours of NMLS approved CE in 2011 in order to renew for 2012

Approved Delivery Methods

PE and CE may be offered either in a classroom, online, or by any other means approved by the NMLS.

Repeat Rule

Continuing education credit may be granted only for the year in which the class is taken and may not be granted for the same course in successive years.

Bond Requirements

Mortgage Lenders

All bonds in 2010 will be $50,000. After that, a mortgage lender shall post and maintain a surety bond in an amount determined by the commissioner, based on the total dollar amount of mortgage loans originated in a calendar year in this State pursuant to the following:

• Dollar volume of mortgage loans from $0 to $49,999,999 = $50,000 bond
• Dollar volume of mortgage loans from $50,000,000 to $249,999,999 = $100,000 bond
• Dollar volume of mortgage loans greater than $250,000,000 = $150,000 bond

Note: In no case is the surety bond to be less than $50,000.

Mortgage Brokers

All bonds for Mortgage Brokers shall also be maintained in an amount based on the total amount of mortgage loans originated in a calendar year as follows:

• Dollar volume of mortgage loans from $0 to $49,999,999 = $25,000 bond
• Dollar volume of mortgage loans from $50,000,000 to $99,999,999 = $40,000 bond
• Dollar volume of mortgage loans greater than $100,000,000 = $55,000 bond

Note: All licensed mortgage brokers must have a bond for at least $25,000 effective January 1, 2010. Letters of credit will not be acceptable.

Fees

DCA licensed Mortgage Brokers, Branches and Broker Loan Originators

• Mortgage Broker license transition cost = $100 (includes the NMLS processing fee)
• Mortgage Broker annual license cost = $850 (includes the NMLs processing fee)
• Mortgage Broker Branch initial NMLS set up fee = $20
• Mortgage Broker Branch annual license cost = $170 (includes NMLS processing fee)
• Mortgage Broker Loan Originator annual license cost = $119 (includes the NMLS processing fee AND the federal criminal background check fee)
• This fee will renew current licenses through December 31, 2010
• South Carolina state criminal records check fee = $35 annually and in addition to the $119 fee

BFI licensed Mortgage Lender/Servicers, Branches and Loan Originators

• Mortgage Lender/Servicer annual license cost = $1,100 (includes NMLS processing fee)