Georgia Revises Category of Persons Covered by License Restrictions for Recording a Prior Crime | PC Weiner Brodsky Kider

Georgia recently revised the Mortgage Lenders and Mortgage Brokers Licensing Act (Georgia Official Code Title 7, Chapter 1, Annotated Section 13). Of note is the amendment to paragraph (h), which previously stated that the Georgia Department of Banking and Finance (Department) will deny or revoke a license or registration if it finds that certain persons have been convicted of a felony in any jurisdiction or a felony which, if committed in Georgia, would constitute a felony under the laws of the state. These persons included: any person who is a director, officer, partner, agent, employee or ultimate owner of 10% or more of the Mortgage Broker or Mortgage Lender who is registered or licensed, or anyone who directs the affairs or establishes the policy of the applicant, registrant or licensee (for example, a control person). It was essentially a prohibition on licensees employing people with felony convictions or its equivalent in any role.

The revision made by the Georgian legislature removes the term “agent” from the subsection and restricts the term “employee” by replacing the term with “covered employee”. “Covered Employee” is defined in part as an employee of a Mortgage Broker or Mortgage Lender who has access to information about the origination, processing or underwriting of Residential Mortgages. The term therefore does not cover staff whose role is completely separate from any work or access to information involving the origination, processing or underwriting of mortgages. This would perhaps apply more to support staff, custodial staff and other employees whose job duties do not, even indirectly, involve working with the origination, processing or underwriting of loans. These personnel can now work at mortgage lenders and mortgage brokers, even if they have already been convicted of a felony, without the employer revoking their Georgia mortgage broker or lender license or registration. .

It is important to note that the impact of this review is limited to such personnel only and does not include directors, officers, partners, owners and other employees whose job functions involve or who have access to information relating to the origination, processing and underwriting of loans, and any person who directs the affairs or establishes the policies of the applying, registered or licensed Mortgage Broker or Mortgage Lender. Thus, the ban on employing persons convicted of a crime remains broad even after the entry into force of the amendment. In addition, entities will be responsible for demonstrating to the Department that any employee not included in subsection (h) who has committed a crime is removed from any duty involving the origination, processing, or underwriting of a mortgage loan.

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