Starting June 30 Louisiana’s mortgage servicers will be required to obtain a license to operate in the state.
Louisiana House Bill 807, signed into law by Governor Bobby Jindal on May 28, amends state law to require mortgage servicers to be licensed by the state. Previously, only residential mortgage lenders, brokers and originators were required to be licensed to do business in the state.
Under the newly adopted law, mortgage servicing is defined as “collecting or remitting payment for another, or the right to collect or remit payments for another, of any of the following: principal, interest, tax, insurance, or other payment under a mortgage loan.”
The text of the law says that it was designed to protect the citizens of Louisiana. “The Legislature of Louisiana does hereby declare that it is in the best interest of the citizens of the state to protect consumers in the most important financial investment most will make, the purchase of a home, by requiring the licensing and regulation of residential mortgage lenders, brokers, originators and servicers,” the text reads.
“The purpose of this Chapter is to promote the safety and welfare of the people of the state by providing for regulatory oversight and by establishing educational requirements in a professional field in which unqualified individuals may injure or mislead the public.”
If a lender, broker, originator or service is operating without a license, the person “shall be guilty of a misdemeanor and upon conviction shall be subject to a fine not less than $500 and not more than $1,000, or to imprisonment not exceeding one year, or both.”
Of note is the author of the bill. Representative Taylor Barras, whose occupation is listed as market president of Iberia Bank, authored the bill.
The bill passed both the Louisiana House of Representatives and the state Senate unanimously and becomes law on June 30, 2014.