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Explanatory All Institutions Letter

December 23, 2009

TO THE INDIVIDUAL OR INSTITUTION ADDRSSED:

Re: Adoption of Amendments to Part 38 of the General Regulations of the Banking Board, Parts 410 and 413 of the Superintendent’s Regulations and Supervisory Procedure MB 106, Title 3 NYCRR

The Banking Board has adopted the attached amendments to Part 38 of the General Regulations of the Banking Board and the Superintendent has adopted the attached amendments to Parts 410 and 413 of the Superintendent’s Regulations and to Supervisory Procedure MB 106.  The amendments will become effective upon publication in the State Register, which is expected to occur on December 23, 2009.  A summary of the amendments as adopted is also attached.

The amendments to Part 38 (i) clarify the definition of “branch”, eliminate the distinction between full service branches and loan solicitation branches, and codify the prohibition on net branching,  (ii) add a definition of “application” which conforms to the federal definition, (iii) clarify disclosure requirements for points and fees and for compensation received from lenders and borrowers, (iv) add disclosure language to applications regarding the effect of providing false information and the effect of paying discount points, and (v) add a specific prohibition against dual employment.  The amendments to Part 410.5 reflect the elimination of the distinction between full service and loan solicitation branches.  Finally, the amendments to Part 413.3(a)(5) and MB 106 clarify the corporate surety bond requirements for mortgage brokers to act as FHA Mortgage Loan correspondents.   The only change in the adopted amendments from those proposed in April, 2009 is that Section 38.7 has been revised to give the Superintendent the power to give written approval for exceptions to the dual employment prohibition.

Very truly yours,



Sam L. Abram
Secretary of the Banking Board

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