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Summary of  New Supervisory Procedure MB 108

November 5, 2008

Adoption of New Supervisory Procedure MB 108 (Approval as Provider of Education Courses for Mortgage Loan Originators; Approval of Education Courses; Other Education Requirements)

Section 108.1 contains definitions of defined terms used in the Supervisory Procedure, including distinguishing between “Approved Providers” (those approved by the Superintendent) and “Authorized Providers” (those authorized by the statute).  It also defines Course Records (which are important for the recordkeeping requirements).

Section 108.2 describes the content of an application to be authorized by the Superintendent as an Approved Provider, and what happens when the Superintendent deems an application to be incomplete.  It also notes that a list of Approved Providers, approved education courses and each trade association and education institution that has notified the Superintendent that it intends to offer Education Courses to MLOs authorized in New York will be available on the Banking Department’s website.

Section 108.3 repeats the statutory requirement that an Authorized Provider must make its own determination that each Education Course offered by it is consistent with the purpose of Article 12-E of the Banking Law.  It also provides that an Authorized Provider may at its discretion apply for prior approval of Education Courses.  At the same time, it makes clear that an Approved Provider may not give any Education Course unless the Superintendent has approved it, and may not accept payment for courses until approval has been received.  It also sets forth the procedures for obtaining prior approval of courses, including the information about the course that should be provided to the Superintendent and the duration of an approval.  Finally, it prohibits a provider from using an Education Course to promote a particular loan product or originating entity, requires each Provider to give the Superintendent a schedule of its course offerings and allow the Superintendent to audit courses, and authorizes the Superintendent to suspend or revoke a course approval if he or she finds that the course does not conform to the requirements of Article 12-E and the Provider does not timely rectify the deficiencies after having been notified thereof.

Section 108.4 sets forth the formats in which courses may be given.  It requires Education Courses taken by Inexperienced Originators (those with less than 4 years of experience) to be in one of three formats:  (i) a traditional live classroom setting, (ii) fully interactive video or audio conferences, where there is an opportunity for students to ask questions, or (iii) a format where the student cannot progress from one course segment to another or complete the course without answering questions that test the student’s comprehension of subjects previously covered.  For experienced MLOs (those with 4 or more years of experience), it requires that half of the credit hours for each biennial or quadrennial continuing education period be in the same formats required for Inexperienced Originators.

Section 108.5 summarizes the subject matter of required courses for inexperienced originators. 

Section 108.6 describes the subject matter of required courses for experienced MLOs.

Section 108.7 sets forth the requirements for certificates of course completion and for verifying that the student attended all required classes and sessions.  It also explains how the number of credit hours for each course is to be calculated. 

Section 108.8 sets forth the required qualifications for instructors of Education Courses.

Section 108.9 sets forth the obligations of providers of Education Courses with respect to record retention, distribution of written course evaluation questionnaires and ensuring that advertisements for Education Courses state whether the course is appropriate for Inexperienced or Experienced Originators.

Section 108.10 provides contact information for obtaining forms, instructions and assistance from the Banking Department.

Information Regarding Regulation

Department of Financial Services


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