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Article IV - Supervision

      (205 ILCS 635/Art. IV heading)ARTICLE IV SUPERVISION

    (205 ILCS 635/4‑1)(from Ch. 17, par. 2324‑1)
    Sec. 4‑1. Commissioner of Banks and Real Estate; functions, powers, and duties. The functions, powers, and duties of the Commissioner of Banks and Real Estate shall include the following:
        (a) to issue or refuse to issue any license as

provided by this Act;

(b) to revoke or suspend for cause any license issued

under this Act;

(c) to keep records of all licenses issued under this

Act;

(d) to receive, consider, investigate, and act upon

complaints made by any person in connection with any residential mortgage licensee in this State;

(e) to consider and act upon any recommendations from

the Residential Mortgage Board;

(f) to prescribe the forms of and receive:             (1) applications for licenses; and             (2) all reports and all books and records

required to be made by any licensee under this Act, including annual audited financial statements and annual reports of mortgage activity;

(g) to adopt rules and regulations necessary and

proper for the administration of this Act;

(h) to subpoena documents and witnesses and compel

their attendance and production, to administer oaths, and to require the production of any books, papers, or other materials relevant to any inquiry authorized by this Act;

(h‑1) to issue orders against any person, if the

Commissioner has reasonable cause to believe that an unsafe, unsound, or unlawful practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Commissioner, or for the purpose of administering the provisions of this Act and any rule adopted in accordance with the Act;

(h‑2) to address any inquiries to any licensee, or

the officers thereof, in relation to its activities and conditions, or any other matter connected with its affairs, and it shall be the duty of any licensee or person so addressed, to promptly reply in writing to such inquiries. The Commissioner may also require reports from any licensee at any time the Commissioner may deem desirable;

(i) to require information with regard to any license

applicant as he or she may deem desirable, with due regard to the paramount interests of the public as to the experience, background, honesty, truthfulness, integrity, and competency of the license applicant as to financial transactions involving primary or subordinate mortgage financing, and where the license applicant is an entity other than an individual, as to the honesty, truthfulness, integrity, and competency of any officer or director of the corporation, association, or other entity, or the members of a partnership;

(j) to examine the books and records of every

licensee under this Act at intervals as specified in Section 4‑2;

(k) to enforce provisions of this Act;         (l) to levy fees, fines, and charges for services

performed in administering this Act; the aggregate of all fees collected by the Commissioner on and after the effective date of this Act shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the Savings and Residential Finance Regulatory Fund; the amounts deposited into that Fund shall be used for the ordinary and contingent expenses of the Office of Banks and Real Estate. Nothing in this Act shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State‑paid insurance of State officers by appropriation from the General Revenue Fund.

(m) to appoint examiners, supervisors, experts, and

special assistants as needed to effectively and efficiently administer this Act;

(n) to conduct hearings for the purpose of:             (1) appeals of orders of the Commissioner;             (2) suspensions or revocations of licenses, or

fining of licensees;

(3) investigating:                 (i) complaints against licensees; or                 (ii) annual gross delinquency rates; and             (4) carrying out the purposes of this Act;         (o) to exercise exclusive visitorial power over a

licensee unless otherwise authorized by this Act or as vested in the courts, or upon prior consultation with the Commissioner, a foreign residential mortgage regulator with an appropriate supervisory interest in the parent or affiliate of a licensee;

(p) to enter into cooperative agreements with state

regulatory authorities of other states to provide for examination of corporate offices or branches of those states and to accept reports of such examinations;

(q) to assign an examiner or examiners to monitor the

affairs of a licensee with whatever frequency the Commissioner determines appropriate and to charge the licensee for reasonable and necessary expenses of the Commissioner, if in the opinion of the Commissioner an emergency exists or appears likely to occur;

(r) to impose civil penalties of up to $50 per day

against a licensee for failing to respond to a regulatory request or reporting requirement; and

(s) to enter into agreements in connection with the

Nationwide Mortgage Licensing System and Registry.

(Source: P.A. 96‑112, eff. 7‑31‑09; 96‑1000, eff. 7‑2‑10.)

    (205 ILCS 635/4‑2)(from Ch. 17, par. 2324‑2)
    Sec. 4‑2. Examination; prohibited activities.
    (a) The business affairs of a licensee under this Act shall be examined for compliance with this Act as often as the Commissioner deems necessary and proper. The Commissioner shall promulgate rules with respect to the frequency and manner of examination. The Commissioner shall appoint a suitable person to perform such examination. The Commissioner and his appointees may examine the entire books, records, documents, and operations of each licensee and its subsidiary, affiliate, or agent, and may examine any of the licensee's or its subsidiary's, affiliate's, or agent's officers, directors, employees and agents under oath. For purposes of this Section, "agent" includes service providers such as accountants, closing services providers, providers of outsourced services such as call centers, marketing consultants, and loan processors, even if exempt from licensure under this Act. This Section does not apply to an attorney's privileged work product or communications.
    (b) The Commissioner shall prepare a sufficiently detailed report of each licensee's examination, shall issue a copy of such report to each licensee's principals, officers, or directors and shall take appropriate steps to ensure correction of violations of this Act.
    (c) Affiliates of a licensee shall be subject to examination by the Commissioner on the same terms as the licensee, but only when reports from, or examination of a licensee provides for documented evidence of unlawful activity between a licensee and affiliate benefiting, affecting or deriving from the activities regulated by this Act.
    (d) The expenses of any examination of the licensee and affiliates shall be borne by the licensee and assessed by the Commissioner as established by regulation.
    (e) Upon completion of the examination, the Commissioner shall issue a report to the licensee. All confidential supervisory information, including the examination report and the work papers of the report, shall belong to the Commissioner's office and may not be disclosed to anyone other than the licensee, law enforcement officials or other regulatory agencies that have an appropriate regulatory interest as determined by the Commissioner, or to a party presenting a lawful subpoena to the Office of the Commissioner. The Commissioner may immediately appeal to the court of jurisdiction the disclosure of such confidential supervisory information and seek a stay of the subpoena pending the outcome of the appeal. Reports required of licensees by the Commissioner under this Act and results of examinations performed by the Commissioner under this Act shall be the property of only the Commissioner, but may be shared with the licensee. Access under this Act to the books and records of each licensee shall be limited to the Commissioner and his agents as provided in this Act and to the licensee and its authorized agents and designees. No other person shall have access to the books and records of a licensee under this Act. Any person upon whom a demand for production of confidential supervisory information is made, whether by subpoena, order, or other judicial or administrative process, must withhold production of the confidential supervisory information and must notify the Commissioner of the demand, at which time the Commissioner is authorized to intervene for the purpose of enforcing the limitations of this Section or seeking the withdrawal or termination of the attempt to compel production of the confidential supervisory information. The Commissioner may impose any conditions and limitations on the disclosure of confidential supervisory information that are necessary to protect the confidentiality of such information. Except as authorized by the Commissioner, no person obtaining access to confidential supervisory information may make a copy of the confidential supervisory information. The Commissioner may condition a decision to disclose confidential supervisory information on entry of a protective order by the court or administrative tribunal presiding in the particular case or on a written agreement of confidentiality. In a case in which a protective order or agreement has already been entered between parties other than the Commissioner, the Commissioner may nevertheless condition approval for release of confidential supervisory information upon the inclusion of additional or amended provisions in the protective order. The Commissioner may authorize a party who obtained the records for use in one case to provide them to another party in another case, subject to any conditions that the Commissioner may impose on either or both parties. The requestor shall promptly notify other parties to a case of the release of confidential supervisory information obtained and, upon entry of a protective order, shall provide copies of confidential supervisory information to the other parties.
    (f) The Commissioner, deputy commissioners, and employees of the Office of Banks and Real Estate shall be subject to the restrictions provided in Section 2.5 of the Office of Banks and Real Estate Act including, without limitation, the restrictions on (i) owning shares of stock or holding any other equity interest in an entity regulated under this Act or in any corporation or company that owns or controls an entity regulated under this Act; (ii) being an officer, director, employee, or agent of an entity regulated under this Act; and (iii) obtaining a loan or accepting a gratuity from an entity regulated under this Act.
    (g) After the initial examination for those licensees whose only mortgage activity is servicing fewer than 1,000 Illinois residential loans, the examination required in subsection (a) may be waived upon submission of a letter from the licensee's independent certified auditor that the licensee serviced fewer than 1,000 Illinois residential loans during the year in which the audit was performed.
(Source: P.A. 96‑112, eff. 7‑31‑09.)

(205 ILCS 635/4‑3) (from Ch. 17, par. 2324‑3)     Sec. 4‑3. Subpoena power of the Commissioner. (a) The Commissioner shall have the power to issue and to serve subpoenas and subpoenas duces tecum to compel the attendance of witnesses and the production of all books, accounts, records and other documents and materials relevant to an examination or investigation. The Commissioner or his or her duly authorized representative, shall have power to administer oaths and affirmations to any person.     (b) In the event of noncompliance with a subpoena or subpoena duces tecum issued or caused to be issued by the Commissioner, the Commissioner may petition the circuit court of the county in which the person subpoenaed resides or has its principal place of business for an order requiring the subpoenaed person to appear and testify and to produce such books, accounts, records and other documents as are specified in the subpoena duces tecum. The court may grant injunctive relief restraining the person from advertising, promoting, soliciting, entering into, offering to enter into, continuing, or completing any residential mortgage financing transaction or residential mortgage servicing transaction. The court may grant such other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment or other disposition of the person's assets or any concealment, alteration, destruction or other disposition of books, accounts, records or other documents and materials as the court deems appropriate, until the person has fully complied with the subpoena or subpoena duces tecum and the Commissioner has completed an investigation or examination.     (c) When it shall appear to the Commissioner that the compliance with a subpoena or subpoena duces tecum issued or caused to be issued by the Commissioner pursuant to this Section is essential to an investigation or examination, the Commissioner, in addition to the other remedies provided for herein, may apply for relief to the circuit court of the county in which the subpoenaed person resides or has its principal place of business. The court shall thereupon direct the issuance of an order against the subpoenaed person requiring sufficient bond conditioned on compliance with the subpoena or subpoena duces tecum. The court shall cause to be endorsed on the order a suitable amount of bond or payment pursuant to which the person named in the order shall be freed, having a due regard to the nature of the case.     (d) In addition, the Commissioner may seek a writ of attachment or an equivalent order from the circuit court having jurisdiction over the person who has refused to obey a subpoena, who has refused to give testimony or who has refused to produce the matters described in the subpoena duces tecum. (Source: P.A. 85‑735.)

(205 ILCS 635/4‑4) (from Ch. 17, par. 2324‑4)     Sec. 4‑4. Report Required of Licensee; False Statements; Delay; Penalties.(a) In addition to any reports required under this Act, every licensee shall file such other reports as the Commissioner shall request.     (b) Any licensee or any officer, director, employee or agent of any licensee who shall fail to file any reports required by this Act, including those under subsection (a) above, or who shall deliberately, wilfully or knowingly make, subscribe to or cause to be made any false entry with intent to deceive the Commissioner or his or her appointees or who shall purposely cause unreasonable delay in filing such reports, shall be guilty of a Class 4 Felony. (Source: P.A. 85‑735.)

    (205 ILCS 635/4‑5)(from Ch. 17, par. 2324‑5)
    Sec. 4‑5. Suspension, revocation of licenses; fines.
    (a) Upon written notice to a licensee, the Commissioner may suspend or revoke any license issued pursuant to this Act if he or she shall make a finding of one or more of the following in the notice that:
        (1) Through separate acts or an act or a course of

conduct, the licensee has violated any provisions of this Act, any rule or regulation promulgated by the Commissioner or of any other law, rule or regulation of this State or the United States.

(2) Any fact or condition exists which, if it had

existed at the time of the original application for such license would have warranted the Commissioner in refusing originally to issue such license.

(3) If a licensee is other than an individual, any

ultimate equitable owner, officer, director, or member of the licensed partnership, association, corporation, or other entity has so acted or failed to act as would be cause for suspending or revoking a license to that party as an individual.

(b) No license shall be suspended or revoked, except as provided in this Section, nor shall any licensee be fined without notice of his or her right to a hearing as provided in Section 4‑12 of this Act.     (c) The Commissioner, on good cause shown that an emergency exists, may suspend any license for a period not exceeding 180 days, pending investigation. Upon a showing that a licensee has failed to meet the experience or educational requirements of Section 2‑2 or the requirements of subsection (g) of Section 3‑2, the Commissioner shall suspend, prior to hearing as provided in Section 4‑12, the license until those requirements have been met.     (d) The provisions of subsection (e) of Section 2‑6 of this Act shall not affect a licensee's civil or criminal liability for acts committed prior to surrender of a license.     (e) No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre‑existing lawful contract between the licensee and any person.     (f) Every license issued under this Act shall remain in force and effect until the same shall have expired without renewal, have been surrendered, revoked or suspended in accordance with the provisions of this Act, but the Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the Commissioner in refusing originally to issue such license under this Act.     (g) Whenever the Commissioner shall revoke or suspend a license issued pursuant to this Act or fine a licensee under this Act, he or she shall forthwith execute a written order to that effect. The Commissioner shall publish notice of such order in the Illinois Register and post notice of the order on an agency Internet site maintained by the Commissioner or on the Nationwide Mortgage Licensing System and Registry and shall forthwith serve a copy of such order upon the licensee. Any such order may be reviewed in the manner provided by Section 4‑12 of this Act.     (h) When the Commissioner finds any person in violation of the grounds set forth in subsection (i), he or she may enter an order imposing one or more of the following penalties:         (1) Revocation of license;         (2) Suspension of a license subject to reinstatement

upon satisfying all reasonable conditions the Commissioner may specify;

(3) Placement of the licensee or applicant on

probation for a period of time and subject to all reasonable conditions as the Commissioner may specify;

(4) Issuance of a reprimand;         (5) Imposition of a fine not to exceed $25,000 for

each count of separate offense; and

(6) Denial of a license.     (i) The following acts shall constitute grounds for which the disciplinary actions specified in subsection (h) above may be taken:         (1) Being convicted or found guilty, regardless of

pendency of an appeal, of a crime in any jurisdiction which involves fraud, dishonest dealing, or any other act of moral turpitude;

(2) Fraud, misrepresentation, deceit or negligence

in any mortgage financing transaction;

(3) A material or intentional misstatement of fact

on an initial or renewal application;

(4) Failure to follow the Commissioner's regulations

with respect to placement of funds in escrow accounts;

(5) Insolvency or filing under any provision of the

Bankruptcy Code as a debtor;

(6) Failure to account or deliver to any person any

property such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, which has come into his or her hands and which is not his or her property or which he or she is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(7) Failure to disburse funds in accordance with

agreements;

(8) Any misuse, misapplication, or misappropriation

of trust funds or escrow funds;

(9) Having a license, or the equivalent, to practice

any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory or country for fraud, dishonest dealing or any other act of moral turpitude;

(10) Failure to issue a satisfaction of mortgage

when the residential mortgage has been executed and proceeds were not disbursed to the benefit of the mortgagor and when the mortgagor has fully paid licensee's costs and commission;

(11) Failure to comply with any order of the

Commissioner or rule made or issued under the provisions of this Act;

(12) Engaging in activities regulated by this Act

without a current, active license unless specifically exempted by this Act;

(13) Failure to pay in a timely manner any fee,

charge or fine under this Act;

(14) Failure to maintain, preserve, and keep

available for examination, all books, accounts or other documents required by the provisions of this Act and the rules of the Commissioner;

(15) Refusing, obstructing, evading, or unreasonably

delaying an investigation, information request, or examination authorized under this Act, or refusing, obstructing, evading, or unreasonably delaying compliance with the Director's subpoena or subpoena duces tecum;

(16) A pattern of substantially underestimating the

maximum closing costs;

(17) Failure to comply with or violation of any

provision of this Act.

(j) A licensee shall be subject to the disciplinary actions specified in this Act for violations of subsection (i) by any officer, director, shareholder, joint venture, partner, ultimate equitable owner, or employee of the licensee.     (k) Such licensee shall be subject to suspension or revocation for unauthorized employee actions only if there is a pattern of repeated violations by employees or the licensee has knowledge of the violations, or there is substantial harm to a consumer.     (l) Procedure for surrender of license:         (1) The Commissioner may, after 10 days notice by

certified mail to the licensee at the address set forth on the license, stating the contemplated action and in general the grounds therefor and the date, time and place of a hearing thereon, and after providing the licensee with a reasonable opportunity to be heard prior to such action, fine such licensee an amount not exceeding $25,000 per violation, or revoke or suspend any license issued hereunder if he or she finds that:

(i) The licensee has failed to comply with any

provision of this Act or any order, decision, finding, rule, regulation or direction of the Commissioner lawfully made pursuant to the authority of this Act; or

(ii) Any fact or condition exists which, if it

had existed at the time of the original application for the license, clearly would have warranted the Commissioner in refusing to issue the license.

(2) Any licensee may submit application to surrender

a license, but upon the Director approving the surrender, it shall not affect the licensee's civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the license fee.

(Source: P.A. 96‑112, eff. 7‑31‑09.)

(205 ILCS 635/4‑6) (from Ch. 17, par. 2324‑6)     Sec. 4‑6. Investigation of Complaints. The Commissioner shall at all times maintain staff and facilities adequate to receive, record and investigate complaints and inquiries made by any person concerning this Act and any licensees under this Act. Each licensee shall open its books, records, documents and offices wherever situated to the Commissioner or his or her appointees as needed to facilitate such investigations. (Source: P.A. 85‑735.)

    (205 ILCS 635/4‑7)
    Sec. 4‑7. Additional investigation and examination authority. In addition to any authority allowed under this Act, the Director shall have the authority to conduct investigations and examinations as follows:
    (a) For purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation to determine compliance with this Act, the Commissioner shall have the authority to access, receive, and use any books, accounts, records, files, documents, information, or evidence including, but not limited to, the following:
        (1) criminal, civil, and administrative history

information, including nonconviction data as specified in the Criminal Code of 1961;

(2) personal history and experience information,

including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the federal Fair Credit Reporting Act; and

(3) any other documents, information, or evidence

the Commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of the documents, information, or evidence.

(b) For the purposes of investigating violations or complaints arising under this Act, or for the purposes of examination, the Commissioner may review, investigate, or examine any licensee, individual, or person subject to this Act, as often as necessary in order to carry out the purposes of this Act. The Commissioner may direct, subpoena, or order the attendance of and examine under oath all persons whose testimony may be required about the loans or the business or subject matter of any such examination or investigation, and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other d Copyright © 2012-2022 Laws9.Com All rights reserved. Contact Us | About Us | Terms | Privacy