710 IAC 1-22-1 - Originators

Authority: IC 23-2-1-15

Affected: IC 23-2

Sec. 1.

(a) As used in this rule, "loan broker" includes a company that:

(1) utilizes the Internet to collect information from potential borrowers; and

(2) submits that information to lenders for the purpose of considering whether the lender wishes to make a loan to the potential borrower or borrowers.

(b) As used in this rule, "originator" includes any person who utilizes the information referred to in subsection (a) in connection with the loan application or process.

(c) Origination activities do not include the following:

(1) Filing or collation of paperwork, including loan paperwork.

(2) Duties in which no loan terms or conditions are communicated either to or with borrowers or prospective borrowers.

(d) An originator must be an employee of a licensee as the term "employee" is defined in 26 U.S.C. 3121 (d). Originators may not be independent contractors of a licensee.

(e) A licensee may not pay, either directly or indirectly, any:

(1) compensation;

(2) commission;

(3) fee;

(4) points; or

(5) other remuneration or benefits;

to an originator other than an employee, as defined by this rule, of the licensee. This prohibition does not include the following:

(A) arrangements in which the compensation of a branch manager is based upon the net profit of the branch; or

(B) licensees working in a co-broker relationship to the extent permitted by federal law.

(f) Upon submission of an initial license application, and with each subsequent license renewal application, a licensee must submit a separate registration form for each originator employed by that licensee. An originator may not be simultaneously registered by more than one (1) licensee for more than five (5) business days. A licensee must maintain, at its principal office, the original registration document issued to each of that licensee's originators.

(g) If the employment of an originator is terminated, the licensee must return the originator's original registration document to the securities division within five (5) business days after the termination.

Notes

710 IAC 1-22-1

Securities Division; 710 IAC 1-22-1; filed Jan 19, 2006, 12:19 p.m.: 29 IR 1924