Official says Wyoming banking law needs revision

Posted by Wyoming Real Estate

July 7, 2007

A top official with the Wyoming Division of Banking says the state needs to do more to regulate companies that offer residential mortgages.

Mike Williams, deputy banking commissioner, proposed amendments to the state’s existing residential mortgage law at a meeting of the Joint Minerals, Business and Economic Development Interim Committee in Cheyenne.

Williams said more than 1,200 residential mortgage lenders operate in the state. He said many of the businesses don’t have home offices here and some only offer services online.

Under the state’s 2005 mortgage law, lenders and brokers that serve Wyoming residents must be licensed. The law also gives the state banking commissioner authority to investigate company loans and records to determine compliance.

However, Williams said the banking commissioner has conducted only 47 exams since the law went into effect. He said the banking commissioner does not have authority to verify applicant information.

Williams suggested Wyoming make the following changes to its law:

Require criminal background checks of mortgage lenders and brokers using fingerprints. The Wyoming Division of Criminal Investigation and the FBI would do the checks.

Require businesses to give notice to the state before they stop operating here so borrowers aren’t left hanging in the middle of trying to get a loan.

Have the state join a national licensing system. Williams said 37 other states have committed to use a service developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. He said that would allow lenders and brokers to apply to several states at once.

Donna Rice, executive director for the Wyoming Real Estate Commission, said she supports any changes that would increase protection of the public.

Rice said people should be confident that they’re dealing with honest mortgage brokers and dealers. Real estate brokers are already subject to fingerprinting and background checks.

Legislative staffers will review the proposed amendments before the committee’s September meeting in Jackson. The committee plans to take public comment at that meeting on whether to sponsor changes to the state’s mortgage law.

Jackson Hole Star-Tribune

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