115 HR 3978 EH: To amend the Real Estate Settlement Procedures Act of 1974 to modify requirements related to mortgage disclosures, and for other purposes.
U.S. House of Representatives
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EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.The table of contents for this Act is as follows: Sec. 1. Table of contents. Sec. 2. Securities and Exchange Commission Reserve Fund. Title I—TRID Improvement Sec. 101. Amendments to mortgage disclosure requirements. Title II—Protection of Source Code Sec. 201. Procedure for obtaining certain intellectual property. Title III—Fostering Innovation Sec. 301. Temporary exemption for low-revenue issuers. Title IV—National Securities Exchange Regulatory Parity Sec. 401. Nationally traded securities exemption. Title V—Eliminating barriers to jobs for loan originators Sec. 501. Eliminating barriers to jobs for loan originators. Sec. 502. Amendment to civil liability of the Bureau and other officials. Sec. 503. Effective date. 2.Securities and Exchange Commission Reserve FundNotwithstanding section 4(i)(2)(B)(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78d(i)(2)(B)(i)), the amount deposited in the Securities and Exchange Commission Reserve Fund for fiscal year 2018 may not exceed $48,000,000.
<enum>I</enum><header>TRID Improvement</header>
<section id="H1B7E5ACB577B40C08F825E09ADC011B2"><enum>101.</enum><header>Amendments to mortgage disclosure requirements</header><text display-inline="no-display-inline">Section 4(a) of the Real Estate Settlement Procedures Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/12/2603">12 U.S.C. 2603(a)</external-xref>) is amended—</text> <paragraph id="H01D2753E0C984684AE89650E96CB1DFE"><enum>(1)</enum><text>by striking <quote>itemize all charges</quote> and inserting <quote>itemize all actual charges</quote>;</text></paragraph>
<paragraph id="HDE3EC910E7BA40409B329974CB605269"><enum>(2)</enum><text>by striking <quote>and all charges imposed upon the seller in connection with the settlement and</quote> and inserting <quote>and the seller in connection with the settlement. Such forms</quote>; and</text></paragraph> <paragraph id="H03184B2BEF1A43038A9091416D1E5EF8"><enum>(3)</enum><text>by inserting after <quote>or both.</quote> the following new sentence: <quote>Charges for any title insurance premium disclosed on such forms shall be equal to the amount charged for each individual title insurance policy, subject to any discounts as required by State regulation or the title company rate filings.</quote>.</text></paragraph></section>
<enum>II</enum><header>Protection of Source Code</header>
<section id="HF0154ED0D40148B2AB90355625517A4A" section-type="subsequent-section"><enum>201.</enum><header>Procedure for obtaining certain intellectual property</header>
<subsection id="H53F3064222124495AC6847DFD956D786"><enum>(a)</enum><header>Persons under Securities Act of 1933</header><text>Section 8 of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77h">15 U.S.C. 77h</external-xref>) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H09BF718A490445E89AA96FD89F881255" style="OLC"> <subsection id="HB41BF6DCDB244561A994C2401430F0CB"><enum>(g)</enum><header>Procedure for obtaining certain intellectual property</header><text display-inline="yes-display-inline">The Commission is not authorized to compel under this title a person to produce or furnish algorithmic trading source code or similar intellectual property that forms the basis for design of the algorithmic trading source code, to the Commission unless the Commission first issues a subpoena.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA052039A0B694060B7734D4619F44F88"><enum>(b)</enum><header>Persons under the Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 23 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78w">15 U.S.C. 78w</external-xref>) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HC426E697254B47179F11854C3F218F90" style="OLC"> <subsection id="HBE5C707BC8F64A41B1525B4559A4D9CD"><enum>(e)</enum><header>Procedure for obtaining certain intellectual property</header><text display-inline="yes-display-inline">The Commission is not authorized to compel under this title a person to produce or furnish algorithmic trading source code or similar intellectual property that forms the basis for design of the algorithmic trading source code, to the Commission unless the Commission first issues a subpoena.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HEE8B49C52C634A94943299D99CE8B9F1"><enum>(c)</enum><header>Investment Companies</header><text display-inline="yes-display-inline">Section 31 of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-30">15 U.S.C. 80a–30</external-xref>) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H38EB504DCFDF423798CDA311FF84FC1B" style="OLC"> <subsection id="HDC61E3C917FC4957B11E194B123C7961"><enum>(e)</enum><header>Procedure for obtaining certain intellectual property</header><text display-inline="yes-display-inline">The Commission is not authorized to compel under this title an investment company to produce or furnish algorithmic trading source code or similar intellectual property that forms the basis for design of the algorithmic trading source code, to the Commission unless the Commission first issues a subpoena.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H502A66108F14480F8B899C24DB503E53"><enum>(d)</enum><header>Investment Advisers</header><text display-inline="yes-display-inline">Section 204 of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-4">15 U.S.C. 80b–4</external-xref>) is amended—</text> <paragraph id="H2E1993A0FBDB47F7BC1DBCF268664476"><enum>(1)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H46AD0E8B68764868A8DE12CBC60AF176" style="OLC">
<subsection id="HF9F756308201491DBF8A1A7F470DECCF"><enum>(f)</enum><header>Procedure for obtaining certain intellectual property</header><text display-inline="yes-display-inline">The Commission is not authorized to compel under this title an investment adviser to produce or furnish algorithmic trading source code or similar intellectual property that forms the basis for design of the algorithmic trading source code, to the Commission unless the Commission first issues a subpoena.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H3A71E69E8DF5435CB24AEDEEDB1C88D1"><enum>(2)</enum><text display-inline="yes-display-inline">in the second subsection (d), by striking <quote>(d)</quote> and inserting <quote>(e)</quote>.</text></paragraph></subsection></section>
<enum>III</enum><header>Fostering Innovation</header>
<section id="H0CE382DE18394D82874353C58463057D"><enum>301.</enum><header>Temporary exemption for low-revenue issuers</header><text display-inline="no-display-inline">Section 404 of the Sarbanes-Oxley Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/7262">15 U.S.C. 7262</external-xref>) is amended by adding at the end the following:</text> <quoted-block id="H0DCE9FBB5EF546208E6DB5ACA2C9D912" style="OLC"> <subsection id="HF8F7AA058DD246B1926661FB4E05FA7A"><enum>(d)</enum><header>Temporary exemption for low-Revenue issuers</header> <paragraph id="H0EA56478E7A14288BB2E71C5C575B26B"><enum>(1)</enum><header>Low-revenue exemption</header><text>Subsection (b) shall not apply with respect to an audit report prepared for an issuer that—</text>
<subparagraph id="HDE2B3AB8BE1D471FB4E0D7D8035E5122"><enum>(A)</enum><text>ceased to be an emerging growth company on the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933;</text></subparagraph> <subparagraph id="H4BF1A8E9C2104C45BAF95C8F496ECE89"><enum>(B)</enum><text>had average annual gross revenues of less than $50,000,000 as of its most recently completed fiscal year; and</text></subparagraph>
<subparagraph id="H065DEB618946475FA53F09ADF1CFF894"><enum>(C)</enum><text>is not a large accelerated filer.</text></subparagraph></paragraph> <paragraph id="H75BD160C848245D48EB1DEE18E3FEE4A"><enum>(2)</enum><header>Expiration of temporary exemption</header><text>An issuer ceases to be eligible for the exemption described under paragraph (1) at the earliest of—</text>
<subparagraph id="HAF3A8DEE70614F058264C46BB9070C8C"><enum>(A)</enum><text>the last day of the fiscal year of the issuer following the tenth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933;</text></subparagraph> <subparagraph id="HA41A70C8D9564376A662D5AE68E42B6B"><enum>(B)</enum><text>the last day of the fiscal year of the issuer during which the average annual gross revenues of the issuer exceed $50,000,000; or</text></subparagraph>
<subparagraph id="HB81B6014D4744A34A4068F8EA1971277"><enum>(C)</enum><text>the date on which the issuer becomes a large accelerated filer.</text></subparagraph></paragraph> <paragraph commented="no" id="H0381AC9C53F847508D0D3D319BFC05DD"><enum>(3)</enum><header>Definitions</header><text>For purposes of this subsection:</text>
<subparagraph commented="no" id="HB71807D897CC4FA6B1FB38EB82500C65"><enum>(A)</enum><header>Average annual gross revenues</header><text>The term <term>average annual gross revenues</term> means the total gross revenues of an issuer over its most recently completed three fiscal years divided by three.</text></subparagraph> <subparagraph commented="no" id="H5FE5994B325449188486437EBF77EDF4"><enum>(B)</enum><header>Emerging growth company</header><text display-inline="yes-display-inline">The term <quote>emerging growth company</quote> has the meaning given such term under section 3 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c</external-xref>).</text></subparagraph>
<subparagraph commented="no" id="HDC2C5C91DF8347299D958FC2A2A13B15"><enum>(C)</enum><header>Large accelerated filer</header><text display-inline="yes-display-inline">The term <quote>large accelerated filer</quote> has the meaning given that term under section 240.12b–2 of title 17, Code of Federal Regulations, or any successor thereto.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <enum>IV</enum><header>National Securities Exchange Regulatory Parity</header> <section id="HA3F65BD73FD0455E92FECFE53AD12824"><enum>401.</enum><header>Nationally traded securities exemption</header><text display-inline="no-display-inline">Section 18(b)(1) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77r">15 U.S.C. 77r(b)(1)</external-xref>) is amended—</text>
<paragraph id="H51514393C7BC401AAB5D77EF02924749"><enum>(1)</enum><text>by striking subparagraph (A);</text></paragraph> <paragraph id="H500AC68F2F1D4F6FABAAC42B212A2A43"><enum>(2)</enum><text>in subparagraph (B)—</text>
<subparagraph id="H11FF2355D26F4AD5A8B909F0B5BBB96E"><enum>(A)</enum><text>by inserting <quote>a security designated as qualified for trading in the national market system pursuant to section 11A(a)(2) of the Securities Exchange Act of 1934 that is</quote> before <quote>listed</quote>; and</text></subparagraph> <subparagraph id="H4D951D1760474DCB81209FDEB0B9A995"><enum>(B)</enum><text>by striking <quote>that has listing standards that the Commission determines by rule (on its own initiative or on the basis of a petition) are substantially similar to the listing standards applicable to securities described in subparagraph (A)</quote>;</text></subparagraph></paragraph>
<paragraph id="HF8CADFA2BD4142BEA893FDF576B00616"><enum>(3)</enum><text>in subparagraph (C), by striking <quote>or (B)</quote>; and</text></paragraph> <paragraph id="H5CFDF4661C8C4EC8999BD1119A5C0BCA"><enum>(4)</enum><text>by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively.</text></paragraph></section>
<enum>V</enum><header>Eliminating barriers to jobs for loan originators</header>
<section id="HEAF7F5E71D2A4BFFBA84D95A49F70A74" section-type="subsequent-section"><enum>501.</enum><header>Eliminating barriers to jobs for loan originators</header>
<subsection id="H9A5FAB367A3D4773A3A1D0BBFE156679"><enum>(a)</enum><header>In general</header><text>The S.A.F.E. Mortgage Licensing Act of 2008 (<external-xref legal-doc="usc" parsable-cite="usc/12/5101">12 U.S.C. 5101</external-xref> et seq.) is amended by adding at the end the following:</text> <quoted-block id="HAE76E8B137F144FD8D49A2FF56CF23A1" style="OLC"> <section id="H0D2795028DCF40138E0EC9FBC5697787"><enum>1518.</enum><header>Employment transition of loan originators</header> <subsection id="HC3D968659EA14589A487E7E6EF4436B6"><enum>(a)</enum><header>Temporary authority To originate loans for loan originators moving from a depository institution to a non-Depository institution</header> <paragraph id="H1460ECADDC504C98B47DBA4E200AFF29"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Upon employment by a State-licensed mortgage company, an individual who is a registered loan originator shall be deemed to have temporary authority to act as a loan originator in an application State for the period described in paragraph (2) if the individual—</text>
<subparagraph id="H1C5F47D5925E4684BBBBDEED0FAA56A5"><enum>(A)</enum><text>has not had an application for a loan originator license denied, or had such a license revoked or suspended in any governmental jurisdiction;</text></subparagraph> <subparagraph id="H3B7BD115D34F4E75A942303631E9B320"><enum>(B)</enum><text>has not been subject to or served with a cease and desist order in any governmental jurisdiction or as described in section 1514(c);</text></subparagraph>
<subparagraph id="H1F8444F9C3AD4A19B004104DAF18E4E8"><enum>(C)</enum><text>has not been convicted of a felony that would preclude licensure under the law of the application State;</text></subparagraph> <subparagraph id="H48A2CAFEAF744261A21681CAB8424D33"><enum>(D)</enum><text>has submitted an application to be a State-licensed loan originator in the application State; and</text></subparagraph>
<subparagraph id="HB793E50D238B463B9B84A8DF40B5D212"><enum>(E)</enum><text>was registered in the Nationwide Mortgage Licensing System and Registry as a loan originator during the 12-month period preceding the date of submission of the information required under section 1505(a).</text></subparagraph></paragraph> <paragraph id="H32A66468FAA146A6B7D5FC7A76D5F88A"><enum>(2)</enum><header>Period</header><text display-inline="yes-display-inline">The period described in paragraph (1) shall begin on the date that the individual submits the information required under section 1505(a) and shall end on the earliest of—</text>
<subparagraph id="HF0D75F2CAE7F495FA6952782D1E8AE73"><enum>(A)</enum><text display-inline="yes-display-inline">the date that the individual withdraws the application to be a State-licensed loan originator in the application State;</text></subparagraph> <subparagraph id="HF165FB3EBBA14378A84404840A70E49A"><enum>(B)</enum><text display-inline="yes-display-inline">the date that the application State denies, or issues a notice of intent to deny, the application;</text></subparagraph>
<subparagraph id="H46B06027A30F45A689144B258BAFDEFA"><enum>(C)</enum><text display-inline="yes-display-inline">the date that the application State grants a State license; or</text></subparagraph> <subparagraph id="H1D6979A821B94FDC96DD7C5A2D2EB3F9"><enum>(D)</enum><text display-inline="yes-display-inline">the date that is 120 days after the date on which the individual submits the application, if the application is listed on the Nationwide Mortgage Licensing System and Registry as incomplete.</text></subparagraph></paragraph></subsection>
<subsection id="H525F405E80A642DDA8A79561420FA55E"><enum>(b)</enum><header>Temporary authority To originate loans for State-Licensed loan originators moving interstate</header>
<paragraph id="H47B7D2E272B4427FA8DEFF5D9EA87197"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A State-licensed loan originator shall be deemed to have temporary authority to act as a loan originator in an application State for the period described in paragraph (2) if the State-licensed loan originator—</text> <subparagraph id="H87AB82ADD99D49AAAAFCA914C457F841"><enum>(A)</enum><text>meets the requirements of subparagraphs (A), (B), (C), and (D) of subsection (a)(1);</text></subparagraph>
<subparagraph id="H8AC805BBCC95420892A47354EF27DAFE"><enum>(B)</enum><text>is employed by a State-licensed mortgage company in the application State; and</text></subparagraph> <subparagraph id="H50E8B4076B674002B3C7C37F2C09055A"><enum>(C)</enum><text>was licensed in a State that is not the application State during the 30-day period preceding the date of submission of the information required under section 1505(a) in connection with the application submitted to the application State.</text></subparagraph></paragraph>
<paragraph id="HF26A8D877F4C4BFE8A6AEBD87409E396"><enum>(2)</enum><header>Period</header><text display-inline="yes-display-inline">The period described in paragraph (1) shall begin on the date that the State-licensed loan originator submits the information required under section 1505(a) in connection with the application submitted to the application State and end on the earliest of—</text> <subparagraph id="H97D9D9DDA21944678EF4FB406D06B4DE"><enum>(A)</enum><text display-inline="yes-display-inline">the date that the State-licensed loan originator withdraws the application to be a State-licensed loan originator in the application State;</text></subparagraph>
<subparagraph id="H55901FA7978942C1BFB14596E665F55F"><enum>(B)</enum><text display-inline="yes-display-inline">the date that the application State denies, or issues a notice of intent to deny, the application;</text></subparagraph> <subparagraph id="HFB647495E1FE44D5A412BD8C4C72C7DE"><enum>(C)</enum><text display-inline="yes-display-inline">the date that the application State grants a State license; or</text></subparagraph>
<subparagraph id="H8F2FD80BE8DF44D1A2E469C22D520677"><enum>(D)</enum><text display-inline="yes-display-inline">the date that is 120 days after the date on which the State-licensed loan originator submits the application, if the application is listed on the Nationwide Mortgage Licensing System and Registry as incomplete.</text></subparagraph></paragraph></subsection> <subsection id="H05D59C2F025F4B498312832844B41C27"><enum>(c)</enum><header>Applicability</header> <paragraph id="H410E7A1CF0384D37985C9160D4C25864"><enum>(1)</enum><text display-inline="yes-display-inline">Any person employing an individual who is deemed to have temporary authority to act as a loan originator in an application State pursuant to this section shall be subject to the requirements of this title and to applicable State law to the same extent as if such individual was a State-licensed loan originator licensed by the application State.</text></paragraph>
<paragraph id="H16C5421544D845018734732B69BA5DCD"><enum>(2)</enum><text display-inline="yes-display-inline">Any individual who is deemed to have temporary authority to act as a loan originator in an application State pursuant to this section and who engages in residential mortgage loan origination activities shall be subject to the requirements of this title and to applicable State law to the same extent as if such individual was a State-licensed loan originator licensed by the application State.</text></paragraph></subsection> <subsection id="HDFA3DD51D67F4FA2AA58095FCB1A8A2F"><enum>(d)</enum><header>Definitions</header><text>In this section, the following definitions shall apply:</text>
<paragraph id="HAAA0CAFC43F64B9380C5280E7208CA1A" commented="no"><enum>(1)</enum><header>State-licensed mortgage company</header><text display-inline="yes-display-inline">The term <term>State-licensed mortgage company</term> means an entity licensed or registered under the law of any State to engage in residential mortgage loan origination and processing activities.</text></paragraph> <paragraph id="H6D6A2626E7FD43A89E6E900034668D03"><enum>(2)</enum><header>Application State</header><text display-inline="yes-display-inline">The term <term>application State</term> means a State in which a registered loan originator or a State-licensed loan originator seeks to be licensed.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB3DC044524C2493E8D5BD0D3588495FE" commented="no"><enum>(b)</enum><header>Table of contents amendment</header><text display-inline="yes-display-inline">The table of contents in section 1(b) of the Housing and Economic Recovery Act of 2008 (<external-xref legal-doc="usc" parsable-cite="usc/42/4501">42 U.S.C. 4501</external-xref> note) is amended by inserting after the item relating to section 1517 the following:</text> <quoted-block style="OLC" id="H8227BCFFFFBF405AB980032E24675ED8" display-inline="no-display-inline"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 1518. Employment transition of loan originators.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H107EC2F4789C4B3D8E7754BA43D18339"><enum>502.</enum><header>Amendment to civil liability of the Bureau and other officials</header><text display-inline="no-display-inline">Section 1513 of the S.A.F.E. Mortgage Licensing Act of 2008 (<external-xref legal-doc="usc" parsable-cite="usc/12/5112">12 U.S.C. 5112</external-xref>) is amended by striking <quote>are loan originators or are applying for licensing or registration as loan originators.</quote> and inserting <quote>have applied, are applying, or are currently licensed or registered through the Nationwide Mortgage Licensing System and Registry. The previous sentence shall only apply to persons in an industry with respect to which persons were licensed or registered through the Nationwide Mortgage Licensing System and Registry on the date of the enactment of this sentence.</quote>.</text></section>
<section id="H2106502888134E70A5F096BB2850A9D6"><enum>503.</enum><header>Effective date</header><text display-inline="no-display-inline">This title and the amendments made by this title shall take effect on the date that is 18 months after the date of the enactment of this Act.</text></section> Passed the House of Representatives February 14, 2018.Karen L. Haas,Clerk.