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WES MOORE, Governor Ch. 512
Chapter 512
(House Bill 38)
AN ACT concerning
Financial Institutions – Licensing of Affiliated Insurance Producer–Mortgage
Loan Originators – Alteration Alterations
FOR the purpose of altering the licensing requirements for an affiliated insurance
producer–mortgage loan originator; requiring the Commissioner of Financial
Regulation to approve a certain financial institution that meets certain criteria or
certain mortgage lender lenders that meets meet certain criteria as to sponsor an
affiliated insurance producer–mortgage loan originator under certain circumstances;
and generally relating to licensing of affiliated insurance producer–mortgage loan
originators.
BY repealing and reenacting, with amendments,
Article – Financial Institutions
Section 11–603.1 and 11–619
Annotated Code of Maryland
(2020 Replacement Volume and 2025 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Financial Institutions
11–603.1.
(a) In this section, “affiliated insurance producer–mortgage loan originator”
means an individual who:
(1) Originates mortgage loans only on behalf of MADE BY [a]:
(I) A single financial institution that is:
[(i)] 1. Described in § 11–502(b)(1) of this title; and
[(ii)] 2. Approved by the Commissioner under subsection (b) of
this section; OR
(II) A SINGLE MORTGAGE LENDER AS DEFINED IN § 11–501 OF
THIS TITLE THAT IS:
1. NOT A FINANCIAL INSTITUTION; AND
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2. APPROVED APPROVED BY THE COMMISSIONER
UNDER SUBSECTION (C) OF THIS SECTION;
(2) Is a licensed insurance producer in good standing under § 10–103 of the
Insurance Article; and
(3) Holds an appointment as an insurance producer for an insurer that
controls, is controlled by, or is under common control with:
(i) The A financial institution OR THE A MORTGAGE LENDER
described in item (1) of this subsection; or
(ii) A mortgage lender licensee that:
1. Is approved by the Commissioner under subsection [(c)]
(D) of this section; and
2. Originates loans only on behalf of the MADE BY A financial
institution OR THE A MORTGAGE LENDER described in item (1) of this subsection under
an exclusive contract with the financial institution OR THE MORTGAGE LENDER; AND
3. IS ACTING AS A MORTGAGE BROKER, AS DEFINED IN §
11–501 OF THIS TITLE.
(b) The Commissioner shall approve a financial institution described in
subsection [(a)(1)] (A)(1)(I) of this section based on the following criteria:
(1) The financial institution is in good standing with its primary state or
federal regulator; and
(2) The financial institution is in material compliance with applicable state
and federal law.
(C) THE COMMISSIONER SHALL APPROVE A MORTGAGE LENDER
DESCRIBED IN SUBSECTION (A)(1)(II) OF THIS SECTION BASED ON THE FOLLOWING
CRITERIA:
(1) THE MORTGAGE LENDER IS IN GOOD STANDING WITH THE
COMMISSIONER AND ANY OTHER REGULATOR TO WHICH IT IS SUBJECT; AND
(2) THE MORTGAGE LENDER IS IN MATERIAL COMPLIANCE WITH
APPLICABLE STATE AND FEDERAL LAW.
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WES MOORE, Governor Ch. 512
[(c)] (D) The Commissioner shall approve a mortgage lender licensee described
in subsection (a)(3)(ii) of this section based on the following criteria:
(1) The mortgage lender licensee is in good standing with the
Commissioner and any other regulator to which it is subject; and
(2) The mortgage lender licensee is in material compliance with applicable
state and federal law.
[(d)] (E) Approval by the Commissioner of a financial institution under
subsection (b) of this section, A MORTGAGE LENDER UNDER SUBSECTION (C) OF THIS
SECTION, and a mortgage lender licensee under subsection [(c)] OR (D) of this section shall
be in writing.
[(e)] (F) (1) An application for a license under this section shall be in the form
approved by the Commissioner.
(2) The application shall require the identification of:
(i) The A financial institution OR A MORTGAGE LENDER described
in subsection [(a)(1)] (A)(1)(I) of this section OR THE MORTGAGE LENDER DESCRIBED
IN SUBSECTION (A)(1)(II) OF THIS SECTION;
(ii) If applicable, the A mortgage lender licensee described in
subsection (a)(3)(ii) of this section; and
(iii) The insurer with which the applicant holds an appointment.
(3) An application for a license under this section shall be signed
SPONSORED by an authorized representative of:
(i) The A financial institution OR THE A MORTGAGE LENDER
DESCRIBED IN SUBSECTION (A)(1) OF THIS SECTION THAT IS identified in the
application; or
(ii) If a mortgage lender licensee DESCRIBED IN SUBSECTION
(A)(3)(II) OF THIS SECTION is identified in the application, the mortgage lender licensee.
[(f)] (G) (1) Notwithstanding §§ 11–602(a) and 11–603 of this subtitle, and subject
to the provisions of this section, a license issued under this section authorizes the licensee
to act as a mortgage loan originator ONLY ON BEHALF OF A SPONSOR THAT IS:
(I) IDENTIFIED IN THE LICENSEE’S APPLICATION; AND
(II) 1. A MORTGAGE LENDER; OR
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Ch. 512 2026 LAWS OF MARYLAND
2. A PERSON THAT IS EXEMPT FROM LICENSING AS A
MORTGAGE LENDER.
(2) THIS SECTION MAY NOT BE CONSTRUED TO AUTHORIZE
SPONSORSHIP OTHER THAN FOR THE PURPOSE DESCRIBED IN PARAGRAPH (1) OF
THIS SUBSECTION.
[(g)] (H) An applicant for a license under this section and a licensee under this
section shall comply with all other requirements for [licensure] LICENSING as a mortgage
loan originator under this subtitle.
[(h)] (I) A licensee under this section shall limit the licensee’s activities to
originating mortgage loans only on behalf of MADE BY [a]:
(1) A single financial institution approved by the Commissioner under
subsection (b) of this section; OR
(2) A SINGLE MORTGAGE LENDER APPROVED BY THE COMMISSIONER
UNDER SUBSECTION (C) OF THIS SECTION.
[(i)] (J) The A financial institution OR THE A MORTGAGE LENDER identified
in THAT SPONSORS a licensee’s license application or, if a mortgage lender licensee is
identified in a licensee’s license application, the mortgage lender licensee shall:
(1) Supervise the licensee, including providing direction through written
instructions or electronic means and by periodically examining the licensee’s books,
records, and other aspects of the licensee’s business;
(2) Be held jointly and severally liable with the licensee for claims arising
out of the licensee’s mortgage loan origination activities; and
(3) Meet, or cause the licensee to meet, the surety bond requirements under
§ 11–619(c) of this subtitle.
[(j)] (K) Except as provided in subsection [(k)] (L) of this section, a licensee
under this section may not:
(1) Aid or assist a borrower to obtain a mortgage loan from [a]:
(I) A financial institution other than the A financial institution
identified in the licensee’s license application; OR
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WES MOORE, Governor Ch. 512
(II) A MORTGAGE LENDER OTHER THAN THE A MORTGAGE
LENDER IDENTIFIED IN THE LICENSEE’S APPLICATION;
(2) Except for compensation based on the principal balance of a mortgage
loan, be compensated by any person for mortgage loan origination activities on a basis that
depends on the terms of the mortgage loan, including interest rate or fees;
(3) Receive a finder’s fee, as defined in § 12–801 of the Commercial Law
Article;
(4) Handle borrower or other third party funds in connection with the
origination or closing of a mortgage loan;
(5) Refer a borrower to any other licensee under Subtitle 5 of this title; or
(6) Make or service a mortgage loan.
[(k)] (L) A licensee under this section may forward a check to the A financial
institution OR THE A MORTGAGE LENDER identified in the licensee’s license application
if the check is:
(1) Made payable to the financial institution OR THE MORTGAGE
LENDER;
(2) From an applicant for a mortgage loan; and
(3) In connection with an application for a mortgage loan to cover costs for:
(i) An appraisal;
(ii) A credit report; or
(iii) Processing the application.
[(l)] (M) (1) An individual may not act as an affiliated insurance
producer–mortgage loan originator under a name or for [an employer] A SPONSOR that is
different from the name and [employer] SPONSOR that appear on the license unless the
licensee:
(i) Notifies the Commissioner, in the form and in accordance with
the process that the Commissioner requires, in advance of a change in the licensee’s name
or the licensee’s [employer] SPONSOR;
(ii) Pays to the Commissioner a license amendment fee set by the
Commissioner for each notice provided under item (i) of this paragraph; and
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Ch. 512 2026 LAWS OF MARYLAND
(iii) In the case of a new [employer] SPONSOR, amends the
sponsorship information on NMLS by submitting the amendment in the form required by
the Commissioner to indicate that the licensee is [an employee of] SPONSORED BY the new
[employer] SPONSOR.
(2) If a licensee ceases to be [employed] SPONSORED by a ANY financial
institution approved by the Commissioner under subsection (b) of this section OR A ANY
MORTGAGE LENDER APPROVED BY THE COMMISSIONER UNDER SUBSECTION (C) OR
(D) OF THIS SECTION, the licensee shall notify the Commissioner within 10 business days,
and the license shall be placed into nonactive status through NMLS.
(3) During the time that a license is in nonactive status, it is a violation of
this subtitle for the licensee to engage in any activity for which a license is required under
this subtitle.
(4) The license shall remain in nonactive status until the licensee:
(i) Notifies the Commissioner, in the form and in accordance with
the process that the Commissioner requires, that the licensee has obtained [employment
with] SPONSORSHIP FROM a financial institution that is approved by the Commissioner
under subsection (b) of this section OR A MORTGAGE LENDER THAT IS APPROVED BY
THE COMMISSIONER UNDER SUBSECTION (C) OR (D) OF THIS SECTION; and
(ii) Has complied with the requirements set forth in paragraph (1) of
this subsection.
[(m)] (N) The Commissioner may issue a license under this subtitle to an
individual who is not [employed] SPONSORED by a financial institution approved by the
Commissioner under subsection (b) of this section OR A MORTGAGE LENDER APPROVED
BY THE COMMISSIONER UNDER SUBSECTION (C) OR (D) OF THIS SECTION, provided
that the license is placed into and remains in nonactive status until the licensee:
(1) Notifies the Commissioner, in the form and in accordance with the
process that the Commissioner requires, that the licensee has obtained [employment with
a] SPONSORSHIP FROM:
(I) A financial institution approved by the Commissioner under
subsection (b) of this section; OR
(II) A MORTGAGE LENDER APPROVED BY THE COMMISSIONER
UNDER SUBSECTION (C) OR (D) OF THIS SECTION; and
(2) Has complied with the requirements set forth in subsection [(l)(1)]
(M)(1) of this section.
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WES MOORE, Governor Ch. 512
11–619.
(a) Each mortgage loan originator shall be covered by a surety bond in accordance
with this section.
(b) (1) A mortgage loan originator who is an employee of a person subject to
licensure under Subtitle 5 of this title may use the surety bond of that person to meet the
mortgage loan originator’s surety bond requirement.
(2) A mortgage loan originator who is an employee of a person exempt from
licensure under Subtitle 5 of this title may use a surety bond of the person to meet the
mortgage loan originator’s surety bond requirement, provided the surety bond meets the
requirements, based on mortgage loan volume, under § 11–508 of this title.
(c) A licensee who is an affiliated insurance producer–mortgage loan originator
shall be deemed in compliance with this section if the licensee:
(1) Holds a surety bond that would satisfy the surety bond requirements
under § 11–508 of this title if the affiliated insurance producer–mortgage loan originator
were a licensee under Subtitle 5 of this title; or
(2) Is covered under a blanket surety bond held by the A financial
institution, MORTGAGE LENDER, IDENTIFIED IN § 11–603.1(A)(1)(I) OF THIS
SUBTITLE or A mortgage lender licensee identified in § 11–603.1(a)(3) §
11–603.1(A)(1)(II) OR (3)(II) of this subtitle if the blanket surety bond:
(i) Covers all affiliated insurance producer–mortgage loan
originators; and
(ii) Is in the amount of $1,000,000 or another amount as required by
the Commissioner by regulation.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2026.
Approved by the Governor, May 12, 2026.
–7–Every fact on this page links to its source, starting with the official bill record.