This is the type of legislation that will start showing up in other states.

The Florida rule as written based on your legislation (introduced after the HUD proposed rule changes below were published) requires all underwriters and processors to be licensed when HUD according to their proposed rules to clarify the original rules draws a distinction between contractor and employee. either your legislation does not or the Florida Division of Finance is misinterpreting your intention.

Federal Register / Vol. 74, No. 239 / Tuesday, December 15, 2009 / Proposed Rules
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 30 and 3400
[Docket No. FR–5271–P–01]
RIN 2502–A170
SAFE Mortgage Licensing Act: HUD
Responsibilities Under the SAFE Act

Section II This Proposed Rule

Item E

E. Independent Contractor Loan Processors or Underwriters Sections 1503(4) and 1504(b) of the SAFE Act provide that certain individuals who ‘‘engage in residential mortgage loan origination activities as a loan processor or underwriter’’ must have a loan originator license, even if their activities do not amount to ‘‘engag[ing] in the business of a loan originator’’ under § 1504(a). The SAFE Act defines ‘‘loan processor or underwriter’’ as an individual who performs ‘‘clerical or support duties’’ at the direction of and subject to the supervision and instruction of a State licensed loan originator or registered loan originator.

‘‘Clerical or support duties’’ are defined to include communicating with a consumer and third parties to collect and analyze information that is necessary to process an application or to underwrite the loan. Sections 1503(4) and 1504(b) provide that this licensing requirement does not apply to an individual who fully meets the definition of a loan processor or underwriter, in that he or she performs these clerical or support duties at the direction of and subject to the supervision and instruction of a State licensed loan originator or registered loan originator. Sections 1503(4) and 1504(b) provide that this licensing requirement does apply to individuals who are ‘‘independent contractors’’ who perform these clerical or support duties, because, by definition, they do not perform their duties at the direction of and subject to the supervision and instruction of a State licensed loan originator or a registered loan originator.

It is the lack of such supervision by individuals already licensed or registered as loan originators that subjects loan processors or underwriters to the SAFE Act licensing and registry requirements.

This proposed rule would clarify in § 3400.23 that an ‘‘independent contractor,’’ for purposes of this provision, is an individual who performs these duties other than at the direction of and subject to the supervision of a State licensed loan originator or a registered loan originator.

Accordingly, an individual who is an employee of some person or entity (i.e., the individual is not an independent contractor), but who is not subject to the direction, supervision, and instruction of a licensed or registered loan originator, would have to obtain a loan originator license. Such a person or entity could prevent its employees from having to obtain a State loan originator license simply by ensuring that they perform any ‘‘clerical or support duties’’ at the direction of and subject to the supervision and instruction of a State licensed loan originator or registered loan originator.

The comment period for these proposed rule changes ended March 15th, 2010.
The full document can be viewed and downloaded at:
http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a6b033

HUD’s commentary is as follows…HUD interprets an individual who “takes a residential mortgage loan application” to exclude an individual who performs purely administrative or clerical tasks, such as physically handling a completed application form or transmitting a completed form to a lender on behalf of a prospective borrower. This interpretation is consistent with the exclusion defined in section 1503(3)(C) of the SAFE Act. On the other hand, HUD views activity that involves assisting or advising a prospective borrower in the completion of an application extending beyond purely administrative or clerical tasks falls within coverage of the SAFE Act provided by section 1503(3)(B). As a result, an individual who offers or negotiates residential mortgage loan terms for compensation or gain could not avoid applicability of the SAFE Act standards by having another person or entity take the application from the prospective borrower and then pass the application to the individual. A state licensing and registration system that permits such individuals to avoid compliance with SAFE Act standards would be determined by HUD to be not in compliance with the SAFE Act.

You can be assured that, without the efforts of Rep. Rogers and Rep. Workman, in particular, what we would up with could have been much harsher. If you recall, when the OFR put out their proposed rules in December, 2008, we had a 2 percent fee cap, no co-brokering, no equity-based lending, private investors would have been required to become licensed as mortgage lenders, etc. I realize that some of these products are not currently present in the mortgage marketplace however, by banning them in statute, we would have no chance of them potentially coming back. No legislation is perfect however, we wound up a lot better than we could have.

This new law does make this a requirement in Florida.
From the Florida Bureau of Finance Regulation Website

6/18/2010

Loan processors and underwriters required to be licensed as loan originators

Are loan processors and underwriters required to be licensed as a loan originator beginning October 1, 2010?

Answer: Yes. In order for an individual to perform these tasks relating to loan processing and underwriting, a loan originator license is required, beginning October 1, 2010:
Receiving, collecting, distributing, and analyzing information common for the processing or underwriting of a residential mortgage loan, or
Communicating with consumers to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or does not include counseling residential mortgage loan rates or terms.
Also effective October 1, 2010, an individual wishing to engage solely in these processing or underwriting activities will be able to contract with more than one mortgage broker (company), mortgage lender, or both simultaneously, so long as they are licensed as loan originators and file a declaration of intent to engage solely in loan processing with the Office.
Statutory reference: Laws of Florida 2010-67, to be codified at Section 494.00331, Fla. Stat.
http://www.flofr.com/Finance/burfindsplay.aspx?ID=49

I agree with the post – this is legislative stupidity – sponsored by industry veterans.