Sec. 09.03.06.23. Supervision of Mortgage Loan Originators

A. A licensee who is the employer of a mortgage loan originator shall at all times reasonably and adequately supervise those activities of the mortgage loan originator that are conducted within the scope of the mortgage loan originator’s employment.

B. In order to determine whether supervision by the licensee is reasonable and adequate, the Commissioner may consider factors that include the following:

(1) The availability of:

(a) Experienced supervisory personnel to review and discuss:

(i) Mortgage loan terms;

(ii) Disclosure requirements; and

(iii) Advertising; and

(b) Regularly updated policies and procedures that provide adequate guidance to mortgage loan originators in the following areas:

(i) Licensing and education requirements;

(ii) State and federal mortgage lending laws and regulations, including any new requirements or changes to existing requirements;

(iii) The preparation, execution, and review of disclosures, agreements, and other documents; and

(iv) Advertising; and

(2) Evidence of:

(a) Review of disclosures, agreements, and other documents prepared or executed by mortgage loan originators;

(b) Compliance with the policies and procedures specified in §B(1)(b) of this regulation; and

(c) Dissemination of the policies and procedures specified in §B(1)(b) of this regulation.

C. If the Commissioner determines that the licensee does not provide reasonable and adequate supervision in the areas specified under §B of this regulation, the burden of proof shall be on the licensee to show that the supervision the licensee provides is reasonable and adequate.