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Senate debates Mortgage Lending and Servicing Act, sponsors and critics clash over scope
Summary
Senate debate focused on SB 37, which would register mortgage lenders/servicers, require borrower notices on assignment and account statements, and give the Department of Financial Institutions enforcement powers; critics called it a 'bankers' bill' and a motion to pause negotiations failed.
Senators spent an extended portion of the floor session debating Senate Bill 37, the Mortgage Lending and Servicing Act, which sponsors said aims to bring mortgage lenders, brokers and servicers under state oversight and give homeowners more information and remedies.
Sponsor Senator Beatty described the bill as a substantive consumer-protection measure that would require mortgage lenders and servicers not already regulated by federal or state banking authorities to register with the Department of Financial Institutions; disclose in writing whether a loan is assignable; and, if servicing is assigned, provide the homeowner with written notice at least 10 days before the next payment is due that states where future payments should be sent and supplies a 12-month payment history and unpaid balance. "When a consumer first applies for a mortgage loan, the lender will be required to disclose in writing whether or not the loan is assignable," Beatty said, explaining required notices and account statement rules.
The bill also requires written account statements within 15 days after a borrower requests them (two free statements per 12-month period), and it authorizes the Department of Financial Institutions to examine registrants, investigate complaints, issue cease-and-desist orders and, in serious cases, prohibit a registrant from making or servicing mortgage loans in Utah.
Sponsor and co-sponsor Sen. Craig Peterson said the measure was the product of long negotiations with industry and state officials and stressed the need to balance consumer protections with the availability of mortgage credit. "We've tried to balance a lot of issues between the issues of the consumer... and the viability of this industry to the state of Utah," he said.
Several senators urged further changes or time to reconcile the Senate version with a different House proposal. Opponents and skeptics pointed to committee composition and said the bill favored industry interests. "The committee is completely a banker's committee," Senator Black said during debate. Beatty rejected that label: "This is not a banking bill. This is my bill," he said, urging senators not to delay action.
A motion to "circle" the bill — pausing it so sponsors could meet with House members to reconcile differences — was put to roll call and failed. The transcript excerpt ends with the body preparing for disposition on reading and a third-reading vote; the excerpt does not include a conclusive final tally for SB 37 in this segment.
What happens next: floor debate will continue and sponsors said they would consult with House members. The bill includes specific procedural protections for borrowers and gives the Department of Financial Institutions enforcement authority; these provisions were central points in the day's exchanges.
