Illinois Amends Involuntary Audit Requirements under RMLA

The Illinois legislature recently amended the Illinois Residential Mortgage License Act (“RMLA”) section covering annual audits. The RMLA retains its requirement for annual audits of licensees’ books and accounts conducted by a certified public accountant not connected with the licensee. The sections affected by the amendment include the compulsory hiring of a certified public accountant at the licensee’s expense, and a licensee’s failure to file a compilation of financial statements.

First, the statute’s imposition of an audit by a certified public accountant chosen by the Commissioner and paid for by the licensee has been stricken and not replaced. The section stated that if a licensee did not make a required audit, the Commissioner would order an audit at the licensee’s expense, conducted by a certified public accountant chosen either by advertising for bids, or by “such other fair and impartial means as he or she establishes by regulation.”

Second, the statute allows licensees who solely broker residential loans to submit a compilation of financial statements in lieu of an audit. Formerly, the statute allowed the Commissioner to cause an audit of the licensee’s books if such financial statements were not submitted, at the licensee’s expense, by a certified public accountant chosen by the Commissioner by advertising for bids or by such other fair and impartial means as he or she established by rule.

The legislature’s full amendment may be found here: http://www.ilga.gov/legislation/99/SB/PDF/09900SB2884sam003.pdf.