South Dakota Enacts Provisions Regarding Exemptions from Licensure for Nonresidential Mortgage Loans

On March 13, 2017, the State of South Dakota enacted provisions relating to exemptions from licensure under the South Dakota Mortgage Lender Business Statute (SDMLBS) for nonresidential mortgage loans that do not exceed a specified amount. The provisions are effective on July 1, 2017.

Specifically, the amendments provide that the provisions of the SDMLBS, except for those requiring the payment of the annual tax in chapter 10-43, are not applicable to persons who originate, sell, or service five or fewer nonresidential mortgage loans in a twelve-month period so long as the total amount of the loans outstanding does not exceed four million dollars. The exemption applies jointly to every entity in which the person has an equity interest, whether the loans are made by that person or through an entity in which the person holds an equity interest. The provisions also provide that any individual who offers or negotiates the terms of five or fewer nonresidential mortgage loans in a twelve-month period are exempt from obtaining a mortgage loan originator license so long as the total amount of the loans outstanding does not exceed four million dollars.

Any exempt person, however, must annually submit to the South Dakota Division of Banking a report containing information about the person who originated, sold, or serviced the nonresidential mortgage loans, the number of loans originated, sold, or serviced in the preceding calendar year, and the total balance of all such outstanding loans.

A copy of the enacted provisions can be viewed here: https://legiscan.com/SD/text/HB1179/2017.