North Carolina HB 762: Modernize NC Secure and Fair Enforcement (S.A.F.E.) Act/Second Mortgage Fee Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2025-43
HOUSE BILL 762

*H762-v-5*
AN ACT TO MODERNIZE THE NORTH CAROLINA SECURE AND FAIR
ENFORCEMENT (S.A.F.E) MORTGAGE LICENSING ACT AND TO MODIFY THE
MAXIMUM PERMISSIBLE FEES OR DISCOUNTS THAT CERTAIN LENDERS MAY
CHARGE ON SECOND OR JUNIOR LIEN REAL ESTATE LOANS TO ALIGN MORE
CLOSELY WITH FEDERAL QUALIFIED MORTGAGE STANDARDS.

The General Assembly of North Carolina enacts:

SECTION 1. Article 19B of Chapter 53 of the General Statutes reads as rewritten:
"Article 19B.
"The Secure and Fair Enforcement Mortgage Licensing Act.
"Part 1. Application, Licensing, Examination, and Enforcement.
"§ 53-244.010. Title.
This act Article may be cited as the "North Carolina Secure and Fair Enforcement (S.A.F.E.)
Mortgage Licensing Act."
"§ 53-244.020. Purpose and construction.
(a) Purpose. – A primary purpose of this Article is to protect consumers seeking
residential mortgage loans and to ensure that the mortgage lending industry operates without
unfair, deceptive, and fraudulent practices on the part of mortgage loan originators. Therefore,
the General Assembly establishes within this Article an effective system of supervision and
enforcement of the mortgage lending industry by giving the Commissioner of Banks broad
administrative authority to administer, interpret, and enforce this Article and adopt rules
implementing this Article in order to carry out the intentions of the General Assembly.
(b) Construction. – It is the intent of the General Assembly that the provisions of this
Article be liberally construed to effect the purposes stated or clearly encompassed by the Article.
"§ 53-244.030. Definitions.
For purposes of the this Article, the following definitions apply:
(1) "Affiliate" means any Affiliate. – Any company that controls, is controlled by,
or is under common control with another company, as set forth in the Bank
Holding Company Act of 1956 (12 U.S.C. § 1841, et seq.), as amended from
time to time.seq.)
(2) "Audited Statement of Financial Condition" means a Audited statement of
financial condition. – A statement of financial condition prepared in
accordance with generally accepted accounting principles and certified by a
certified public accountant as fairly and accurately reflecting the financial
condition of the licensee as of the date specified in the statement.specified.
(2a) "Banking Commission" means the Banking Commission. – The North
Carolina Banking Commission. For the purpose of complying with this Article
by credit unions, Banking Commission means the North Carolina Credit
Union Commission.
(2b) Bona fide nonprofit. – Has the same meaning as in 12 C.F.R. §
1008.103(e)(7)(ii).

Page 2 Session Law 2025-43 House Bill 762
(3) "Branch manager" means the individual Branch manager. – A mortgage loan
originator who meets the requirements of G.S. 53-244.050(b), has at least
three years of residential mortgage lending experience, and is assigned to, is
in charge of, and is responsible for the business operations of a branch office
of a mortgage broker or mortgage lender.office.
(4) "Branch office" means an Branch office. – An office of a mortgage broker or
mortgage lender that is open to the public, separate and distinct from the
mortgage broker's or lender's principal office office, and consists of at least
one enclosed room or building of stationary construction from which its
employees engage in the mortgage business. A branch office shall not be
located at an individual's home or residence.
(5) "Certified Statement of Financial Condition" means a Certified statement of
financial condition. – A statement of financial condition prepared in
accordance with generally accepted accounting principles and certified by the
preparer or licensee as fairly and accurately reflecting the financial condition
of the licensee as of the date specified in the statement.specified.
(6) "Commissioner" means the Commissioner. – The North Carolina
Commissioner of Banks and the Commissioner's designees. For the purpose
of compliance with this Article by credit unions, Commissioner means the
Administrator of the Credit Union Division of the Department of Commerce.
(7) "Control" means the Control. – The power, directly or indirectly, to direct the
management or policies of a company, whether through ownership of
securities, by contract, or otherwise. Any person that (i) is a director, general
partner, or executive officer; (ii) directly or indirectly has the right to vote ten
percent (10%) or more of a class of voting security or has the power to sell or
direct the sale of ten percent (10%) or more of a class of voting securities; (iii)
in the case of a limited liability company, is a managing member; or (iv) in
the case of a partnership, has the right to receive upon dissolution, or has
contributed, ten percent (10%) or more of the capital, is presumed to control
the company.
(8) "Depository institution" has Depository institution. – Has the same meaning
as in secti