Pennsylvania SB 1402: An Act amending Title 7 (Banks and Banking) of the Pennsylvania Consolidated Statutes, providing for licensing and regulation of shared equity providers and shared equity agreements; imposing duties on the Department of Banking and Securities; and imposing penalties.

Bill Text

PRINTER'S NO. 1857
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1402
Session of
2026
INTRODUCED BY PISCIOTTANO, SAVAL, FONTANA, HAYWOOD, COSTA,
COLLETT, SCHWANK, MALONE AND KEARNEY, JUNE 26, 2026
REFERRED TO BANKING AND INSURANCE, JUNE 26, 2026
AN ACT
Amending Title 7 (Banks and Banking) of the Pennsylvania
Consolidated Statutes, providing for licensing and regulation
of shared equity providers and shared equity agreements;
imposing duties on the Department of Banking and Securities;
and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 7 of the Pennsylvania Consolidated Statutes
is amended by adding a chapter to read:
CHAPTER 63
SHARED EQUITY AGREEMENTS
Subchapter
A. Preliminary Provisions
B. Licensing and Administration
C. Shared Equity Agreements
D. Enforcement
E. Miscellaneous Provisions
SUBCHAPTER A
PRELIMINARY PROVISIONS
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Sec.
6301. Scope of chapter.
6302. Definitions.
§ 6301. Scope of chapter.
This chapter relates to the licensing and regulation of
shared equity providers and shared equity agreements.
§ 6302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commission." The Banking and Securities Commission of the
Commonwealth.
"Control person." A member, director, principal officer,
office manager or controlling shareholder that owns, directly or
indirectly, 25% of a legal entity and any other person that has
authority to direct the management of the legal entity.
"Department." The Department of Banking and Securities of
the Commonwealth.
"Ending home value." The value of residential property
subject to a shared equity agreement at the time of settlement.
"Homeowner." The owner of residential property that is
subject to a shared equity agreement.
"Instrumentality created by the United States or any state."
Any of the following:
(1) A Federal, state or municipal government, quasi-
governmental entity or nonprofit agency or corporation
incorporated under the laws of this Commonwealth that has
tax-exempt status under 26 U.S.C. § 501(c)(3) (relating to
exemption from tax on corporations, certain trusts, etc.) and
that exclusively engages in:
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(i) making shared equity agreements on residential
property financed with public money; or
(ii) negotiating, placing, assisting in the
placement of, finding or offering to negotiate, place,
assist in the placement of or find shared equity
agreements on residential property financed with public
money only under a contract with the Federal Government,
a state or municipal government, an instrumentality of
the government or a quasi-governmental entity, as
determined by the department.
(2) A person named as the investor in the legal
documents for a shared equity agreement, if the person
otherwise meets the requirements of paragraph (1).
"Multistate licensing system." A licensing system developed
and maintained by the Conference of State Bank Supervisors.
"Residential property." Real property located in this
Commonwealth containing a dwelling house with accommodations for
four or fewer separate households and occupied in whole or in
part by either of the following:
(1) The homeowner who obtained the shared equity
agreement or, if the homeowner is deceased, the homeowner's
heirs.
(2) A tenant who pays rent directly to the homeowner.
"Senior secured debt." An obligation secured by a lien on
residential property that would be senior to the lien securing
obligations under a shared equity agreement after application of
proceeds from the shared equity agreement at closing to reduce
the amount of the obligation.
"Settle" or "settlement." The process by which a homeowner
terminates a shared equity agreement in accordance with the
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terms of the shared equity agreement.
"Settlement payment." The dollar amount that a homeowner is
required to pay to settle a shared equity agreement.
"Shared equity agreement." As follows:
(1) A nonrecourse transaction under which a shared
equity provider advances a sum of money to a homeowner and,
in exchange, obtains a mortgage on the residential property
and either:
(i) an equity interest in the residential property;
or
(ii) a future obligation to pay a sum that may vary
based on future home value upon the occurrence of one or
more subsequent conditions.
(2) The term does not include a reverse mortgage
transaction as defined in 12 CFR 1026.33(a) (relating to
requirements for reverse mortgages).
"Shared equity provider." A person engaged in the business
of making, holding or servicing shared equity agreements.
"Starting home equity." The homeowner's equity in
residential property as of the effect