COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1955-02
Bill No.: SB 538
Subject: Banks & Financial Institutions; Bonds-Surety; Department of Economic Development; Licenses-Professional; Mortgages & Deeds; Savings & Loan
Type: Original
Date: March 5, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Division of Finance Fund | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials with the Department of Economic Development-Division of Finance (DOF) assume the proposal corrects technical errors, eliminates surplusage, and makes clarifications. Additionally, the proposal allows brokers to file a bond in lieu of providing a certified audit. DOF assumes it may need an Examiner (1 FTE at $40,000 per year) and a part-time Secretary (0.5 FTE at $21,000 per year) to carry out the examination duties added under the act. Total costs of $67,617 in FY 2002; $78,847 in FY 2003; and $80,857 in FY 2004 would be offset by the Division's ability to set licensing fees as needed.
Officials with the Department of Economic Development-Divisions of Credit Unions, the Department of Insurance, and the Office of the Secretary of State assume the proposal will have no fiscal impact on their agency.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| DIVISION OF FINANCE FUND | |||
| Revenues-DOF
Increased Licensing Fees |
$67,617 |
$78,847 |
$80,857 |
| Costs-DOF
Personal Service (1.5 FTE) |
($43,136) |
($53,057) |
($54,383) |
| Fringe Benefits | ($14,377) | ($17,684) | ($18,126) |
| Expense & Equipment | ($10,104) | ($8,106) | ($8,348) |
| Totals Costs-DOF | ($67,617) | ($78,847) | ($80,857) |
| ESTIMATED NET EFFECT TO
DIVISION OF FINANCE FUND |
$0 |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
This proposal would allow mortgage brokers to substitute a surety bond for the required annual audit. It is possible that some brokers will be able to obtain the bond at a lower cost than the audit. Also, some CPA firms currently providing the required audit services for brokers likely may be classified as small businesses, and may be adversely affected by the proposal.
DESCRIPTION
This act allows licensed residential mortgage brokers the option of providing a $100,000 surety bond or $100,000 irrevocable letter of credit instead of an annual audit to the Director of the Division of Finance. Also, the act removes the requirement for "probable cause" for periodic examinations of mortgage brokers.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Economic Development
Division of Finance
Division of Credit Unions
Department of Insurance
Office of the Secretary of State
Jeanne Jarrett, CPA
Director
March 5, 2001