The bill amends Section 19-14-1 of the General Laws in Chapter 19-14, titled "Licensed Activities," to enhance and clarify definitions related to financial and mortgage services. It introduces new definitions such as "Board of directors," "Corporate governance," "Covered mortgage servicer," "External audit," "Internal audit," "Mortgage-backed security," "Mortgage call report," "Risk management program," "Operating liquidity," "Servicing liquidity," "Mortgage servicing rights investor," "Sub-servicer," and "Whole loans." These updates aim to improve understanding of corporate governance and compliance standards within the financial services sector, particularly for mortgage servicing and lending entities.

Furthermore, the bill establishes new requirements for nonbank mortgage servicers concerning capital, liquidity, and corporate governance. Covered mortgage servicers are required to maintain written policies and procedures for capital and servicing liquidity, conduct annual risk management assessments, and ensure compliance with a corporate governance framework. The bill mandates that covered mortgage servicers receive external audits annually, which must include audited financial statements and an assessment of the internal control structure.

Covered mortgage servicers must also maintain adequate liquidity for normal business operations, with specific exclusions for not-for-profit servicers and those solely involved in reverse mortgage servicing. The director or their designee is empowered to adopt rules necessary for the implementation and administration of these provisions and may adjust requirements based on the assessed risk level of specific servicers. The act takes effect upon passage.

Statutes affected:
3075: 19-14-1