224.74 Division's review of the operations of a mortgage loan originator, mortgage broker, mortgage banker, or registered entity.
(1) Call reports; audits.
(a) Mortgage call report. Each mortgage banker, mortgage broker, and mortgage loan originator licensed under this subchapter, and each registered entity, shall submit to the nationwide mortgage licensing system and registry reports of condition, which shall be in such form and contain such information as the nationwide mortgage licensing system and registry may require.
(b) Audit requirement for mortgage bankers. Each year, no later than 6 months following the end of its most recently completed fiscal year, each mortgage banker shall submit a copy of an audit of the mortgage banker's operations during that fiscal year. An audit under this paragraph shall be conducted by an independent certified public accountant in accordance with generally accepted auditing standards. The financial statements in the audit report shall be prepared in accordance with generally accepted accounting principles.
(bm) Reviewed financial statements for mortgage brokers. Each year, no later than 6 months following the end of its most recently completed fiscal year, each mortgage broker shall submit a copy of the mortgage broker's reviewed financial statements for the mortgage broker's operations during that fiscal year. The reviewed financial statements shall include a balance sheet, an income statement, and a written statement by an independent certified public accountant attesting that he or she has conducted his or her review in accordance with generally accepted accounting principles and professional standards of the American Institute of CPAs.
(c) Audits requested by the division. The division may request that a mortgage banker or mortgage broker obtain an audit of the mortgage banker's or mortgage broker's operations if the division has reason to believe that the mortgage banker or mortgage broker may not have sufficient financial resources to meet its obligations to its clients or investors or to other persons directly affected by the activities conducted by the mortgage banker or mortgage broker under the license issued by the division. If the division requests an audit under this paragraph, the mortgage banker or mortgage broker shall have the audit completed no later than 90 days after the date of the division's request. The mortgage banker or mortgage broker shall submit the audit report to the division no later than 5 days after the date on which the audit is completed. An audit under this paragraph shall be conducted by an independent certified public accountant in accordance with generally accepted auditing standards. The financial statements in the audit report shall be prepared in accordance with generally accepted accounting principles.
(2) Examination and investigation.
(ag) The division may at any time, on its own motion or upon complaint, conduct inquiries, investigations, and examinations of licensees under this subchapter, or of persons required to be licensed under or otherwise subject to the provisions of this subchapter, including doing any of the following:
1. Examining, accessing, receiving, or using any books, accounts, records, files, documents, or other information relating to the condition or affairs of a mortgage banker, mortgage loan originator, or mortgage broker.
2. Interviewing or examining under oath any mortgage banker, mortgage loan originator, or mortgage broker, any of the members, officers, directors, agents, employees, contractors, or customers of the mortgage banker, mortgage loan originator, or mortgage broker, or any other person whose testimony the division deems to be relevant. The division may direct, subpoena, or order the attendance of a person to provide testimony under this subdivision and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other document the division deems relevant to the inquiry, investigation, or examination.
3. Direct or order any licensee under this subchapter to make or compile reports or other information, in a format directed by the division, that the division considers necessary to carry out any investigation or examination under this subchapter, including any accounting compilation or other loan transaction data, list, or information.
4. Examine, access, receive, and use any other records, documents, or other information that the division deems relevant to the inquiry, investigation, or examination, regardless of the location, possession, control, or custody of the records, documents, or information, including any of the following:
a. Criminal, civil, and administrative history information, including conviction information and nonconviction information to the extent permitted by law.
b. Personal history and experience information, including credit reports obtained from a consumer reporting agency, as defined in s. 100.54 (1) (c).
(ar) In making any investigation or examination authorized under this subchapter, the division may control access to any documents and records of the licensee or of any other person under investigation or examination. The division may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person may remove or attempt to remove any of the documents and records except with the consent of the division or by court order. Unless the division has reasonable grounds to believe the documents and records have been or are at risk of being altered or destroyed for purposes of concealing a violation of this subchapter, the licensee or owner or custodian of the documents and records shall have access to the documents and records as necessary to conduct its ordinary business affairs.
(b) The division shall prepare a report for each investigation or examination conducted under this subsection. These reports, and correspondence regarding these reports, are confidential, except that the division may release these reports and correspondence in connection with a disciplinary proceeding conducted by the division, a liquidation proceeding, or a criminal investigation or proceeding. In addition, any information from these reports or correspondence may be provided to the nationwide mortgage licensing system and registry and is not confidential to the extent specified in s. 224.728 (4) (b) and (c).
(c) The division may require a mortgage banker, mortgage loan originator, or mortgage broker who is investigated or examined under this subsection to pay to the division a reasonable fee for the costs of conducting the investigation or examination. A mortgage banker, mortgage loan originator, or mortgage broker shall pay these costs to the division within 30 days after the division demands payment of these costs.
(3) Additional division authority. To carry out the purposes of this section, the division may do any of the following:
(a) Retain attorneys, accountants, and other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of investigations or examinations.
(b) Enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, or information obtained under this section.
(c) Use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate any licensee or other person subject to investigation or examination.
(d) Accept and rely on investigation or examination reports made by other government officials, in this state or elsewhere.
(e) Accept audit reports made by an independent certified public accountant for the licensee or another person relevant to the investigation or examination and incorporate any such audit report into any report of the division.
History: 1987 a. 359; 1987 a. 403 ss. 182, 256; Stats. 1987 s. 440.74; 1991 a. 39; 1995 a. 27 s. 6595; Stats. 1995 s. 224.74; 1997 a. 145; 2009 a. 2; 2013 a. 360; 2015 a. 195 s. 83.