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Securities Division > News Archive  > 2008 Press Releases > For Immediate Release: August 6, 2008 Indiana Secretary of State Todd Rokita Announces Final Compliance with Loan Broker

Contact: Jim Gavin


As August 5th deadline expires, 361 loan brokers fail to establish a Principal Manager as required by law or surrender licenses

Indianapolis (August 6) - Indiana Secretary of State Todd Rokita announced today that 361 loan brokers failed to comply with the state's loan broker licensing requirements and have, therefore, lost their licenses to do business in Indiana. Another 143 brokers voluntarily surrendered their licenses. Secretary Rokita authorized an enforcement strategy to begin immediately to stop any unlicensed loan brokers attempting to serve Indiana homebuyers.

In July, Secretary Rokita issued a final notice to more than two-thirds of the loan brokers regulated by his office that their licenses would be revoked, effective August 5th, unless they complied with a 2007 Indiana law. The law (HEA 1717) requires, among other things, that each office establish a Principal Manager to supervise and be accountable for the business affairs of the office. A Principal Manager is a mortgage professional with at least three years experience in the industry who has passed a practice standards examination. None of these loan broker businesses had had anyone attempt the exam, despite a July 1st deadline to comply.

In issuing the final notice to these businesses, Secretary Rokita announced their licenses would be revoked effective August 5th unless they achieved full compliance with the requirements. As of today:

  • 169 mortgage professionals have passed the Principal Manager Assessment since the final notice letters were sent
  • 63 loan brokers have achieved full compliance with HEA 1717-2007 with 69 more pending final approval
  • 143 loan brokers have surrendered their licenses
  • 361 loan brokers still have not complied with the provisions of HEA 1717-2007
  • 389 loan brokers are compliant and continue to be licensed to do business in Indiana

"These provisions were put in place to ensure a loan broker industry in Indiana that is competent, responsible and accountable," said Secretary Rokita. "Any loan broker business attempting to operate in Indiana without meeting these requirements is engaging in criminal activity, and my office will work aggressively to stop them."

Secretary Rokita announced that investigators from his Securities Division would be immediately deployed to determine if the now unlicensed loan brokers are continuing to operate in the state. The Division is also asking mortgage lenders to alert investigators if they believe an unlicensed loan broker is conducting business in Indiana. If a loan broker is found to be operating without a license, it could face criminal charges or civil penalties.

Consumers can access a list of unlicensed loan brokers on the Secretary of State's Web page ( The list will be updated daily. The site also features a database where consumers can look up a specific company by name and confirm if it is a licensed loan broker. Loan brokers who have surrendered their licenses and/or those with pending applications will be added to the database upon successfully completing the application process.

"Going forward, consumers can have more confidence when working with a licensed broker to purchase a home in Indiana," said Secretary Rokita. "Because of the higher standards in place, our licensed mortgage broker industry is now more capable of responsibly meeting the needs of and protecting Hoosier homebuyers."

Note: An additional 360 loan brokers are operating in Indiana that are currently exempt from these requirements. For example, a company that provides Veterans Administration (VA) loans and/or some other loans through federal programs is exempt. These businesses will have to comply with the requirements of the law as of January 1, 2009.