In a series of Legal Updates, we previously discussed legislation introduced and passed by the Maryland General Assembly and then signed by Maryland Governor Wes Moore, which provided an exemption for “passive trusts” from the licensing requirements of the Maryland Mortgage Lender Law and Maryland Installment Loan Law.
The version of law that passed the Senate, SB 1026, provided another exemption from the Maryland Mortgage Lender Law and Maryland Installment Loan Law for essentially all purchasers of mortgage loans. However, the House version, HB 1516, did not include this “all purchasers” exemption. Despite this inconsistency, Governor Moore approved both versions, resulting in a conflict as to the applicability of the Maryland Mortgage Lender Law and Maryland Installment Loan Law to purchasers of mortgage loans.
Almost immediately after Governor Moore signed the conflicting bills, the Maryland Office of Financial Regulation (OFR) issued guidance taking the position that SB 1026 was an inaccurate, earlier version of the proposed law and deemed HB 1516 as the accurate version.
In mid-April 2026, Governor Moore signed SB 784, which will repeal the “all purchasers” exemption and therefore makes the Maryland Code and OFR guidance consistent with each other. According to the bill, the intent of the bill is to be construed as a “clarifying corrective measure to repeal a provision of law erroneously enacted.”
Notably, SB 784 does not affect the previous legislation that provided an exemption for passive trusts from the licensing requirements of the Maryland Mortgage Lender Law and Maryland Installment Loan Law. Thus, while SB 784 takes effect on July 1, 2026, the status quo will not change for passive trusts and those relying on the OFR’s earlier guidance. Those relying on the “all purchasers” exemption, however, will need to reevaluate whether they are required to hold a license in Maryland.