HB 2120An Act amending Title 7 (Banks and Banking) of the Pennsylvania Consolidated Statutes, providing for licensing and regulation of shared equity providers and shared equity agreements and for duties of Department of Banking and Securities; and imposing penalties.

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This version creates the entire regulatory framework for shared equity agreements in Pennsylvania by adding new Chapter 63 to Title 7 of the Pennsylvania Consolidated Statutes. The legislation establishes mandatory licensing for shared equity providers (entities that advance money to homeowners in exchange for a mortgage and either equity interest or future payments tied to home value), with application fees of $5,000 plus investigation costs. The Department of Banking and Securities gains authority to license, investigate applicants and control persons, conduct criminal background checks, and participate in multistate licensing systems. Significant exemptions are carved out for traditional financial institutions (banks, credit unions, savings associations, insurance companies), their subsidiaries and affiliates, government instrumentalities, and 501(c)(3) nonprofits meeting specified criteria. The framework also exempts publicly-financed residential property transactions conducted under government contracts. Key definitions establish that control persons hold 25% or more ownership, residential property includes dwellings with four or fewer households, and shared equity agreements are nonrecourse transactions explicitly excluding reverse mortgages regulated under federal law.