COMPLIANCE HOT TOPIC MLO Transitional Licensing Authority QUESTION: Is it true there is a new law that permits transitional licensing authority for mortgage loan originators (MLO)? ANSWER: Yes. On May 24, 2018 (the “Enactment Date”), the President signed a Dodd-Frank roll back regulation, known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, which, among other things, provides MLO transitional licensing authority effective 18 months after the Enactment Date. Under the new regulation, a federally-registered MLO that has been registered as such for at least one year may obtain temporary authority to act as a MLO for up to 120 days after becoming employed by a state-licensed company and submitting a MLO application in a particular state. In order to qualify the MLO cannot (i) have had an application for a MLO license previously denied, revoked or suspended, (ii) be subject to or served with a cease and desist order in any governmental jurisdiction or under the SAFE Act; or (iii) be convicted of a misdemeanor or felony that would preclude licensure in the application state. Additionally, under the new regulation, a state-licensed MLO that has been licensed as such for at least 30 days may obtain temporary authority to act as a MLO for up to 120 days in another state if the MLO submitted a MLO application in that other state. Again, to qualify, the MLO must meet the requirements outlined in (i)-(iii) above. |
