CFPB Clarifies Loan Originator Transitional Licensing Rules

In a bulletin published Thursday, the Consumer Financial Protection Bureau stated a clarification to the SAFE Act regarding loan originator licensing from state to state.

Responding to questions from state regulators concerning the ability for state licenses to transfer, the CFPB states that the SAFE Act and Regulation H do permit state reciprocity with respect to transitional loan originator licensing, under certain conditions.

“The Bureau is committed to working with states and the industry to make interstate transitions as smooth as possible for loan originators,” said CFPB Director Richard Cordray.

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Additionally, the CFPB addressed transitions of registered loan originators who are changing employment and are no longer employees of federally regulated institutions.

“The CFPB stated that its regulations do not allow states to provide for transitional licensing for registered but unlicensed loan originators who leave banks to act as loan originators while pursuing a state license,” the agency said.

View the bulletin.

Written by Elizabeth Ecker

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  • “The Bureau is committed to working with states and the industry to make interstate transitions as smooth as possible for loan originators,” said CFPB Director Richard Cordray.

    Uh huh. We just endured an office visit from a major federal agency, a routine visit but they had NO IDEA of what NMLS was and were asking us to verify state licenses and individual licenses the old time honored way of producing all the paper. Did not want to accept the NMLS records.

    So, I’m sure they’ll love this transition thing.

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