Discusses the new qualifications requirements for loan originators, the training requirement, and changes to the use of the NMLS unique identifier.

1. Loan Originator
Qualifications
Jeffrey J. Andersen
jandersen@dickinsonlaw.com
(515) 246-4515
Compliance Counsel on Command:
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2. Who’s a LO?: SAFE Act vs. CFPB
 Remember, CFPB definition of loan
originator is much broader
 CFPB rule does not change who must
register as an MLO under the SAFE
Act
 CFPB rule will apply, however,
regardless of whether an individual is
registered under the SAFE Act
 See Loan Originator Compensation
session for more detail

3. SAFE Act Refresher
 Requires LO’s employed at the bank to
be registered with the NMLS
◦ De minimum exception – 5 or fewer in past
12 months
 Annual Renewal
 Unique Identifier
◦ On request
◦ Before acting as LO
◦ On initial written communication
 License v. Registration

4. Loan Originator Qualifications
 For each LO employee hired on or
after Jan. 1, 2014, or who was hired
before, but not subject to regulatory
background standards, and not
required to be state licensed must:
◦ Get criminal background check
◦ Get credit report
◦ Get info from NMLS about any
administrative, civil, or criminal findings

5. Bright Line Disqualifications
 Felony within the last 7 years
 Felony involving dishonesty at any
time

6. Loan Originator Qualifications
(cont’d)
• Determine that LO has
demonstrated financial
responsibility, character, and
general fitness such as to warrant a
determination that the individual
loan originator will operate
honestly, fairly, and efficiently
 Absence of significant adverse info is
sufficient
 Follow written procedures

7. Qualifications after Hire
 There is no duty to continue to
monitor LO qualifications
 Only required to take action if you
have actual knowledge that a LO does
not meet the qualifications
requirements

8. Training
 Must be sufficient in frequency, timing, duration,
and content to ensure knowledge of State and
Federal legal requirements that apply to the
LO’s loan origination activities
 Must take into consideration the particular
responsibilities of the LO and the nature and
complexity of the mortgage loans with which
the LO works
 Can be delivered through webinar or any other
interactive means
 Applies regardless of hire date
 NMLS certified safe harbor

9. NMLS Unique Identifier
 Name and NMLS # on all loan docs
◦ Credit application
◦ Note or loan contract
◦ Security instrument
 If more than one MLO, list the MLO
with primary responsibility
◦ Establish a written policy for who is
primary
 If MLO has changed from previously
issued doc, no need to reissue

10. Recordkeeping
 Retain records sufficient to evidence
all compensation it pays to a loan
originator, as well as the
compensation agreements that govern
those payments
 Reg Z currently generally required
retention of evidence of compliance
for 2 years
 Final LO rules extends this to 3 years
as applied to LO comp compliance

11. Policies & Procedures
 Must establish and maintain written
policies and procedures to ensure and
monitor compliance
◦ Dual compensation
◦ Compensation based on a term of the
transaction
◦ Steering
◦ LO Qualifications
◦ NMLS ID Number

12. A comprehensive compliance solution tailored to fit your compliance needs
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 Document reviews
 Training
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 Corporate governance advice
 Marketing/Advertising reviews
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 Mortgage rule policy & procedure reviews &
advice
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13. This material is designed and intended
for general informational purposes only,
and is not intended, nor should it be
construed or relied upon, as legal advice.
Please consult with your attorney if
specific legal information is desired.