In May 2018, the U.S. Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) that included various changes for laws and regulations governing the mortgage industry. Section 106 of the EGRRCPA, entitled “Eliminating Barriers to Jobs for Loan Originators”, amended the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”) to provide temporary authority to act as a loan originator in a state. This section becomes effective November 24, 2019, or 18 months after the date of enactment of the EGRRCPA, which occurred on May 24, 2018.
The amendments provide that certain loan originators have temporary authority to act as a loan originator in a state, if they have applied for a state license in that state and were previously licensed or registered for a defined period of time. Such loan originators also must be employed by a state-licensed mortgage company and meet criminal history and experience requirements. Persons who have had a license application denied, revoked or suspended in any jurisdiction will not be eligible for temporary authority under the SAFE Act amendments.
Persons who were registered in the same state in which they are now applying for a loan originator license must have been registered in that state for 1 year before the application is submitted. Persons who were licensed in another state must have been licensed for at least the thirty days preceding their application for a license.
The temporary authority will expire 120 days after it begins if the licensing authority has not yet denied or approved the application or the applicant has not withdrawn the application. Employers of loan originators with temporary authority are subject to the same requirements as employers of persons with authority to act as a loan originator.
The CFPB recently posted FAQs and other information to its website, which can be found here.
