The House Financial Services Committee unanimously approved a bill that would enable registered mortgage loan originators to move from a depository mortgage lender to a state-licensed mortgage lender almost immediately. This would allow eligible originators time to complete SAFE education and testing requirements while still earning a living.
Introduced by Rep. Stivers of Ohio, H.R. 2121, the SAFE Transitional Licensing Act, would provide a 120-day period for individuals moving from a federally insured institution (bank or credit union) to a nonbank lender while they work to complete their SAFE Act mandated education and testing requirements. The transitional authority would be available only to tenured depository loan originators who have a clean history and no serious financial responsibility or background issues. Consumer protections include that individuals would not be eligible if they ever had their license denied or revoked or were convicted of a felony that precludes state licensing. A state-licensed originator would also be eligible under H.R. 2121 for transitional authority when moving to a different state. The authority would begin once the originator has applied for a license through NMLS, completed the required attestations, and authorized the required credit report and background check.
Please note, the bill amends SAFE to grant authority to originate while completing the process but does not grant an actual license. The process for terminating this transitional authority is a lower standard than for license denial or revocation. The bill would not become effective for at least 18 months to allow for NMLS implementation of this new originating authority.