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Loan Originator Screening Standards

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  • #3680
    wp27
    Participant

    We have commercial lenders who are not licensed under the S.A.F.E. act and do not make consumer mortgage loans. However, with the new rules under reg Z being so general about what a loan originator does, I think it is safer to get them registered (if they ever take an application, for example). They were not required previously to be qualified under any standards so I think even though they were hired before 1/10/14, the rule still applies to them. Is it ok to just register them under the S.A.F.E. act because this option seems easier and does not involve a credit report or do I have to opt for background check, credit report, etc. since the S.A.F.E. act doesn’t apply to them? In other words, if I register them through NMLS does that take care of the new Reg Z requirements?

    #3681
    rcooper
    Keymaster

    I don’t see a problem with registering your loan officers through the NMLS even if they don’t typically act as an MLO. Many banks did this as a precautionary measure with employees they weren’t quite sure about. It’s been a while since I’ve looked at the NMLS registration process, but I believe there is still a background check requirement, but that’s handled through the registry as part of the registration process. And, as you already know, they’ll have to renew their registration annually.

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