A non-bank mortgage trade group is opposing legislation that would allow former bank loan officers to originate while obtaining a state license.
Back in April of last year, Rep. Steve Stivers (R-Ohio) introduced H.R. 2121, the
SAFE Transitional Licensing Act of 2015, into the House.
The bill, if passed, would
amend the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or S.A.F.E, for originators at banks.
H.R. 2121 would provide a temporary license for 120 days for registered loan originators who are moving from a financial institution, which requires no state licensing, to a state-licensed non-bank originator.
The bill will enable any originator currently registered with the Nationwide Mortgage Licensing System and Registry the ability to originate loans for 120 days while they obtain a license at the new location.
It will also provide the temporary license for a registered originator moving from one state to another.
“Any person registering a registered loan originator with the Nationwide Mortgage Licensing System and Registry shall be subject to this act and to applicable state law to the same extent as if that registered loan originator was licensed and registered as a state-licensed loan originator,” an overview of the bill states.
But
the proposed bill will only harm consumers, according to a statement Wednesday from NAMB, the Association of Mortgage Professionals.
NAMB, which used to be known as the National Association of Mortgage Brokers, claims that
state law and regulations are already in place for consumer protection and should not be bypassed by those not properly educated and tested.
“One of the touchstones of the Dodd-Frank act was to permit states to go beyond federal law to protect consumers in their state,” NAMB Government Affairs Committee Chair Valerie Saunders said in the statement. “H.R. 2121 completely nullifies state consumer protections.”
NAMB’s position is that all originators should be subject to the education, criminal background checks, test-taking, and making application for a loan originator license before they deal with consumers.
“This destroys state consumer protections by cramming down a licensing construct that states have demonstrated they don’t want,” NAMB President Rocke Andrews said in the announcement.
