Two states have recently passed laws modifying existing loan originator licensing and continuing education requirements and allowing for transitional LO licenses.
Arizona’s House Bill 2098, passed March 23 and effective immediately, grants loan originators a license once they complete a 20-hour education course at some point during the three years immediately preceding their application. This extends the previous two-year window applicants had to complete the course.
Another change: LOs formerly had to have passed their exam within a year of being granted a license, but the modified law removes that one-year window and simply requires applicants to demonstrate knowledge and understanding of federal laws, state laws, and other applicable information.
Additionally, licensed LOs are now required to retake the loan originator exam if they fail to maintain a valid license for a period of five years or longer, not including time when applicants are registered loan originators.
Struck from the existing law was a provision that licensees can’t be on inactive status for more than two consecutive renewal periods in any 10-year period.
Virginia also has introduced new LO licensing legislation and recently passed a new law authorizing the State Corporation Commission to issue transitional mortgage loan originator licenses. Senate Bill 118 will go into effect on July 1 and essentially allows pre-licensed individuals to conduct business as an LO for up to 120 days.
During that time frame, the individual can fulfill pre-licensing education and written test requirements and apply for a mortgage loan originator license.
Those applying for a transitional LO license aren’t required to comply with pre-licensing education requirements or pass a written test requirement.
However, the SCC can’t issue the transitional LO license unless applicants have never had a mortgage loan originator license revoked by any governmental authority, haven’t been convicted of or pled guilty to certain felonies, and have become registered through and obtained a “unique identifier” from the Nationwide Mortgage Licensing System and Registry.
Applicants must also be employed by an SCC-licensed employer as a mortgage lender or broker.
Written by Alyssa Gerace
