Allen Matkins Leck Gamble Mallory & Natsis LLP
United States: For Finance Lenders, The Times They Are A-Changing
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The California Financing Law (fka Finance Lenders Law) requires
that persons engaged in the business of making loans be licensed by
the Department of Financial Protection &
Innovation (fka Department of Business Oversight fka
Department of Corporations). Both consumer and commercial
lenders are subject to the CFL, including those that make
residential mortgage loans. The DFPI has for some time
required residential mortgage lenders and brokers to file license
applications through the Nationwide Multistate Licensing
System (NMLS). Other lenders used the infamous “long form”
application. Recently, however, the DFPI has announced that
non-residential mortgage lenders and brokers may apply through the
NMLS.
The DFPI’s website initially contained inconsistent
messaging on the transition – one page stated that all applicants
must now file through the NMLS while another page stated that
filing through the NMLS is optional. I checked with the DFPI
which has confirmed that for the time being the long form may still
be used for the time being. However, if your time to
you is worth savin’, it makes sense to file through NMLS
because the license must eventually be transitioned to the
NMLS.
Existing licensees must soon start swimmin or they will sink
like stone, for the times for them are a-changing as well.
The DFPI has stated that when the NMLS becomes mandatory for all
applicants, current licensees will be required to transition their
licenses and bond to the NMLS. The DFPI expects this will
occur by the end of this year. This change will undoubtedly
shake the windows and rattle the walls of both the DFPI and its
licensees.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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