Last week, the SAFE Transitional License Act (S. 1753) was introduced in the Senate with the enthusiastic support of MBA and the mortgage industry. Similar bipartisan legislation (H.R. 2948) was introduced in late June in the U.S. House of Representatives. The SAFE Transitional License Act, could have a huge impact for the mortgage industry, as mortgage loan officers (MLOs) may soon be able to transition from a traditional bank to a nonbank and keep originating new mortgage loans without having to wait for a new license.
Under the current rules of the SAFE Act of 2008, an MLO who moves between states or from a bank to a nonbank lender is required to wait for a new license before they can begin originating at their new job. The result is a two-tiered system that inhibits job mobility. Rather than leaving a job on a Friday and starting a new job on a Monday, loan officers who move from a federally-insured institution to a non-bank lender, or who move to a new state, must sit on their hands for weeks, even months, while they meet the SAFE Act’s licensing and testing requirements— despite the fact that they have already been employed and registered as a loan officer by their previous employer.
Both the House and Senate bills would amend the SAFE Act to provide temporary authority for 120 days to originate mortgage loans to MLOs transitioning between bank and non-bank lenders, as well as across state lines. The legislation would require states to issue this transitional authority to experienced loan originators currently employed by a financial institution. Importantly, the bill also stipulates that all transitioning individual MLOs – and the non-bank institutions sponsoring them – remain subject to all required elements of the SAFE Act, as well as applicable state law.
Last week, the Mortgage Action Alliance (MAA) issued a Call to Action in support of the SAFE Act. MAA also created an Advocacy in August Campaign including an August Recess Toolkit that offers tips on meeting with your elected officials when they are back in their home districts.
However you contact your elected officials, I encourage you to reach out today to support this bipartisan legislation that would be such a positive development for the mortgage industry.