CFPB issues guidance on Uniform State Test for mortgage loan originators

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The CFPB has issued guidance that provides states may use the Uniform State Test (UST) developed by the Nationwide Mortgage Licensing System and Registry (NMLSR) to satisfy the testing requirement of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act).

The SAFE Act requires state-licensed mortgage loan originators to pass a “qualified written test” developed by the NMLSR. In addition to questions about other subjects, the test must include questions covering state laws and regulations. The CFPB’s guidance confirms that this requirement can be satisfied through a UST rather than a separate test for each state covering the state’s particular laws and regulations combined with a National Test Component developed by the NMLSR. According to the CFPB, a state can use a UST if “it adequately tests required laws and regulations.”

 As we have reported, 31 state regulators have already adopted (or announced that they are adopting) the UST. Although these agencies will no longer require a state specific test component as a prerequisite for mortgage loan originator licensure, many states will continue to require state specific education. It is expected that eventually nearly every state will adopt the UST.