The CFPB recently published SAFE Act FAQs addressing temporary authority.

The CFPB identifies the following categories of loan originators under the SAFE Act, as amended by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), effective November 24, 2019.

• Registered Loan Originators;
• State-Licensed Loan Originators; and
• Loan Originators with Temporary Authority, which the CFPB describes below:

“As of November 24, 2019, certain loan originators have temporary authority to act as a loan originator in a state for a limited period of time while applying for a state loan originator license in that state. Not all loan originators are eligible for temporary authority. Temporary authority applies to loan originators who were previously registered or state-licensed for a certain period of time before applying for a new state license. Additionally, loan originators are eligible for temporary authority only if they have applied for a license in the new state, are employed by a state-licensed mortgage company in the new state, and satisfy certain criminal and adverse professional history requirements described in the SAFE Act. More information about these requirements can be found in the SAFE Act, 12 USC § 5117.”

The FAQs also address where loan originators can exercise temporary authority:

“Beginning on November 24, 2019, a loan originator that satisfies the Loan Originator with Temporary Authority eligibility criteria may act as a loan originator in a state where the loan originator has submitted an application for a state loan originator license, regardless of whether the state has amended its SAFE Act implementing law to reflect the EGRRCPA amendments.”

The FAQs provide that state transitional licensing is not impacted by the EGRRCPA. Per the FAQs: “The EGRRCPA amendments to the SAFE Act will not affect the permissibility of transitional licensing under the SAFE Act and Regulation H, which was addressed in the Bureau’s Bulletin 2012-05. The EGRRCPA amendments do not impact the ability of a state to consider or rely on a prior state’s findings when considering a State-Licensed Loan Originator’s license application, as discussed in the Bureau’s 2012 bulletin. The EGRRCPA amendments establish temporary authority, which provides a way for eligible loan originators who have applied for a new state loan originator license to act as a loan originator in the application state while the state considers the application.”