Following receipt and consideration of three written comments on proposed rules distributed on November 18, 2019, the Georgia Department of Banking and Finance adopted final rules on December 20, 2019, that establish additional disclosure, advertising, and record-keeping requirements applicable when MLOs (mortgage loan originators) operate under temporary authority.

The rules include:

• Disclosure Requirements - Effective April 1, 2020. Mortgage lenders or mortgage brokers sponsoring MLOs who are unlicensed but operating under 12 USC § 5117 must disclose in writing to each applicant that such MLO has temporary authority to operate. The disclosure must be made no later than the date the consumer signs an application or any disclosure, whichever event occurs first, and must include the language quoted below in at least 10-point, bold-faced type. The applicant must sign the disclosure, and the lender or broker, as applicable, must keep a copy of the signed disclosure.
• “The Georgia Department of Banking and Finance requires that we inform you that our company is licensed but the mortgage loan originator responsible for your loan is not currently licensed by the Georgia Department of Banking and Finance. The mortgage loan originator has applied for a mortgage loan originator license with the Georgia Department of Banking and Finance. Federal law (12 U.S.C. § 5117) authorizes certain mortgage loan originators to operate on a temporary basis in the state of Georgia while their application is pending. The Georgia Department of Banking and Finance may grant or deny the license. Further, the Georgia Department of Banking and Finance may take administrative action against the mortgage loan originator that may prevent such individual from acting as a mortgage loan originator before your loan closes. In such case, our company could still act as your broker or lender.”
• Additional Disclosure Requirements - Effective January 9, 2020. A MLO “purporting to operate under temporary authority” is jointly responsible with the sponsor for ensuring that the above disclosure is provided. Such MLO must also indicate “TAO” or “temporary authority to operate” or a substantially similar designation next to the signature line on any document, application, or disclosure signed by the MLO in connection with the negotiation of terms, application for, or the offering of a residential mortgage loan.
• Advertising Requirements – Effective January 9, 2020. “In the event that a mortgage broker or lender sponsors a mortgage loan originator purporting to operate under the temporary authority requirements set forth in 12 U.S.C. § 5117, any advertisement by the mortgage broker or lender that mentions such mortgage loan originator’s ability to act as mortgage loan originator in Georgia shall clearly and conspicuously indicate that the individual has temporary authority to operate in Georgia. Any such advertisement must also clearly and conspicuously indicate that he individual is unlicensed, has submitted a license application to the Department, and the Department may grant or deny the license application.”
• Record-keeping - Effective January 9, 2020. Required mortgage loan transaction journals must clearly identify if the MLO utilized temporary authority to operate at any point in the application or loan process. For MLOs that utilize temporary authority, the journal should also identify the final status of the MLO’s Georgia license application as one of the following: approved, withdrawn, or denied.

Colorado followed many other states and has adopted provisions permitting mortgage loan originators to act with temporary authority during certain transition periods, reconciling its law with the federal SAFE Act amendments. The Colorado amendments are incorporated into the regulations and are effective immediately.