Virginia Enacts Transitional MLO Licensing Law for Out-of-State MLOs


Last month, Virginia Governor Terry McAuliffe signed Senate Bill 118, creating a transitional mortgage loan originator (MLO) license. Specifically, the law authorizes Virginia's State Corporate Commission to issue a transitional MLO license to individuals who are either licensed as an MLO in another state, or (to the extent permitted under the SAFE Act, or any rule, regulation, interpretation, or guideline thereunder) formerly registered loan originators who worked for depository institutions. The new transitional MLO license will allow an individual to engage in the business of an MLO while completing the requirements necessary to obtain a state license. The temporary license will be valid for up to 120 days and cannot be renewed.

To qualify for this transitional license, an eligible individual must provide an application, surety bond, and complete an FBI criminal background check. Further, the person must never have had an MLO license revoked, and must not have been convicted of or pled guilty or nolo contendere to a felony in a domestic, foreign, or military court during the seven-year period preceding the application for licensing and registration, or at any time preceding the date of the application if the felony involved an act of fraud, dishonesty, breach of trust, or money laundering. Applicants must pay an application fee for the license as well as fees for a credit report and criminal background check.

As we previously reported, the Virginia Senate and House of Delegates unanimously passed the legislation, and David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), strongly voiced the MBA's support for the bill. The creation of the transitional MLO license will allow out-of-state and registered loan originators to more quickly begin engaging in the business of mortgage loan originating in Virginia.

The legislation is effective July 1, 2014.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.