California Amends Education Requirements for Mortgage Loan Originators

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California recently amended its pre-licensing and continuing education requirements for mortgage loan originators (MLOs) licensed under the California Finance Lenders Law and the California Residential Lending Act. The education requirements passed in Senate Bill No. 1459 become effective on January 1, 2015.

The new law requires an MLO to complete at least 20 hours of NMLS-approved pre-licensing education. An applicant may take pre-licensing education courses either in a classroom, online, or by any other means approved by the NMLS. Further, education requirements approved by the NMLS for any other state are accepted as credit toward the completion of pre-licensing education requirements in California.

The law requires that the pre-licensing education include at least:

  • Three hours of instruction on federal law and regulations
  • Three hours of ethics, including instruction on fraud, consumer protection, and fair lending issues
  • Two hours of training related to lending standards for the nontraditional mortgage product marketplace
  • Two hours of training related to relevant California law and regulations

Regarding continuing education requirements, the law requires a licensed MLO to complete at least eight hours of continuing education a year for license renewal. Under the law, an MLO may only receive credit for a continuing education course in the year in which the course is taken. An MLO may also not take the same course in the same year or successive years to meet the annual requirements for continuing education. The continuing education must include at least:

  • Three hours of instruction on federal law and regulations
  • Two hours of ethics, which shall include lending standards for the nontraditional mortgage product market place
  • One hour of training related to relevant California law and regulations.

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.

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