Why CFL Licensed Lenders Must Submit New License Applications By Year End

Allen Matkins
Contact

Allen Matkins

Several thousand lenders and brokers are currently licensed by the Department of Financial Protection & Innovation under the California Financing Law.   The CFL generally requires that persons engaged in the business of either finance lender or broker.  The law applies to both consumer and commercial lenders.   

For some time, the DFPI has required residential mortgage lenders and brokers to file license applications through the Nationwide Multistate Licensing System (NMLS).  Other lenders used the infamous "long form" application.  For many applicants the process of becoming licensed under the CFL took several months.  Earlier this year, the DFPI has announced that non-residential mortgage lenders and brokers may apply through the NMLS.  

Beginning October 1, all applicants for licensing under the CFL will be required to transition to the NMLS by December 31, 2021.  10 CCR § 1422.4(b)(3).    Essentially, this will involve filing an MU1 application form through the NMLS.  However, transitioning licensees will not be required to submit the following items if those items are already on file with the DFPI:

  • Copies of Fictitious Business Name Statements bearing the seal of the county clerk;
  • Fingerprints for individuals identified in the “Direct Owners and Executive Officers,” “Indirect Owners,” and “Qualifying Individuals” sections of Form MU1, unless fingerprints have not previously been submitted for an individual;
  • Financial statements required of an applicant;
  • The Customer Authorization of Disclosure of Financial Records form;
  • A business plan, except that a licensee transitioning to NMLS shall provide an updated business plan if the plan previously submitted to the Commissioner is no longer accurate;
  • An organizational chart, unless the organizational chart previously submitted to the Commissioner is no longer accurate;
  • A management chart, unless the management chart previously submitted to the Commissioner is no longer accurate;
  • A certificate of qualification or good standing;
  • A partnership agreement; and
  • An Execution Section.

Despite these exceptions, current licensees should expect that they will be required to expend considerable time and effort to transition to the NMLS.

The DFPI's new rules with respect to NMLS are available here.  They take effect on October 1, 2021.

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.

© Allen Matkins | Attorney Advertising

Written by:

Allen Matkins
Contact
more
less

Allen Matkins on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.