MBANow: William Kooper on Transitional Licensing

In this MBANow video, William Kooper, MBA Vice President of State Government and Industry Relations, discusses Transitional Licensing and Temporary Authority and how to best prepare for future changes.Kooper noted while the terms have been used interchangeably, there are distinct differences.

Before Congress changed the laws, there were two ways to originate a mortgage: either as a state-licensed mortage loan originator working for a state-regulated mortgage lender; or a federally licensed MLO working for a federally regulated lender. Some states, however, have established a 120-day transition period, enabling MLOs to change their originator status. Now, Congress provides “temporary authority” that gives MLO a 120-day period in which they can continue to work while obtaining new state and/or federal licenses.

The Nationwide Mortgage Licensing System, which oversees the temporary authority provision, is very familiar to MBA members, Kooper said. NMLS is working to make the system more responsive for MLOs.

Congress has provided an 18-month impilementation period. “However, that period ends in November, during the middle of state licensing renewal season,” Kooper said.

“While this is all new and exciting, it’s also much more complicated than it seems,” Kooper added. “The important thing to remember is to build out some of the operational tracking devices that companies need to supervise all this licensing activity.”

More information can be found on the NMLS website, www.nmls.org.

Other videos in the MBANow series can be viewed at the MBANow website: https://www.mba.org/get-involved/stay-connected/mba-now.