Continuing Education (CE) Required Topic List for Annual CE Year 2026

Background: Who Established the Required CE Topics and Why?

(Cover in 2-3 mins)

• The role of the State Regulator’s includes licensing and supervising of state-chartered banks and non-bank entities to include mortgage lenders. They ensure the financial services operates in a safe and sound manner.
• An examination is completed by State Regulators to determine if a financial institution is operating in compliance with state and federal laws. A review of a financial institutions loans and corporate records is conducted to decide whether the entities are effectively meeting the requirement to operate, monitor, and control risks associated with loan origination activities.
• Individual Mortgage Loan Originators are and will be held accountable by State Regulators for violations found during examinations.

For each required topic listed below, thoroughly review the citations, findings, and outline potential consequences and recommendations for the violations.

These consequences and recommendations can be general, as they depend on the regulator’s interpretation. The objective is to help the student grasp the possible repercussions of wrong doings. Examples may include, but are not limited to: Additional audits, monetary fines and penalties (specify and cite the amounts), issuance of corrected disclosures, written letters of explanation, refunding borrower’s funds, improved internal controls, employee training programs, corrective action of employees, written assurances detailing policy and procedure amendments aimed at preventing future violations of the Act, etc.

Topic 1: ECOA - 12 C.F.R. §1002.9(a)(1)

• Findings Title: Notifications
  • Citation Violation: A creditor shall notify an applicant of action taken within: (i) 30 days after receiving a completed application concerning the creditor’s approval of, counterof fer to, or adverse action on the application.
  • Examination Findings: It was noted that on eleven (11) loan files the Licensee failed to provide the applicant a Notice of Incompleteness or a Notice of Adverse Action (a/k/a Statement of Credit Denial, Termination, or Change) or retain a copy of the letter when issued by the broker or lender within 30 days of a complete or incomplete application concerning the creditor’s approval of, counteroffer to, or adverse action on the application, or 90 days after notifying the applicant of the counter offer if the applicant does not expressly accept or use the credit offered. The Licensee’s MLOs obtained application information, such as credit reports, to evaluate the applicants’ credit worthiness but failed to act with reasonable diligence to collect information to complete the application. The Licensee’s records failed to document the actions taken by the Licensee to complete the application nor sent a Notice of Incompleteness or denying the application outright for an incomplete application.

    The Licensee is required to provide the consumer with a Notice of Action Taken as outlined in Regulation B §1002.9(c)(2) and commentary 2(f)-6 requires the creditor to act with reasonable diligence to collect information needed to complete the application.

Topic 2: ECOA - 12 C.F.R. §1002.9(a)(1)(ii) and (c)(1), 1002.12(b)(1), 1002.02(f)

• Findings Title: Notifications of Actions Taken
  • Citation Violation:
    • 12 C.F.R. §§ 1002.9(a)(1)(ii) and (c)(1) Requires a creditor notify an applicant of action taken within 30 days after taking an adverse action on an incomplete application or notify an applicant of application being incomplete.
    • 12 C.F.R. § 1002.12(b)(1) Requires a creditor to retain, for 25 months, the notification of action taken in original form or a copy thereof.
    • 12 C.F.R. § 1002.2(f) Defines an application as “an oral or written request for an exten sion of credit that is made in accordance with procedures used by a creditor for the type of credit requested.” The creditor is also responsible for reasonable due diligence to ob tain any required information for a completed application.
  • Examination Findings: A one-month sample of credit bureau logs along with the originated and adverse loan production logs were reviewed.

    There were 61 credit pulls classified by the company as a Prequalification with No GFE/ Inquiry only. No other documentation was tied to the credit pulls. Upon questioning, the company's explanation was “Pursuant to ECOA, there are situations where a borrower can simply inquire, and the inquiry does not rise to the level of an ECOA application. ECOA gives lenders the latitude to establish their own application process and decide what information is required to constitute an application. However, the company has a dedicated team in its Consumer Direct division responsible for contacting consumers who submit an inquiry through the online portal, assuming actual accurate contact information was provided.”

    Of the 61 missing transactions, 21 had credit information requested by a company licensed online tool and 40 transactions had credit information requested by the MLO. Amongst several items the borrowers' entire credit profile was obtained.

    The company policy document stated that “For purposes of Regulation B, the company uses the same procedures and requires receipt of the same information in the same format and same location as described above in the TRID Section to define an “Application.” According to the company's own definition, all 61 missing applications would have been considered incomplete applications. The company failed to produce the Notice of Incompleteness, or any supporting documentation including conversation logs and notes regarding the transactions.

    Furthermore, records of 15 credit pulls related the handling of the request for credit including any conversation logs or supporting documentation were requested. The company failed to produce any Notice of Adverse Action, Notice of Incompleteness, or any supporting documentation including conversation logs and notes regarding the transactions. The company failed to act with reasonable due diligence to complete the application in violation of Regulation B § 1002.2(f). Compliance with ECOA was unable to be determined regarding the purpose (purchase/refinance) for the request for credit due to the company's lack of supporting documentation.

Topic 3: ECOA- 12 C.F.R.§1002.9(a)(2)(i) and (ii)

• Findings Title: Adverse Action Not Compliant – Failure to Indicate Specific Reasons
  • Citation Violation: A notification given to an applicant when adverse action is taken shall contain “A statement of specific reasons for the action taken; or a disclosure of the applicant’s right to a statement of specific reasons within 30 days, if the statement is re quested within 60 days of the creditor’s notification.” Whereas Section 1002.9(b)(2) states “Statement of specific reasons. The statement of reasons for adverse action re quired by paragraph (a)(2)(i) of this section must be specific and indicate the principal reason(s) for the adverse action. Statements that the adverse action was based on the creditor's internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditor's credit scoring system are insufficient.”
  • Examination Findings: The company issued Notifications of Action Taken stating: “Does not meet minimum investor guidelines” as the reason for the denial. This general explanation for denial does not provide the applicant with specific information regarding the reasons for the application’s rejection and therefore considered insufficient.

Topic 4: ECOA - 12 C.F.R. §1002.12(b)(1)

• Findings Title: Records to be Maintained
  • Citation Violation: For 25 months (12 months for business credit, except as provided in paragraph (b)(5) of this section or otherwise provided for in subpart B of this part) after the date that a creditor notifies an applicant of action taken on an application or of in completeness, the creditor shall retain in original form or a copy thereof: (i) Any applica tion that it receives, any information required to be obtained concerning characteristics of the applicant to monitor compliance with the Act and this part or other similar law, any information obtained pursuant to § 1002.5(a)(4), and any other written or recorded infor mation used in evaluating the application and not returned to the applicant at the applicant's request..
  • Examination Findings: The company was using the Factual Pre-Qualification Credit Report product, which enables it to obtain a credit report from the three major credit reporting agencies (Transunion, Equifax, and Experian) through a soft credit inquiry for the purpose of prequalifying consumers. The process for pulling soft credit inquires is to obtain the consumers name, social security number, date of birth, current address, and authorization for prequalification credit report. This report allows the mortgage loan originator (MLO) to review the borrower’s liabilities, credit history and credit scores prior to pulling a hard pull credit report. The credit inquiry is downloaded into the company’s underwriting software and allows the MLO to generate a prequalification estimate. During the meeting, it was represented by the company that other than the credit bureau record, no records such as a conversation log detailing the MLOs discussion with the consumer, or copies of the pre-qualification letter (unless the consumer completes an application), are maintained in their loan origination software (LOS) or company records. It appears the Licensee does not consider the process of gathering demographic information, such as a social security number, date of birth, address, and name as taking an application. It was also represented that if the consumer did not qualify for a mortgage program, the branch would need to submit a statement of denial. Other than encouraging the consumer to complete an application when a consumer qualifies for a residential mortgage loan, there is no record of the company’s due diligence to complete the applications.

    The Licensee should be aware of the use of the consumer credit report to make a credit decision requires a Notice of Action Taken, or Notice of Incompleteness, as required by 12 CFR §1002.9(c)(1).

    Also, the Act requires the Licensee to maintain records of its MLO actions so that the Director can determine compliance. The Department suggests the company review Commentary for 12 CFR §1002.2(f) regarding the company’s responsibilities to complete the application. Most specifically, comment 2(f)-5(ii) which provides examples of applications, and Comment 2(f)-6 which describes the due diligence requirements to complete the application.

    It appears based on commentary, the company is taking an application but treating the request as an inquiry or prequalification. The Licensee represented that they do not consider the credit bureau pulls completed via the soft pull prequalification an application for credit until the consumer officially completes an application.

    The Licensee should be aware that a credit report is not a requirement for an application as defined by 12 CFR §1026.2(a)(3)(ii) which requires, in addition to other elements, the consumers social security number to obtain a credit report. Until the Licensee can demonstrate compliance with the use of the prequalification soft credit pulls to include oversight, handling, and record retention, the Licensee should not be offering this product to consumers seeking a residential mortgage loan.

Topic 5: TILA - 12 C.F.R. §1026.19(a)

• Findings Title: Timely Disclosure
  • Citation Violation: The creditor shall provide the consumer with good faith estimates of the disclosures and shall deliver or place them in the mail not later than the third busi ness day after the creditor receives the consumer's written application.
  • Examination Findings: The Licensee failed to deliver a Loan Estimate (LE) within three days of a completed application. The Licensee obtained the required six items of infor mation (address, loan amount, income, estimate of value, name, and social security number) to satisfy TILA-RESPA Integrated Disclosure (TRID) requirements for a com pleted application but, failed to timely issue the required initial LE, and failed to timely enter the data into the loan origination software (LOS) to trigger required disclosures. Additionally, this is a repeat violation of a previous Report of Examination. The Licensee failed to take corrective actions within their procedures, enact controls within the (LOS), or failed to audit its production to ensure MLOs timely enter triggering application data into its LOS, to prevent repeated violations.

Topic 6: TILA - 12 C.F.R. §1026.19(e)(1)(i) and (e)(3)(i)

• Findings Title: Loan Estimate Tolerance
  • Citation Violation: Closing costs disclosed in the Loan Estimate (LE) are in good faith if the charges paid by or imposed on the consumer do not exceed the amount originally disclosed in (e)(1)(i) of this section.
  • Examination Findings: The exam team identified loan files that reflect fees exceeding the amount originally disclosed on the LE.

Topic 7: TILA, 12 C.F.R. §1026.19(e)(3)(i)

• Findings Title: 0% Tolerance – Good Faith Costs Exceeded
  • Citation Violation: An estimated closing cost is in good faith if it does not exceed the amount originally disclosed. A revised estimate may be used in the event of a valid changed circumstance if the revised fee is disclosed to the borrower within three business days of the change. Third-party fees the borrower cannot shop for are subject to a zero percent tolerance limit. In addition, recording fees may increase by no more than ten percent from the amount initially disclosed on the Loan Estimate (LE) without a valid changed circumstance. § 1026.19(e)(3) and (4).
  • Examination Findings: Instances were identified where the company charged an ap praisal fee on the Closing Disclosure (CD) that exceeded the amount disclosed on the initial Loan Estimate (LE) in section B: “Services You Cannot Shop For.” This section has a zero tolerance for variations or discrepancies from the LE to the CD.

Topic 8: TILA - 12 C.F.R. §1026.19(e)(4)(i)

• Findings Title: Loan Estimate - Allowable Reasons and Timing for Revised Disclosure
  • Citation Violation: If a creditor uses a revised estimate pursuant to paragraph (e)(3)(iv) of this section, for the purpose of determining good faith under paragraphs (e)(3)(i) and (ii) of this section, the creditor must provide a revised version of the disclosures within three business days of receiving information sufficient to establish that one of the rea sons for revision applies.
  • Examination Findings: Loan files where the company did not issue a revised LE.

Topic 9: TILA - 12 C.F.R. §1026.19(f)(3)(i)

• Findings Title: 0% Tolerance – Collection of Excessive Fees
  • Citation Violation: The amount imposed on the consumer for any settlement service shall not exceed the amount actually received by the settlement service provider for that service.
  • Examination Findings: A loan had a $720 charge for an appraisal fee on the final signed CD. The invoice for the appraisal provided in the loan file was $680 for the appraisal's cost. The borrower was charged $40 more than the actual cost of the appraisal.

Topic 10: TILA - 12 C.F.R. §1026.38(f)(2)

• Findings Title: Closing Disclosure Not Completed Correctly
  • Citation Violation: Requires, in part, the name of the person ultimately receiving the payment for each service under the subheading “Services Borrower Did Not Shop For.”
  • Examination Findings: The CD provided to borrower disclosed the ultimate recipient for the mortgage insurance premium as “To Be Determined.” For another borrower, the ultimate recipient for 442 Completion (an appraisal fee) was listed as “TBD.”

NON-APPROVED TOPIC LIST