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Temporary Authority
Chapter VI covers Temporary Authority to Operate which pertains to eligible MLOs who are changing employment from a depository institution to a state-licensed mortgage company, and qualified state-licensed MLOs seeking licensure in another state.
Chapter VI—Temporary Authority to Operate
The Economic Growth, Regulatory Relief, and Consumer Protection Act, 12 U.S.C. 5101 et seq., (S. 2155) was signed into law on May 24, 2018, and became effective November 24, 2019. This amendment to the 2008 SAFE Act permits eligible MLOs to originate loans while completing state specific requirements such as testing and education.
Eligibility Requirements
To be eligible for Temporary Authority to Operate (TA), an MLO must meet the following eligibility requirements at time of application:

Temporary Authority
Chapter VI covers Temporary Authority to Operate which pertains to eligible MLOs who are changing employment from a depository institution to a state-licensed mortgage company, and qualified state-licensed MLOs seeking licensure in another state.
- Chapter VI—Temporary Authority to Operate
  The Economic Growth, Regulatory Relief, and Consumer Protection Act, 12 U.S.C. 5101 et seq., (S. 2155) was signed into law on May 24, 2018, and became effective November 24, 2019. This amendment to the 2008 SAFE Act permits eligible MLOs to originate loans while completing state specific requirements such as testing and education.
  - Eligibility Requirements
    To be eligible for Temporary Authority to Operate (TA), an MLO must meet the following eligibility requirements at time of application:
  - Length of TA Period
    TA begins when a qualified MLO, who meets all TA eligibility requirements, submits an MLO application (application requirements are listed below).
  - TA Application Requirements
    An MLO application will enter the TA workflow if the above eligibility requirements are met and the application includes:
  - How Eligibility is Determined in the System
    NMLS is programmed to check the following TA eligibility requirements:
  - Worker Classification
    To be eligible for TA, an MLO must be employed by a state-licensed company in the applicationstate. “Employee” has been interpreted to mean a W-2 employee, as defined by the IRS, not a 1099 contractor.
  - Sponsorship
    For an MLO to receive TA, the MLO’s company must have requested sponsorship.
  - Criminal History Record Information (CHRI)
    There is a 2-Day / 9-Day CHRI review process for applications in the TA workflow.
  - Intent to Deny
    The intent of S. 2155 is to permit qualified mortgage loan originators to continue originating loans for up to 120 days while completing testing, education, and/or state- specific requirements, including additional documents.
  - TA Licensing Statuses
    There are four NMLS licensing statuses that will be used in relation to applications in the TA workflow.
  - Consumer Access
    Pending Deficient (Temporary Authority), Pending Review (Temporary Authority), and Pre-Approved (Temporary Authority) will show in Consumer Access with a status of Temporary Authority.
  - Professional Standards: Education
    TA permits MLOs to apply for a license without completing testing and education requirements. Those MLOs who are eligible for TA may continue originating loans but must complete their testing and education requirements within the 120-day TA period.
  - Enhanced Individual Roster Report (Company)
    The Individual Roster Report (Company) captures the Worker Classification and Classification Begin Date fields.
  - Recovery Funds and Surety Bonds
    The SAFE Act gives the Consumer Financial Protection Bureau authorization to set minimum net worth or surety bond requirements for MLOs and for recovery funds paid into by MLOs. These amounts are based on the amount of loans originated by an MLO.
  - Loss of TA and Effect on Originated Loans
    Loans, whether closed or not, are not affected by the intent to deny or denial of an MLO’s application. Loans not closed belong to the company and closed loans cannot be undone.
  - Mortgage Call Report (MCR)
    An MCR must be completed by all state-licensed companies and companies employing state-licensed MLOs.
  - Notifications
    Individual applicants and companies will receive notification when one of the following events occurs:

Eligibility Requirements

To be eligible for Temporary Authority to Operate (TA), an MLO must meet the following eligibility requirements at time of application:

An MLO must have been either continuously registered for one year, or continuously licensed for the 30 days preceding application submission;
The MLO cannot have had a break in service of more than 14 calendar days. A break in service starts at the end of registration / licensure and ends with the request for sponsorship;
The MLO must be a W-2 employee of a state-licensed company in the application state.

An MLO would not be eligible for TA if they have:

Had a loan originator license application denied;
Had a loan originator license revoked or suspended in any jurisdiction;
Been subject to or served with a cease and desist order; or
Been convicted of a misdemeanor or felony that would preclude licensure in the application state.

Note: Not all licenses are eligible for Temporary Authority. To determine an individual’s eligibility for Temporary Authority, consult the License Requirements and Fees Chart on the State Licensing Checklist Compiler.

Note: In accordance with the spirit of S.2155, if an MLO is licensed by one agency in a state, the MLO should be eligible for TA should they seek licensure with another agency within the same state if all requirements are met and the licensing agency agrees.

Note: Pursuant to the federal SAFE Act, an MLO cannot receive Temporary Authority if they become employed by a registered exempt mortgage company. Under the SAFE Act an MLO is deemed to have Temporary Authority, “upon becoming employed by a state-licensed mortgage company” subject to certain conditions. A state-licensed mortgage company is defined as “an entity that is licensed or registered under the law of any State to engage in residential mortgage loan origination and processing activities.” Therefore, a registered exempt mortgage company does not meet the criteria of a “state-licensed mortgage company” for purposes of the Act.

Note: Temporary Authority may be available under the state’s authority. To determine if a state permits Temporary Authority, consult the License Requirements and Fee Chart on the NMLS Resource Center.

Contact the NMLS Call Center with any questions: 1-855-665-7123
Monday - Friday from 9:00AM to 9:00PM ET
Available from all U.S. States and Territories.