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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.
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.

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:

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.

S.2155 adds section 5117(d) to the SAFE Act which states that:

“Any individual who is deemed to have Temporary Authority to act as a loan originator… under this section and who engages in residential mortgage loan originationactivities shall be subject to the requirements…to the same extent as if that individual was a State-licensed loan originator licensed by the application State.”

MLOs with TA must meet all requirements of the SAFE Act, including those of bonding and recovery funds. Since MLOs with TA can originate loans, their total loan amount volume would need to be covered by a bond or recovery fund.

Similar language in 5117(d)(1) extends this applicability to employers of MLOs with TA.

Note: A sponsoring company’s bond satisfies the bonding requirement for their MLOs.

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.