Stivers Wins House Support for Bipartisan Bill to Cut Red Tape, While Maintaining Consumer Protections for Homebuyers


WASHINGTON – (RealEstateRama) — Congressman Steve Stivers (R – OH) recently won House support for H.R. 2121—the SAFE Transitional License Act. While maintaining high standards for mortgage loan originators (MLOs), the bill ensures that these professionals will have more flexibility when they transition jobs between bank and non-bank employers.

“This is a jobs issue, providing qualified mortgage professionals more portability and a minimal amount of work disruption when making a change in an employer,” Stivers explained. “I am pleased to have worked across the aisle and with state regulators to ensure we could reduce red tape without compromising important consumer protections.”


Stivers’ bill modifies the SAFE Act, originally passed in 2008 as part of the Housing and Economic Recovery Act (HERA). The SAFE Act created two different sets of requirements for the qualification of mortgage loan originators (MLOs) depending on whether the MLO works for a state-licensed non-depository entity or a federally-regulated depository. MLOs employed by non-bank lenders must be licensed, which includes pre-licensing and annual continuing education requirements, passage of a comprehensive test, and criminal and financial background reviews conducted by state regulators. These MLOs are also registered in the National Mortgage Licensing System and Registry (NMLS). By contrast, MLOs employed by federally-insured depositories or their affiliates must only be registered in the NMLS, and do not have to meet testing and specific education requirements.

Under H.R. 2121, an individual who is employed by a financial institution and has been a registered loan originator under the SAFE Act for the preceding 12 months may continue to originate loans after submitting background and credit information to the state until the application is approved, denied, withdrawn, or deemed incomplete. This would ensure the MLO would face little or no disruption during the transition to a different employer. It is important to note that MLOs eligible for this temporary authority may not have previously had a loan originator license application denied, an MLO license revoked or suspended, been subject to a cease and desist order, and convicted of a felony that would preclude licensure.

Similarly, a state-licensed loan originator in one state who takes a similar position in another state may be granted the same transitional authority while pursuing licensure in the new state. In both instances, the temporary transitional authority expires after the granting of the state license, withdrawal or denial of the application, or 120 days if the application is incomplete.

Congressman Stivers is grateful to his colleagues on the House Financial Services Committee for working with him on this common sense legislation, and especially to his lead co-sponsors from both sides of the aisle — Representatives Terri Sewell (D-AL), Joyce Beatty (D-OH), Lynn Westmoreland (R-GA), Kyrsten Sinema (D-AZ) and Luke Messer (R-IN).


Watch Congressman Stivers’ floor speech urging passage of HR 2121:–VNBjHM

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