[Congressional Record Volume 162, Number 81 (Monday, May 23, 2016)]
[House]
[Pages H2905-H2907]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1545
S.A.F.E. MORTGAGE LICENSING ACT OF 2008 AMENDMENT
Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 2121) to amend the S.A.F.E. Mortgage Licensing Act of
2008 to provide a temporary license for loan originators transitioning
between employers, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2121
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ELIMINATING BARRIERS TO JOBS FOR LOAN ORIGINATORS.
(a) In General.--The S.A.F.E. Mortgage Licensing Act of
2008 (12 U.S.C. 5101 et seq.) is amended by adding at the end
the following:
``SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS.
``(a) Temporary Authority to Originate Loans for Loan
Originators Moving From a Depository Institution to a Non-
depository Institution.--
``(1) In general.--Upon employment by a State-licensed
mortgage company, an individual who is a registered loan
originator shall be deemed to have temporary authority to act
as a loan originator in an application State for the period
described in paragraph (2) if the individual--
``(A) has not had an application for a loan originator
license denied, or had such a license revoked or suspended in
any governmental jurisdiction;
``(B) has not been subject to or served with a cease and
desist order in any governmental jurisdiction or as described
in section 1514(c);
``(C) has not been convicted of a felony that would
preclude licensure under the law of the application State;
``(D) has submitted an application to be a State-licensed
loan originator in the application State; and
``(E) was registered in the Nationwide Mortgage Licensing
System and Registry as a loan originator during the 12-month
period preceding the date of submission of the information
required under section 1505(a).
``(2) Period.--The period described in paragraph (1) shall
begin on the date that the individual submits the information
required under section 1505(a) and shall end on the earliest
of--
``(A) the date that the individual withdraws the
application to be a State-licensed loan originator in the
application State;
``(B) the date that the application State denies, or issues
a notice of intent to deny, the application;
``(C) the date that the application State grants a State
license; or
``(D) the date that is 120 days after the date on which the
individual submits the application, if the application is
listed on the Nationwide Mortgage Licensing System and
Registry as incomplete.
``(b) Temporary Authority to Originate Loans for State-
licensed Loan Originators Moving Interstate.--
``(1) In general.--A State-licensed loan originator shall
be deemed to have temporary authority to act as a loan
originator in an application State for the period described
in paragraph (2) if the State-licensed loan originator--
``(A) meets the requirements of subparagraphs (A), (B),
(C), and (D) of subsection (a)(1);
``(B) is employed by a State-licensed mortgage company in
the application State; and
``(C) was licensed in a State that is not the application
State during the 30-day period preceding the date of
submission of the information required under section 1505(a)
in connection with the application submitted to the
application State.
``(2) Period.--The period described in paragraph (1) shall
begin on the date that the State-licensed loan originator
submits the information required under section 1505(a) in
connection with the application submitted to the application
State and end on the earliest of--
``(A) the date that the State-licensed loan originator
withdraws the application to be a State-licensed loan
originator in the application State;
``(B) the date that the application State denies, or issues
a notice of intent to deny, the application;
``(C) the date that the application State grants a State
license; or
``(D) the date that is 120 days after the date on which the
State-licensed loan originator submits the application, if
the application is listed on the Nationwide Mortgage
Licensing System and Registry as incomplete.
``(c) Applicability.--
``(1) Any person employing an individual who is deemed to
have temporary authority to act as a loan originator in an
application State pursuant to this section shall be subject
to the requirements of this title and to applicable State law
to the same extent as if such individual was a State-licensed
loan originator licensed by the application State.
``(2) Any individual who is deemed to have temporary
authority to act as a loan originator in an application State
pursuant to this section and who engages in residential
mortgage loan origination activities shall be subject to the
requirements of this title and to applicable State law to the
same extent as if such individual was a State-licensed loan
originator licensed by the application State.
``(d) Definitions.--In this section, the following
definitions shall apply:
``(1) State-licensed mortgage company.--The term `State-
licensed mortgage company' means an entity licensed or
registered under the law of any State to engage in
residential mortgage loan origination and processing
activities.
[[Page H2906]]
``(2) Application state.--The term `application State'
means a State in which a registered loan originator or a
State-licensed loan originator seeks to be licensed.''.
(b) Table of Contents Amendment.--The table of contents in
section 1(b) of the Housing and Economic Recovery Act of 2008
(42 U.S.C. 4501 note) is amended by inserting after the item
relating to section 1517 the following:
``Sec. 1518. Employment transition of loan originators.''.
SEC. 2. AMENDMENT TO CIVIL LIABILITY OF THE BUREAU AND OTHER
OFFICIALS.
Section 1513 of the S.A.F.E. Mortgage Licensing Act of 2008
(12 U.S.C. 5112) is amended by striking ``are loan
originators or are applying for licensing or registration as
loan originators'' and inserting ``are applying for licensing
or registration using the Nationwide Mortgage Licensing
System and Registry''.
SEC. 3. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on the date that is 18 months after the date of the
enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Luetkemeyer) and the gentlewoman from Alabama (Ms.
Sewell) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave
Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and to include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may
consume.
I rise in support of H.R. 2121, the S.A.F.E. Transitional Licensing
Act of 2015, introduced by the gentleman from Ohio. (Mr. Stivers).
H.R. 2121 would establish that a mortgage loan originator who is
employed by a federally insured depository institution and who leaves
to join a State-licensed mortgage company would have temporary
authority to originate mortgages. The bill stipulates that, in order to
qualify for this transitional license, the individual must have filed
an application with the State to be a licensed loan originator.
More simply, this bill allows flexibility to workers who are looking
to make a career change. This bill does not allow for unregulated,
unlicensed mortgage originators to have a free pass.
The S.A.F.E. Transitional Licensing Act makes clear that the
temporary license--good for a maximum of 120 days--can apply only to a
registered loan originator.
Further, H.R. 2121 stipulates that the originator must be registered
with the Nationwide Mortgage Licensing System, or NMLS, and be employed
by a licensed and supervised mortgage lender, banker, or servicer.
H.R. 2121 includes other safeguards that are important to point out.
The bill makes clear that the temporary authority would automatically
expire should the originator withdraw his or her application or if the
State denies the application.
This is a highly bipartisan bill that will ensure workers who
originate mortgages at depository institutions are able to move to non-
depository institutions with a minimal amount of work disruption.
At the end of the day, this bill is about jobs. It is about
streamlining the government processes to make sure that people can
continue to put food on the table. Folks shouldn't be prevented from
working for months at a time simply because they want to change jobs or
employers. Our regulatory structure should foster not only consumer
protection, but job growth and efficient marketplaces. The current
licensing requirements do the exact opposite.
I thank the gentleman from Ohio for his hard work on this
legislation. I ask my colleagues to join me in supporting this
commonsense, employee-friendly bill.
Mr. Speaker, I reserve the balance of my time.
Ms. SEWELL of Alabama. Mr. Speaker, I yield myself such time as I may
consume.
I rise in support of H.R. 2121, the S.A.F.E. Transitional Licensing
Act of 2015.
I am proud to serve as an original Democratic cosponsor of this
commonsense, yet critically important, legislation. I also applaud my
colleagues, led by Representative Stivers, for working in a bipartisan
way to draft this legislation that we are considering here today.
Homeownership continues to be and remains a dream for millions of
Americans across the country. This legislation is an important step
towards helping to ensure that this dream becomes a reality. H.R. 2121
helps to facilitate a loan originator's job mobility while ensuring
that State regulators continue to have the ability to protect consumers
and the marketplace.
This legislation offers a narrowly tailored and pragmatic solution
that provides a transitional authority to originate mortgages for
individuals who move from a federally insured institution to a nonbank
lender. During this transition, these individuals will also work to
meet the S.A.F.E. Act's licensing and testing requirements.
Over the past several years, State regulators, key industry
stakeholders, and Members of Congress have been engaged in an extensive
dialogue on ways to eliminate job barriers for loan originators as well
as to help to promote homeownership for qualified buyers.
I am committed to continuing to ensure that our housing finance and
mortgage system continues to deliver fair, sustainable, and responsible
financing to meet the ever-changing needs of homeownership.
H.R. 2121 is truly a reflection of what can be achieved when we all
work together towards a unified and shared goal. I urge my colleagues
to support this critically important piece of legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman
from Ohio (Mr. Stivers), a distinguished member of the Financial
Services Committee.
Mr. STIVERS. Mr. Speaker, I thank the gentleman for yielding me time,
and I thank him for all of the work that he has done as the chair of
the subcommittee.
It is work that is making a difference as it allows people to get
access to their own versions of the American Dream. This is a piece of
that, as the Representative told you. I thank Representative Sewell and
Representative Beatty for all of their hard work.
Mr. Speaker, this is a bipartisan bill. This is a commonsense bill.
This is a jobs bill. This was a unanimous bill in the Financial
Services Committee. It passed 56-0 on March 2, and I am so proud of
that.
The S.A.F.E. Act passed in 2008 as part of the Housing and Economic
Recovery Act, and it created two different sets of requirements for
qualifications on mortgage loan originators, depending on whether they
worked for a State-licensed nondepository or a federally regulated
depository.
The problem with that is it kept people captive working for the same
kind of company that they worked for yesterday. If they try to change
between the two, they don't have a license and they can't help people
achieve their versions of the American Dream, of owning a home.
This will allow people to be more mobile in moving between depository
and nondepository institutions. It is a jobs issue for that very
reason. It will help make sure that the workforce can go where the jobs
are and that they can help people get loans to own a home. We all
believe in homeownership, and this is a small way we can be for it
today.
Representatives Sewell and Beatty worked very hard with me with
industry stakeholders and with State regulators in getting the bill
that we have today, which, as I said, passed unanimously out of the
Financial Services Committee.
H.R. 2121, as amended, would foster an efficient marketplace of
competition between banks and nonbanks and allow mortgage loan
originators to help all Americans achieve homeownership. It would
provide them with a transitional authority if you move from a
depository to a nondepository or the other way around.
Under the proposal, an individual who is employed by a financial
institution that has been a registered loan originator under the
S.A.F.E. Act for the preceding 12 months can originate loans after
submitting a background check and credit information to his
[[Page H2907]]
State regulator until the application is either approved, denied,
withdrawn, or even if it is just deemed incomplete.
At that point, the transitional authority ceases, so he has to submit
a full application. Once he does that, he gets a chance to continue to
work under this transitional period.
Again, this is a jobs issue. It will help people move between the two
types of institutions, which most Americans don't think about. They
just want to make sure they get a mortgage. That is what we need to
make sure we facilitate here with commonsense rules.
Sadly, some States have had transitional license authority, but the
CFPB does not allow them now to exercise that authority. That is why
this bill is necessary. I am really glad that we can allow for that now
to make sure that all Americans can get access to homeownership.
I thank Representative Sewell, Representative Beatty, all of the
members of the House Financial Services Committee, the gentleman from
Missouri for his leadership, the gentleman from Texas--the chair of the
full committee--for his leadership, and the ranking member of the
committee, the gentlewoman from California.
This is indeed a unanimous bill. I urge my colleagues to support it.
Mr. LUETKEMEYER. Mr. Speaker, again, I thank the sponsor of the bill,
the gentleman from Ohio (Mr. Stivers), as well as Ms. Sewell and Mrs.
Beatty from the other side for their fine work and their support. I
appreciate all of the work that was done.
Mr. Speaker, I yield back the balance of my time.
Mrs. BEATTY. Mr. Speaker, I rise today to express support for the
SAFE Transitional Licensing Act, H.R. 2121 introduced by my good friend
from Ohio, Mr. Stivers. This bipartisan bill provides much needed,
common-sense regulatory relief for mortgage loan originators that
levels the playing field, creates job mobility and allows independent
mortgage lenders to recruit a talented workforce.
The SAFE Transitional Licensing Act requires states to provide a
temporary, transitional license for registered loan originators that
move from a financial institution to a state-licensed non-bank
originator or move interstate to a state-licensed loan originator.
These individuals will be allowed to continue to work and originate
loans in their new capacity for up to 120 days, while seeking the
appropriate state licenses. This bill addresses the unintended
consequences of some of the provisions in the Secure and Fair
Enforcement for Mortgage Licensing Act of 2008, which created
difficulties when a mortgage loan officer decided to switch jobs from a
bank to a non-bank lender, or when a mortgage loan officer decided to
move across state lines.
Under current law, mortgage loan originators are required to wait
until they receive their new licenses before they can originate loans.
Often times, mortgage loan originators are forced to wait weeks, even
months, before their new licenses are approved. This unfairly inhibits
job mobility for mortgage loan originators and puts independent
mortgage lenders at a disadvantage in recruiting talented staff. The
SAFE Transitional Licensing Act amends the SAFE Mortgage Licensing Act
to give relief to loan officers, while also allowing state regulators
the authority to continue to keep bad actors out of the industry and
enforce applicable state laws.
The State of Ohio was the first state to enact a transitional license
for out-of-state licensed mortgage loan originators. Now, it is time
for Congress to follow Ohio's lead and provide regulatory relief that
levels the playing field, creates job mobility and allows independent
mortgage lenders to recruit a talented workforce. I urge my colleagues
to vote ``Yes'' for this common-sense piece of legislation.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the
rules and pass the bill, H.R. 2121, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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