[Congressional Record (Bound Edition), Volume 162 (2016), Part 5]
[House]
[Pages 6847-6849]
[From the U.S. 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;

[[Page 6848]]

       ``(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.
       ``(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

[[Page 6849]]

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 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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