STATE
OF
NEBRASKA
Department
of
Banking
&
Finance
IN THE MATTER OF:
Mortgage Loan Originator
License Applications
)
)
)
)
ORDER ADOPTING
UNIFORM STATE TEST AND
NEBRASKA-SPECIFIC
PRELICENSE EDUCATION
THIS
MATTER comes before the Nebraska Department
of
Banking and Finance
("DEPARTMENT"), by and through its Director, pursuant to its authority under the
Residential Mortgage Licensing Act, Neb. Rev. Stat.
§§
45-701 to 45-754 (Reissue 2010;
Cum. Supp. 2012) ("the Act").
1.
Neb. Rev. Stat. § 45-727 (Reissue 2010) provides that all individuals who are
acting as mortgage loan originators in connection with residential real estate or a
dwelling located in Nebraska must be licensed as mortgage loan originators.
2. Neb. Rev. Stat. § 45-729 (Cum. Supp. 2012) provides, in relevant part, that
the Director shall not grant a mortgage loan originator license application unless he or she
finds that the applicant has completed prelicense education and has passed a prelicense
written examination.
3.
Neb. Rev. Stat. § 45-730(1) (Reissue 2010) provides that an individual shall
complete at least twenty
(20) hours
of
prelicense education which shall include at least
the following:
(a) Three (3) hours
of
instruction in federal law and regulations regarding
mortgage origination;
(b) Three (3) hours
of
instruction in ethics, which shall include instruction on
fraud, consumer protection, and fair lending issues; and
(c) Two (2) hours
of
instruction related to lending standards for the nontraditional
mortgage product marketplace.
4. Neb. Rev. Stat. § 45-730(2) (Reissue 2010) provides that the Nationwide
Mortgage Licensing System and Registry ("NMLS") is responsible for approving
prelicense education courses and course providers.
5.
Neb. Rev. Stat. § 45-731 (Cum. Supp. 2012) provides that an individual must pass
a written test developed by the NMLS. The test must include the following subject areas:
(a) Ethics;
(b) Federal laws and regulations pertaining to mortgage origination;
(c) State laws and regulations pertaining to mortgage origination; and
(d) Federal and state laws and regulations, including instruction on fraud,
consumer protection, the nontraditional mortgage marketplace, and fair
lending issues.
6.
The testing and education provisions in the Act were mandated by the federal
Secure and Fair Enforcement for Mortgage Licensing Act
("SAFE Act"). In order to
meet the requirements
of
the
SAFE Act, the NMLS mandates that loan originators take
and pass two (2) test components. The first component is a national component devoted
to federal laws related to mortgage originations, and the second component is a state
component devoted to state laws related to mortgage originations.
7.
Each state currently has its own state component. Therefore, an individual
seeking a Nebraska mortgage loan originator license is required to pass both the national
component and the Nebraska component
of
the test before the DEPARTMENT can grant
such individual a mOligage loan originator license. The purpose
ofthc
Nebraska component
2
is to ensure that applicants have at least entry-level knowledge regarding the laws which
govern mortgage loan originations in Nebraska.
8.
The NMLS has developed a uniform state test based upon the SAFE Act and a
model state law which served as the basis for the mortgage loan originator provisions in the
Act. Each state has the option
of
adopting the uniform state test or retaining a state-specific
exam component. However, the uniform state test will be scored as part
of
the national
component; thus, all loan originators will take the uniform state test, even
if
the state retains
its state-specific component. The uniform state component will be implemented in
2013.
9.
The NMLS also is offering a stand-alone version
of
the uniform state test for
mortgage loan originators who have already passed the national test component. The
stand alone component will be available for enrollment through March 31,
2014, unless
the
NMLS elects to extend such deadline.
10.
There is substantial overlap between the Nebraska component
of
the prelicense
test and the proposed uniform state test. Requiring applicants to pass the Nebraska
component
of
the prelicense test in addition to the uniform state test would be duplicative.
11.
Neb. Rev. Stat. § 45-748 (Reissue 2010) provides that the Director may
establish by rule, regulation or order, requirements necessary to participate in the
NMLS,
including requirements related to prelicense education and testing.
12.
The use
of
the term
"at
least" in Neb. Rev. Stat. § 45-730(1) (Reissue 2010)
makes it clear that the possibility
of
additional prelicense education requirements is
permissible.
13.
Requiring applicants to take Nebraska-specific education is necessary in order
to insure that applicants will have at least an entry-level understanding
of
the laws that
3
govern mortgage loan originations in Nebraska. Therefore, the Director has determined
that an
Order adopting the uniform state test and implementing Nebraska-specific
prelicense education will reduce regulatory burden and is necessary to effectuate the
purposes
of
the Act.
IT IS THEREFORE ORDERED, ADJUDGED, and DECREED as follows:
1.
Effective July
1,2013,
the
Nebraska component
of
the prelicense test shall be
discontinued. All candidates taking the prelicense test on or after July
1,2013,
shall take
only the national test containing the uniform state test component.
2. Individuals who have passed the national component
of
the prelicense test prior
to July
1,2013,
but who have not passed the Nebraska component,
may
retake the national
component containing the uniform state test. In the alternative such candidates
may
take
the stand-alone version
of
the uniform state test provided that they enroll for such test prior
to any enrollment deadline established by NMLS.
3. Effective July
1,2013,
all applicants for a mortgage loan originator license shall
take at least twenty-two (22) hours
of
prelicense education, which shall include at least the
specific hours required by Section
45-730(1)( a)-( c) , at least two (2) hours
of
Nebraska-specific
education, and at least twelve (12) hours
of
elective courses.
4. The provisions
of
Paragraph
No.3
of
the Order shall not apply to any applicant who
successfully passed the Nebraska component
of
the prelicense test prior to July
1,2013.
Such
individuals may submit an application on or after July
1,2013,
and rely upon passage
of
the
Nebraska component
of
the prelicense test in lieu
of
Nebraska-specific prelicense education.
5.
A copy
of
this Order shall be made publicly available on the
DEPARTMENT's
website.
4
6.
This Order shall remain in effect until subsequently modified or vacated by
Order
of
the Director.
7.
The effective date
of
this Order shall be the date
of
the Director's signature.
DATED this
19JX-
day
of
February, 2013.
STATE OF
NEBRASKA
DEPARTMENT
OF BANKING AND FINANCE
Co merce Court,
Suite 400
12
0
"0"
Street
nco
In,
Nebraska 68508
402)
471-2171
5
