The California Financing Law (fka Finance Lenders Law) requires that persons engaged in the business of making loans be licensed by the Department of Financial Protection & Innovation (fka Department of Business Oversight fka Department of Corporations). Both consumer and commercial lenders are subject to the CFL, including those that make residential mortgage loans. The DFPI has for some time required residential mortgage lenders and brokers to file license applications through the Nationwide Multistate Licensing System (NMLS). Other lenders used the infamous “long form” application. Recently, however, the DFPI has announced that non-residential mortgage lenders and brokers may apply through the NMLS.
The DFPI’s website initially contained inconsistent messaging on the transition – one page stated that all applicants must now file through the NMLS while another page stated that filing through the NMLS is optional. I checked with the DFPI which has confirmed that for the time being the long form may still be used for the time being. However, if your time to you is worth savin’, it makes sense to file through NMLS because the license must eventually be transitioned to the NMLS.
Existing licensees must soon start swimmin or they will sink like stone, for the times for them are a-changing as well. The DFPI has stated that when the NMLS becomes mandatory for all applicants, current licensees will be required to transition their licenses and bond to the NMLS. The DFPI expects this will occur by the end of this year. This change will undoubtedly shake the windows and rattle the walls of both the DFPI and its licensees.