79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–552 

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 

FEBRUARY 13, 2018.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 2948] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 2948) 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, having 

considered the same, reports favorably thereon without amendment 

and recommends that the bill do pass. 

PURPOSE AND SUMMARY

Introduced on June 20, 2017, by Representative Stivers, H.R. 

2948 amends the Secure and Fair Enforcement (SAFE) Mortgage 

Licensing Act of 2008 to provide temporary loan-origination authority for registered loan originators: (1) moving from a financial institution to a state-licensed non-bank originator, or (2) moving interstate to a state-licensed loan originator in another state. This legislation also updates civil liability protections to ensure that those 

protections continue to apply where state regulators use the National Mortgage Licensing System and Registry (NMLS) as a licensing system for financial services providers other than loan 

originators. 

BACKGROUND AND NEED FOR LEGISLATION

Congress enacted the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008 (‘‘SAFE Act’’) as part of the Housing 

and Economic Recovery Act (HERA). The SAFE Act created state 

licensing or registration requirements for mortgage loan originators 

(MLOs). MLOs working as loan officers in federally-regulated depository institutions were required to register with the National 

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Mortgage Licensing System and Registry (NMLS). MLOs working 

for non-depository mortgage companies were required to become licensed at the state level, complete annual continuing education, 

and pass criminal background checks. 

Because bank loan officers are not state-licensed MLOs, a problem arises when an individual wishes to leave a bank and instead 

work for a non-bank mortgage company: he or she must wait until 

completing the SAFE Act’s state licensure requirements—a process 

that can take weeks or months, depending upon the state—in order 

to originate loans for the mortgage company, notwithstanding his 

or her prior experience as a registered bank loan officer. Under current law, the SAFE Act allows for a 60-day grace period for 

changes in employment due to acquisitions, mergers, and reorganizations, but does not provide for a grace period or other transitional accommodation for bank loan officers seeking to work for 

non-bank mortgage companies. 

H.R. 2948 makes it easier for a registered bank MLO to transition to a non-bank mortgage company, or for a state-licensed MLO 

to move to another state. The bill grants such persons temporary 

authority to originate loans for up to 120 days after submitting 

their application for licensure. H.R. 2948 also establishes eligibility 

requirements for MLOs seeking transitional loan origination authority. For instance, registered MLOs seeking to move to a nondepository mortgage company must have been registered as an 

MLO in the NMLS for the 12 months immediately prior to seeking 

the transitional authority. Additionally, the registered MLO must: • Not have had an application for an MLO license revoked 

or suspended in any governmental jurisdiction; • Not have been subject to a cease and desist order; • Not have been convicted of a felony that would make the 

individual ineligible for licensure; and • Have submitted an application to be a state-licensed MLO 

through the NMLS. 

H.R. 2948 establishes similar transitional authority for a statelicensed MLO to originate mortgages in a different state, provided 

that the person is employed by the mortgage company in the state 

where licensure is sought and has: 

• Not had an application for an MLO license revoked or suspended in any governmental jurisdiction; 

• Not been subject to a cease and desist order; 

• Not been convicted of a felony that would make the individual ineligible for licensure; 

• Submitted an application to be a state-licensed MLO 

through the NMLS; and 

• Maintained licensure in the first state for the 30-day period preceding the date of application submission. 

H.R. 2948 provides that both the MLO and the company hiring 

the MLO are subject to the SAFE Act and applicable state law as 

if the MLO were duly licensed, thus enabling state regulators to 

fulfill their obligations as regulators of mortgage companies and individual MLOs under the SAFE Act and state financial and consumer protection laws. 

Finally, H.R. 2948 includes a technical change to Section 1513 of 

the SAFE Act to update the SAFE Act’s existing civil liability protections to ensure that those protections continue to apply where 

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state regulators use the NMLS as a licensing system for financial 

services providers other than loan originators. 

In a December 12, 2017, letter of support, the Mortgage Bankers 

Association expressed its support for H.R. 2948, stating: 

Rather than leaving a job on a Friday and starting a 

new job on a Monday, an MLO who moves from a bank to 

a non-bank lender must sit idle for weeks, and sometimes 

months, unable to engage in loan origination activities 

while they complete the SAFE Act’s licensing and testing 

requirements—despite the fact they have already been registered in the NMLS and originating loans. H.R. 2948 promotes a fair and competitive labor market by eliminating 

barriers to the ability of non-bank lenders (especially small 

lenders) to compete for talented staff, and allowing MLOs 

to more easily move to the employer that offers them the 

best chance to succeed. 

HEARINGS

The Committee on Financial Services held a hearing examining 

matters relating to H.R. 2948 on April 26, 2017, and April 28, 

2017. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on December 12, 2017, and ordered H.R. 2948 to be reported favorably 

to the House without amendment by a recorded vote of 60 yeas to 

0 nays (Record vote no. FC–129), a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole recorded 

vote was on a motion by Chairman Hensarling to report the bill favorably to the House without amendment. The motion was agreed 

to by a recorded vote of 60 yeas to 0 nays (Record vote no. FC–129), 

a quorum being present. 

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Insert graphic folio 5 HR552.001
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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 2948 will provide a temporary license for loan originators transitioning between 

employers, and for other purposes, would amend the S.A.F.E. Mortgage Licensing Act of 2008 to provide temporary loan-origination 

authority for registered loan originators: (1) moving from a financial institution to a state-licensed non-bank originator, or (2) moving interstate to a state-licensed loan originator in another state. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 12, 2018. 

Hon. JEB HENSARLING, Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2948, a bill 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. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Stephen Rabent. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

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H.R. 2948—A bill 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 

The Nationwide Mortgage Licensing System (NMLS) was established by a consortium of states in response to requirements of the 

Housing and Economic Recovery Act of 2008 that mandated the 

creation of such a system. The purpose of the NMLS is to track 

people who provide mortgages—across state lines and through 

changes in employment—to ensure that they meet certain qualifications and cannot evade pending regulatory action by moving to 

a new state or changing employers. 

H.R. 2948 would provide temporary authority for licensed mortgage originators to work in a new state or under a new employer— 

if the employer is a state-licensed mortgage company—for up to 

120 days or until a new license is issued. Licensed originators with 

certain active or previous regulatory violations would not be eligible to obtain the new temporary status. 

Using information from the Consumer Financial Protection Bureau (CFPB), CBO estimates that rulemaking to implement the 

registration requirements would cost $1 million. The CFPB is permanently authorized to spend amounts transferred from the Federal Reserve to fund its operations. Because that funding is not 

subject to appropriation, the CFPB’s expenditures are recorded in 

the budget as direct spending. 

Using information from the Department of Housing and Urban 

Development and the NMLS, CBO estimates that enacting H.R. 

2948 would have no significant net effect on the collection of licensing fees (which are considered revenues) or on the NMLS’s subsequent spending of those fees for its operations. Any change in the 

timing of when fees are collected would be insignificant. 

Because enacting the bill would affect direct spending and revenues, pay-as-you-go procedures apply. 

CBO estimates that enacting H.R. 2948 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2028. 

H.R. 2948 contains no private-sector mandates as defined in the 

Unfunded Mandates Reform Act (UMRA). 

H.R. 2948 would impose an intergovernmental mandate as defined in UMRA by preempting state licensing laws. The bill would 

grant a temporary license for some loan originators who become 

employed by a state-licensed mortgage company. Because the preemption would impose no duty on state governments that would result in additional spending or a loss of revenues, CBO estimates 

that the cost of the intergovernmental mandate would fall well 

below the UMRA threshold ($78 million in 2017, adjusted annually 

for inflation). 

The CBO staff contacts for this estimate are Stephen Rabent (for 

federal costs) and Rachel Austin (for mandates). The estimate was 

approved by H. Samuel Papenfuss, Deputy Assistant Director for 

Budget Analysis. 

FEDERAL MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995. 

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The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, (115th Congress), the following statement is made concerning directed rulemakings: The 

Committee estimates that the bill requires no directed rulemakings 

within the meaning of such section. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Eliminating barriers to jobs for loan originators 

This section provides temporary loan-origination authority to registered loan originators: (1) moving from a financial institution to 

a state-licensed non-bank originator, or (2) moving interstate to a 

state-licensed loan originator in another state. This section further 

provides that both the mortgage loan originator and the company 

hiring the MLO are subject to the SAFE Act and applicable state 

law as if the MLO were duly licensed. 

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Section 2. Amendment to civil liability of the bureau and other officials 

This section updates the SAFE Act’s existing civil liability protections to ensure that those protections continue to apply where state 

regulators use the NMLS as a licensing system for financial services providers other than loan originators. 

Section 3. Effective date 

This section states that the Act takes effect 18 months after enactment. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

and existing law in which no change is proposed is shown in 

roman): 

HOUSING AND ECONOMIC RECOVERY ACT OF 2008 

SEC. 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Housing and 

Economic Recovery Act of 2008’’. 

(b) TABLE OF CONTENT.—The table of contents for this Act is as 

follows: 

Sec. 1. Short title; table of contents. 

* * * * * * * 

TITLE V—S.A.F.E. MORTGAGE LICENSING ACT 

* * * * * * * 

Sec. 1518. Employment transition of loan originators. 

* * * * * * * 

DIVISION A—HOUSING FINANCE 

REFORM 

* * * * * * * 

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TITLE V—S.A.F.E. MORTGAGE 

LICENSING ACT 

SEC. 1501. SHORT TITLE. 

This title may be cited as the ‘‘Secure and Fair Enforcement for 

Mortgage Licensing Act of 2008’’ or ‘‘S.A.F.E. Mortgage Licensing 

Act of 2008’’. 

* * * * * * * 

SEC. 1513. LIABILITY PROVISIONS. 

The Bureau, any State official or agency, or any organization 

serving as the administrator of the Nationwide Mortgage Licensing 

System and Registry or a system established by the Director under 

section 1509, or any officer or employee of any such entity, shall 

not be subject to any civil action or proceeding for monetary damages by reason of the good faith action or omission of any officer 

or employee of any such entity, while acting within the scope of office or employment, relating to the collection, furnishing, or dissemination of information concerning persons who øare loan originators or are applying for licensing or registration as loan originators.¿ have applied, are applying, or are currently licensed or registered through the Nationwide Mortgage Licensing System and 

Registry. The previous sentence shall only apply to persons in an industry with respect to which persons were licensed or registered 

through the Nationwide Mortgage Licensing System and Registry 

on the date of the enactment of this sentence. 

* * * * * * * 

SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS. 

(a) TEMPORARY AUTHORITY TO ORIGINATE LOANS FOR LOAN

ORIGINATORS MOVING FROM A DEPOSITORY INSTITUTION TO A NONDEPOSITORY 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 

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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 

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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 ‘‘Statelicensed 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. 

* * * * * * * 

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