2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 7 - BANKS AND BANKING › Chapter 61 - Mortgage Loan Industry Licensing and Consumer Protection › Section 6131.1 - Prelicensing and continuing education

§ 6131.1. Prelicensing and continuing education.
(a) General requirements.--
(1) Applicants shall complete prelicensing education required under subsection (b) and pass a written test regarding the education under subsection (c) in order to obtain a license under this chapter.
(2) Licensees shall complete continuing education required under subsection (d) in order to renew a license under this chapter.
(b) Prelicensing education.--
(1) A mortgage originator applicant, and at least one qualifying individual of a mortgage broker or mortgage lender applicant, shall complete at least 20 hours of education programs approved in accordance with paragraph (2), which shall include all of the following:
(i) Three hours of Federal law and regulations.
(ii) Three hours of ethics, which shall include instruction on fraud, consumer protection and fair lending issues.
(iii) Two hours of training related to lending standards for the nontraditional mortgage loan marketplace.
(iv) Three hours of Pennsylvania law and regulations, including this chapter, the act of December 3, 1959 (P.L.1688, No.621), known as the Housing Finance Agency Law, and the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law.
(2) Prelicensing education programs shall be reviewed and approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department based upon reasonable standards. Review and approval of a prelicensing education program shall include review and approval of the program provider.
(3) A prelicensing education program approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department may be provided by the sponsor of the applicant or an entity which is affiliated with the applicant by an agency contract, or any subsidiary or affiliate of such sponsor or entity.
(4) Prelicensing education programs may be offered either in a classroom, online or by any other means approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department.
(5) Except for prelicensing education programs under paragraph (1)(iv), prelicensing education programs approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department and completed for another State license application shall be accepted as credit toward completion of the prelicensing education requirements of this chapter.
(6) An applicant that was previously licensed under this chapter that is applying to become licensed again under this chapter must demonstrate that the applicant has completed all of the continuing education requirements for the year in which the applicant was last licensed under this chapter.
(c) Prelicensing written test.--
(1) A mortgage originator applicant, and at least one qualifying individual of a mortgage broker or mortgage lender applicant, shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the Nationwide Mortgage Licensing System and Registry and administered by a test provider approved by the Nationwide Mortgage Licensing System and Registry based upon reasonable standards. The department may also require applicants to pass a test regarding Pennsylvania-specific law, which shall be administered by a test provider approved by the department or as otherwise determined by the department under subsection (e).
(2) A written test shall not be treated as a qualified written test for purposes of paragraph (1) unless the test adequately measures the applicant's knowledge and comprehension in appropriate subject areas, including:
(i) Ethics.
(ii) Federal law and regulation pertaining to mortgage origination.
(iii) Pennsylvania law and regulation pertaining to mortgage origination, unless otherwise determined by the department.
(iv) Federal and Pennsylvania law and regulation related to fraud, consumer protection, the nontraditional mortgage marketplace and fair lending issues.
(3) A test provider approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department may provide a test at the location of the sponsor of the applicant or an entity which is affiliated with the applicant by an agency contract, or any subsidiary or affiliate of the sponsor or entity.
(4) (i) An applicant shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than 75% correct answers to questions.
(ii) An applicant may take a test three consecutive times with each consecutive taking occurring at least 30 days after the preceding test.
(iii) After failing three consecutive tests, an applicant shall wait at least six months before taking the test again.
(iv) A formerly licensed mortgage originator applicant who has been unlicensed for five continuous years or longer shall retake a test. Any time during which the individual is a registered mortgage loan originator shall not be counted toward the five-year continuous period.
(d) Continuing education.--
(1) A licensee who is a mortgage originator and all branch managers and qualifying individuals of a mortgage broker or mortgage lender shall annually complete at least eight hours of education programs in accordance with paragraph (2), which shall include all of the following:
(i) Three hours of Federal law and regulations.
(ii) Two hours of ethics, which shall include instruction on fraud, consumer protection and fair lending issues.
(iii) Two hours of training related to lending standards for the nontraditional mortgage loan marketplace.
(iv) One hour of Pennsylvania law, including this chapter, the act of December 3, 1959 (P.L.1688, No.621), known as the Housing Finance Agency Law, and the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law.
(2) Continuing education programs shall be reviewed and approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department based upon reasonable standards. Review and approval of a continuing education program shall include review and approval of the program provider.
(3) A continuing education program approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department may be provided by the sponsor of the licensee or an entity which is affiliated with the licensee by an agency contract, or any subsidiary or affiliate of the sponsor or entity.
(4) Continuing education programs may be offered either in a classroom, online or by any other means approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department.
(5) A licensee may only receive credit for a continuing education program in the year in which the program is taken and may not take the same continuing education program in the same or successive years to meet the requirements of this subsection.
(6) A licensed mortgage originator who is an instructor of an approved continuing education program may receive credit for the licensed mortgage loan originator's own continuing education requirement at the rate of two hours credit for every one hour taught.
(7) Except for the continuing education program under paragraph (1)(iv), continuing education programs approved by the Nationwide Mortgage Licensing System and Registry or as otherwise determined by the department and completed for another state shall be accepted as credit toward completion of the continuing education requirements of this chapter.
(8) An individual who is a mortgage originator, branch manager or qualifying individual of a mortgage broker or mortgage lender is not required to complete the requirements of this subsection in any licensing year in which the individual has completed the requirements of subsection (b).
(e) Pennsylvania-specific education and testing programs.--
(1) Pennsylvania-specific education and testing programs shall be approved by the department, unless otherwise determined by the department. The department may charge education and testing providers a fee, to be determined by the department, for department review of Pennsylvania-specific education and testing programs.
(2) An education provider may apply for education and testing program approval on a form prescribed and provided by the department. The application shall be submitted to the department at least 60 days prior to the first date that the education is proposed to be offered. The application shall include:
(i) An outline of the proposed education and testing program, and the method of instruction and testing, whether in a classroom, online or by any other means.
(ii) A resume detailing each proposed instructor's qualifications. The following individuals shall not be qualified to be instructors, unless the department determines otherwise:
(A) An individual who has had his license denied, not renewed, suspended or revoked by the department or any other state.
(B) An individual who has been the director, officer, partner, employee, agent or ultimate equitable owner of 10% or more of a licensee that has had its license denied, not renewed, suspended or revoked by the department or another state.
(C) An individual who has been subject to a department order or agreement prohibiting the individual from engaging in the mortgage loan business in this Commonwealth or acting in any other capacity related to activities regulated by the department or similar order or agreement issued by another state.
(D) An individual who has pleaded guilty, been convicted of or pleaded nolo contendere to a crime of moral turpitude or felony.
(iii) Other information that the department may require.
(3) The department shall be notified in writing at least 10 days prior to any change in instructors. A new instructor shall be subject to the criteria under paragraph (2)(ii).
(4) Education programs offered solely to satisfy the requirements of subsection (d) shall not be required to include a written testing component.
(5) The department shall have 45 days from receipt of a completed application to approve or deny the proposed education and testing program. An application shall be deemed completed when the requirements of this subsection have been fulfilled. If the department fails to approve or deny an application submitted by a prospective education provider within 45 days of its receipt, the education program shall be deemed approved by the department. The department may deny an application submitted by an education provider if the education and testing program or education provider fails to satisfy any of the conditions or requirements contained under this chapter.
(6) Approval of an education program by the department shall be valid for one licensing year and shall not constitute permanent approval of the education program.
(7) Education providers shall provide free access to the department to monitor education programs. In order to ensure the department's access to education programs, education providers shall provide the department with notification of the date, time and location of each education program that is offered by the education provider.
(8) Education providers shall retain original records of attendance for each education and testing program conducted by the education provider for four years and shall provide the department free access to the records upon request.
(9) The department may revoke its approval of an education provider's education and testing programs if the education provider fails to comply with any requirement of this chapter.
(Aug. 5, 2009, P.L.117, No.31, eff. imd.; July 2, 2013, P.L.210, No.38, eff. 60 days; Feb. 3, 2022, P.L.24, No.8, eff. 60 days)
2022 Amendment.
Act 8 amended subsecs. (b)(1) intro. par., (c)(1), (d)(1) intro. par. and (8).
2013 Amendment.
Act 38 amended subsecs. (b), (c) and (d).
2009 Amendment.
Act 31 added section 6131.1.
Cross References.
Section 6131.1 is referred to in sections 6112, 6139 of this title.