NMLS Targets Disciplinary Action Information

NMLS now collects information about certain disciplinary, enforcement, and other actions against MLOs.

November 26, 2012

Since October, the Nationwide Mortgage Licensing System and Registry (NMLS) now collects information about certain disciplinary, enforcement, and other actions against a mortgage loan originator (MLO).

Each MLO must provide the information (or on behalf of the MLO by the employing credit union) under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) and Regulation G.

Previously, MLOs only had to disclose whether they had been subject to any disciplinary action. MLOs now must provide the following information if they answer “yes” to any of the questions regarding disciplinary actions on NMLS Form MU4R (not applicable to MLOs answering “no” to these disclosure questions):

  • Action type (criminal, regulatory, civil judicial, or civil regulatory);
  • Name of authority that took the action being disclosed;
  • Date of action; and
  • Official documentation related to the action (e.g., court order or letter from regulatory authority).

Additionally, MLOs have the option to provide an explanation of the disciplinary action, in their own words.

MLOs who answered “yes” must update their profiles during their next annual update after Oct. 22, 2012, unless they voluntarily update them before that time.

Only federal regulators will have access to the additional information from Oct. 22, 2012 to February 2013. Consumers will have access beginning March 2013.

The NMLS offers a step-by-step explanation for completing the process—The Disciplinary Action Reference Guide. It’s available a fedregistry.nationwidelicensingsystem.org.