States have traditionally licensed mortgage companies; however a growing number of states are moving beyond corporate licensing and requiring the licensing of loan officers and even support staff. Additionally, an increasing number of states are adding onerous requirements to existing mortgage company licensing. These new laws and regulations are adding significant costs to mortgage companies, particularly for national and multi-state lenders. Some lenders believe that the increase and expansion of these state laws has placed state-licensed mortgage companies at a disadvantage in relation to federally chartered financial institutions.
MBA believes regulating mortgage companies can help to monitor lending activity, prevent abusive lending and build a competitive marketplace for the benefit of consumers. The increasing array of burdensome state licensing legislation, though, is adversely affecting multi-state mortgage companies, who help secure our national real estate finance system. Mortgage companies that do not enjoy a federal pre-emption from state laws are at an increasing disadvantage in comparison to federally chartered financial institutions, thus diminishing competition in mortgage lending. Solutions must allow for appropriate oversight of mortgage companies without excessive, and sometimes redundant, costs.
For more information about state mortgage banking issues, visit the MBA State Legislative and Regulatory Resource Center. www.mortgagebankers.org/Advocacy/StateLegislativeandRegulatoryResources .
As a service to its members, MBA also maintains a comprehensive online password protected resource where MBA members can review state legislation and regulations twenty-four hours a day, seven days a week. To access the State Legislative Database, visit its log-in page. www.mortgagebankers.org/Login