The California Department of Business Oversight (“DBO”) on October 25 published a regulatory proposal to “modernize” the California Financing Law (“CFL”) licensing process. To do so, the DBO proposed amending existing licensing rules to transition all licensees onto the Nationwide Multistate Licensing System (“NMLS”). According to the notice of rulemaking, today many CFL licensees receive and maintain their licenses through NMLS. This includes licensees engaged in residential mortgage origination and brokering. Other entities, such as non-residential real property lenders and brokers, are not currently on NMLS.
The DBO observes that because some “licensees may already participate in NMLS in other states,” moving all licensees to NMLS would remove some of the inefficiencies associated with maintaining a “California license outside of NMLS.” Additionally, the regulatory proposal would assist consumers by “providing … a common location nationally to access information on financial services providers.” It would also streamline the DBO’s licensing process “by leveraging the technology already developed and used nationally.”
Acknowledging the growth of the NMLS platform beyond simply managing mortgage loan originators, the DBO notes that NMLS “now serves as a multistate licensing system for many industries.” The DBO further notes that it currently uses the system to license “mortgage lenders, mortgage brokers, mortgage servicers, mortgage loan originators, student loan servicers, and program administrators.” Consequently, this proposal would further solidify the important role NMLS serves in administering state licenses for financial services within California.
In addition to the above, the regulatory proposal implements AB 1284, which amended the CFL by establishing licensing requirements for Property Assessed Clean Energy programs administrators. AB 1284 was signed into law on October 4, 2017.
Until December 9, 2019, the DBO will accept and consider written comments related to the regulatory proposal.