The House of Representatives approved legislation on Monday that U.S. Rep. Steve Stivers (R-OH) introduced to give mortgage loan originators more flexibility to transition between bank and non-bank employers.
Under the Safe Transitional Licensing Act, H.R. 2121, mortgage loan originators would receive a grace period to obtain a new license when the change jobs so they can continue to originate loans.
“This is a jobs issue, providing qualified mortgage professionals more portability and a minimal amount of work disruption when making a change in an employer,” Stivers said. “I am pleased to have worked across the aisle and with state regulators to ensure we could reduce red tape without compromising important consumer protections.”
The bill would allow individuals who have been employed by a financial institution for the previous 12 months to continue to originate loans after submitting background and credit information to the state until his or her application is approved.
The bill is designed to ensure that mortgage loan originators wouldn’t face a disruption during the transitional period from one employer to another. Loan originators would not be eligible for the Safe Transitional Licensing Act if a previous loan originator license application has been denied.
“I believe most of us would agree that our economy works better for all Americans when small businesses can focus on creating jobs rather than navigating bureaucratic red tape,” U.S. Rep. Jeb Hensarling (R-TX), the chairman of the Financial Services Committee, said of Stivers’ bill.