Use of a Uniform State Test For NMLS Licensing gets CFPB green light

ustadoptionmap

Click on the image* for a map and updated list of states that have adopted the Uniform State Test. *From the NMLS website.

The CFPB has validated the use of a Uniform State Test (UST) developed by the Nationwide Mortgage Licensing System and Registry (NMLSR) to satisfy SAFE Act testing requirements.

The SAFE Act requires state-licensed MLOs to pass a written test developed by the NMLSR. The test must include questions that examine an applicant on ethics and federal and state laws regarding mortgage origination, fraud, consumer protection and fair lending issues.

The UST allows mortgage loan originators more flexibility and makes it easier to do business in other states. Previously, if an MLO wanted to be licensed to do business in multiple states, they would have to take very similar tests for every state they wished to be licensed in.  The UST will cut down on time spent answering questions that the applicant has already demonstrated knowledge of.

As of June 7, the Uniform State Test is currently adopted, or will be adopted by 32 state regulatory agencies, and it is expected that nearly every state will adopt the UST. As the UST continues to grow and develop, it will eliminate the need to take several state exams that ask for, essentially, the same information.  For MLOs wishing to be licensed in multiple states, this will save time, money, and the hassle of finding a testing facility and carving out half of the day to take a test. Originators are still required to meet state-specific criteria, but the UST allows the originator to demonstrate that they have met the minimum applicable state examination requirements, eliminating the frustration of taking redundant tests.

The test is only $33, consists of 25 questions, and takes about 45 minutes to complete. Information on the UST and the states that have adopted it is available through the NMLS website.  We will continue to track and post information as it becomes available.

Joseph

About the Author

Joseph is a graduate of Oregon State University. When he isn't at work, he stays busy with music and recreational sports.