Office of the Commissioner of Financial Regulation


SAFE Act and Maryland NMLS Transition


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June 1, 2009

TO: Maryland Mortgage Lender Licensees

SUBJECT: SAFE Act and Maryland NMLS Transition

Senate Bill 269, which significantly reforms mortgage licensing in Maryland, was passed by the General Assembly in the most recent legislative session and signed by the Governor. It is effective July 1, 2009. This legislation brings Maryland into compliance with the new federal standards under the Secure and Fair Enforcement for Mortgage Licensing Act, also known as the SAFE Act, which sets certain minimum mortgage originator licensing standards and mandates that the Office of the Commissioner of Financial Regulation (the "Commissioner") transition to the Nationwide Mortgage Licensing System ("NMLS").

The Commissioner will transition to the NMLS over the 18-month period from July 1, 2009 to December 31, 2010. This period is designed to enable existing licensees to transition at any time prior to the expiration of their current licenses. The Commissioner had previously issued two-year licenses, but beginning January 1, 2009 began issuing one-year licenses. By providing this 18-month transition period, the Commissioner seeks to minimize the disruption to those operating with two-year licenses issued prior to December 31, 2008.

This advisory is to alert licensees to these developments and to highlight the following key issues:

  • Elimination of exemptions - Prior to the effective date of SB 269, Maryland law had certain exemptions from originator licensing which have largely been eliminated. SB 269, in conformity with the SAFE Act, requires all mortgage loan originators to be licensed (or registered through the federal banking regulators if an employee of a depository institution or subsidiary), with limited exceptions. For example, if you are a Maryland mortgage lender licensee that does not broker Maryland loans, thereby previously making your loan originators exempt from licensing, be advised that beginning July 1, 2009 these originators must be licensed. Remember, accepting mortgage loans from unlicensed mortgage loan originators is a violation of COMAR and can result sanctions, including fines.
  • Non-reciprocal states - A mortgage originator employed by an out-of-state lender may be licensed by the Commissioner, even if the lender does not have a licensed Maryland location, provided the lender comes from a state that does not impose an "in-state" location requirement on Maryland mortgage lenders. Md. Code Ann., Financial Institutions § 11-602(d). Subject to this "reciprocity" provision, if you are located in one of the following thirteen states requiring Maryland mortgage lenders to maintain in-state office locations, you will likewise be required to have a licensed Maryland mortgage lender location before your loan originators can be licensed by the Commissioner: Alabama, Arizona, Hawaii, Missouri, Montana, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, and Texas.
  • Single Corporate Office - The NMLS will accommodate only one corporate office. If your corporate office has not been previously licensed in Maryland, you will need to license that office before any branch can be licensed and/or transitioned onto the Nationwide Mortgage Licensing System (NMLS).

Additional information regarding the new requirements and the NMLS transition are available at:

NMLS Website
Md. Transition Plan on NMLS
Md. Transition Briefing (PowerPoint document, 1.3MB, download PowerPoint viewer for free)
Md. Licensing Newsletter