H.R. 2121, SAFE Transitional Licensing Act of 2015

H.R. 2121

SAFE Transitional Licensing Act of 2015

May 23, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On Monday, May 23, 2016, the House will consider H.R. 2121, the SAFE Transitional Licensing Act of 2015, under suspension of the rules. The bill was introduced on April 29, 2015, by Rep. Steve Stivers (R-OH) and was referred to the Committee on Fiancial Services, which ordered the bill reported by a vote of 56 to 0 on March 2, 2016.


Bill Summary

H.R. 2121 would provide temporary authority for licensed mortgage loan originators to work in a new state or under a new employer—if the new employer is a state-licensed mortgage company—until the individual is issued a new mortgage originator license. Specifically, the bill enables mortgage originators’ to originate mortgages after taking a new job under temporary authority for up to 120 days or until a new license is issued. Licensed originators with certain active or previous regulatory violations would not be eligible to obtain this new temporary status.


The Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008 created state licensing or registration requirements for mortgage loan originators (MLOs). MLOs working as loan officers in federally-regulated depository institutions were required to register with the National Mortgage Licensing System and Registry (NMLS). MLOs working for non-depository mortgage companies were required to become licensed at the state level, complete annual continuing education, and pass criminal background checks.

Bank loan officers are not state-licensed MLOs, therefore individuals that leave a bank and a non-bank mortgage company must wait until completing the SAFE Act’s state licensure requirements in order to originate loans for the mortgage company. This process can sometimes take take weeks or months, depending upon the state, which inhibits these individuals from doing. Under current law, the SAFE Act allows for a 60-day grace period for changes in employment due to acquisitions, mergers, and reorganizations, but does not provide for a grace period or other transitional accommodation for bank loan officers seeking to work for non-bank mortgage companies.

According to the bill sponsor, “The SAFE Act inhibits job mobility and puts independent mortgage lenders at a considerable disadvantage in recruiting talented individuals,” said Stivers. “Rather than leaving a job on a Friday and starting a new job on a Monday, as most of us do, a loan officer who moves from a federally-insured institution to a non-bank lender must sit on their hands for weeks, even months, while they meet the SAFE Act’s licensing and testing requirements.  This is despite the fact that they have already been employed and registered as a loan officer.” This bill is a simple solution that would allow these individuals to continue working and underwriting loans, while in no way weakening the important consumer protections of the SAFE Act.[1]

[1] See Rep. Steve Stivers Press Release, “Stivers Introduces SAFE Transitional License Act,” April 30, 2015.


A Congressional Budget Office (CBO) estimates that enacting H.R. 2121 would have no significant net effect on the federal budget because any change in either the amount or timing of the licensing fees (which are considered to be revenues) paid by applicants and subsequently spent by the NMLS for its operations would be insignificant.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.