November 19, 2020
By: Melissa Richards
The California Department of Financial Protection and Innovation (fka Department of Business Oversight) has taken further steps to transition its administration of the California Financing Law (CFL) License to the Nationwide Mortgage Licensing System (NMLS) portal. On November 18, 2020, DFPI issued a Notice of Third Modifications to Proposed Rulemaking Requirements for CFL NMLS Transition with a short, 15-day comment period ending December 3, 2020. The proposed target date for completing this transition is July 1, 2021. This rulemaking affects all current and prospective CFL licensee brokers and lenders including commercial, consumer finance and PACE program administrators. A copy of the proposed rulemaking is attached HERE.
Additional highlighted provisions are:
- Revised CFL license application and instructions for non-residential mortgage applicants (who are already applying for CFL licenses through NMLS) to be used until the effective NMLS transition date. Revised instructions include an express caveat for brokers that (a) the CFL broker license only authorizes them to do business with CFL lenders, and (b) if doing business with lenders that are not CFL licensed (ie, depository institutions), the broker may be subject to other CA licensing laws (ie, real estate law).
- Revised requirements for proposed CFL business plans and for PACE program administrator business plans.
- Starting on the effective NMLS transition date and continuing through December 31, 2021, current CFL licensees will need to establish a company NMLS online account and secure their unique identifier number. Once a NMLS account is established, CFL licensees must file a company MU1 application accompanied by MU2 applications for each individual “control person.”
- The proposal imposes additional documentation requirements for PACE program administrators seeking CFL licensure, including (a) a copy of the public agency authorization agreement, (b) proposed agreement templates for PACE solicitors and solicitor agents, as well as for property owners, and (c) a new DFPI form PACE Program Administrator Application Request for Information.
Please reach out to Melissa Richards for assistance in understanding the proposed rule provisions, for filing a comment letter, and for assistance in transitioning your CFL licensed business over to NMLS.
This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.
