6471 was passed during the 2008 legislative session and became
effective June 12, 2008, the definition of mortgage broker under the
MBPA was amended to remove references to making a loan. The
net effect of the amendment was to prohibit lending under the
MBPA. SB 6471 also expanded the Consumer Loan Act (CLA) to
all lending in
Because licensing under the CLA would have caused mortgage brokers to incur the cost of a much larger bond, and to otherwise delay the impact of the license change on the mortgage broker industry at a time when the industry was beginning to suffer due to the economic downturn, the department created the means for brokers acting as non-delegated correspondent lenders to remain licensed under the MBPA.
Now that the legislature has amended both the MBPA and CLA bonding requirements, effective January 1, 2010, and particularly because the CLA bonding will be significantly lower, non-delegated correspondent lenders licensed under the MBPA must license under the CLA.
Frequently asked questions:
What activities will remain permissible under the MBPA?
Effective January 1, 2010, companies licensed under the MBPA will only be permitted to broker or table fund loans.
Will companies licensed under the MBPA still be able to act as a non-delegated correspondent lender?
No. In order to act as a non-delegated correspondent lender beyond 2009, a company must be licensed under the CLA.
My company is licensed under the MBPA and wants to continue as a non-delegated correspondent lender, what action must I take?
If you are licensed under the MBPA and wish to act as a non-delegated correspondent lender beyond 2009 your company must obtain a license under the CLA.
When should my company apply for a license under the CLA?
To avoid potential business interruption and allow for application processing time, the department recommends that you apply for a CLA license no later than October 31, 2009.
What benefit will my company receive by applying for a CLA license before October 31, 2009?
If you are licensed under the MBPA and submit a complete CLA license application by October 31, 2009, you will avoid potential business interruption and allow for application processing time. In addition, to cover the additional cost of licensing under the CLA, if you convert to the CLA in 2009 you will not have to pay assessments or file a CLA annual report for CLA activity during 2009.
As a CLA licensee must I also hold an MBPA license to broker loans?
Brokering and lending are both permitted under the CLA license.
Where can I find more information about converting to a license under the CLA?
Please visit our website http://dfi.wa.gov/cs/consumer_loan_apply.htm for instructions on submitting a CLA license application. More details about converting to the CLA will follow in the coming months, so please watch for additional ListServ messages and information on our website regarding this topic.
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