In numerous states, personal loan products are being subjected to new regulations, mostly depending around who offers them. Agents that offered both large and small loans that were not up to snuff are the target of these regulations. When New York passed these regulations in 2006, the federal government passed comparable laws in 2008.
New York state loan licensing
The newest regulations in New York state are intended to regulate not cash advance lenders that offer mortgages, but their agents. A license is necessary for anyone who wants to work in New York State after July 31, 2010. Getting this license needs a 20 hour course in responsible lending. Financial, criminal, and knowledge tests are also required for the license. Around the country, comparable laws are likely to be taking effect within the next few years.
Limiting employees that offer bad loans
The Secure and Fair Enforcement for Mortgage Licensing law addresses one very specific problem. A unique subset of lenders created the fast cash advance products that contributed to the economic recession. You didn’t need a separate certification if you worked for an employer that had a mortgage license. Mortgage loan officers who were known to make no credit loans or bad loans could jump from job to job.States can keep closer tabs on mortgage lenders with these licenses.
Relatively weak licensing requirements
The mortgage licensing requirements may not be enough, according to some industry watchers. Most say that the required 20 hours of training simply isn’t enough. There is a minimum of 75 hours of professional training for most licenses. Either way, the Nationwide Mortgage Licensing System and Registry is now providing a search for borrowers to identify whether they are working with a licensed mortgage lender.
