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Financial Services Law Insights and Observations

Louisiana Provides Additional Exemptions from Mortgage Loan Originator Licensing Requirement

State Issues

On June 21, Louisiana Governor Bobby Jindal signed into law H.B. 492, which exempts certain individuals that originate residential mortgage loans exclusively for one federally chartered depository institution from the mortgage loan originator licensing requirement set forth under the Louisiana S.A.F.E. Residential Mortgage Lending Act (the Act). To be eligible for the exemption, such individuals must also, among other things, (i) originate no more than five residential mortgage loans per calendar year, (ii) be contractually prohibited from soliciting, processing, negotiating, or placing a residential mortgage loan with a person other than the single federally chartered depository institution, (iii) enroll with the Louisiana Office of Financial Institutions as an individual who originates exclusively with a single federal depository institution until the time federal law or regulation requires such individuals to register with the Nationwide Mortgage Licensing System and Registry, and (iv) be sponsored by a life insurance company or an affiliate of the company which is authorized to engage in business in Louisiana and which is licensed as a Louisiana mortgage loan broker or originator. The bill also exempts individuals employed by certain non-profit organizations approved by the Department of Housing and Urban Development from the Act’s mortgage loan originator licensing requirement. Finally, the bill removes from the Act eligibility and filing requirements previously applicable to persons meeting the definition of registered mortgage loan originator. These provisions are effective immediately.