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Financial Services Law Insights and Observations

Connecticut Expands Processing and Underwriting Licensing Requirements

State Issues

On July 13, Connecticut enacted a law that, among other things, requires a broader range of loan processors and underwriters to obtain a license. Previously, loan processors or underwriters who were independent contractors were required to obtain a license, but the act expands the licensing requirement to include processors and underwriters who are not employed by a licensed mortgage lender, correspondent or broker or other person exempt from the licensing requirement. Loan processors and underwriters employed by mortgage lenders, correspondent lenders, mortgage brokers or exempt entities remain exempt from the licensing requirements. The law also permits exempt entities to register on the National Mortgage Licensing System and Registry as an exempt registrant for purposes of sponsoring a mortgage loan originator or loan processor or underwriter without impacting their exempt status. Finally, the law amends the licensing act’s educational requirements and surety bond requirements. The pertinent provisions of the act take effect October 1, 2011.