VIDEO: Does the NMLS Number Need to be on Adverse Action Notices?
Adam uses this Compliance Clip (video) to answer the question as to whether a Mortgage Loan Originator’s unique ID - i.e. the NMLS number - needs to be included on Adverse Action Notices. The answer is quite simple, but how we arrive at that answer is a bit confusing.
Video Transcript
The following is a transcript of this video:
This Compliance Clip is going to focus on the NMLS number on Adverse Action Notices. Our question is: “Does a loan officer’s NMLS number need to be on Adverse Action Notices?
The answer, of course, is going to come from the Safe Act. Let's take a look and see what the Safe Act says about the requirements to provide the NMLS number. The Safe Act says that the NMLS number must be delivered to a consumer under a number of conditions. First of all, it must be delivered upon request. That's not an issue here, so let's see what else there is. It needs to be delivered when? Before acting as an MLO, a Mortgage Loan Originator, or through the originator’s initial written communication with the consumer. The Safe Act basically says that if one of these applies, your loan officers must be providing their NMLS number.
What it doesn't say is it doesn't address anything about your Adverse Action Notices. However, if your Adverse Action Notice is your loan originator’s initial written communication The very first document that you provide to the applicant is the Adverse Action Notice, then guess what? You need to be providing the NMLS number under this part of the Safe Act. What that means is if you've not provided it previously, you should be providing it with or on your Adverse Action Notices.
The best practice that we see quite often is to include the NMLS number on Adverse Action Notices. There's no other rule that says it has to be on there but this is exactly why.
That concludes our Compliance Clip for today.