We have several employees that are registered on the NMLS and have NMLS#'s that were currently laid off. When we lay someone off is that considered termination under the NMLS and their # should be terminated? Our internal system puts them into a suspended account until their severance is paid out and then they are issued a termination date, which in some cases could be many months.

I am wondering how others treat these. Just terminate the MLO on the NMLS? Or change them to "not authorized" and then terminate them when their severance pay is up and we internally give them a termination date?


Thanks.

Their NMLS number doesn't get terminated. If they are hired elsewhere, either as a licensed or a registered MLO, they use the same number they had when they worked for you. That's one of the keys for a consumer to be able to look back on an MLO's work record. You change their status to whatever NMLS uses to indicate they no longer work for you.Under Regulation G section 1007.103(e)(2)(ii), you have 30 days of the date the registrant ceases to be an employee to notify NMLS that you no longer employ the individual and the date the registrant ceased being an employee.

Somewhat related ... if the bank terminates an MLO for disciplinary reasons (i.e., those covered by the SAFE Act such as dishonesty, breach of trust, money laundering, etc.), is there any SAFE Act reporting requirements other than to update the NMLS registry to indicate they are no longer employed by the financial institution?

No - file your SAR and notify your regulatory agency,