Is the NMLS required on denials if the denial happened before early disclosures?
Thank you,
Elizabeth

The NMLS# is required with the creditor's first written communication with the applicant and if there are no earlies, i would think the AAN might well be your first written communication. We include the NMLS# on all applicable AANs.

For certain mortgage loans, the NMLS number is required to be on your application. If that is the case, I would say that you have already provided it. As raitchjay says, the number is required at the earliest point of contact. If your turndown is the earliest point of contact, you have other issues.

For context, I don't list the NMLS number on my AA notices.

What written communication are you sending for a loan denied so quickly that you don't need earlies, other than the AAN? Just confused about your statement of 'having other issues' if denial is the earliest point of contact....what other WRITTEN form of contact would there be?

There has to be some level of contact to get you to the point where you are denying a loan. Did you speak with the customer? Did you correspond via email? Does the customer have your business card (assuming you provide the NMLS number on the card). Finally, many applicants submit an application. In the case of a mortgage loan, the application would have the number on it.

You can't make a decision to deny a loan without some form of basic information being submitted by the customer.

Maybe we are making the same point. A denial should not be your earliest point of contact with a customer.

I'm talking specifically about the requirement to provide the NMLS# with the LO's "initial written communication" with the customer. An application is a way for the applicant to communicate with the bank, not vice-versa (IMO). An application denied after earlies are given would already have the "initial written communication" with the applicant, but the OP's scenario was a denial before earlies are ever sent. Speaking with the customer and verbally giving the NMLS# doesn't satisfy the requirement to give it (again) with the initial written communication. That's my take on it anyway.

Gotcha. Agree to disagree I suppose. My point is, at some point earlier than the denial the NMLS number should have been presented to the customer. Whether that is listed online, on a business card, or on a pre-printed application. For that reason, I don't bother listing any of this on my AA notice.

Hopefully the OP is following the industry practice of including the NMLS number on the business card. Not required, but certainly a good idea.

::Exits room::

Handing the customer a business card at the time they hand a customer an application or when they turn one in or posting the NMLS number on a website has nothing to do with complying with the specific regulatory requirement to provide the number with the initial written communication.

While your statement is probably true from a theoretical standpoint, an adverse action notice may well be the first written communication to the customer from the bank (received app, pulls credit, score is in the 400's) and therefor the NMLS number would be required if that is the situation.

Thanks for all your help!

This is our practice as well.

Let's put two more twists on it:

1) HELOC application from the website goes through an automated decisioning system and based on credit, denies the loan. First contact is the AAN. Do we pick a random MLO or do we use the bank's NMLS #?

2) Slightly different version - application comes in from the website to an underwriter who pulls credit and denies for credit before it's assigned to an MLO. A processor sends the AAN. Do we register the processor (who doesn't meet the definition of an MLO), do we use the bank NMLS #, or if neither of those, how do you pick which MLO's info to use?

As to #2, there is no need to register an LO who is not an MLO just to comply with 1026.36(g). A careful read reveals that the NMLSR ID only has to appear if the individual is registered. If he or she isn't registered, only the name has to appear.

Thanks John - if I'm reading you and the Reg B definitions right, you're saying that if we deny it out of the shoot for credit and no MLO is ever involved, then we don't need anything on the AAN but the name of the creditor and contact info? In that case, and where we're getting ready to roll with an automated system, we can just list the bank's name as creditor with contact info? By doing that, wouldn't we list the bank's NMLS#?

Don't infer too much from my response. What I was attempting to make clear is that there is a distinction between a Regulation Z Loan Originator and a Regulation G Mortgage Loan Originator. In general, one can be the former without being the latter, but virtually every MLO fits the criteria for LO.

All I said was, if the LO isn't an MLO (and therefore doesn't need or have an NMLS ID), his or her name should appear on the documents listed in 1026.36(g) (and no NMLS number for him or her is required).

Where I'm hung up is what to put on the adverse action notice that's fully automated and never makes it to a loan officer of any variety because it dies from a case of bad credit. They've registered the 2 processors that send out the notices and that's not right since they aren't MLO's or LO's and are merely serving as the creditor point of contact on first written communication. The real estate portion of the system isn't up and running yet, but I'd like to get this right. Logic says use the bank name and NMLS# as the creditor, but since when has logic ever prevailed in Compliance?

FWIW HMS Pippii, i agree with your assessment. No MLO has acted in his/her role as a mortgage loan originator, so I don't see the requirement to randomly give an MLO's NMLS# on the AAN.

Even if an MLO has been assigned to a file, but hasn't had any written communication with the applicant, and the applicant is denied, would the name and NMLS number be required on the Adverse Action Notice (AAN) if the MLO doesn't produce, sign, or send the AAN?

The regulation states that the name and number are required "Through the originator's initial written communication with a consumer, if any, whether on paper or electronically.

Yes

I have not been able to locate where in the regulation it says on the first written communication. I found 1026.36(g) where it describes what information must be included, the documents listed are application, note and security agreement, and what to do if there are multiple LO's.

SAFE Act.

Part 1007.105 Use of unique identifier.






(a) The covered financial institution shall make the unique identifier(s) of its registered mortgage loan originator(s) available to consumers in a manner and method practicable to the institution.

(b) A registered mortgage loan originator shall provide his or her unique identifier to a consumer:

(1) Upon request;

(2) Before acting as a mortgage loan originator; and

(3) Through the originator's initial written communication with a consumer, if any, whether on paper or electronically.

I've been looking all over 1026.36. Thank you