We have designated lenders in each branch registered as MLOs. The rest of the lenders are not registered, and we have been able to stick to that very well. How should we handle a situation where the customer applies for a loan secured by their vehicle and changes their mind and wants to get a home equity loan? Do we have to switch loan officers? The non-registered lender has already started acting in the capacity of a lender.

Unless you want to track this officer for the de minimus exception, i would say yes, switch lenders. You say the other lender has already began acting as a lender on the home equity loan; just my opinion, but i'd make it clear that any time an applicant makes such a switch in the future, the non-registered lender should immediately transfer the request to a registered MLO.

I would think that this would have to start over from the application. (decline initial application and start a new one) If any work has been done it can already be thought of originated and thus be part of the de minimus exception.

Why would you have to decline the application? The customer changed their mind on the collateral.....what would your denial reason be?

I think maybe ANBMNCO meant the applicant would "withdraw" their prior application?? Just guessing.