Legislation from state Rep. Diana Farrington easing requirements for mortgage loan originators when they change employers within the industry has been signed into law.

Loan originators employed by a federally insured financial institution must be licensed and registered with the Nationwide Mortgage Licensing System. This registration makes them exempt from state licensure.

But when these individuals don’t work for a financial institution, they must complete pre-license training, additional classes, a criminal background check and a test before they can be licensed and registered at the state level. House Bill 5084, now Public Act 141 of 2019, will give those transitioning to employers who aren’t federally insured 120 days to meet the different requirements.

“We are removing a disincentive that discouraged people from changing jobs within the mortgage industry,” said Farrington, who chairs the House Financial Services Committee. “A person in this industry doesn’t lose knowledge just by leaving a formal financial institution, and this is a practical update that will make it easier for people in Michigan who are in this line of work.”

Safeguards would remain in place to deny transitional licenses if it is deemed an applicant is ineligible or unfit to be certified.

“More and more people are working from home. Someone who may have recently had a child may want to conduct this business from the home instead of being in an office setting. They also wouldn’t have time to take more classes or fill out additional paperwork,” Farrington said. “So there are many examples where the current setup is unfair and needlessly strict. I’m pleased the governor offered her signature to this plan, as we can now offer some flexibility for Michigan’s employees in this sector.”