---
kind: "section"
citation: "12 U.S.C. § 5104"
title: "12"
title_heading: "Banks and Banking"
number: "5104"
heading: "State license and registration application and issuance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5104"
units:
  - "Chapter 51 — Secure and Fair Enforcement for Mortgage Licensing"
---

# §5104. State license and registration application and issuance

- (a) **Background checks—** In connection with an application to any [State](/usc/12/5102.md?p=11) for licensing and registration as a [State-licensed loan originator](/usc/12/5102.md?p=12), the applicant shall, at a minimum, furnish to the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) information concerning the applicant’s identity, including—
  - (1) fingerprints for submission to the Federal [Bureau](/usc/12/5102.md?p=1) of Investigation, and any governmental agency or entity authorized to receive such information for a [State](/usc/12/5102.md?p=11) and national criminal history background check; and
  - (2) personal history and experience, including authorization for the System to obtain—
    - (A) an independent [credit](/usc/12/5481.md?p=7) report obtained from a [consumer](/usc/12/5481.md?p=4) reporting agency described in [section 1681a(p) of title 15](/usc/15/1681a.md?p=p); and
    - (B) information related to any administrative, civil or criminal findings by any governmental jurisdiction.
- (b) **Issuance of license—** The minimum standards for licensing and registration as a [State-licensed loan originator](/usc/12/5102.md?p=12) shall include the following:
  - (1) The applicant has never had a [loan originator](/usc/12/5102.md?p=4-A) license revoked in any governmental jurisdiction.
  - (2) The applicant has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court—
    - (A) during the 7-year period preceding the date of the application for licensing and registration; or
    - (B) at any time preceding such date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering.
  - (3) The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the [loan originator](/usc/12/5102.md?p=4-A) will operate honestly, fairly, and efficiently within the purposes of this chapter.
  - (4) The applicant has completed the pre-licensing education requirement described in [subsection (c)](#c).
  - (5) The applicant has passed a written test that meets the test requirement described in [subsection (d)](#d).
  - (6) The applicant has met either a net worth or surety bond requirement, or paid into a [State](/usc/12/5102.md?p=11) fund, as required by the [State](/usc/12/5102.md?p=11) pursuant to [section 5107(d)(6) of this title](/usc/12/5107.md?p=d-6).
- (c) **Pre-licensing education of loan originators—**
  - (1) **Minimum educational requirements—** In order to meet the pre-licensing education requirement referred to in [subsection (b)(4)](#b-4), a [person](/usc/12/5481.md?p=19) shall complete at least 20 hours of education approved in accordance with [paragraph (2)](#c-2), which shall include at least—
    - (A) 3 hours of Federal law and regulations;
    - (B) 3 hours of ethics, which shall include instruction on fraud, [consumer](/usc/12/5481.md?p=4) protection, and [fair lending](/usc/12/5481.md?p=13) issues; and
    - (C) 2 hours of training related to lending standards for the [nontraditional mortgage product](/usc/12/5102.md?p=7) marketplace.
  - (2) **Approved educational courses—** For purposes of [paragraph (1)](#c-1), pre-licensing education courses shall be reviewed, and approved by the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6).
  - (3) **Limitation and standards—**
    - (A) **Limitation—** To maintain the independence of the approval process, the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) shall not directly or indirectly offer pre-licensure educational courses for [loan originators](/usc/12/5102.md?p=4-A).
    - (B) **Standards—** In approving courses under this section, the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) shall apply reasonable standards in the review and approval of courses.
- (d) **Testing of loan originators—**
  - (1) **In general—** In order to meet the written test requirement referred to in [subsection (b)(5)](#b-5), an individual shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) and administered by an approved test provider.
  - (2) **Qualified test—** A written test shall not be treated as a qualified written test for purposes of [paragraph (1)](#d-1) unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including—
    - (A) ethics;
    - (B) Federal law and regulation pertaining to [mortgage](/usc/12/1707.md?p=a) origination;
    - (C) [State](/usc/12/5102.md?p=11) law and regulation pertaining to [mortgage](/usc/12/1707.md?p=a) origination;
    - (D) Federal and [State](/usc/12/5102.md?p=11) law and regulation, including instruction on fraud, [consumer](/usc/12/5481.md?p=4) protection, the nontraditional [mortgage](/usc/12/1707.md?p=a) marketplace, and [fair lending](/usc/12/5481.md?p=13) issues.
  - (3) **Minimum competence—**
    - (A) **Passing score—** An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than 75 percent correct answers to questions.
    - (B) **Initial retests—** An individual may retake a test 3 consecutive times with each consecutive taking occurring at least 30 days after the preceding test.
    - (C) **Subsequent retests—** After failing 3 consecutive tests, an individual shall wait at least 6 months before taking the test again.
    - (D) **Retest after lapse of license—** A [State-licensed loan originator](/usc/12/5102.md?p=12) who fails to maintain a valid license for a period of 5 years or longer shall retake the test, not taking into account any time during which such individual is a [registered loan originator](/usc/12/5102.md?p=8).
- (e) **Mortgage call reports—** Each [mortgage](/usc/12/1707.md?p=a) licensee shall submit to the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) reports of condition, which shall be in such form and shall contain such information as the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) may require.

## Source credit

(Pub. L. 110–289, div. A, title V, § 1505, July 30, 2008, 122 Stat. 2814.)