---
kind: "section"
citation: "12 U.S.C. § 5107"
title: "12"
title_heading: "Banks and Banking"
number: "5107"
heading: "Bureau of Consumer Financial Protection backup authority to establish loan originator licensing system"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5107"
units:
  - "Chapter 51 — Secure and Fair Enforcement for Mortgage Licensing"
---

# §5107. Bureau of Consumer Financial Protection backup authority to establish loan originator licensing system

- (a) **Backup licensing system—** If, by the end of the 1-year period, or the 2-year period in the case of a [State](/usc/12/5102.md?p=11) whose legislature meets only biennially, beginning on July 30, 2008, or at any time thereafter, the [Director](/usc/12/5102.md?p=10) determines that a [State](/usc/12/5102.md?p=11) does not have in place by law or regulation a system for licensing and registering [loan originators](/usc/12/5102.md?p=4-A) that meets the requirements of sections [5104](/usc/12/5104.md) and [5105](/usc/12/5105.md) of this title and [subsection (d)](#d) of this section, or does not participate in the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6), the [Director](/usc/12/5102.md?p=10) shall provide for the establishment and maintenance of a system for the licensing and registration by the [Director](/usc/12/5102.md?p=10) of [loan originators](/usc/12/5102.md?p=4-A) operating in such [State](/usc/12/5102.md?p=11) as [State-licensed loan originators](/usc/12/5102.md?p=12).
- (b) **Licensing and registration requirements—** The system established by the [Director](/usc/12/5102.md?p=10) under [subsection (a)](#a) for any [State](/usc/12/5102.md?p=11) shall meet the requirements of sections [5104](/usc/12/5104.md) and [5105](/usc/12/5105.md) of this title for [State-licensed loan originators](/usc/12/5102.md?p=12).
- (c) **Unique identifier—** The [Director](/usc/12/5102.md?p=10) shall coordinate with the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) to establish protocols for assigning a [unique identifier](/usc/12/5102.md?p=13-A) to each [loan originator](/usc/12/5102.md?p=4-A) licensed by the [Director](/usc/12/5102.md?p=10) as a [State-licensed loan originator](/usc/12/5102.md?p=12) that will facilitate electronic tracking and uniform identification of, and public access to, the employment history of and the publicly adjudicated disciplinary and enforcement actions against [loan originators](/usc/12/5102.md?p=4-A).
- (d) **State licensing law requirements—** For purposes of this section, the law in effect in a [State](/usc/12/5102.md?p=11) meets the requirements of this subsection if the [Director](/usc/12/5102.md?p=10) determines the law satisfies the following minimum requirements:
  - (1) A [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority is maintained to provide effective supervision and enforcement of such law, including the suspension, termination, or nonrenewal of a license for a violation of [State](/usc/12/5102.md?p=11) or Federal law.
  - (2) The [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority ensures that all [State-licensed loan originators](/usc/12/5102.md?p=12) operating in the [State](/usc/12/5102.md?p=11) are registered with [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6).
  - (3) The [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority is required to regularly report violations of such law, as well as enforcement actions and other relevant information, to the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6).
  - (4) The [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority has a process in place for challenging information contained in the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6).
  - (5) The [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority has established a mechanism to assess civil money penalties for individuals acting as [mortgage](/usc/12/1707.md?p=a) originators in their [State](/usc/12/5102.md?p=11) without a valid license or registration.
  - (6) The [State](/usc/12/5102.md?p=11) [loan originator](/usc/12/5102.md?p=4-A) supervisory authority has established minimum net worth or surety bonding requirements that reflect the dollar amount of loans originated by a [residential mortgage loan](/usc/12/5102.md?p=9) originator, or has established a recovery fund paid into by the [loan originators](/usc/12/5102.md?p=4-A).
- (e) **Temporary extension of period—** The [Director](/usc/12/5102.md?p=10) may extend, by not more than 24 months, the 1-year or 2-year period, as the case may be, referred to in [subsection (a)](#a) for the licensing of [loan originators](/usc/12/5102.md?p=4-A) in any [State](/usc/12/5102.md?p=11) under a [State](/usc/12/5102.md?p=11) licensing law that meets the requirements of sections [5104](/usc/12/5104.md) and [5105](/usc/12/5105.md) of this title and [subsection (d)](#d) if the [Director](/usc/12/5102.md?p=10) determines that such [State](/usc/12/5102.md?p=11) is making a good faith effort to establish a [State](/usc/12/5102.md?p=11) licensing law that meets such requirements, license [mortgage](/usc/12/1707.md?p=a) originators under such law, and register such originators with the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6).
- (f) **Regulation authority—**
  - (1) **In general—** The [Bureau](/usc/12/5102.md?p=1) is authorized to promulgate regulations setting minimum net worth or surety bond requirements for [residential mortgage loan](/usc/12/5102.md?p=9) originators and minimum requirements for recovery funds paid into by [loan originators](/usc/12/5102.md?p=4-A).
  - (2) **Considerations—** In issuing regulations under [paragraph (1)](#f-1), the [Bureau](/usc/12/5102.md?p=1) shall take into account the need to provide originators adequate incentives to originate affordable and sustainable [mortgage](/usc/12/1707.md?p=a) loans, as well as the need to ensure a competitive origination market that maximizes [consumer](/usc/12/5481.md?p=4) access to affordable and sustainable [mortgage](/usc/12/1707.md?p=a) loans.

## Source credit

(Pub. L. 110–289, div. A, title V, § 1508, July 30, 2008, 122 Stat. 2818; Pub. L. 111–203, title X, § 1100(3), (6), July 21, 2010, 124 Stat. 2106.)

## Notes

### Editorial Notes

### Amendments

2010—Pub. L. 111–203, § 1100(3), (6)(A), inserted section catchline, struck out former section catchline which read “Secretary of Housing and Urban Development backup authority to establish a loan originator licensing system”, and substituted “Director” for “Secretary” wherever appearing in text.

Subsec. (f). Pub. L. 111–203, § 1100(6)(B), added subsec. (f).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.