---
kind: "section"
citation: "12 U.S.C. § 5117"
title: "12"
title_heading: "Banks and Banking"
number: "5117"
heading: "Employment transition of loan originators"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5117"
units:
  - "Chapter 51 — Secure and Fair Enforcement for Mortgage Licensing"
---

# §5117. Employment transition of loan originators

- (a) **Definitions—** In this section:
  - (1) **Application State—** The term “application [State](/usc/12/5102.md?p=11)” means a [State](/usc/12/5102.md?p=11) in which a [registered loan originator](/usc/12/5102.md?p=8) or a [State-licensed loan originator](/usc/12/5102.md?p=12) seeks to be licensed.
  - (2) **State-licensed mortgage company—** The term “[State](/usc/12/5102.md?p=11)-licensed [mortgage](/usc/12/1707.md?p=a) company” means an entity that is licensed or registered under the law of any [State](/usc/12/5102.md?p=11) to engage in [residential mortgage loan](/usc/12/5102.md?p=9) origination and processing activities.
- (b) **Temporary authority to originate loans for loan originators moving from a depository institution to a non-depository institution—**
  - (1) **In general—** Upon becoming employed by a [State](/usc/12/5102.md?p=11)-licensed [mortgage](/usc/12/1707.md?p=a) company, an individual who is a [registered loan originator](/usc/12/5102.md?p=8) shall be deemed to have temporary authority to act as a [loan originator](/usc/12/5102.md?p=4-A) in an application [State](/usc/12/5102.md?p=11) for the period described in [paragraph (2)](#b-2) if the individual—
    - (A) has not had—
      - (i) an application for a [loan originator](/usc/12/5102.md?p=4-A) license denied; or
      - (ii) a [loan originator](/usc/12/5102.md?p=4-A) license revoked or suspended in any governmental jurisdiction;
    - (B) has not been subject to, or served with, a cease and desist order—
      - (i) in any governmental jurisdiction; or
      - (ii) under [section 5113(c) of this title](/usc/12/5113.md?p=c);
    - (C) has not been convicted of a misdemeanor or felony that would preclude licensure under the law of the application [State](/usc/12/5102.md?p=11);
    - (D) has submitted an application to be a [State-licensed loan originator](/usc/12/5102.md?p=12) in the application [State](/usc/12/5102.md?p=11); and
    - (E) was registered in the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) as a [loan originator](/usc/12/5102.md?p=4-A) during the 1-year period preceding the date on which the information required under [section 5104(a) of this title](/usc/12/5104.md?p=a) is submitted.
  - (2) **Period—** The period described in this paragraph shall begin on the date on which an individual described in [paragraph (1)](#b-1) submits the information required under [section 5104(a) of this title](/usc/12/5104.md?p=a) and shall end on the earliest of the date—
    - (A) on which the individual withdraws the application to be a [State-licensed loan originator](/usc/12/5102.md?p=12) in the application [State](/usc/12/5102.md?p=11);
    - (B) on which the application [State](/usc/12/5102.md?p=11) denies, or issues a notice of intent to deny, the application;
    - (C) on which the application [State](/usc/12/5102.md?p=11) grants a [State](/usc/12/5102.md?p=11) license; or
    - (D) that is 120 days after the date on which the individual submits the application, if the application is listed on the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) as incomplete.
- (c) **Temporary authority to originate loans for State-licensed loan originators moving interstate—**
  - (1) **In general—** A [State-licensed loan originator](/usc/12/5102.md?p=12) shall be deemed to have temporary authority to act as a [loan originator](/usc/12/5102.md?p=4-A) in an application [State](/usc/12/5102.md?p=11) for the period described in [paragraph (2)](#c-2) if the [State-licensed loan originator](/usc/12/5102.md?p=12)—
    - (A) meets the requirements of subparagraphs [(A)](#b-1-A), [(B)](#b-1-B), [(C)](#b-1-C), and [(D)](#b-1-D) of subsection (b)(1);
    - (B) is employed by a [State](/usc/12/5102.md?p=11)-licensed [mortgage](/usc/12/1707.md?p=a) company in the application [State](/usc/12/5102.md?p=11); and
    - (C) was licensed in a [State](/usc/12/5102.md?p=11) that is not the application [State](/usc/12/5102.md?p=11) during the 30-day period preceding the date on which the information required under [section 5104(a) of this title](/usc/12/5104.md?p=a) was submitted in connection with the application submitted to the application [State](/usc/12/5102.md?p=11).
  - (2) **Period—** The period described in this paragraph shall begin on the date on which the [State-licensed loan originator](/usc/12/5102.md?p=12) submits the information required under [section 5104(a) of this title](/usc/12/5104.md?p=a) in connection with the application submitted to the application [State](/usc/12/5102.md?p=11) and end on the earliest of the date—
    - (A) on which the [State-licensed loan originator](/usc/12/5102.md?p=12) withdraws the application to be a [State-licensed loan originator](/usc/12/5102.md?p=12) in the application [State](/usc/12/5102.md?p=11);
    - (B) on which the application [State](/usc/12/5102.md?p=11) denies, or issues a notice of intent to deny, the application;
    - (C) on which the application [State](/usc/12/5102.md?p=11) grants a [State](/usc/12/5102.md?p=11) license; or
    - (D) that is 120 days after the date on which the [State-licensed loan originator](/usc/12/5102.md?p=12) submits the application, if the application is listed on the [Nationwide Mortgage Licensing System and Registry](/usc/12/5102.md?p=6) as incomplete.
- (d) **Applicability—**
  - (1) **Employer of loan originators—** Any [person](/usc/12/5481.md?p=19) employing an individual who is deemed to have temporary authority to act as a [loan originator](/usc/12/5102.md?p=4-A) in an application [State](/usc/12/5102.md?p=11) under this section shall be subject to the requirements of this chapter and to applicable [State](/usc/12/5102.md?p=11) law to the same extent as if that individual was a [State-licensed loan originator](/usc/12/5102.md?p=12) licensed by the application [State](/usc/12/5102.md?p=11).
  - (2) **Engaging in mortgage loan activities—** Any individual who is deemed to have temporary authority to act as a [loan originator](/usc/12/5102.md?p=4-A) in an application [State](/usc/12/5102.md?p=11) under this section and who engages in [residential mortgage loan](/usc/12/5102.md?p=9) origination activities shall be subject to the requirements of this chapter and to applicable [State](/usc/12/5102.md?p=11) law to the same extent as if that individual was a [State-licensed loan originator](/usc/12/5102.md?p=12) licensed by the application [State](/usc/12/5102.md?p=11).

## Source credit

(Pub. L. 110–289, div. A, title V, § 1518, as added Pub. L. 115–174, title I, § 106(a), May 24, 2018, 132 Stat. 1302.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective 18 months after May 24, 2018, see section 106(d) of Pub. L. 115–174, set out as an Effective Date of 2018 Amendment note under section 5112 of this title.