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Protecting Homebuyers with NMLS and Consumer Access

As part of National Homeownership Month, CSBS wants to help you understand what the Nationwide Multistate Licensing System (NMLS) is and why one of its primary purposes is to promote consumer protection for homebuyers nationwide.  

Whether you are buying or refinancing a home, the process can be complex. In addition, consumers will interact with many people as part of the homebuying process. Each of these individuals has an important job to do and with that comes accountability, especially for mortgage companies and mortgage loan originators (MLOs).  

Why NMLS was created        

Historically, prospective homeowners in the United States would seek a home loan from a bank. However, that began to change throughout the 1990s. By the early 2000s, mortgage companies had emerged as a primary option for mortgage loans. This shift led to more risks and sometimes deceptive practices, which had a negative impact on prospective homeowners. State financial services regulators recognized the unfavorable trends and looked to create a system that would allow them to better manage mortgage company and MLO business activities across various states. This system, initially called the “Nationwide Mortgage Licensing System,” was established in 2008.  

The U.S. Congress also recognized the value of the “Nationwide Mortgage Licensing System,” which had been created at the state level. When the financial crisis of 2008 occurred, the “Nationwide Mortgage Licensing System,” was adopted as part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”). The SAFE Act required that all state-licensed companies and federal depository institutions (or banks) that originate mortgage loans, as well as individual MLOs, be licensed or registered through NMLS. The name “Nationwide Mortgage Licensing System” was eventually changed to “Nationwide Multistate Licensing System,” once other state-licensed financial services industries (i.e., debt, consumer finance, money services businesses) began using the system to manage licensing.          

How NMLS works    

As referenced above, the SAFE Act mandates that all state-licensed companies and federally regulated depository institutions that originate mortgage loans (i.e., banks and credit unions), as well as individual MLOs, be licensed or registered through NMLS as a matter of consumer protection. So, let’s explain who gets licensed and who gets registered and requirements that must be met to maintain this status. 

Prospective MLOs seeking a state license must complete 20 hours of educational courses prior to licensing, pass a national mortgage test, and give state agencies permission to review their credit report and the results of an FBI criminal background check through NMLS – all as part of the licensing review process. In addition, MLOs must complete eight hours of continuing education annually to maintain their state license(s). 

Federally regulated depository institutions and the MLOs they employ must maintain an active registration in NMLS. Both licensees and registrants receive a unique NMLS ID that they maintain throughout their affiliation with NMLS. They also must renew their license or registration in NMLS annually.         

Using NMLS Consumer Access for assurance  

NMLS Consumer Access ( is a reliable source for consumer protection. Anyone can use the website to check the status of mortgage companies and MLOs. Consumers can see the licenses MLOs hold and the states where they are authorized to do business, and if any regulatory actions have been taken against a mortgage company or MLO. 

NMLS Consumer Access also includes information on federally registered depository institutions and the MLOs they employ.