Washington Regulatory Update

November 7, 2019



The Washington Department of Financial Institutions has amended rules implementing the Mortgage Broker Practices Act (“Act”), effective November 24, 2019. 


A new rule was added to allow qualified mortgage loan originators who are changing employment from a depository institution to a state-licensed mortgage company or qualified mortgage loan originators licensed in another state seeking licensure in Washington to originate loans while completing any state-specific requirements for licensure.  A mortgage loan originator is eligible for this temporary authority to originate loans if he or she is employed and sponsored through the Nationwide Multistate Licensing System (“NMLS”) by a state-licensed mortgage company and either registered in NMLS as a mortgage loan originator during the one year preceding the application submission or licensed as a mortgage loan originator during the thirty-day period preceding the date of application.


To receive temporary authority, an individual must file a license application and be employed and sponsored by a company licensed in Washington.  The applicant also must not have any disqualifying criminal history, been subject to or served with a cease and desist order or had a mortgage loan originator license denied, revoked, or suspended in any jurisdiction.


Temporary authority beings on the date an eligible mortgage loan originator submits a license application and ends when the earliest of the following occurs:

  • The mortgage loan originator withdraws the application;
  • The state denies or issues a notice of intent to deny the application;
  • The state grants the license; or
  • 120 days after the application submission if the application is listed on NMLS as incomplete.


Provisions requiring notice to the director of the Department of Financial Institutions upon the occurrence of specific events have also been amended.


Notice must be provided to the Director within 20 business days (previously 20 days) after the occurrence of certain events (licensee is charged with a felony indictment related to lending or brokering activities or involving dishonesty, licensee receives service of notice of the filing of any material litigation against licensee or a change to licensee’s residential address or telephone number).  Notice must now also be given to the director upon the closure or surrender of a main or branch license location within 20 business days.


The deadline for notifying the director in writing of a data breach has been reduced from 45 days to 30 days after the occurrence. 


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Expert insights and regulatory updates on RegTech, compliance management, and fair lending.

Diane Jenkins

Director, National Mortgage Compliance Practice Group, AsurityDocs Of Counsel, Sandler Law Group

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