Several thousand lenders and brokers are currently licensed by the Department of Financial Protection & Innovation under the California Financing Law. The CFL generally requires that persons engaged in the business of either finance lender or broker. The law applies to both consumer and commercial lenders.
For some time, the DFPI has required residential mortgage lenders and brokers to file license applications through the Nationwide Multistate Licensing System (NMLS). Other lenders used the infamous "long form" application. For many applicants the process of becoming licensed under the CFL took several months. Earlier this year, the DFPI has announced that non-residential mortgage lenders and brokers may apply through the NMLS.
Beginning October 1, all applicants for licensing under the CFL will be required to transition to the NMLS by December 31, 2021. 10 CCR § 1422.4(b)(3). Essentially, this will involve filing an MU1 application form through the NMLS. However, transitioning licensees will not be required to submit the following items if those items are already on file with the DFPI:
Despite these exceptions, current licensees should expect that they will be required to expend considerable time and effort to transition to the NMLS.
The DFPI's new rules with respect to NMLS are available here. They take effect on October 1, 2021.