A loan originator organization employs eight originators who are not required to be licensed and are not licensed under the applicable SAFE Act provisions. It gave them a two-hour orientation in 2023 but no further training, despite changes to state disclosure rules that apply to their work. Does the one-time orientation satisfy the organization’s periodic training obligation under Regulation Z?
Correct Answer
A) Insufficient: the 8 need periodic training on the law they work under
A. A one-time orientation does not satisfy the described periodic-training obligation. The organization must keep applicable legal knowledge current for employees covered by this provision. Frequency and content must suit their duties and products. The omitted training on applicable state changes is the problem, not merely the two-hour duration. Scope and exceptions: This rule is distinct from SAFE prelicensing and licensed-originator continuing education. It does not exempt someone who actually needs a license. Source: 1026.36(f)(3), (f)(3)(iii), comment 36(f)(3)(iii)-1 — https://www.consumerfinance.gov/rules-policy/regulations/1026/36/
Why This Is the Correct Answer
A. A one-time orientation does not satisfy the described periodic-training obligation. The organization must keep applicable legal knowledge current for employees covered by this provision. Frequency and content must suit their duties and products. The omitted training on applicable state changes is the problem, not merely the two-hour duration. Scope and exceptions: This rule is distinct from SAFE prelicensing and licensed-originator continuing education. It does not exempt someone who actually needs a license.
Why the Other Options Are Wrong
Option B: Sufficient, since state rule changes are the individual's own responsibility
The organization cannot transfer its training obligation to employees.
Option C: Sufficient: the rule requires training at hire and imposes no repeat
An initial orientation is not a perpetual substitute for periodic training.
Option D: Insufficient: each of the 8 must complete 20 hours of education a year
This provision does not prescribe 20 annual hours.
Exam Tip
Identify the employee category before applying its training standard.
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