A licensed New York banker learns in 2026 that a firm it deals with is unregistered. If the firm is conducting mortgage broker business without a required registration or exemption, what must the banker do?
Correct Answer
D) Stop dealing with it and promptly notify the department
No mortgage banker, mortgage broker or exempt organization shall conduct business with any entity which it knows or should have known is acting as a mortgage banker or mortgage broker without being licensed or registered, and shall promptly notify the department of any such unlicensed or unregistered operations. Other choices: the duty falls on the counterparty too; notification is prompt rather than at examination; and there is a notification duty. Source: N.Y. Banking Law § 590(5)(e)
Why This Is the Correct Answer
No mortgage banker, mortgage broker or exempt organization shall conduct business with any entity which it knows or should have known is acting as a mortgage banker or mortgage broker without being licensed or registered, and shall promptly notify the department of any such unlicensed or unregistered operations. Other choices: the duty falls on the counterparty too; notification is prompt rather than at examination; and there is a notification duty. Source: N.Y. Banking Law § 590(5)(e)
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