An MLO licensed in States A and B has the State A license revoked. What is the safest conclusion about the State B license?
Correct Answer
D) The State A action must be disclosed as required and may prompt State B to evaluate its own authority and rules
Why this is correct: While NMLS facilitates information sharing, each state retains its own licensing authority. A revocation in State A creates a disclosure obligation in State B (often through the NMLS renewal or amendment process). State B's regulator may then evaluate the action under its own laws to decide on reciprocal discipline, independent action, or no action, but it is not automatic. Why the other choices are wrong: "It is automatically unaffected and need never be disclosed" is wrong because the action must be disclosed, and State B may consider it. "It is automatically revoked by NMLS without regulatory action" is wrong because NMLS does not revoke licenses; state regulators do. "The MLO may keep originating in State B under the State A license number" is wrong because a revoked license cannot be used, and State B licensing requires a valid State B license. Exam tip: A license revocation in one state triggers disclosure duties elsewhere and may lead to separate regulatory scrutiny, but it's not an auto-revocation in other states.
Why This Is the Correct Answer
Why this is correct: While NMLS facilitates information sharing, each state retains its own licensing authority. A revocation in State A creates a disclosure obligation in State B (often through the NMLS renewal or amendment process). State B's regulator may then evaluate the action under its own laws to decide on reciprocal discipline, independent action, or no action, but it is not automatic. Why the other choices are wrong: "It is automatically unaffected and need never be disclosed" is wrong because the action must be disclosed, and State B may consider it. "It is automatically revoked by NMLS without regulatory action" is wrong because NMLS does not revoke licenses; state regulators do. "The MLO may keep originating in State B under the State A license number" is wrong because a revoked license cannot be used, and State B licensing requires a valid State B license. Exam tip: A license revocation in one state triggers disclosure duties elsewhere and may lead to separate regulatory scrutiny, but it's not an auto-revocation in other states.
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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