Which of the following individuals is required to submit to a criminal background check through the NMLS as part of the DFPI licensing process?
Correct Answer
C) The MLO applicant, and control persons of a company applicant including owners with 10% or more interest
The DFPI requires criminal background checks through FBI fingerprinting for individual MLO applicants and for control persons of company license applicants. Control persons include officers, directors, managers, and owners holding 10% or more of the company's equity.
Why This Is the Correct Answer
The DFPI requires criminal background checks through FBI fingerprinting for individual MLO applicants and for control persons of company license applicants. Control persons include officers, directors, managers, and owners holding 10% or more of the company's equity.
Why the Other Options Are Wrong
Option A: Only the designated MLO applicant
While MLO applicants must be checked, the requirement also extends to control persons of company applicants, not just the individual MLO.
Option B: Only the company's CEO and CFO
The requirement is not limited to specific executive titles; it applies to all control persons including owners with 10%+ equity, not just the CEO and CFO.
Option D: All employees of the applying company
Not all employees require background checks; only control persons and individual MLO applicants are subject to the criminal background check requirement.
Memory Technique
CA -> ca-dfpi-dre-MLO-licensing-education-renewal
Exam Tip
California questions often require separating DFPI and DRE authority, current NMLS CA-DFPI and CA-DRE education tables, annual renewal, DRE endorsement timing, and the national SAFE test with UST.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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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