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
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