Which of the following entities is EXEMPT from CFL licensing requirements in California?
Correct Answer
C) Federally chartered banks
Federally chartered banks are exempt from state CFL licensing because they are regulated by federal agencies such as the OCC.
Why This Is the Correct Answer
Federally chartered banks are exempt from state CFL licensing because they are regulated by federal agencies such as the OCC.
Why the Other Options Are Wrong
Option A: Online payday lenders
Online payday lenders are not exempt and must obtain a CFL license to operate in California.
Option B: Private mortgage companies
Private mortgage companies are not federally regulated and must obtain appropriate state licensing.
Option D: Auto title loan companies
Auto title loan companies must be licensed under the CFL to operate in California.
Memory Technique
CA -> ca-cfl-finance-lenders-brokers-licensing-records-reports
Exam Tip
CFL questions often test whether the person is lending, brokering, doing MLO activity, using a branch, meeting residential mortgage net worth and bond requirements, keeping records, filing reports, or facing DFPI examination/enforcement authority.
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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