A California credit union originates residential mortgage loans for its members. Does the credit union need a CRMLA license?
Correct Answer
C) No, credit unions are exempt from CRMLA licensing requirements
Federal and state credit unions authorized to transact business in California are exempt from the California Residential Mortgage Lending Act licensing provisions. A credit union originating residential mortgage loans for its members does not need a separate CRMLA license solely because of that activity.
Why This Is the Correct Answer
No, credit unions are exempt from CRMLA licensing requirements is correct. Federal and state credit unions authorized to transact business in California are exempt from the California Residential Mortgage Lending Act licensing provisions. A credit union originating residential mortgage loans for its members does not need a separate CRMLA license solely because of that activity. Federal and state credit unions authorized to transact business in California are exempt from the California Residential Mortgage Lending Act licensing provisions. A credit union originating residential mortgage loans for its members does not need a separate CRMLA license solely because of that activity.
Why the Other Options Are Wrong
Option A: Yes, all entities originating residential mortgages in California must hold a CRMLA license
California does not require every entity that originates residential mortgage loans to hold a CRMLA license; the statute includes exemptions for specified regulated institutions.
Option B: Yes, but only if the credit union originates more than 50 loans per year
The credit-union exemption is not based on a 50-loan annual threshold.
Option D: No, but only if the credit union is federally chartered
The exemption is not limited to federally chartered credit unions; California law also exempts state credit unions that are authorized to transact business in the state.
Memory Technique
CA -> ca-crmla-lenders-servicers-bonds-net-worth-servicing
Exam Tip
CRMLA questions usually turn on lender versus servicer authority, branch authority, $250,000 net worth, surety bond coverage, servicing duties, DFPI oversight, and exemptions for regulated depository institutions.
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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