A loan file reviewer documents a Colorado advertising approval and needs one rule for licensing and NMLS authority. Which statement belongs in the file?
Correct Answer
D) Colorado applies the stated financial-responsibility, bond, credit-history, or net-worth requirement.
Colorado surety bond compliance can be met with an individual $25,000 bond, a company bond of $100,000 for companies with fewer than 20 licensed individuals, or a company bond of $200,000 for companies with 20 or more licensed individuals.
Why This Is the Correct Answer
Colorado applies the stated financial-responsibility, bond, credit-history, or net-worth requirement. This is correct because Colorado surety bond compliance can be met with an individual $25,000 bond, a company bond of $100,000 for companies with fewer than 20 licensed individuals, or a company bond of $200,000 for companies with 20 or more licensed individuals.
Why the Other Options Are Wrong
Option A: Temporary authority automatically removes Colorado-specific application, background-check, bond, and E&O requirements.
Temporary authority automatically removes Colorado-specific application, background-check, bond, and E&O requirements. is not correct because it does not match the Colorado rule applied in this scenario.
Option B: A temporary Colorado MLO may continue indefinitely if the sponsor approves an extension.
A temporary Colorado MLO may continue indefinitely if the sponsor approves an extension. is not correct because it does not match the Colorado rule applied in this scenario.
Option C: Inactive Colorado license status still allows origination if E&O coverage is current.
Inactive Colorado license status still allows origination if E&O coverage is current. is not correct because it does not match the Colorado rule applied in this scenario.
Memory Technique
CO -> licensing and NMLS authority
Exam Tip
Identify the Colorado state requirement first, then choose the answer that preserves licensing, disclosure, record, supervision, or enforcement compliance.
Common Mistakes to Avoid
- -Using a generic national rule when the Colorado state requirement controls
- -Treating Colorado licensing, reporting, advertising, records, or enforcement duties as optional
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