Perhaps these two double entendres can help double your understanding of a singularly confusing subject!
I receive at least one call or email a week about this subject... seems we're all trying to get our heads around it. So maybe it's a good time to address the MLO "licensed vs. registered" dilemma. Who needs to be licensed? Who needs to be registered? What's an easy way to remember?
You can "bank" on needing to be registered...
if you work for a depository (banks, credit unions, savings and loans where folks deposit their money) you simply need to be registered with, and get your unique identifier from, the NMLS.
But you're given a little more "license" if you work for a mortgage lender or mortgage broker...
Although you need to be licensed in each state in which you will be originating loans (pay the fees, get fingerprinted, have the background and credit check, complete the required hours for prelicensing/annual continuing education and pass the NMLS tests) as well as register with, and get your unique identifier from, the NMLS, you get to choose your own hours and the splits are great!
The huge discrepancy in requirements is the result of depositories being overseen by the federal government, as are their loan-originating employees. These loan originators still have to be registered with the NMLS and given a “unique identifier", but they don’t have to take the NMLS tests or be licensed by their state because the depositories they work for are subject to federal regulation.
The Bottom Line:
A “licensed loan originator” is a person who is registered with the NMLS and is ALSO licensed.
A “registered loan originator" is a person who is ONLY registered with the NMLS and is NOT licensed.