Arizona issues MLO compensation guidelines for independent contractors and branch licensing requirements – Finance and Banking
United States: Arizona issues MLO compensation guidelines for independent contractors and branch licensing requirements
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On April 23, 2021, the Arizona Department of Insurance and Financial Institutions released Substantive Policy Statement 2021-02 to resolve issues related to the employment and remuneration of loan originators, and branch licensing requirements. In the statement, the department determines that Arizona mortgage laws do not prohibit mortgage lenders from employing and compensating approved mortgage creators (MLOs) as independent contractors. The Department states that after reviewing relevant Arizona and federal mortgage laws and regulations, it has not found any express requirements prohibiting such a practice.
The Department also provides advice on branch licensing requirements in light of the development of the remote working environment. In the Statement, the Ministry concludes that the physical location of an MLO does not require a sponsoring mortgage lender to obtain a branch license for such a location, unless the mortgage lender maintains that physical location for a period of time. similar manner to how it maintains its location in Arizona to meet the physical presence requirement in Arizona mortgage laws. However, the Department specifies that all MLOs licensed in Arizona must continue to have a licensing relationship with an approved location in Arizona, inside or outside Arizona, of the mortgage lender who employs them.
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