California Residential Mortgage Lending Act (CRMLA)
Scope of the license
The CRMLA (Financial Code Division 20, beginning at Section 50000) is administered by the DFPI. It licenses companies to make, service, or make and service residential mortgage loans - loans secured by a deed of trust or mortgage on residential real property improved with one to four dwelling units. A license must be in hand before the company conducts any activity; there is no de minimis exception for a handful of loans.
What the licensee must maintain
CRMLA licensees must satisfy a minimum tangible net worth requirement set by statute, maintain a surety bond, file annual reports, renew through NMLS, keep books and records available for DFPI examination, and ensure every individual originator acting for them holds an MLO license. Servicing carries its own duties: timely crediting of payments, accurate payoff statements, notices of servicing transfer, and response to qualified written requests under federal Regulation X.
Exemptions and interactions
A CRMLA licensee is exempt from the CFLL for its residential mortgage lending and from California's usury limitation when acting within the license. That exemption does not stretch to consumer finance lending or to loans on five-plus unit or commercial property - those need other authority.
Traps
Examiners test whether you know the CRMLA is an entity license that does nothing to license the individual employee; both layers are required. Also watch for questions that describe a five-unit apartment building or a commercial loan and invite you to apply the CRMLA - the answer is no. Another favorite: assuming a CRMLA license authorizes small consumer installment loans; it does not.
Rule of thumb: one-to-four units and a DFPI charter equals CRMLA; anything else, look for different authority.