CA Branch 2 cheat sheet

California Residential Mortgage Lending Act (CRMLA) licenses residential mortgage lenders and servicers under the DFPI; the California Finance Lenders Law (CFLL) covers consumer and commercial finance lending.

The Real Estate Law, administered by the DRE, governs real estate brokers and salespersons; mortgage loan originators must hold an NMLS license endorsed by the DFPI or DRE.

The federal SAFE Act requires MLOs to pass a national test with a uniform state component, complete 20 hours of pre-licensure education, and submit fingerprints for an FBI criminal background check.

The Secure and Fair Enforcement licensing standards set minimum standards: no felony conviction within the past 7 years (subject to state variations) and no revocation of a financial-services license.

The federal Truth in Lending Act (Regulation Z) requires disclosure of the annual percentage rate and finance charge; the CFPB enforces it federally, while the DFPI enforces state-level compliance.

The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and unearned fees for referrals of settlement-service business and requires a good-faith estimate of closing costs.

The Home Mortgage Disclosure Act (HMDA, Regulation C) requires covered institutions to collect and report loan application data, including applicant demographics and loan purpose.

The California Homeowner Bill of Rights restricts dual tracking, requires a single point of contact for borrowers in foreclosure, and limits fees during the foreclosure process.

Licensees must act in the borrower's best interest and must not steer a borrower into a loan that is not suitable given the borrower's documented income, assets, and stated goals.

Prohibited conduct includes making false or misleading statements on a loan application, forging a borrower signature, and altering documents without the borrower's knowledge.

Dual compensation is prohibited: a licensee may not receive compensation from both the borrower and a third party (such as a lender or title company) for the same service without full disclosure and consent.

Licensees must not accept compensation from a person other than the licensee's employer or a party disclosed in the loan documents; undisclosed referral fees are prohibited.

A licensee must not engage in any transaction in which the licensee has a conflict of interest, such as purchasing the property being financed, without written disclosure and borrower acknowledgment.

Licensees must not discriminate on the basis of race, color, religion, national origin, sex, familial status, or disability under the Fair Housing Act and California's Unruh Civil Rights Act.

Licensees must maintain the confidentiality of nonpublic personal information under the Gramm-Leach-Bliley Act and must not disclose borrower data without authorization.

Licensees must not engage in predatory lending practices, including equity stripping, loan flipping, and packing of unnecessary products into the loan.

All advertisements must include the licensee's name as licensed and the NMLS unique identifier; the identifier must be displayed clearly and conspicuously.

Advertised rates must be actually available and must disclose the APR, the APR's basis, and any conditions that affect the rate, such as a minimum loan amount or credit score.

The term "guaranteed" or "pre-approved" may not be used unless the licensee has actually completed the underwriting review and the commitment is binding.

Testimonials and endorsements must reflect the actual experience of the person giving them and, where required, must disclose any compensation paid for the endorsement.

Advertising in any medium, including social media, websites, and email, is subject to the same disclosure requirements as print and broadcast advertising.

A licensee may not advertise a service it is not licensed to provide, and may not use a fictitious business name without registering it with the licensing agency.

The "trigger terms" rule requires that if an advertisement states a specific payment amount, interest rate, or down payment, it must also disclose the APR and other required terms.

Records of advertisements must be retained for the period required by the licensing agency, generally at least 3 years from the date the advertisement was last disseminated.

Licensees must maintain books and records of all mortgage loan transactions for at least 3 years after the date of the final transaction or the date of the loan's payoff, whichever is later.

Records must be maintained in a manner that permits the DFPI or DRE to determine compliance, and must be made available for examination upon request.

A licensee must file an annual report with the DFPI or DRE, as applicable, within the time specified by the agency, containing information about loan volume and business operations.

A licensee must notify the licensing agency of any change in ownership, control, or principal officers within the time specified by statute, generally within 30 days.

A licensee must report any administrative or criminal action taken against it by another state or federal agency within 30 days of the final disposition.

A licensee must file a suspicious activity report (SAR) with FinCEN when it knows or suspects a transaction involves illegal activity, and must not notify the subject of the report.

The Bank Secrecy Act requires an anti-money-laundering program, including a designated compliance officer, ongoing training, and independent testing.

Electronic records must be retrievable in a legible format and retained for the same period as paper records; destruction must not occur while an investigation or examination is pending.

A licensee must acknowledge a written consumer complaint within the time required by agency rule, typically 15 business days, and must provide a substantive written response within 30 days.

The complaint log must record the complainant's name, the nature of the complaint, the date received, the action taken, and the date the response was sent.

A borrower who submits a qualified written request under RESPA must receive an acknowledgment within 5 business days and a substantive response within 30 days, with a possible 15-day extension.

The Consumer Financial Protection Bureau accepts complaints through its website; a licensee must respond to the CFPB within the time frame set by the CFPB, generally 15 days.

A licensee must not retaliate against a borrower for filing a complaint or exercising a legal right, and must not discourage a borrower from contacting a regulator.

The Fair Credit Reporting Act requires a licensee to investigate a consumer's dispute of inaccurate credit information and to correct or delete information that cannot be verified.

The Homeowner Bill of Rights requires a licensee to provide a borrower with a single point of contact during the foreclosure process and to provide written notice of the right to request a meeting.

A licensee must provide a borrower with a written disclosure of the borrower's right to file a complaint with the licensing agency, including the agency's contact information.

A licensee owes a fiduciary duty to the borrower, which includes loyalty, confidentiality, disclosure, and the duty to act in the borrower's best interest.

A licensee must disclose all material facts to the borrower, including any conflict of interest, any compensation received from a third party, and any relationship with a service provider.

A licensee must not accept a gift or thing of value from a service provider that could influence the licensee's recommendation to the borrower.

A licensee must maintain competence by completing continuing education requirements, including ethics coursework, as required by the licensing agency.

A licensee must not misrepresent the licensee's qualifications, experience, or the services the licensee is authorized to provide.

A licensee must treat all parties to a transaction fairly and honestly and must not take unfair advantage of a borrower's lack of knowledge.

A licensee must not use a borrower's confidential information for the licensee's own benefit or for the benefit of a third party.

A licensee must comply with all applicable laws and regulations and must report any known violation by another licensee to the appropriate licensing agency.