ND MLO flashcards

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North Dakota Money Brokers Act

The state statute in N.D.C.C. chapter 13-04.1 that licenses and regulates mortgage brokers and loan originators doing business in North Dakota, enforced by the Department of Financial Institutions.

North Dakota DFI

The Department of Financial Institutions is the state regulator that licenses mortgage brokers and MLOs, conducts examinations, investigates complaints, and imposes discipline for violations of state mortgage law.

Surety bond requirement

North Dakota requires licensed mortgage brokers to maintain a surety bond in an amount set by statute or rule, running to the state for the benefit of consumers harmed by licensee misconduct.

Net worth requirement

License applicants must demonstrate a minimum net worth or financial responsibility standard established under North Dakota law and rules before a mortgage broker license is granted.

Unlicensed brokering prohibited

North Dakota law bars persons from negotiating or placing mortgage loans for compensation without a valid license, and violations may lead to civil and criminal penalties.

Annual license renewal

North Dakota mortgage licenses renew annually through NMLS; licensees must meet education, bonding, and fee requirements by the deadline to avoid expiration and enforcement action.

Recordkeeping obligation

Licensees must retain mortgage transaction records for the period prescribed by North Dakota rules and make them available to DFI examiners upon request during examinations or investigations.

Exempt entities

Certain regulated institutions, such as banks and credit unions, are exempt from the North Dakota Money Brokers Act licensing requirements because they are supervised under other regulatory frameworks.

State-specific exam content

The North Dakota portion of the licensing test covers state statutes and rules that differ from federal law, including licensing, supervision, prohibited practices, and enforcement procedures.

DFI authority

The Department of Financial Institutions may investigate, examine, subpoena records, hold hearings, and impose sanctions on licensees and unlicensed persons subject to North Dakota mortgage law.

Fraud and misrepresentation

North Dakota prohibits licensees from making false or misleading statements about loan terms, rates, or fees, and from concealing material information from borrowers in mortgage transactions.

State disclosure requirements

North Dakota imposes disclosure obligations on licensees in addition to federal requirements, covering fees, compensation, and consumer protections specific to state mortgage transactions.

Foreclosure statute overlay

North Dakota foreclosure law imposes notice and process requirements on residential mortgages; noncompliance can affect enforceability and expose servicers to liability under state law.

Grounds for discipline

North Dakota lists grounds for license denial or revocation, including fraud, material misstatements on applications, failure to maintain records, and refusal to cooperate with examinations.

Administrative hearings

Licensees facing discipline are entitled to notice and a hearing before DFI, and final agency orders may be appealed under North Dakota administrative procedure law.

Advertising standards

North Dakota requires mortgage advertising to be accurate and nondeceptive, to identify the licensed entity, and to avoid implying government affiliation or misstating rates and fees.

Undisclosed fees prohibited

Licensees may not charge or collect fees that have not been disclosed to the borrower in writing, and all compensation and third-party charges must be documented.

Appraisal independence

North Dakota restricts licensees from improperly influencing appraisers or the appraisal process, protecting the integrity of property valuations used in mortgage lending decisions.

Consumer complaint process

DFI accepts and investigates consumer complaints against licensees and may take enforcement action, including ordering refunds or restitution, when violations are substantiated.

Privacy of borrower data

Licensees must safeguard nonpublic personal information under state and federal privacy requirements and may not misuse or improperly disclose borrower data obtained in mortgage transactions.

Steering prohibition

North Dakota law restricts steering borrowers into loan products that benefit the licensee financially at the borrower's expense without proper disclosure and suitability consideration.

Civil penalties

North Dakota authorizes DFI to impose civil money penalties on licensees for statutory or rule violations, in addition to license suspension, revocation, and restitution orders.

NMLS application submission

Applicants file license requests through NMLS, including fingerprints for criminal background checks, credit reports, and disclosure of administrative or legal actions.

Prelicensure education

State-licensed MLOs must complete federal prelicensure education plus North Dakota-specific education before licensure, covering state law, rules, and consumer protections.

SAFE Act testing

MLOs must pass the national test with Uniform State Content and any required North Dakota state-specific test component before obtaining a state MLO license.

NMLS record updates

Licensees must promptly update NMLS records after changes to name, address, employment, or material events such as criminal charges or regulatory actions within required timeframes.

Employer sponsorship

An MLO license in North Dakota requires employment or sponsorship by a licensed mortgage entity, which must itself hold the appropriate state license to conduct business.

Continuing education deadline

North Dakota MLOs must complete annual continuing education, including state-specific hours, by the renewal deadline; failure results in license expiration and loss of origination authority.

Compliance management system

Licensees must maintain policies, training, monitoring, and complaint handling proportionate to their business to ensure compliance with North Dakota and federal mortgage requirements.

DFI examination cooperation

Licensees must produce loan files, advertisements, fee agreements, and MLO activity records on request and cooperate fully with Department of Financial Institutions examinations.

Mortgage call report

Licensees must submit required mortgage call reports and other filings accurately and on time through NMLS, reflecting their lending and servicing activity for regulatory review.

Third-party oversight

Licensees remain responsible for the activities of brokers and service providers acting on their behalf and must monitor those parties for compliance with North Dakota law.