Regulatory Alerts1998-10-16
Licensing Requirements Under The Secondary Mortgage Loan Act
The Pennsylvania Department of Banking confirms that a subsidiary of a national bank brokering loans under the Simplification Act is exempt from the Secondary Mortgage Loan Act licensing requirements. This exemption applies because the National Bank Act's most favorable lender provision allows the bank to originate loans outside the SMLA's definition of secondary mortgage loans. However, if the bank instead originates loans using the SMLA's provisions, the subsidiary must obtain a separate mortgage broker license as no exemption exists for such subsidiaries in that context.
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