We do not believe that a bank employee who is a registered mortgage loan originator (MLO) would be required to obtain an MLO license under either federal or state law, if the employee is volunteering the origination services without expectation of compensation or gain.

The federal regulations governing MLO registration and licensure would not require a MLO to obtain a loan originator license if the MLO is employed at a financial institution and is registered with the NMLS. 12 CFR 1008.103(e)(5). (There is also an exception for nonprofit organizations, but it applies only to individuals who are employed by the nonprofit.) Similarly, Illinois law would not require an MLO who is performing services voluntarily to obtain a license. The Illinois Residential Mortgage License Act prohibits individuals from acting as mortgage loan originators without first obtaining a license, but it defines “mortgage loan originator” as “an individual who for compensation or gain or in the expectation of compensation or gain” takes mortgage loan applications and negotiates loan terms. 205 ILCS 635/7-1A(a)205 ILCS 635/1-4(jj). If the bank employee volunteers with no expectation of compensation or gain, then the employee would not be required to be licensed.

However, neither the federal nor the Illinois laws exempt MLOs who are performing services voluntarily from the requirement of displaying the NMLS unique identifier on loan documents. Specifically, Illinois law requires “any person originating a residential mortgage loan” to display the unique identifier on “all residential mortgage loan application forms, solicitations, and advertisements, including business cards and websites.” 205 ILCS 635/7-14. Similarly, Regulation Z requires loan originators to place their unique identifiers on all credit applications, RESPA disclosures, TILA disclosures, notes or loan contracts, and security instruments (mortgages). 12 CFR 1026.36(g).