What law requires the establishment of the Nationwide Mortgage Licensing System and Registry (NMLSR)?

The Secure and Fair Enforcement Act (SAFE ACT) is the law that mandates the establishment of the Nationwide Mortgage Licensing System and Registry (NMLSR). The SAFE Act, enacted in 2008, aims to enhance consumer protection and reduce fraud in the mortgage industry by requiring all mortgage loan originators to be licensed and registered within the NMLSR. This system provides a comprehensive database where consumers can verify the credentials of loan originators, thus promoting transparency and accountability within the mortgage industry.

By facilitating a uniform licensing process across states, the SAFE Act improves regulation and ensures that mortgage professionals meet specific education and background requirements. This directly relates to consumer safety, as it allows for better oversight and tracking of mortgage loan originators, which was a crucial step in the wake of the financial crisis.