Which law requires states to ensure loan originators are registered or licensed?

The Secure and Fair Enforcement Act, commonly referred to as the SAFE Act, establishes a framework that requires states to implement licensing and registration requirements for mortgage loan originators. This law was enacted to enhance consumer protection by ensuring that loan originators meet certain educational standards, pass background checks, and adhere to ethical practices.

The SAFE Act regulates both state-licensed loan originators and those who are federally registered. By requiring a national registry, it makes it easier for consumers to access the credentials and complaint histories of loan originators, thus increasing transparency in the mortgage lending process. This law fundamentally aims to reduce instances of fraud and improve the overall quality of loan origination by promoting accountable practices.

In contrast, the other options mentioned, such as the Mortgage Disclosure Improvement Act, the Emergency Economic Stabilization Act, and the Home Ownership and Equity Protection Act, address different aspects of mortgage lending, but they do not impose specific licensing or registration requirements for loan originators as mandated by the SAFE Act.