A section of President Donald Trump's recent executive order, titled "Promoting Access to Mortgage Credit," caused confusion throughout the mortgage industry, seemingly addressing a nonissue.
Section 10 of the order called for "eliminating duplicative or unnecessary requirements regarding licensing or registration for mortgage loan officers of any smaller bank."
The directive fits with the Trump administration's ongoing efforts to
"It's basically seamless," Richards added. "There's really not a way to reduce requirements there."
Mortgage loan originators who work for a bank are required to be federally registered with the Nationwide Mortgage Licensing System & Registry under the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008.
To be registered, loan originators must provide personal and employment history, disclose criminal history, provide fingerprints for a criminal background check and pay either $35 or $65 dollars annually depending on what time of year the registration occurs. The institution must also pay $120 annually.
Prior to the SAFE Act, there wasn't a nationwide regulatory framework for mortgage loan originators, heightening the risk of malpractice and fraud. An originator could get his license taken in one state, then go to a different state and continue to work as an originator in the new location.
"These registration requirements were put in place to protect consumers," said Brandon Milhorn, president and CEO of the Conference of State Bank Supervisors. "NMLS is a very important component for establishing a trustworthy mortgage system in the United States."
The recent executive order's mention of licensing creates a bit of confusion, as only mortgage loan officers who do not work for depository institutions have to be licensed. The process includes the same requisites as registration, as well as education requirements, among other things.
"Where you get a lot of complaints from the industry is on the licensing piece," said Peter Idziak, senior associate at Polunsky Beitel Green, "but on the registration side, it's never really been something, in my opinion, that was high on the list of pain points."
In the case where a mortgage loan originator working for a depository moves over to a nondepository mortgage company, they could be subject to registration and state licensure. But this would only occur with the originator's employers' approval.
Even so, there were 358,509 federally registered mortgage loan originators in 2025, only 527, or 0.1%, of them also held at least one active state license, according to the CSBS.
Richard Horn, a co-managing partner at Garris Horn, said the inclusion of licensing in the section could have been a simple misinterpretation between the administration and a trade association.
"Consumer finance regulation in general is a very complex area and requires a lot of experience in the subject matter to fully understand," he added. "If someone doesn't have a lot of experience, sometimes things will look weird."
Richards, Idziak and Horn shared similar puzzlement as to why this section was included in the order, but Ron Haynie, senior vice president of mortgage finance policy at the Independent Community Bankers of America, said he was pleasantly surprised by it.
The ICBA has had an issue with the regulation process since the SAFE Act was passed, he added, citing that bank employees have always been subject to background checks.
"It's a compliance burden and it's a cost," Haynie said. "If you add all these things together, it becomes kind of overwhelming, especially if you're not a huge originator."
Banks have been backing out of the mortgage business for years, Haynie added. He hopes the requirements are removed and community banks bring more competition to the mortgage industry.
The CSBS said they have not heard complaints from banks in regard to registration, and that its removal would not bring banks back to mortgage lending.
"What drove banks out of mortgage lending were capital requirements and the risk weighting, and some of the compliance implications of [the Real Estate Settlement Procedures Act] and [the Truth in Lending Act]," Milhorn said. "It just became really burdensome for them to meet those obligations."
The registration fee has also increased once since its inception, $5 last year, Milhorn added.
Regardless as to whether this section of the order will impact the industry, both organizations want to see more community banks in the mortgage space.
Overall, the order is well done and the message is regulatory relief for everyone, Horn said. "The wording might not be 100% accurate but the [Consumer Financial Protection Bureau] will get the message."
