If we run a background check on a potential MLO that we may employ, what would ‘trigger’ us to NOT employ them – in other words, are there specified infractions that would trigger us to not employ them? The SAFE Act seems to be silent on this.
The SAFE act doesn't speak to that - presumably someone failing the background check would be turned down by the NMLSR. Reg Z, however, does prohibit certain people from being loan originators which would prevent someone from being an LO if they were convicted of a felony related to fraud or dishonesty.
12 CFR 1026.36 (f)
ii. Determine on the basis of the information obtained pursuant to paragraph (f)(3)(i) of this section and any other information reasonably available to the loan originator organization, for any individual whom the loan originator organization hired on or after January 1, 2014 (or whom the loan originator organization hired before this date but for whom there were no applicable statutory or regulatory background standards in effect at the time of hire or before January 1, 2014, used to screen the individual) and for any individual regardless of when hired who, based on reliable information known to the loan originator organization, likely does not meet the standards under this paragraph (f)(3)(ii), before the individual acts as a loan originator in a consumer credit transaction secured by a dwelling, that the individual loan originator:
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