Recently, the California DFPI entered a consent order resolving allegations of unlicensed mortgage loan origination activity at a California branch of a Texas-based mortgage company. The order required the company to stop violating Section 22100(b) of the California Financial Code and Section 50002.5(a) of the California Residential Mortgage Lending Act, which mandates that every mortgage loan originator employed or compensated by a licensee must obtain and maintain a mortgage loan originator license.

According to the order, the DFPI found that, during 2021 and 2022, unlicensed, non-loan officer employees at the company’s aforementioned branch engaged in activities requiring licensure. The order noted that the branch and its manager were no longer associated with the company as of 2022 and that the company reported it had “taken steps to enhance its oversight of unlicensed employees.” Under the consent order, the company agreed to pay a $160,000 administrative penalty, submit a declaration detailing compliance enhancements, and cooperate with any further DFPI enforcement matters. The company also agreed to an independent audit of unlicensed activity from January 1, 2023, to the effective date, with additional penalties of $500 per employee found to have engaged in unlicensed mortgage loan origination activity.