Exempt Entity Processor Registration ($50,000) - NMLS Bond - Statewide in Illinois

Brief Summary

This registration is how a third party processing shop sponsors its people in Illinois, and the $50,000 Electronic Surety Bond is the one financial item on the checklist. It is a flat figure with no volume reporting behind it, and because the bond is perpetual there is no annual bond renewal to chase.

Illinois requires an entity that does nothing but provide loan processing services by sponsoring individual processors to register with the Division of Banking through NMLS and file a $50,000 Electronic Surety Bond. The amount comes from 38 Ill. Adm. Code 1050.490(b), the bond is perpetual under 1050.490(c), and each sponsored processor working as an independent contractor must still hold a mortgage loan originator license.

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How to Apply for a Exempt Entity Processor Registration ($50,000) - NMLS Bond:

• Confirm the company does nothing but provide loan processing services by sponsoring individual processors.
• Register the entity with the Illinois Secretary of State and obtain a certificate of good standing dated within 60 days.
• File the company form (MU1) and an individual form (MU2) for each control person in NMLS.
• Authorize your surety or producer in NMLS and have the $50,000 Electronic Surety Bond submitted.
• Pay the $100 Illinois registration fee and the $100 NMLS processing fee.
• Make sure each sponsored independent processor holds an Illinois mortgage loan originator license.

Detailed Information About the Illinois Exempt Entity Processor Registration ($50,000) - NMLS Bond:

Two separate requirements, not one

Illinois treats the independent processor and the company behind them differently. Under 205 ILCS 635/7-1A(d), a loan processor or underwriter who is an independent contractor may not do that work without a mortgage loan originator license under subsection (a) of that section. The Exempt Entity Processor Registration is for the business that sponsors those individuals. Registering the company does not replace anyone's MLO license.

Who registers

Public Act 100-851 added to the Residential Mortgage License Act of 1987 an exempt category for any entity engaged solely in providing loan processing services through the sponsoring of individuals acting under Section 7-1A(d). The word solely matters. A company that also brokers or makes loans falls under the regular license rules instead.

A flat $50,000, not the broker scale

Licensed brokers and bankers file a bond scaled to the Illinois loans their originators applied for or closed in the preceding calendar year, on a schedule in 38 Ill. Adm. Code 1050.490 that runs from $25,000 to $150,000. Processing entities are carved out. Subsection (b) of that rule says exempt independent loan processing entity registrants must file and maintain an electronic surety bond that provides coverage for each sponsored Mortgage Loan Originator in the amount of $50,000. If you sponsor several processors, ask the Division of Banking how it applies that wording to your roster before the bond is issued.

Perpetual term and NMLS filing

Subsection (c) of the rule makes every bond under it perpetual, so it stays in force until cancelled rather than expiring each year. The Division of Banking checklist calls for an Electronic Surety Bond via NMLS of $50,000 from a surety authorized in Illinois. Fees are a $100 Illinois registration fee and a $100 NMLS processing fee, both nonrefundable. No paper registration certificate is issued.

Eligibility and Requirements for a Illinois Exempt Entity Processor Registration ($50,000) - NMLS Bond:

• Electronic Surety Bond of $50,000 under 38 Ill. Adm. Code 1050.490(b).
• Surety company authorized to conduct business in Illinois.
• Perpetual bond term under 1050.490(c).
• Formation documents appropriate to the entity type uploaded in NMLS.
• Primary company contact and consumer complaint contact listed in NMLS.

Illinois Exempt Entity Processor Registration ($50,000) - NMLS Bond FAQs:

Official and Additional Resources for the Illinois Exempt Entity Processor Registration ($50,000) - NMLS Bond: