Effective April 18, 2026, the Nationwide Multistate Licensing System (“NMLS”) implemented changes to the Individual (MU2 and MU4) Disclosure Questions along with definitional updates that also apply to Company (MU1) and Branch (MU3) Disclosure Questions that will impact existing licensees (“Update”). The Update requires disclosure question updates for individuals identified as control persons, branch managers, licensed Mortgage Loan Originators, and qualifying individuals who have MU2 profiles associated with a company’s license. The NMLS Glossary of terms was also updated to amend existing definitions and incorporate new definitions.
The NMLS is the system of record for non-depository, financial services licensing or registration for participating state or territorial governmental agencies, including the District of Columbia and U.S. Territories of Puerto Rico, the U.S. Virgin Islands, and Guam. In these jurisdictions, NMLS is the official system through which companies and individuals apply for, amend, renew and surrender license authorities managed through NMLS. These agencies require companies seeking licensure maintained through the NMLS, the individuals designated as control persons, branch managers, licensed Mortgage Loan Originators, and qualified individuals of such companies to answer Disclosure Questions pertaining to various topics, including criminal, civil, and regulatory items that may impact licensure, and make updates to maintain the accuracy of these answers on the NMLS.
The Update requires individuals with associated MU2/MU4 profiles to review their existing information compared to the new Disclosure Questions and the updated terms in the Glossary. For example, the existing term “financial services-related” is no longer applicable in the Individual (MU2/MU4) context, and a new term, “financial services”, was added to the MU2/MU4. However, the term “financial services-related” still applies in the Company (MU1) Disclosure Question context. Terms such as “found,” “order,” and “governmental entity” are equally applicable between the Company (MU1) and Individual (MU2/MU4) Disclosure Questions.
While the Update largely reformats and clarifies existing questions, this is not entirely the case and the changes may in some instances implicate new disclosures. It is important to note in this regard that the revised questions are retroactive and that the scoping of some questions has been narrowed. If revisions are required due to the changes, the commentary describing the changes recommends not adding a new explanation, but rather updating the existing fields in the Explanation section of the Disclosure Questions where applicable. If there is any change in an existing response, the explanation should be updated accordingly. It is our understanding that any previously uploaded documents and associated explanations will be available to be “matched” to “yes” answers for the new disclosure questions.
The NMLS materials regarding the Update indicate an August 31, 2026, deadline for compliance, which is likely realistic for individual Mortgage Loan Originators or other individuals associated with companies that are not often making updates in the NMLS. However, the updates may be more time sensitive from the Company licensing perspective if a company has upcoming filings, given that the licensed entity will not be able to make any filings of any kind in the system until the Disclosure Questions for all individuals associated with the Company-level record are updated. The procedural consequence of the update requirements is that the updates essentially halt the licensee’s ability to respond to regulator inquiries via the NMLS or submit new license filings until all associated individuals have updated and attested to their individual filing.
The Conference of State Bank Supervisors has published materials on NMLS to assist with this process.
