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Tennessee Licensing Requirements
Does the state require a physical location within the state?
There is no in state requirement under the Tennessee Residential Lending, Brokerage, and Servicing Act. There is an in state requirement under the Tennessee Industrial Loan and Thrift Companies Act.
Is there individual loan officer licensing?
Yes (under the Tennessee Residential Lending, Brokerage, and Servicing Act).
What are lenders, brokers and loan officers called?
The terms mortgage loan broker, mortgage lender and mortgage loan originator are used in Tennessee.
Is there state reciprocity across state lines?
As of this writing there is no pre-licensing state reciprocity.
What is the cost of a license? Surety bond? Are there net worth requirements?
The initial license application must be accompanied by the following documentation and fees:
- A certified financial statement showing a tangible net worth of at least $25,000,
- a surety bond in the amount of $200,000 for a lender or $90,000 for a broker
(this bond must remain in effect at least 24 months following the expiration, revocation, suspension, or surrender of the Tennessee license)
- a license and investigation fee of $600.
The annual renewal fee of $500 is due on or before December 1 of each year.
Failure to pay the renewal fee or to submit a renewal application will cause the license to expire at the close of business on December 31.
A certified financial statement completed by a CPA that shows compliance with the net worth requirement of $25,000 must be submitted to the Commissioner within 120 days of the end of each fiscal year.
The mortgage licensee must designate one managing principal as the person primarily responsible for the operations of the entity.
There must also be a designated branch office manager for each branch office located in Tennessee.
The Mortgage Loan Originator Registration forms must be completed by the managing principal of the mortgage licensee.
Mortgage loan originators can be affiliated with only one licensee or registrant. The sponsoring licensee/registrant must submit to the state a completed Mortgage Loan Originator Registration Form along with a registration fee of one hundred dollars ($100) for each mortgage loan originator.
To register as an Industrial Loan and Thrift Company, a lender must submit an application, a certificate of authority to do business in Tennessee, and proof of $25,000 in capital available for use in each registered office.
A lender must also submit a surety bond or letter of credit in the amount of $200,000, if making loans secured by a mortgage.
Applicants must pay a $50 investigation fee, a $325 annual inspection fee, and a $300 payment for the Tennessee privilege tax.
A separate registration is required for each business location in Tennessee.
A physical place of business in Tennessee is required to obtain an Industrial Loan and Thrift Company license.
Is there a pre-licensing education requirement? Is there a test?
No
Is there a CE requirement?
No
Are there different requirements for mortgage brokers and mortgage lenders (i.e. can you broker under a lender license)?
An applicant should indicate on their initial application if they are applying for licensing as a lender, broker or both.
Are there any state specific high cost loan provisions?
Tennessee enacted the Tennessee Home Loan Protection Act Of 2006 which became effective January 1, 2007. This act defines a “high cost home loan” and provides for numerous limitations and prohibitions on those loans.
The terms of the loan must exceed at least one of the following thresholds:
APR threshold: The Tennessee act uses TILA section 32/Regulation Z section 226.32's APR threshold.
Points and fees threshold: The threshold is the total points and fees payable by the borrower at or before the loan closing exceed the greater of 5 percent of the total loan amount or $2,400 if the total loan amount is more than $30,000 or 8 percent of the total loan amount if the total loan amount is $30,000 or less.
Are there any state specific predatory lending laws?
See the high cost loan provisions.
Closing practices – attorney or title state? Wet or dry settlement?
Tennessee is treated as a wet funding state by practice. There is no penalty for not delivering funds with closing documents, but closing may be delayed if funds are not delivered.
Are there 2nd mortgage policies and/or restrictions? Do you need a separate license to do 2nd mortgages?
Second mortgage lending is regulated by two laws in Tennessee.
The principal regulatory scheme is found in the Tennessee Residential Lending, Brokerage, and Servicing Act which requires lenders, brokers, and servicers to be licensed or registered. In addition, all loan originators must be registered. The act covers residential mortgage loans regardless of lien priority, including second mortgages and home equity lines of credit.
Lenders making second mortgage loans with an interest rate higher than the state's general usury rate (12.25 percent as of October 2006) must register under the Tennessee Industrial Loan and Thrift Companies Act.
A lender may not be licensed under both the Residential Lending, Brokerage, and Servicing Act and the Industrial Loan and Thrift Companies Act; the lender must choose between the two licenses.
Who is the regulator and what is their contact information?
Tennessee Department of Financial Institutions
Compliance Division
511 Union Street, Suite 400
Nashville, TN 37219
Phone number: 615-741-3186
Fax number: 615-532-1018
state.tn.us/tdfi/
DISCLAIMER: The data contained here is for informational purposes only. It should not be the sole resource for licensing decisions. Please consult the regulator and/or an attorney that specializes in these matters before taking action.
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