How to Check If a Lender Is Licensed in Your State
The NMLS (Nationwide Multistate Licensing System) website or other official sources may allow you to check a lender’s credentials and licensing status using the NMLS number. If you discover that the NMLS number provided on the loan offer is tied to a company with a different name, it may just be that the company is doing business under a trade name that’s different from its legal name. Or, someone may have simply copied the credentials of another company.
Keep the search going to determine the relationship between the company that made the loan offer and the company that holds the license or registration number that was provided to you.
The company behind the loan offer
Look up the lender’s information and find out who your lender is. Sometimes the owner of a loan website isn’t the lender. Instead, it’s a matching service that passes your information along to potential lenders. That means investigating the matching service won’t give you accurate information about the company that’s actually offering you a loan.
Find the lender’s legal name. If you already have loan disclosures or a proposed loan agreement, check to see if the lender’s name is listed. If not, ask the person offering you the loan who would be listed as the creditor. Use the lender’s full legal name for your search. Also use any “doing business as” name (also known as a DBA).
Next, gather this information about the lender:
- its website
- its business address
- its phone number
- any license numbers
- its National Mortgage Licensing System and Registry (NMLS) ID number, if there is one
These details can help you find the right licensing information for the right type of loan in your state. Check the lender’s NMLS ID number. A lender’s NMLS ID number identifies a company, branch, or individual in the Nationwide Multistate Licensing System. But an NMLS ID number isn’t a license, and it doesn’t mean a company’s license is currently active. See if the lender is registered to do business.
You can use your Secretary of State’s website to find out if a company is registered to do business in your state. But being registered to do business doesn’t necessarily mean a company can legally make loans. Also, business registration numbers, tax ID numbers, and badges on websites don’t necessarily show that a company is legally allowed to make loans.
Official records for banks, credit unions, and nonbank lenders
Keep in mind that some credit unions chartered by a state carry private insurance. If you can’t find a credit union in the federal records, your state regulator may be able to help you verify the credit union’s status. Banks and credit unions may have a charter or exemption that means they don’t need a state consumer lending license, so interpret their records differently than you would for a nonbank business.
BankFind includes banks that no longer exist, so a match isn’t proof that a bank still exists. A bank’s deposit-insurance record isn’t proof that a particular loan offer was approved.
| Business name on the offer | Start here | What you are checking |
|---|---|---|
| For nonbank lenders and loan brokers | Check your state regulator’s license search. Your state regulator’s license search may refer you to the NMLS Consumer Access website. | Check the lender’s license or registration, license status, and whether it’s licensed or registered to perform the activity it’s performing (lending or brokering). |
| For banks | Check the FDIC’s BankFind Suite for FDIC-insured banks. | Check the bank’s official name, status, website address, and which regulator is listed for the bank. |
| For credit unions | Check the NCUA’s Credit Union Locator. | Check the credit union’s official name, charter information, and whether it’s insured. If you can’t find a credit union or are unclear about its status, contact your state’s credit union regulator. |
Some personal-loan or payday-lender records may be in state databases and aren’t included on the NMLS, so keep in mind that the NMLS may not have records on all businesses that make these loans. The NMLS tracks mortgage licenses, and some other types of financial licenses, for states that participate in the database. Find out whether the state regulatory agency listed actually regulates the type of loan you have in mind.
There may be a separate office that regulates consumer lending, or the regulator may point you in the right direction. If you work with a state-regulated lender, find the CSBS state agency directory to get contact information for the office that regulates your lender.
The state, license type, and current status
The type of license should also be commensurate with the type of loan (e.g., a mortgage broker’s license would not authorize a company to make an unsecured personal loan to you). Different products may be subject to different state laws, so it’s important to know what type of license the company needs to conduct the business it offers.
The lender’s home state license doesn’t necessarily mean they can make you the loan you’re requesting. Many lenders operate on the Internet, but that doesn’t mean they can avoid state regulations.
Search by the company’s legal name, trade name, license number, or NMLS ID. If you don’t have the company’s legal name, use any trade name disclosed by the lender. Go to the company’s full profile and make sure the company’s legal name, trade names, and address match the information on your offer. It’s OK for a branch location to be in a different city than the company’s head office, as long as there’s an explanation.
Determine whether or not the company is Authorized to Conduct Business. This Yes/No answer applies to the specific state and license type. Check the status of each entry, as well as any restrictions or other conditions that may currently be in effect.
A pending application generally does not constitute authorization to do business unless the applicable state expressly grants temporary authority or another limited authorization. A lapsed, suspended, surrendered, or revoked license means the lender is not currently authorized to make new loans to consumers in that state. If you’re having trouble interpreting the language, contact the regulator for help figuring out what the lender is and isn’t authorized to do with its license. Check the History tab for any regulatory actions involving the lender.
If you find an order or disciplinary action, look at the party the order applies to and the types of acts or business it’s restricted from engaging in. An order is not the same thing as an allegation or settlement agreement. If there’s no information in the History section, that doesn’t necessarily mean there are no regulatory actions on record. When in doubt, ask the regulator about the final outcome of any regulatory actions.
Example: A matching name with no entry for your state
A lender can operate in multiple states. If the lender holds a consumer lending license in one state but you don’t see a license for your state listed, that doesn’t mean you can’t get a loan from that lender.
The lender may hold a different license in your state, or it could be exempt from having a consumer lending license. Contact your state regulator to find out if the company is licensed to make the type of loan you’re interested in.
Mortgage loan originators: licenses and federal registration
Check with the regulator in the state in which the property is located to find out what licensing records apply.
Find the company’s and the mortgage loan originator’s (MLO) records. Make sure the company is the one listed as your MLO’s employer. If it isn’t, ask your MLO to explain why. Some states require a separate license for the branch where you’re handling your business. Ask whether that applies.
Some MLOs who work for covered banks and credit unions are federally registered. If your MLO’s record is a federal one, check to make sure his or her registration is in effect and shows the correct employer. A missing MLO state license doesn’t necessarily mean there’s a violation.
Who is behind the email, text, or website?
Be aware that anyone can make a website or send an email or text using another business’s name, address, and license number. Authenticating records cannot tell you if the website, email, or text is actually from a business with that license number.
Be wary of a domain name (web address) that looks a little different than the one you expected, or a representative who can’t tell you why they are using another company’s credentials. Keep in mind that anyone can also copy a business’ license number or logo.
If something seems off, don’t proceed with sending money or signing documents. Before providing personal information such as a bank statement or a picture of your Social Security card, make sure to confirm that the website and representative you’re doing business with actually represent the licensed business.
Find a phone number on the licensing regulator’s website or in other official records to double-check, instead of just using the contact information that’s already in the email, text, or website you’re trying to verify.
Questions for the state regulator
If you’ve already taken out a loan, finding out that a licensing agency doesn’t have a complete licensing record for your lender won’t necessarily tell you whether or not your loan is enforceable (that is, whether or not you’re still obligated to repay it). You may still owe the loan even if the licensing agency doesn’t have information about your lender. A lawyer (on your own or through Legal Aid) can help you understand what a licensing issue could mean for your loan.
Contact the state regulator that oversees your type of loan and ask whether the lender you’re dealing with is authorized to make that type of loan in your state. Check to make sure you’re using the correct legal name for the company, and that it doesn’t do business under another name. If there’s no license, ask if the lender falls under an exemption or some other status, and what law or regulation that is based on.
Ask the regulator how to file a complaint about your lender. Ask if there’s any way to file a complaint anonymously or keep your information confidential. In any letter or email, avoid providing identifying information about you, like your loan account number. Give that information only if the agency specifically requests it.
Sample script: On [insert date], I searched your website for [lender’s legal name], license number or NMLS ID [insert license number or NMLS ID], and the search did not return any results. I have been offered a loan through [insert website]. Is this lender authorized to offer this type of loan to me in [state]? If this lender is not required to be on your licensed lender list, can you tell me what status this lender is operating under, and what law, rule, or regulation that is based on?
Licensing records and the agreement you sign
Compare the name of the creditor in your loan transaction to the name of the company you checked. There may be another company that collects payments, but you shouldn’t have any doubt about who is lending you money. If there’s another company name or if anything else has changed, ask for clarification. Check any new mortgage professional or lender prior to closing.
It’s important to research the lender, mortgage professional, and/or mortgage company that’s named on your closing documents. If you find the names have changed, ask for clarification. Keep track of the results of your research, the date you did the research, and any information you receive from a regulator.
Remember, a license simply means a person or business is authorized to engage in certain activities. It’s your responsibility to make sure the fees and loan contract are appropriate for your financial situation.