SAFE MLO SAFE Act, NMLS & Licensing question: SAFE Act's minimum standards

SAFE MLOSAFE Act, NMLS & Licensing

An applicant was convicted of felony embezzlement 15 years ago. Under the SAFE Act's minimum standards, may she be licensed?

A Yes, if her employer agrees to supervise her
B Yes, because it was more than 7 years ago
C Yes, if she completes 20 extra hours of ethics education
D No, a fraud or breach-of-trust felony is a bar at any time

Show the answer and explanation

Answer: D. No, a fraud or breach-of-trust felony is a bar at any time

An applicant may not have been convicted of a felony at any time if it involved an act of fraud, dishonesty, breach of trust or money laundering (12 U.S.C. 5104(b)(2)(B); 12 CFR 1008.105(b)). Embezzlement is a breach-of-trust offense, so the 7-year look-back does not help her. A pardoned conviction is not treated as a conviction for this purpose. Source: 12 U.S.C. 5104(b)(2); 12 CFR 1008.105(b) (as at 11 Oct 2026).

Common mistake

Applying the 7-year look-back to fraud-type felonies.

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Original study material mapped to the public NMLS Content Outline; not a real test question.Not affiliated with or endorsed by NMLS, CSBS or SRR. Verify figures and rules against current guidance before relying on them.