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Indiana Securities Division

Securities Division > Resources for > Loan Brokers Loan Brokers

Applying for License as a Loan Broker

  • Any person who, in return for any consideration from any source procures, attempts to procure, or assists in procuring a loan from a third party or any other person, whether or not the person seeking the loan actually obtains the loan, is required to become licensed under the Indiana Loan Broker Act (Ind. Code 23-2-5), unless the person is not considered a loan broker under Ind. Code § 23-2-5-3(c).
  • A person applying for a loan broker license must:
    • Submit a properly completed application (MU1) through the Nationwide Mortgage Licensing System. Licensing fee is paid through NMLS and is non-refundable;
    • Pay $100.00 [directly to the division] for each of the loan broker's ultimate equitable owners (UEO) plus obtain an FBI background report for each UEO.  Instructions for obtaining this report can be found here: Federal Criminal Background Report: Explanation and Instructions;
    • Obtain a surety bond in the appropriate graduated amount based on the previous year's loan volume, in effect for a continuous period with the obligee as State of Indiana; New bond form should not have an expiration date.
      • $50,000   -    Less than $5 Million
      • $60,000   -    More than $5 Million less than $20 Million
      • $75,000   -    More than $20 Million
    • Submit a properly completed branch application (MU3) through the NMLS for each of the loan broker's branch office(s) (the main office is not considered a branch office) located or engaging in origination activities in Indiana; and
    • Have a properly registered principal manager for each office location, including the principal office location (See the section "Applying for Registration as a Principal Manager or an Originator" for registration requirements);
  • Loan Broker Licensees must renew their license annually between November 1 and December 31. The license expires on December 31 of the same year it was issued unless applying for an initial application during the renewal period, if application is approved during the renewal period the license will expire December 31 of the year following issuance.

Applying for License as a Principal Manager or an Originator

  • Any individual that engages in origination activities or serves as a Principal Manager on behalf of a licensed loan broker must become licensed with the Indiana Secretary of State, Securities Division under the Indiana Loan Broker Act (Ind. Code 23-2-5). A principal manager's license incorporates loan origination authority.
  • Applicants for license as a Principal Manager must:
    • Submit a properly completed application (MU4) through the Nationwide Mortgage Licensing System. Licensing fee is paid through NMLS and is non-refundable;
    • Complete 20-hours of live, NMLS approved academic instruction; (Note: The Indiana Loan Broker Act requires two [2] hours of academic instruction on Indiana law prior to the applicant obtaining a license. These hours may be taken in addition to the twenty [20] hour prelicensure course, or it may be incorporated into the twenty [20] hour course if an all-inclusive Indiana course is available.)
    • Complete an additional 16-hours of NMLS approved academic instruction, of which at least 4-hours must be on the subject of ethics. See Administrative Order regarding Principal Manager Licensing.
    • Effective July, 1, 2013, an applicant must successfully pass the NMLS National Test w/UST Component. Prior to July 1, 2013, applicants were required to pass both a National Component Test and a State Component Test.
    • Obtain an FBI background report via the NMLS
    • Show proof that the individual has satisfied the minimum three (3) year experience requirement under Ind. Code § 23-2-5-5(c)(8); and
    • Show proof of employment before the individual may engage in origination activities or serve as a principal manager through a sponsorship request via the NMLS.
  • Applicants for license as an Originator must:
    • Submit a properly completed application (MU4) through the Nationwide Mortgage Licensing System. Licensing fee is paid through NMLS and is non-refundable;
    • Complete 20-hours of NMLS approved academic instruction; (Note: The Indiana Loan Broker Act requires two [2] hours of academic instruction on Indiana law prior to the applicant obtaining a license. These hours may be taken in addition to the twenty [20] hour prelicensure course, or it may be incorporated into the twenty [20] hour course if an all-inclusive Indiana course is available.)
    • Effective July, 1, 2013, an applicant must successfully pass the NMLS National Test w/UST Component. Prior to July 1, 2013, applicants were required to pass both a National Component Test and a State Component Test.
    • Obtain an FBI background report via the NMLS
    • Show proof of employment before the individual may engage in origination activities through a sponsorship request via the NMLS.
  • Continuing Education and Licensing Period Information
    • Principal Managers and Originators are required to complete eight (8) hours of NMLS approved continuing education during each calendar year after the year in which their license was issued to maintain their license.
    • Principal Managers and Originators must renew their license annually between November 1 and December 31. The license expires on December 31 of the same year it was issued unless applying for an initial application during renewal period, if application is approved during the renewal period the license will expire December 31 of the year following issuance.

Education, Testing and Additional Resources

Amendments

  • Should be completed via the NMLS.

HEA 1359 required that the Securities Division and Department of Financial Institutions issue guidelines by September 1, 2008 informing lenders and loan brokers of the appropriate agency by which they will be regulated. These guidelines can be found at Joint Guidelines for Licensing.

Exemptions

  • Effective July 1, 2009 all exemptions to the Indiana Loan Broker Act have been removed per HEA 1646.

Forms

Statutes, Rules, & Notifications

Additional Information:

Attention Lending Institutions: Lending Institutions are regulated by the Indiana Department of Financial Institutions. Any questions regarding the licensing of lending institutions should be directed to the Department of Financial Institutions. You may contact the Department of Financial Institutions at 317.232. 3955. The Indiana Secretary of State, Securities Division regulates loan brokers.

Revised: December 2013