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An MLO has been licensed in States A, B, and C. She is the subject of a regulatory action in State B where her license is suspended. Under the NMLS system, what is the most accurate statement about the effect on her licenses in States A and C?

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Correct answer: Her licenses in States A and C are unaffected; each state independently determines the effect of another state's enforcement action on its own license

While the NMLS provides a centralized database where enforcement actions are visible to all state regulators, each state independently evaluates whether another state's enforcement action warrants action against its own license. State B's suspension does not automatically suspend or revoke licenses in States A and C — those states may choose to take action based on the information available in NMLS, but they make independent determinations. There is no automatic NMLS-triggered suspension across states, no NMLS arbitration process for this, and no automatic conversion to provisional status.

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