A state legislature is considering whether to require all MLOs operating in the state to either maintain a surety bond of at least $50,000 or contribute to a state-administered recovery fund. An industry lobbyist argues this requirement exceeds the state's authority under the SAFE Act framework. Which of the following most accurately evaluates this argument?

The lobbyist is correct; recovery funds are only permitted for depository institutions, not mortgage companies The lobbyist is incorrect, but only if the bond amount does not exceed the federally mandated minimum of $25,000 The lobbyist is correct; surety bond requirements are exclusively a federal regulatory function under the SAFE Act The lobbyist is incorrect; state agencies are expressly authorized under the SAFE Act framework to establish bonding or recovery fund requirements to protect consumers