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A state mortgage regulatory agency discovers that an MLO has been charging borrowers undisclosed fees and misrepresenting loan terms. Which of the following actions is within the agency's authority under the SAFE Act framework?

Uniform State Test (UST) · 11% of the SAFE exammedium

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Correct answer: Suspending the MLO's state license pending investigation and requiring restitution

State mortgage regulatory agencies have broad supervisory authority, including the power to suspend or revoke licenses and order restitution for consumer harm caused by MLO misconduct. State agencies cannot issue federal criminal indictments (that is a DOJ function) or revoke federal registrations (which is a federal regulator's domain). While agencies may refer cases to the CFPB, they are not required to transfer jurisdiction and can take independent action.

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