Georgia Relaxes Felony Ban for DBF Licenses
The Georgia legislature has revisited the state’s broad ban on regulated entities employing individuals with felony convictions, giving the Division of Banking and Finance (DBF) the authority to issue an MLO license to an individual with a felony conviction and to permit a mortgage lender or mortgage broker to obtain or retain a license while employing a covered employee who has a felony conviction, as long as the conviction at issue is more than seven years old and not one of a list of enumerated disqualifying crimes.
For many years, Georgia denied or revoked mortgage lender and mortgage broker licenses if an entity employed any individual with any felony conviction, without regard to the employee’s job function, type of felony, or how long ago the conviction occurred. As covered by WBK here, Georgia previously amended the company-level felony ban in 2022 by narrowing its application to “covered employees.” While this allowed licensees to employ individuals with felony convictions for certain roles, the restriction was still often interpreted to cover many employees who were not obviously connected to Georgia loans, and MLOs were still subject to the near total ban.
The prohibition remains, however, for an MLO or covered employee with a felony that is either less than seven years old, or one of the following disqualifying crimes (unless the individual receives a presidential or gubernatorial pardon):
- Conversion
- Theft
- Money laundering
- Bribery
- Dishonesty
- False statements or omissions
- Perjury
- Extortion
- Breach of trust
- Forgery
- Counterfeiting
- Embezzlement
- Insider trading
- Tax evasion
- Kickbacks
- Identity theft
- Cyber attacks
- Social engineering
- Fraud, including but not limited to check fraud, credit card fraud, mortgage fraud, medical fraud, corporate fraud, bank account fraud, payment (point of sale) fraud, currency fraud, bank fraud, and securities fraud
- A felony directly related to the financial services business
The statutory amendment also gives DBF authority to issue by email or in NMLS a notice of intent to administratively withdraw an application for a license with respect to applicants for a Mortgage Lender, Mortgage Broker, or MLO license, who fail to provide any information requested by DBP, and to withdraw such application administratively 30 days after such notice.
These changes are effective July 1, 2025.
