Critical and Retroactive Changes Coming to NMLS Disclosures This Week

Significant changes are coming to the Nationwide Multistate Licensing System (NMLS) later this week that will affect every person with an Individual NMLS record (Forms MU2 and MU4), as well as Company NMLS records (Form MU1) and Branch NMLS records (Form MU3) associated with such Individual NMLS records. For the first time since the system’s launch in 2008, the disclosure questions that must be answered by every “control person” and mortgage loan originator (MLO) have been revised. The new disclosure questions will be released April 18, 2026. On or after that date, an individual completing an MU2 or MU4 for the first time will respond to the revised disclosure questions. If an individual has previously submitted or currently has an MU2 or MU4 associated with an MU1 or MU3, they will have to answer the new disclosure questions and submit those answers in the system before the NMLS will allow the individual to amend their MU2 or MU4 or make a filing through NMLS tied to their MU2 or MU4. All companies will need to resubmit their MU1 company and MU3 branch forms in the NMLS. This could include new Individual, Company, Branch and/or MLO license applications, as well as Advance Change Notice (“ACN”) filings to amend a Company or Branch license.

The changes will apply retroactively, meaning that an existing disclosure response may need to be changed even if the facts remain the same, because the disclosure question is now being asked in a different manner or because the new or amended definitions being released with the new disclosure questions change the context of the question or the applicable time period. While there is a “suggested” deadline of August 31, 2026 for NMLS users to complete all updates to their MU2 and MU4 records, the practical deadline will be much sooner for many companies, as the NMLS will not permit any MU1 or MU3 filings amending the company and/or branch records after April 18, 2026 unless and until all of the company’s MU2 and MU4 individuals associated with such records complete the new disclosure questions and attest to them. 

This Legal Update discusses relevant background, notable changes being made to the disclosure questions, changes to important definitions, and present and future impact on company (MU1) filings, in addition to MU2 and MU4 filings.

Background and Revisions to Disclosure Questions

Launched in 2008, the NMLS was established by the Conference of State Bank Supervisors (“CSBS”) in cooperation with the Association of Residential Mortgage Regulators (“AARMR”) to serve as the system of record for non-depository financial services licensing and registration for participating state regulators. The NMLS aimed to provide a system for states to streamline and standardize financial services regulatory requirements across the states, improve coordination among regulators, ease compliance for industry members, and strengthen consumer protection. In addition, the NMLS was used by states to satisfy the requirement imposed by the federal SAFE Act, enacted as part of the Dodd-Frank Act, to require the licensing or registration of MLOs in the wake of the 2008 financial crisis. Later, most states voluntarily added other mortgage-related—and then non-mortgage-related—licenses and approvals to be administered through the NMLS. To register an NMLS account and apply for a state license, an MLO must answer, and continually update, a set of disclosure questions, which have remained unchanged since 2008. “Control persons,” which, depending on the state, can include certain direct or indirect owners, executive officers, managers, partners, directors or other board members, as well as branch managers, and qualified individuals, also must complete and maintain accurate answers to the disclosure questions.

In late 2025, the CSBS, which administers the NMLS, informed key stakeholders that its long-planned changes to the “individual” disclosure questions that must be answered by a licensee’s control persons, branch managers, qualifying individuals and MLOs on the NMLS would take effect in 2026. The changes, initially proposed in 2022, will require every control person and MLO that has an MU2 or MU4 “individual” form, respectively, on file in the NMLS to review and revise their responses to mandatory criminal, civil, financial, and regulatory disclosure questions that are seen by financial services regulators across all US states and the District of Columbia (and some US territories). According to the CSBS, the disclosure question revisions are meant to clarify the existing questions to eliminate confusion.

Practical Effective Date and Retroactivity

While CSBS initially advised only that the revised questions will be “deployed Spring 2026,” the organization clarified in a recent update that the deployment will begin April 18. Although CSBS “encourages” industry participants to revise affected NMLS records by August 31, 2026 in order to avoid delays resulting from overlap with the annual license renewal season that begins on November 1, the effective deadline will be much sooner. As noted above, the NMLS will prohibit any company (MU1) or branch office (MU3) filing or attestation unless and until all associated individual forms have been updated.

Despite the CSBS’s suggested deadline of August 31, the effective deadline for companies and individuals on NMLS to update the disclosure questions will be the first time the company needs to amend its company (MU1) filing or branch office (MU3) filing, or the first time any control person or MLO with an individual form on file (MU2 and MU4 respectively) needs to amend their NMLS records. Each time any of these records is updated, the licensee (company and individual) must attest to the accuracy of all information currently on file in the NMLS. As a result, a routine company or individual filing that requires attestation will trigger the requirement for every person associated with a licensed company to update their disclosure question responses. For example, any change to the company’s record or branch office record (or opening or closing of same) that amends the legal name, business address, trade name, business activities, jurisdictions serviced, contact employees, resident agents, or qualifying individuals, would trigger the requirement for every MU2 and MU4 individual associated with the company or branch record to update their disclosure responses before such change can be effected in the NMLS. As another example, a filing that requires changes in ownership or control of the company will also trigger the requirement for all MU2 and MU4 individuals associated with the company record to update their disclosure responses before these changes can be filed.

Furthermore, on or after April l8, 2026, merely amending the effective date of a previously made Advance Change Notice filing for a change in ownership or control which closing date has been delayed also will require the disclosures to be updated so that attestations can be completed by MU2 and MU4 individuals associated with the company record before the effective date can be changed. Companies in the midst of a change in ownership or control should plan ahead for the disclosures to be updated so that any necessary MU2 and MU4 attestations can be completed on or after April 18.

Moreover, the retroactivity of the 2026 changes means that each MU2 and MU4 individual will need to review their records to determine whether their existing responses are no longer accurate given changes to the questions and defined terms. This could result in some “No” answers changing to a “Yes.” Any changes to disclosure questions resulting in a “Yes” response will require uploading of a statement of explanation and supporting documentation, where applicable.  The NMLS FAQs recommend beginning the statement of explanation with the reason why the answer to the question changed to ease the review process by state regulators. On the positive side, this could also lead to some “Yes” answers becoming “No.” While not required, an explanation can also be provided at the disclosure category level for a “No” answer. Some questions will now permit the response of “Not Applicable,” which includes the Regulatory Action - Part II questions (questions 20 and 21) and the control questions (23 through 30) to avoid misleading responses that do not apply to the individual.

Even if an individual has no changes to his or her answers to the revised disclosure questions, each individual will need to go through the process of responding to the updated disclosure questions and re-attesting to the accuracy of the NMLS record after the disclosure questions are updated on April 18, 2026. CSBS has advised that a person’s existing disclosure questions will be available to review while the person answers the revised disclosure questions. Please note that MLOs not associated with a Company MU1 record or Branch MU3 record can amend their disclosure questions and attest to their MU4 record independently from the company’s record and will not be required to attest in order for the company to make an MU1 or MU3 filing.

Updated Disclosure Questions

As part of the revisions, the individual disclosure questions are being re-ordered and reorganized, disclosure language is being amended, certain definitions are being revised, and some new terms and definitions are being adopted. All individuals with an MU2 or MU4 record in the NMLS should review the full set of new disclosure questions, but a non-exhaustive summary of some of the more significant changes follows:

Civil Disclosure Questions

• The following new question is being added: “Has any court ever: found that you made a false statement or omission, or you were dishonest, unfair or unethical?”
• The existing question regarding dismissals of regulatory civil actions pursuant to a settlement is broadened to include actions brought by a “consumer protection agency,” which is a new term (discussed below).

Criminal Disclosure Questions

• The question pertaining to misdemeanor convictions involving certain enumerated offenses is being limited to the past 10 years, whereas the current question contains no time limitation.

Financial Disclosure Questions

• A question regarding personal bankruptcy in the past 10 years is being revised to clarify that the question pertains to both voluntary and involuntary bankruptcies.
• A question on foreclosure is being changed to clarify that it applies to “efforts to foreclose” both judicial and non-judicial foreclosures, on either residential or commercial property, with “efforts to foreclose” being a newly defined term.

Regulatory Action Disclosure Questions

• The Regulatory Action Disclosure Questions are being divided into two parts, with Part I applicable to all applicants, and Part II applicable only to persons who have ever been licensed as an attorney or accountant or held an authorization to act as a contractor on behalf of a government entity.
• A new question is being added to Part I that asks, “Have you ever had a financial services license, or any other professional license revoked, suspended or restricted?” This question resembles portions of two existing questions: the existing requirement to disclose whether a financial regulator has revoked a person’s registration or license, and the requirement to disclose whether the person has ever had an authorization to act as an attorney, accountant, or state or federal contractor revoked or suspended. However, given that “financial services” is a newly defined term that applies more broadly—e.g., to securities, commodities, banking, insurance, consumer lending, money-services businesses, consumer-debt management or real estate—the new question will reach professional licenses that are not covered by the existing questions.
• The existing regulatory disclosure questions are being broadened to include findings and actions brought by local regulatory agencies in addition to federal and state authorities, any “governmental entity,” or any “consumer protection authority,” both newly defined terms. 
• The revised questions will require a person to disclose the dismissal of a regulatory action pursuant to a settlement agreement.
• A new question asks if there are any pending regulatory actions against the person where the remedy sought is the revocation, suspension, or restriction of a financial services license or any other professional license.

Individual Disclosure Questions Pertaining to Control Activities

• The disclosure questions relating to events that occurred while an individual exercised control over an organization are being moved to a new, separate section instead of being imbedded within other individual questions. The control activities questions will include separate sections pertaining to civil, criminal, financial, and regulatory actions. These questions will not apply to a person who has never had control over an organization.
• The control activities questions are being broadened to apply to actions involving local regulatory agencies and consumer protection authorities in addition to the authorities listed in the existing questions.

Changes to Definitions

The changes to disclosure questions are accompanied by revisions to several existing definitions in the NMLS Glossary and the adoption of several new terms. The NMLS Glossary defines terms used in the disclosure questions. Some of the notable changes include the following:

• The definition of “found” is being revised. “Found” is an important term that is used in the existing disclosure questions four times and nine times in the revised questions. The NMLS uses the term to capture a breadth of civil and regulatory actions and determinations that may not rise to the level of, or result in, an order, settlement, judgment, or other kinds of discipline. The revised definition of “found” expressly includes public settlements and agreements and excludes settlements that are not public. While the original definition of “found” suggested this result, it was less clear.
• The definition of “order” is being amended to include orders agreed to by the parties, including consent orders and stipulated orders, in addition to other minor changes.
• “Consumer protection” is a newly defined term, referring to “laws or regulations designed to protect a consumer, including but not limited to, laws or regulations which limit or prohibit unfair, deceptive, abusive or fraudulent practices, or require disclosures to consumers.” Several of the revised individual disclosure questions are being broadened accordingly to include actions initiated by consumer protection authorities or agencies.
• “Court” is a newly defined term that will capture domestic, foreign, military, and tribal courts.
• “Financial services” is a new term, not to be confused with the existing term “financial services or financial services related.” “Financial services” includes the activities that constitute “financial services or financial services related” activities, and also adds “real estate broker” activities and expands references to financial services statutes or regulations to include consumer protection statutes or regulations. While “financial services” activities will define the revised individual disclosure questions, “financial services or financial services related” activities will remain applicable to company-level disclosure questions.

Impact on Company (MU1) Filings

Although the revisions target individual MU2 and MU4 disclosures, CSBS acknowledges that company (MU1) records may be affected as well, given that the revisions to the NMLS Glossary will also affect the scope of company disclosure questions that share the defined terms with the individual questions. Thus, CSBS recommends that companies “determine whether any of these changes affect their answers to the disclosure questions.”

The company/MU1 disclosure questions use the new terms “court,” “lien” and “unsatisfied,” and the revised terms “found” and “order.” Although the company disclosure questions use the term “financial services-related,” CSBS guidance advises that the new “financial services” term “is applicable only to the Individual Disclosure Questions.” Presumably, then, company disclosure questions using the term “financial services-related” should continue to be interpreted using the legacy term, “financial services or financial services related.”

It is likely that many companies will not need to make any changes to their company (MU1) records in response to the individual disclosure question revisions. Nonetheless, companies should review the new and revised definitions to confirm.

Looking Ahead

More excitement awaits in 2027, when CSBS plans to revise the disclosure questions at the company (MU1) level. For now, individuals with an MU2 or MU4 individual record on file with the NMLS should begin reviewing the revised disclosure questions, which are available on the NMLS State Resource Center, so that they are prepared to update and attest to their responses as soon as possible after the April 18, 2026 launch. Individuals who do not yet have an individual form on file with the NMLS, but who are planning to register on the system, should also review the revised disclosure questions in preparation for filing. Just as with the current existing disclosure questions, grey areas and edge cases are likely to proliferate as the revised disclosure questions are applied to specific individuals and fact patterns.

Companies should use the time before April 18, 2026 to begin the process of coordinating with their associated MU2 and MU4 individuals so that any needed company- or branch-level filings, such as changes in control of the licensee and branch applications, will not be held up while individual disclosures are updated. For larger companies with a substantial number of associated MU2 and MU4 persons, the uplift will be considerable. Licensees should also consider whether any upcoming MU1 or MU3 filings can be made prior to the launch of the disclosure questions on April 18, 2026 to avoid any delay caused by the MU2 and MU4 attestation updates.