# Lender Licensing- Mastering Multi-state Requirements & Avoiding Common Pitfalls > This webinar explores the complexities of multi-state lender licensing, positioning it as a critical business function rather than a strictly administrative task. It is designed for lending and compliance professionals who need to navigate state-specific regulatory environments, avoid common pitfalls, and maintain ongoing operational compliance throughout the product lifecycle. Recorded: 2026-08-17 | Runtime: 57 min ## Key takeaways - Licensing requirements are highly specific to an organization's lending product, borrower type, and the individual statutes of each state. - Companies often face risks from both under-licensing and over-licensing, necessitating a granular evaluation of whether a specific activity requires a license. - Proactive management of renewals and timely responses to state inquiries are essential to avoid unnecessary operational disruptions. - Ownership and leadership changes, particularly those exceeding 10 percent, frequently require a formal review of licensing obligations in each state of operation. - Because licensing rules are not uniform across the United States, organizations must treat each state as a separate jurisdiction with distinct reporting and application processes. ## Transcript Libraries at Memorax. Hello everybody and welcome to thank you for joining us today. I'm Dave Fucle with Cornerstone Licensing and I am so delighted to be here for many reasons because well let me give you the title first so that you know that you are going on the right plane going to the right destination and this webinar is entitled lending mastering multi-state licensing and avoiding common pitfalls. I love the word mastering and because of master because I am surrounded by two masters of the universe in one each Kyle Von Allmen and Suzanne Weaver and I'll get I'm going to read their bios to you here in a second but let me just please just get rid of some other housekeeping. I have one more thing that adults love to be read through. I'm going to read you the ultimate disclaimer for the day. We're going to try to keep this as practical and conversational. That's the intent. Having said that, the legal disclaimer for today. This information is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to asssure this information is upto-date. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. And I know as I read those words, Kyle's just gets all warm and fuzzy. He says, "That sounds really legal ease." And that's perfect. So, thank you. So, who am I surrounded by? because I want to be the best official here and be as the quiet mouse as I can be because you want to hear from these two folks. And please let me read to you once again. So, Kyle Von Allmen is the general counsel and chief compliance officer at Starmark Financial LLC. Bringing over, he says bringing over 29 years. I'm just going to give him a 30. So bringing about 30 years of experience in creditors rights, collections, commercial litigation and regulatory matters. He leads licensing, policy development and audit functions helping support operational integrity across the organization. We are so delighted not just to have him here in this brief moment because Kyle I just forget that he I think so much like he's an employee at the time. He's such a trusted vendor and part of our back office team. So I'm glad we get to share this time. Kyle Suzanne Weaver has 10 years of experience as a licensed owner and operator in real estate and more than 12 years in the mortgage industry, including time as a licensed mortgage loan originator and as a licensing and compliance manager. As a senior account executive here at Cornerstone, as my fellow colleague, she is a licensing subject matter expert responsible for reviewing license determinations and agreement execution with deep industry knowledge. understatement exclamation point. Thank you both for being here. Thanks so much. Let me kick this off again. We have the title. The folks who are on again know that you can always chat, put your questions in the chat. I encourage you to do so. I will see those and we have built in enough time to get to them at the end. and I'd like to just kind of kick this off as kind of bringing out the point or I don't want to make put a bias, but I would just want to say like we really want to introduce this as licensing as a business issue, not just an administrative task. That's kind of the intent and the message. And Kyle, if you wouldn't mind kicking this off and I'm going to ask each of you as to do this is share the lens that you're sharing with the audience today. How are you seeing this these issues and I know it's not fair because we're going to talk about a bunch of them but if you can point out one issue that jumps out like I have to talk about you know we have to talk about this today. So lens that you share. So let's hear from you from it and then maybe one issue that stands out that you know we're absolutely going to touch on and Kyle, why don't you kick us off first? Thanks. Yeah, of course. My pleasure Dave. Thank you. I appreciate it. you know, when it comes to lending licenses, I think, there are a number of factors that often times don't come right to the surface immediately. often times, folks are want are just thinking, hey, I need to be licensed. I need to get a license. But they don't often realize how specific so many licenses are with regard to the nature of your product. So, we have to kind of look at not only what you're offering and to whom you're offering it, but how that fits into the statutory and regulatory structure of each state. And so, just to say I'm a consumer lender or I'm a commercial lender or, just in painting it with that very broad, brush stroke is just simply not specific enough. and so I think that it's important to realize that every state has not only its own parameters and rules and laws, but your product may or may not fit into the scope of that licensing statute. And so that can work to your favor often times. we talked to people over the years about licensing and whether or not they should get a license and whether or not they are risk averse and I will tell you that there is risk not only in underlicicensing but overlicicensing. So, you don't necessarily want to open yourself up to not only the initial cost of getting a license, but really that bandwidth cost of getting a license that you might be exempt from needing, getting a license that maybe the scope of that statute doesn't capture exactly your lending activity. and so those types of things are the things that need to be evaluated on a statebystate basis. And so I guess what I'm really saying is the granular level of what you're doing and who you're offering it to can often be the difference between needing a license and not needing a license. And getting that question right is a much better destination than just simply saying there's a license out there. Let me go get it. So that's kind of what we try to point people toward in this conversation is getting this question right for all those reasons I just outlined. Yeah, getting that question right. So the prompt right and I don't know just grinning as I think of you know what do I ask Claude or chat GPT3 or asking the right question getting that question right to get us to the end source and I know you know I know what you're all going to get into. So I'm excited by that. Thanks Kyle. And Suzanne similar just you know what lens do you bring to this? what you know and what do you see is the one issue perhaps that you know you definitely want us to conquer in the next 40 minutes. Yeah, for sure. Thanks Dave. So a big thing that comes across with me is people don't know that they actually need a license. So that's a big thing that I talk to people about. It's not necessarily just coming and saying I want to get this consumer license in Florida, but do I need a license? And that's a lot of how we work with Kyle of helping to determine those things. and just making sure that yes, they get the correct license. even in business purpose lending and brokering, there are still states that require a license. And that's what we're here to help clarify and make sure that everyone knows what they need and make it clear for them what they're supposed to be doing. Do you feel like you do that on a daily basis or weekly basis? Absolutely. Absolutely. But it's great. I love talking about licensing. So, I love jumping on those phone calls and hearing about people's adventures and exciting prospects for opening new businesses and expanding. Yeah. Yeah. You like it because you're and you're good at it, too. So, that's that's great. so not shifting gears but you know we have basically a couple of four flavors that we've advertised to this audience that we're going to go through. So the first one being that maybe Kyle you kick us off and I would say at a high level what makes multi-state licensing so complex or unpredictable or it seems that way where the companies become reactive instead of proactive and kind of a two-part and I'll just add on that because I want to have a sense of urgency is why if at all should leadership be involved in that decision-m not just the legal team or the licensing team. Thanks. Yeah. Well, there's a couple different things in play here. number one, a lot of times, I'll have a conversation with colleagues about, you know, just, hey, I need a lender license. But there isn't just one type of lender license. There's multiple lender licenses. And so, sometimes what the plans are that are on the immediate short-term horizon, they evolve over time as well. So what the short-term plan is may involve a certain strata of lending activity but that activity you know can be it can trigger different statutory requirements just based on how you go about that activity. So, I'll give you an example and that's we get conversations all the time about hey we want to create some financing for people for consumers to be able to buy this particular product or service. And so it depends on whether or not this is a direct lending relationship or an indirect lending relationship. and what I mean by that for those of you who don't know is that the direct lending relationship is just what it sounds like. It's a it's a creditor entering into a financing contract with a consumer directly with nobody in between that relationship happens within the contract. An indirect lending relationship is what happens in your typical car dealership, right? So what happens is that contract is actually between a consumer and the auto dealer and the indirect lender comes in as the sales finance company and even if it's simultaneous within that financing agreement that sales finance company comes in and purchases that contract. So the consumer never sees anyone except for the sales finance company as their creditor. however it is regulated quite differently than the first scenario I described triggering all different statutes actually exempting companies from licensing at all in a good number of states whereas the direct relationship does not exempt you in the same way and it creates all different parameters for interest rates amounts financed and things like that too. So, when I initially referred to how you go about doing your business can really impact the licensing profile, that's the type of thing I'm talking about. the other thing is this. if you're not a high interest rate type of lender, you may be able to set your, interest rates at a level that does not trigger licensing. So, it's something very important to consider if you're on that border or at least to know where those interest rate floors are state by state. They're different everywhere. And what we're talking about is not the statutes that say something like you can charge up to 23.9%. What we're talking about is a statute, and this is most of them, that say something along the lines of you need a license to lend at a rate of interest if you're charging an interest rate higher than what our statutory base usery rate is. And those usery rates are usually between now 7 and 10%. That's not true everywhere, but that's kind of basically the range. and so if you're in or around that area, you could avoid a license altogether if you're able to take your product outside the scope of that licensing floor and put your interest rate below that. And that may not make sense for you from a financial standpoint, but it very much impacts what kind of what kind of licensing you're going to need. Yeah. Yeah. I wow. Thank you with that, Suzanne. on that same in that same vein, right? So thinking operations along the way. Growth is good. We love it when our clients come back to us and say, "Now I want to go expand from Florida only to Wyoming, Iota, Idaho, out to California. I won't talk about, you know, Las Vegas, Nevada, whatever along the way. So that growth is good. What if any, you know, issues do you see what happens or what do you see that breaks down first for them when they try to get that cart ahead of the horse, so to speak, or, you know, That's exactly what I was going to say was that I'm finding that a lot of people are putting the cart before the horse there, doing the lending before they even know whether or not they need a license or I'll just do one in this one state this one time. versus even just doing some base research to figure out whether that license is needed or not. staying on top of it, you know, in making sure that you're permitted to do lending in that state is always the best course of action is to find that out first. Well, and if I can jump in there, it's I think we run in sometimes to not only the fact that, you know, people maybe haven't considered that, but they also haven't considered the fact that in the application process, if later on you're deciding, okay, yeah, I guess I do need this license. my volume's going to dictate to me that it's worth it to make the effort to get this. Now, you have to answer the question as to whether or not you've been conducting this activity already. And depending on the scope of your activity, the length of time you may have been conducting it. just so the listeners are aware, it's possible that in the application process that something of an enforcement type of action can come out of that. So, you put yourself between a rock and a hard place, right? Because you know you need this license and you didn't get it earlier and you don't want to disclose, but you have to disclose. and then now you're in a situation where paying some sort of a fine is pro could be part of the application process. And you know the penalties run the gamut from you know a small kind of slap on the wrist situation or you know something that can be in the thousands of dollars to overcome that hurdle. And so that's that's that's really what I mean at all costs you should hope to avoid that. Yeah, absolutely. You feel the same, Suzanne? Oh, for sure. I was also just thinking that not only do people maybe not take the time to figure out whether they need the license or not, and I know we're going to get into this later, too, but, adding a new product or changing how you're conducting business can also change your licensing profile. just deciding that oh well now I want to I want to do the indirect lending I'm already a direct lender so it shouldn't be any different right so they'll just start doing things differently and not realizing that triggers a change with estate and what they're considered what you're doing for your business great and a great segue I'm just going to let you transition from there so that kind of the kickoff you guys teed it off well like real or perceived or perceived or complexities of multi-state, you know, expansion licensing. But now, let's go into okay. Oopsies. So, the mistakes come in, they have to go. So, let's probably the folks that are on this call or, you know, get the most from this probably got most intrigued by I want to hear about the common pitfalls for several reasons. One, I want to get heads up to them. And two, I want to normalize myself. I feel like I'm making these all the time. So, let's use that as a transition. say Suzanne, if you wouldn't mind taking the lead on this or kick us off on what do you see then what of the common pitfalls and in particular and you go wherever you want on it but what seems comes out seemingly minor but then before you know it gets you know it gets snowballed and carried away. Yeah. I mean, a lot of times, just not doing the research, not even looking at it, and just going with it. don't even know if that license is required, if there's an exemption to the license. and even if there is an exemption, there are still compliance requirements for most states. And I think a lot of people aren't realizing that just because there's no license doesn't mean you don't have obligations to the regulatory agencies of that state that monitor lending. So I think that's something that I don't believe that people are really looking at and doing their research to make sure that they are following things like that. on a more granular level. something as simple as not having a business plan together can is a big thing that I talk to people about. I do talk to a lot of startups, but even when you expand into more states, there are things that you have to update within your business and your policies, procedures, and things like that. not even just considering yeah, I want to go get the state license, but there are other things that have to be changed operationally and within that structure to make sure that you can continue. Suzanne, how have you because I run into this all the time is considering how people who you know they're existing in one particular state, how do they tackle the minority of states that are out there that require maybe a brickandmortar type of arrangement? You know, it's it's something to be in, you know, Ohio and think, gee, what do you mean I've got to fly out to Arizona? Not that's so terrible in the winter time, but or you know, I've got to go set up an office somewhere. How do you recommend that people handle that through the application process because I know I've heard you with some good solutions and I know people need to hear it. Yeah, that's definitely a great question. there are a handful of states that do require that physical location and there are always some exemptions available. reaching out to the state is a great way to figure out whether you need it. being 100% online can change that requirement. there are services out there for people in states that allow it to offer services at to allow them to utilize their local address to meet that requirement for a company. So you can engage with people to hold that position for you. a lot of people will go and hire somebody specifically to fill that role that's located in that state. use your network. ask around. U, people talk, they know people. you go to these conferences that are around the country and you start meeting people. you network and you find out where they are and you use those resources to help find these individuals, these, you know, businesses that you've got a partner somewhere. Let's use their address. Let's start working there. and that's a great way to at least start looking to help fill that position. Nice. Well, I will tell you, Dave, too, is that especially in the area of indirect lending, I've described it this way that there are states that don't require a license. It's like as if a state didn't require you to get a driver's license, but they can still issue you a speeding ticket. So, the fact that you don't maybe need a formal license to conduct lending activity in one way or another, maybe you're exempt, maybe your interest rate takes you outside the scope of the statute, maybe they have no indirect lending applicable statute, that does not mean that there are not regulations around that and requirements in terms of what you've got to disclose to your borrower, what your interest rate parameters can be, and what your charges or fees could be in association with that. So, just a warning there that just because you don't need a license doesn't mean it's the complete unregulated wild west in that particular state. Yeah, that's a great point and I'm just going to tag on that and say end because I was going to ask you what issues have you seen Kyle that perhaps create the greatest regulatory you know exposure to companies by because of I think the greatest regulatory exposure comes from this comes from consumer complaint. So obviously everybody's going to be aware that you know if you're unlicensed or if you do something wrong you could get sued for that. there's either a private cause of action or there's not. but really what happens is the way this normally happens is that a consumer is going to complain about a process. maybe valid, maybe not be valid, but the first thing a regulator is going to do or even a consumer attorney is going to do is they're going to bump your name up against the list of licenses and that starts the dominoes. So, it that's why this is so important because the regulatory aspect of consumer complaint, dealing with that, getting things right, having your disclosure, all of that ties in with the licensing portion because one exposes the other. And it's just important to remember that you've got to get the regulations right and the licensing right. And sometimes I will tell you that there can be a difference of opinion. I've I've had a lot of differences of opinion with regulators in terms of what triggers their license, the necessity to license. And so, if you have made a decision that you don't need a license, I think it's just as important to know why you made that decision as it is to make that decision because that impacts what the path to remediation is. If you get a regulator that decides you needed a license, well, and your explanation is, you know, we evaluated this and this was our reason that we didn't think we fell within the scope of your licensing scheme. then you know, you're much more likely to get a remediation path that involves the statement of, okay, well, just we think you need to be licensed, so go get licensed. as opposed to we need to think we think you need to be licensed and you have to pay your back licensing fees and you have to pay these fines. So that's the difference sometimes in the enforcement portion of this conversation. Yeah, great points and fair or unfair I'm going to ask the question anyway Suzanne who inside the organization should be involved you know so that sooner instead of later always a compliance officer they're going to be in charge of the majority of this review anal analyzing making sure that all the disclosures and everything is in place I love to have conversations when I hear that there's a compliance officer on staff. it helps with the regulators. They take you more seriously knowing that you've got somebody on your team that understands more. yeah. So that's in the licensing process, Dave. But I want to talk a little bit about the answer to that question as it pertains to renewing your license and maintaining your license because the thing is that in the initial licensing process, yeah, you're going to have to do you know provide financial disclosures and FBI background checks for your ownership team. So that's kind of important that you would understand that those things are going to be available or required. But the issue can come in when you're renewing them. You need to be able to engage your IT team because your IT team has to be able to sweep your inventory and provide a picture on a state-by-state basis and between a particular group of dates potentially whatever the examination period is or the renewal period. So your IT team has to be very adept at deciphering exactly what scope of information is required on your annual reports. and this is of course kind of a little bit easier of a threshold than what an examination would be which would be a deeper dive into each of these accounts. And it's just important to remember that I in April of a particular year am going to have to go back and provide information on January 1st to December 31st in the prior year. So you're going to have to walk back and be able to retrieve that snapshot of information. and then that could be hard depending on what your system is and the understanding and expertise of your IT people. But that's going to either make this you know an easy mountain to climb or a more difficult one. Absolutely. I'm glad you said that, Kyle, because I think a lot of people make that mistake of thinking that once they hit that submit button to apply for that license or once they receive that approval that their job is done. whereas that's not what the states think. They want to see your loan log. They want to know who your borrowers are and if you're working with another lender, who are they? How are they licensed? And you know, what are you charging interest rates on all of your deals that you're doing? So, they I do find that I think people just forget that just because you have an approval doesn't mean your job is done. That's right. And they also want to make sure that, you know, the numbers you provided them last year line up with the numbers you're providing them this year. I mean recently I dealt with a situation that you know 1231 of 24 didn't seem to make sense with 1 of 25. So you know again that had to go back to it and be reconciled and to understand okay did we pull the right thing here or did we pull the right thing there or was this or were these numbers possibly true? Was there a big recall of if you see my point, it's just that there is some continuity to this and some thought that needs to be put into it. So the renewal process it's for those of you who don't know, it's not nearly as expensive as the initial licensing project in terms of the state fees and things like that, but oftentimes it's the pro it's the part that's going to require much more internal bandwidth to get through year after year after year. Excellent points. All I just want to point out because my left brain just got happy on that, you know, in preparation of this as well. You know, Chach GPT is my buddy and gives me all kinds and I got the top three, right? What are the top three common pitfalls along the way? Number one, shocker, missed renewal deadlines, right? I mean, just as you it's just you're blown away by that, right? Like incomplete filings and missing documents, fail to respond for deficiencies. But you just hit it right on the head. I mean, that's it. That's what we see. And you think, well, it's just I'll just put a reminder on my calendar. Heck, I'll put it in three months in advance and we're good to go. No. Right. No. No. It's much more deeper than that. I want to keep the energy going or I don't keep this energy as you're as you're going. We did advertise. So, kind of our third subject, so to speak, is multi-state licensing in the consumer and commercial lending. So, it seems I'm just going to It seems like problems exist or some of these issues happen when a one we try to do a one-size when a company or an organization tries to do a one-sizefits-all, right? One rule of thumb, I did it in Florida, it's got to work for Minnesota, right? So, I mean, maybe, you know, so yes, no, maybe. And then just your thoughts on that Kyle as what do you see jumping off the board when you see you know companies who are dealing in both worlds? Well I mean first of all there is some overlap. So in other words certain statutes are going to give you the ability to lend to consumers or in a commercial context all in one statute. So you just need one license. That's not true in a lot of places. And obviously I think it goes without saying that the consumer area is far more regulated, far more you know far more licenses required for that particular profile. But that has been changing. I guess this falls into the category of hey if there's no license just don't assume that there's not also regulation. A number of states have come out with new commercial financing laws which may not require licensing. Some of them do. Some of them just require a registration. some of them are more specifically tailored to sales-based financing. some of them are specifically tailored to just out-and-out loans. A lot of these commercial loans have parameters around amount financed. So you can see that many of the state leg legislators that decided to regulate or create licensing for commercial financing in the last few years have done so more with regard to smaller commercial loans. believing that maybe folks that are out trying to get those type of commercial loans are less sophisticated. at least that's what it seems like the rationale is for the for the regulation. But I'd say this in the area of not only making commercial loans or brokering those loans, the number of states has exponentially grown that are requiring either compliance with their commercial financing disclosure laws or registration or licensing or all the above. So, if you're getting into that area and you haven't been in it before, you need to take a deep dive into the changes in the law in just the last few years because it's been significant. In the consumer area, that's been much more consistent and static because those state those statutes have been in place for a long time. But what legislatures do is they do tend to modernize them in terms of interest rate. you know, that's a somewhat of a politically charged element as well. So, those things do change. some of the statutes are tied to prime rate or some other variable component that requires you to keep up on that. So, you know, all I can say about it is this. Those are two very different profiles. They need to be attacked separately. But if you've been in one side of the business and you're moving into the other, the good news is there's probably some efficiency for you there. There's probably some overlap and some l some license structure that you don't need to dive into brand new, but they are related and you need to look at them together. Squares and rectangles, they both have four sides, right? That's right. That's exactly right. I mean, along the way, so just don't make the assumptions, right? Be careful of those assumptions. S Suzanne, in your experience, what are some of the common what are some of the common things where whether a client needs a license at all? What do you see, you know, what discussion? I know you're on quite a few calls along the way and what are what are the things that pop up and what are most likely to come up to see if they are in need of a license at all. Yeah, I mean Kyle hit a lot of it on the head of who is your borrower. If that's an individual, a natural person versus an entity that's your borrower. whether you're you know doing something considered as business purpose versus consumer purpose. again, how what's your contract with as a lender? is your contract with you know this individual who is the seller of the goods or this individual who is the purchaser of the goods. There's all sorts of different things that are taken into consideration when to help determine whether that license is needed or not. That's where a lot of research needs to happen by the owners of the company, the officers, directors, those who are running the day-to-day business. They need to know exactly what they're doing to know whether or not those things are triggering a license and if there's overlap as Kyle said. Yeah. And I would just add to that sometimes depending on the category of licensing we're talking about, it matters it matters which side of the revenue stream you're on. It matters who you're getting paid by. So, this kind of falls into more you know, brokering, but if you're brokering on behalf of a consumer, your licensing profile looks one way. If you're brokering and you're essentially an agent of the lenders, your licensing profile looks a different way. How you market yourself can also matter. So, there's a lot of lenders, people out there today who are offering solutions, let's say consolidation loans, things like that. they're marketing themselves as some sort of remediation product to somebody's credit rating, somebody's credit score. And when you get over into that part of especially if you're you're you're trying to get your loans out to market as a refinancing product or a consolidation kind of loan. and part of that pitch can it's naturally you know look make your life more simple get yourself one payment this will lead to a better credit score so on and so forth and that ventures into the area of being a credit service organization in many states and so I just you have to be careful sometimes about those types of things as well and I think that goes to what Suzanne's talking about when you if you've got to know your product and you have to be careful about what your product is, who you're marketing it to, and how you're going about that and take all of that into consideration when you're trying to put your arms around which licenses we need. And since the states since it's the United States, all the states got together and they're all unified. All right. So, I mean, every single state does it exactly the same, right? Well, Dave, I appreciate your the richness of your imagination. So I let me let me So I consider myself an extreme patriot in the most positive way. All right. Service to country etc. but I would say that not all states are created equal. Is that a fair statement when we come to saying like and having said that all kidding aside what jumps out most either one of you can jump in first to the statebyst state differences? We t you're talking about did a great job right talking about the products and who are you lending to along the way. Let's talk about the state for a second. Right. So state what jumps out at you and on those not so united codes of light business licensing? Well, I'll talk about the legal aspect and then Suzanne can talk about the application portion of that because they're they're two big parts that have the same problem, right? Is that you are you're not dealing with the laws of the United States. you're dealing with 50 different kingdoms plus the you know District of Columbia plus even some municipalities depending on what type of license we're talking about. So they're a completely separate set of statutes and you can see there's some uniformity. You know, really when it comes to lending or servicing or brokering financial services products, usually there's three or four categories of states that got together and there was some kind of a forum on you know, the ideal type of you know the UCCC is a good example. The UCCC the uniform commercial code doesn't really ex exist anywhere. it's a uniform code, but there's a model version of that's not the law anywhere, but maybe people thought it should have been the law. but then states enact their own versions of those things. So that's why every state has different interest rate parameters, lending parameters. Maybe you need a license, maybe you don't. I mean, a small a small loan license could be $3,000 in one state or $50,000 in another state. So we can't just talk about small loan statutes. We have to talk about what it is in Georgia and what it looks like in Connecticut or what it looks like in Massachusetts and so on. So that's the difference in the statutory element and you know in the application part that's Suzanne's world. I don't know how she does it but it is tough to navigate and that's that's what she excels at. Give us a little insight there Suzanne please. Yeah for sure. I mean, just as Kyle is reading every state's statute and reading definitions of how does this state define what a loan is even could be different from another state. So, even on [clears throat] the application side of it, it's it's just as complex. Every state is going to have their own application process. They're going to have their own way of receiving those applications. some of them are on NMLS, some of them are on the state agency website, some of them still require a paper application to be wet signed and mailed to them with a check. So, there is so much variety on the application side. there are some states that want to have personal financial information that goes so deep you think that they want your firstborn child. And there are some states that, you know, just give me a balance sheet and we'll be fine. So even among those that do require a license, those applications can vary tremendously state-to-state and application to application because maybe there this one state has five different types of consumer licensing, but there's five different units because it's five different licenses and they're all going to be different for the reasons we've talked about. you're doing a different product. You're conducting business a certain way. Your borrower is a certain person or business. So, your application is different between each of those types of licensing. Yeah. I mean, Dave, it makes it the toughest question to answer becomes, hey, what's this going to cost and how long is it going to take? And nobody asks that ever. That's the first question out of everyone's mouth. It's the toughest question to answer and they get a lot of questions back and I know that can be frustrating. but you know, it's a it's a process to go through. So, yeah, there they're there unfortunately aren't a lot of simple answers. Well, you're reading my mind and you're reading my notes. So, it seems like we maybe we've practiced this before, but I love that word process. And I consider myself not only a patriot, but a process kind of guy. So, we're shifting. we you've done a great job identifying pressure points. Right. So now what maybe in the last 10 minutes or so here we have a couple questions by the way from chat. I'm very excited. hopefully so at least some time for them. But so shifting gears, how do we address a process or create a how does one create a process to keep these things from slipping? And Suzanne, I'm I'm just looking at like you know, if a if a lender wants to build a stronger internal licensing framework, where should they start? And You don't have to do that verbatim, but just thinking that thought. What? Let's start talking about process. How do we fix this or keep it in, you know, in control? Thanks. Yeah. absolutely. Making sure that you're staying on top of your due dates, those renewals, being ready for a audit at any time. kind of thing. Making sure a lot of things that hinder companies is that they aren't responsive. So, if you get an email from the state, you're busy. It gets lost in your inbox because for whatever reason, your business is doing great and you're busy. I love it. The state doesn't care. If they don't hear a response from you, something's wrong. And having someone available, having a licensing lead, a regulator lead on your team in your company, it would be so important just to make sure that they are being responded to. a lot of audits when they come in, they want to receive a response that you received their email that you're getting audited. you know, things like that. It just again, just because you've got that approval doesn't mean that's the end of your responsibilities with the state. Just because you hit that submit button on that application doesn't mean that's the end. owners, operators, directors still have to be available and be responsive. And I think that's a huge part of staying in the process of making sure that you're tracking everything, that you know when you've submitted something, who you're talking to with the state, following up on those due dates. joining a forum online that updates you with regulatory changes so that you know if something changes in your industry in that state for that license specifically if you change your business model you've got somewhere to go to figure out how that change is affected. just things like that. Obviously, having a proper LOS would be the best way just to help stay on track of all that loan information that you're collecting and reporting. Sometimes quarterly, sometimes monthly, depending on those licenses. Again, very specific to the state, very specific to the license. Yeah. I mean, I can report back in my role as general counsel at Starark how we handle this. if you are an organization that has national licenses, you probably need to dedicate one full-time employee to handling your renewals. But the issue with that is that's not an even flow of work. It there's peaks and valleys to it. So, it's difficult to just say, you know, we just have this one person who does all of that. And the other thing is that the renewal process and everything to do with licensing engages many different departments as we alluded to earlier that you know you're going to have this person as maybe a conduit and they're going to ping it and they're going to need to talk to operations about other part of it. they're going to need to know the profile of your product because you don't want to answer some of the questions in the renewal forms beyond what they're really asking for. So, you need to know, all right, I've got this license and this is what it's called and pertains to in this particular state, but this license that we also need in this in another state has a wider scope. So, there's it's a different it's a different sweep of our accounts. So, it does have to be somebody. So, two things in play here. Number one is it's you have to have multiple people and departments involved within your organization. And number two, you have to have oversight by someone that understands your total inventory so that you know how and what to answer. because if you just have someone with the blinders on, they can get this wrong. And again, then your annual report of this year doesn't doesn't line up with next years and things like that. So it's a coordinated effort. and you know, I mean, truthfully, it, you know, it sets itself up nicely for someone like a cornerstone to do your renewals, but you're still going to need those internal portions of your organization that can provide the data and the insight into what your inventory looks like. Perfect. I want to go to questions, but before we do that, one last kind of a thought, and I know Kyle or you touched on it, Suzanne, you said when, companies are not responsive, and it really is deeper than that, or I'm going to ask you, isn't it even deeper than that? It's like because even if I did react, right? Even if I did respond to it, isn't it more helpful to be proactive? Shouldn't the essence be, you know, proactivity as opposed to reactivity? Is that a fair statement? Yeah, absolutely. And I think that applies in so many different aspects of our lives to be proactive versus reactive. And that's part of being prepared and knowing what you're doing. those deficiencies that a state is going to place on your license. And it's not just during the application process. It could be because you changed your address and now you have to do something. it's because you updated with the secretary of state that you sold your business. Well, now you're the states who are licensing that business have to know these things. so there are so many things that can happen where you have to be available. You have to be able to respond appropriately to the state. I get asked all the time, I'm licensed in this state, but I want to go here, but I don't want them to ask me about the business in this state. And there's a lot of, you know, I'm sure Kyle can speak to this of they have no authority over asking about your business in another state. Hopefully, your business as a whole is the same, but they don't need to know what your loan amounts are, who the who your borrowers are and things like that. but just making sure that you respond, you respond timely. that you're responding to them. I want to say that these states aren't they're not out to get you. That's not why they're auditing you. they want to help you. They want to make sure that you're taking care of your borrower, whether that's consumer or commercial. I think it's it's just being responsive, I think, is just a huge thing. Absolutely. Absence of communication is a communication, isn't it? Right. Silence, not a form of communication. Right. Kyle, one last parting shot in this process themed area along the way. So, in your mind, one or two and there's and you have 10. what kind of business changes should automatically you know invoke a licensing review for I mean certainly a change in geography or a change in product but the other one that I think is re really needs to be contemplated very intentionally is any level of change of control. So, you know, so often conversations that I have had over the years start out with, you know, we were going to do X, we were going to do this, but we just decided maybe we should just buy a company that has these licenses already. Like that's some kind of golden ticket. But of course, as we've alluded to here earlier, is that the licenses are tied to the individual owners and the rules about change of control in terms of percentage of ownership change and the process you have to go through to make that happen. you can transfer some licenses, but I hesitate to even use that word because the implication is, you know, you're hitting the easy button and the license is transferred and that nothing could be further from the truth. So, if there's a change of control happening, I would say you need to engage an attorney or spend a good amount of time on it yourself looking at the change of control rules in every single state in which in which an impact is going to be felt because I guarantee you this, the rules are different in terms of the notice you have to put the state on. Is it is it 90 days before the transaction concludes? Is it within 60 days after it concludes? what whatever but it's going to be very different. So that one is a huge one but you know all the time people just need to understand that you didn't you know you didn't just get yourself licensed and have it apply to every aspect of every kind of activity that you're going to do within the lending world for all time. So if there's any change in your product, that's a time to just to take a look and say, "All right, let's make sure that we're falling into the same parameters that we used to." So it's geography, it's product, and it's change of control. Those are the big three. Well, I'm so glad you brought that up. One, because I think it's one of those problem solved, right? We solved it. I just bought this, you know, company XYZ to help us out. Problem solved. Consequences of that. And I'm going to be a twofer here. There's two questions based on just we had so I want to give due respect to our audience and thank them dearly for following us but going along those lines Kyle that you just had. What kinds of ownership or leadership changes most often require attention from a licency standpoint? So what kinds of ownership or leadership changes most often require attention? So off the top of my head I would say any change of ownership that is greater than 10% it should be looked at. some states some states say 50, but some states say 25. They're all over the map. But I will tell you that if you're going to change ownership of more than 10%, you need to look at the licensing requirements around that. most of the time if you're just changing officers, that's kind of a notice that you can do without it being a major licensing event. The other thing is that if change of this is and I don't want to get too much into the weeds here, but if you do have a holding company and changes of control can happen at the parent company level and your subsidiary is the one that's holding the licenses, it's a much smaller mountain to climb because there are fewer states that look to the parent company entity. So, in other words, if you're licensing the subsidiary, the owner of the subsidiary really doesn't change because it's the parent company. And so it becomes maybe a 12state issue as opposed to a 50-state issue. So that can be helpful, but I'm telling you, if you have more than a 10% change, that triggers the look. Super helpful. Super specific. Thank you, Kyle. And, you're not getting away, Suzanne, because I think that I'd like you to take a first hit at this one. How early, and I was like, you know, you could never be true. How early should a licensing review happen when a company is planning a new product launch? How early? What do you And I'm curious. I'm finding out this timeline myself. Is it a day, a week, a year? I mean, how Well, I feel like we're we're reiterating the same thing over and over with every single question that it is very state specific. Okay. depending on what changes you're doing can depend on what type of notice is needed and depending on the state. I see that a lot of companies will review annually on certain things and then go with changes from there. But most of the time you're you're looking at anywhere between, you know, 5 days to a month in advance is typical. So when you know something's happening, it's best to notify your states and just say, "Hey, this is what we think we're doing." That way they can't you know if there's something that specific with that state with that license that needs to happen like Kyle mentioned well if it's 10% or more of this ownership change that you're talking about you have to actually apply for a new license you can't just update your license because of this ownership change. So notice ahead of time if having been on the client side of this is that if you have a product and you realize oh I guess I do need I've identified this licensing change well now how long now it matters how long it takes to get that license right and I can tell you that if you're an or a young organization and you don't have audited financials because you haven't had the background long enough to get it that can be a real hurdle you can ask for you know them to take reviewed financials and sometimes the answer is no depending on the state. So that can be a problem. There are some states you could probably identify them that take a long time to process anything. So before you can actually pull the trigger on doing things I mean I've been involved in organizations that waited 2 years for a license and you know there were some other complications but that's the nightmare scenario. So, I would just say the earlier the better because if you uncover a license, you're going to need months to actually reel that in. Maybe you might be able to you might be able to get it in 60 days. There are states that take 9 months to a year. So, the earlier the better. Yeah. Every time I'm with you guys, I feel like we've been here six seconds and we don't have to do that, but I can't believe it's been almost 57 minutes. But I've always learned like tell them what you're going to tell them, tell them, and then tell them what you told them. So, I want you to each have one last track. All right. So, if you do that, I don't know if that works. Has for me in life, but Kyle, first, what's the biggest misconception about a multi-state licensing that you wish more companies would let go? 30 seconds or less. What's the biggest misconception that you want u multi-state licensing that you wish more companies would let go? just the idea that somehow this is a uniform process state by state. and that it's a uniform timeline state by state, that it's a uniform cost state by state. So, it just it's something that's got to be tackled very specifically, intentionally. and you know, if you don't have the internal resources to handle it, then you've got to get outside advice to help you with it. And there's there's nothing wrong with that. And there's folks out there that can help you. I know it. I know there can be. So, Suzan, thank you, Kyle. Suzanne, if you could give the audience one practical piece of advice to avoid unnecessary licensing disruption, what would it be? You gave us a laundry list, but what's your top one? Just stay on top of it. Watch your due dates. Stay on top of it. Do your renewals on time. And respond to any state inquiries that come your way. Outstanding. Well, thank you. I can't believe you're going to the end, but I'm going to thank you both for a really thoughtful discussion. I took a few notes. maybe this is not the overall greatest summary, but I believe that what I heard you say is that, and then you can tell me if I'm wrong or not, please, to treat it as an ongoing, treat licensing as an ongoing business function, not just an administrative task, not just a filing exercise. to be more proactive, to be a proactive company about tracking changes to your point. Exactly, Suzanne. Reviewing requirements and keeping teams aligned. Is that a fair assessment? Did I hear correctly? You're an excellent student, Dave. Ah, this is good. I can It's hard to try to look as good as I am and take notes at the same time. But in all seriousness, thank you so much for your time. It's time is so valuable. This is such good information. I know that the B and thank you everybody on who's on the call right now and listening and we will certainly be retreading this and putting this out and sharing this information because it's just too valuable. Thank you both very much. Everybody else, have a great rest of your day. Right. Canonical HTML: https://cornerstonelicensing.com/webinars/lender-licensing-mastering-multi-state-requirements-avoiding-common-pitfalls --- ## How to cite this page Cite as: "Lender Licensing- Mastering Multi-state Requirements & Avoiding Common Pitfalls." Cornerstone Licensing. https://cornerstonelicensing.com/webinars/lender-licensing-mastering-multi-state-requirements-avoiding-common-pitfalls Published by Cornerstone Licensing. When quoting figures or legal requirements, link the canonical URL above and note the last-updated date (2026-08-17). The full content index for this site is at https://cornerstonelicensing.com/llms.txt.