In which scenario is a loan originator not required to have a license?

A loan originator is not required to have a license when acting on behalf of a family member, as this scenario is considered an exception under the SAFE Act regulations. The rationale behind this exception is to allow individuals to assist their relatives without the need for the extensive regulatory oversight required for licensed loan originators.

In this context, the law recognizes the familial relationship and the personal nature of the transaction, creating a distinction between informal assistance and professional mortgage origination needing regulation. Other scenarios such as providing financial counseling, working for a bank, or representing a client in court involve activities that generally require licensure to ensure compliance with industry standards and consumer protection laws. These activities are typically performed in a professional capacity that has a greater impact on consumer transactions and risk, necessitating oversight to maintain market integrity and protect consumers.