Montana MLO Worker Classification Must Be W-2 in NMLS
Summary
The Montana Division of Banking and Financial Institutions issued a notice clarifying that mortgage loan originators (MLOs) must be classified as W-2 Employees in the NMLS system under Montana law (MCA 32-9-116(1)) and ARM 2.59.1701(3). The only exception applies to MLOs who are also owners of the employing mortgage broker or lender entity. The Division will reject sponsorship requests where worker classification is left blank or listed as Non-W-2 Employee and will contact companies with improperly classified MLOs.
What changed
The Division issued guidance clarifying that Montana law requires mortgage loan originators to receive W-2 classification, meaning the employing broker or lender must be liable for payroll tax withholding. MLOs must be classified as W-2 Employees in the NMLS system. The sole exception is for MLOs who hold ownership stakes in the licensed mortgage broker or lender entity.\n\nCompanies sponsoring MLOs with blank or Non-W-2 Employee classifications will receive additional communications from the Division. Going forward, the Division will reject any sponsorship request where the worker classification field is blank or shows Non-W-2 Employee status. Mortgage brokers and lenders in Montana should audit their MLO rosters and update classifications in NMLS to ensure compliance and avoid sponsorship rejection.
Archived snapshot
Apr 17, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Mortgage Loan Originator Worker Classification
- August 31 2023 Montana law requires that mortgage loan originators (MLOs) receive a W-2. The Montana Mortgage Act (32-9-116(1), MCA) provides that a mortgage loan originator may transact business for only one employing mortgage broker or one employing mortgage lender licensed in accordance with the provisions of the Act. Additionally, the term “employing” within ARM 2.59.1701(3) means the entity for whom the individual works is liable for withholding payroll taxes pursuant to Title 26 of the United States Code.
The worker classification for Montana MLOs should be designated as a W2 Employee in the NMLS. The only exception would be for MLOs that are also owners of the mortgage broker and/or mortgage lender entity.
The Division of Banking and Financial Institutions (Division) will be sending out additional communications to companies sponsoring MLOs in which the worker classification has been left blank or is listed as a Non-W2 Employee. Please be advised that the Division will be rejecting sponsorship requests if the MLO’s worker classification is left blank or listed as a Non-W2 Employee.
If you have any questions, please email the Division at mortgagelicensing@mt.gov. Tags: Non Depository News
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