Which of the following would prevent someone from obtaining their registration as an MLO working for a qualified depository institution?

Pleading "nolo contendere" to petty theft does not automatically disqualify an individual from obtaining their registration as a Mortgage Loan Originator (MLO) for a qualified depository institution. While it indicates a plea without admitting guilt, the nature of the crime (petty theft) is typically classified as less serious than felonies. Federal regulations, particularly the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), primarily focus on felonies and certain misdemeanors in relation to moral character assessments for MLO registration.

A felony conviction is more likely to impact an individual's eligibility. Therefore, while a plea of "nolo contendere" may raise red flags regarding the person’s judgment or reliability, it does not carry the same weight as a felony conviction. This aspect of the law reflects a belief in the capacity for rehabilitation and the consideration of more serious offenses having greater implications for trustworthiness in the financial services sector.

In contrast, felony convictions, particularly those related to violence or serious offenses, carry significant weight in the review process of an MLO application. An indictment or a felony conviction could clearly disqualify an applicant, as would regulatory actions against a professional license in different contexts.