Help update restrictive lending laws to support business-purpose lenders.

Private lending is a cornerstone of real estate investment and small business growth nationwide. However, in Utah, outdated and overly restrictive lending regulations are limiting opportunities for qualified professionals to serve borrowers who depend on business-purpose loans.

Currently, Utah requires all private lenders to operate under a Principal Lending Manager (PLM) license originally crafted for consumer mortgage professionals. These regulations emphasize consumer-loan experience and standards—criteria that do not align with business-purpose or investment lending practices.

As a result, experienced private lenders who specialize in commercial or investment loans are being excluded from Utah’s market. This restriction not only impedes the growth of responsible lending businesses but also limits access to essential capital for Utah’s investors and entrepreneurs.

The Proposal

Fortra Law has introduced a reform initiative designed to modernize Utah’s lending framework and better accommodate business-purpose lenders. Their proposed updates include:

• Creating a Business-Purpose PLM License: A license designed specifically for private lenders who work with investment or commercial loans.
• Updating Experience Requirements: Recognizing business-purpose lending experience as a valid qualification.
• Adding Certification Safeguards: Implementing reasonable consumer protections without unnecessary regulatory burdens.

These reforms would open the door for more qualified lenders to operate responsibly in Utah, promoting competition, innovation, and economic opportunity while maintaining strong borrower protections.

As a national voice of private lenders, the American Association of Private Lenders (AAPL) strongly supports the proposed updates to Utah’s PLM licensing requirements.

AAPL believes these changes are critical to ensuring that business-purpose lenders are recognized for their expertise and given a fair opportunity to participate in the state’s lending ecosystem. By distinguishing between consumer and business-purpose lending, Utah can maintain robust protections for borrowers while fostering a more dynamic and inclusive lending environment.

AAPL urges its members and the broader lending community to join in supporting this effort. Together, we can help modernize Utah’s regulations to better reflect today’s lending landscape

Your voice matters. You can submit a letter of support to the Utah Residential Mortgage Regulatory Commission to help move this reform forward.

Fortra Law has provided a detailed overview of the proposed changes and a template letter you can use to share your support.

Read the full article and access the support letter template here:
https://fortralaw.com/utah-lending-license-requirements-calls-for-reform/