Which of the following is not an affirmative duty of a principal lending manager?

• A. Ensuring that licensees do not offer high-cost mortgage loans
• B. Supervising licensees' activities
• C. Approving or denying license applications
• D. Establishing reasonable supervisory procedures

Answer: (A)

Affirmative duties of a principal lending manager are proactive governance tasks that keep the lending operation compliant and well supervised. The PLM is responsible for overseeing how licensees operate, deciding on license applications, and putting in place procedures to guide daily activities.

Supervising licensees’ activities is a direct duty because it involves ongoing oversight to ensure practices align with laws and policies. Approving or denying license applications is another clear duty, shaping who is authorized to operate and how they’re vetted. Establishing reasonable supervisory procedures is essential for creating a framework that drives consistent compliance and controls.

The idea of “ensuring that licensees do not offer high-cost mortgage loans” sounds like a regulatory objective, but it isn’t an explicit standalone affirmative duty of the PLM. Rather, preventing such loans comes from the PLM’s broader responsibility to supervise, enforce compliance, and implement policies. If high-cost loans appear, the PLM addresses it through those duties—monitoring, training, and corrective actions—not by a separate duty of simply guaranteeing they won’t be offered.