Assume a mortgage loan originator violates Utah statute. Which of the following best describes the liability of the PLM responsible for supervising the mortgage loan originator?

The correct answer highlights the principle of accountability in supervisory roles within the mortgage lending industry in Utah. When a mortgage loan originator violates state statutes, the person overseeing them, in this case, the Personal Lending Manager (PLM), can be held liable depending on their level of supervision.

If the PLM can demonstrate that they provided reasonable supervision over the mortgage loan originator, it acts as a defense against disciplinary action. “Reasonable supervision” implies that the PLM has taken appropriate steps to ensure compliance with relevant laws and regulations and has maintained oversight of the actions of the originator. This reflects a crucial aspect of industry regulation, where supervisors are encouraged to establish systems and protocols that promote legal and ethical lending practices.

In contrast, the other choices suggest incorrect understandings of the responsibilities of PLMs. The notion that a PLM would not be held liable at all for the actions of an originator undermines the supervisory framework established to ensure accountability. Similarly, suggesting automatic disciplinary action regardless of supervision disregards the expectation that supervisors will actively monitor their teams and maintain compliance with legal standards. Lastly, the idea that a PLM is only responsible if the violation was reported fails to recognize their proactive duty to monitor and prevent violations before they occur. This