What describes the liability of a PLM supervising a mortgage loan originator who violates Utah statute?

The correct answer highlights the concept of supervisory responsibility in the context of mortgage loan origination within Utah. If a supervising PLM (Personal Lending Manager) oversees a mortgage loan originator who breaches Utah statutes, the PLM can be held accountable unless they can demonstrate that they exercised reasonable supervision over the mortgage loan originator's activities.

This principle functions on the premise that proper oversight is necessary to ensure compliance with legal regulations. The requirement for reasonable supervision means that the PLM must actively monitor and manage the actions of the loan originator, providing guidance and support, as well as taking corrective action if any breaches occur. If the PLM can show that they took this responsibility seriously and had systems in place to prevent violations, they may not face disciplinary actions.

Furthermore, while civil penalties and disciplinary measures may be imposed in cases of violations, the emphasis here is on demonstrating due diligence in supervision as a defense against liability. This underscores the importance of compliance training and the establishment of effective oversight mechanisms in the lending environment. Automatic expulsion is not a standard consequence in these cases, reinforcing that consequences depend on the specifics of each situation and the supervising PLM's actions.