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#1931526 - 06/11/14 06:12 PM MLO TRAINING SAFE ACT - CLARIFICATION
Complianceking Offline
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West Coast
Hi Everyone,

I am trying to obtain some clarity regarding the training of Mortgage Loan Originators (MLOs) under the SAFE Act. From what I've read it states that MLOs must receive 8 hours of training on federal laws and regulations. However it does not provide specifics as to the course name the hours should be applied. Any guidance would be greatly appreciated.

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#1931537 - 06/11/14 06:23 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Dani York, CRCM Offline
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Dani York, CRCM
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TN
Originally Posted By: Complianceking
From what I've read it states that MLOs must receive 8 hours of training on federal laws and regulations.


Where did you read this? State law? Training material from a consultant?

Also are you looking for information on state licensed MLOs (non-bank) or federally regiatered MLOs (bank)?
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#1931564 - 06/11/14 06:54 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Complianceking Offline
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Yes I received it from a consultant and we are a State Chartered Bank and Federal Reserve Bank regulated. We have about nine Mortgage Loan Originators with their assigned NMLS and it's my understanding that the Compliance Officer as SAFE Act coordinator must provide training awareness to MLOs, in light of the new loan originator rules that took effect on January 1 2014.

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#1931583 - 06/11/14 07:12 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Dani York, CRCM Offline
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TN
For federally registered MLOs, the SAFE Act only requires that you train on registration requirements. You only have to do it once. The new Reg Z LO compensation rule (1026.36) requires that you train your LOs (includes non-SAFE Act LOs) commensurate with their job duties. There are no stipulations on content or the number of hours in either of these regs. Basically if you are giving loan training to MLOs and LOs that pertains to their job duties (ie when you disclose their number, basic RESPA/TIL, flood insurance, fair lending, etc), then you are meeting the federal rquirements.

State licensed MLOs are required to meet their state's minimums on content and number of hours. Some states extend that to federally registered MLOs as well (TN does not), so you will want to check law to determine if your state does extend those requirements to federally registered MLOs.

Or call the consultant and ask them to show where federally registered MLOs in your state are required to take 8 hours of training.
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#1931584 - 06/11/14 07:13 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Matt_B Offline
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Some of that yes, some of it no.

The 8 hour requirement is for state-licensed MLOs, not registered MLOs. Your consultant may be selling you on something more than what you need, or may be selling you a viable product. Registered MLOs need training commensurate with their lending activities, but there is no specification for how many hours, or how that training should be administered (thus, it doesn't have to be you, it can be webinars, in-person training, conferences, etc). You'll have to determine what that training looks like for your lenders. Don't let your consultant tell you what you need to know, make sure you know it and are covered. Not all of these courses are going to cover everything you truly need to train on, they're too general and can't cover your specific products or services.

ETA: Do what Dani say smile
Last edited by Matt_B; 06/11/14 07:14 PM.
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#1931652 - 06/11/14 08:14 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Complianceking Offline
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I just need to clarify that our MLOs are registered by our Human Resources Department with NMLSR (Registry) I still need to add that we are state chartered not federally chartered bank. As a state chartered institution this means that we are regulated by the California Department of Business Oversight (DBO. I think what may have caused confusion is because I indicated that we are regulated by the Federal Reserve Bank of San Francisco, which is our examiner.

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#1931691 - 06/11/14 08:49 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Dani York, CRCM Offline
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TN
If you are a bank regulated by the FRB, then you are federally regulated for SAFE Act purposes. Follow the federally regulated SAFE Act rules. IE--No mandated 8 hours training udner SAFE Act or Reg Z. Just training commensurate with their job function.

BUT check your state law to determine if your state requires federally regulated MLOs to have additional specified training (TN does not).
Last edited by Dani York, CRCM; 06/11/14 08:50 PM.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1931715 - 06/11/14 09:16 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Complianceking Offline
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I am so confused, because you indicated to follow the SAFE Act rules, but the Act states that 8 hours of annual training is required. Now Regulation Z, it does not impose a specific number of training hours. Perhaps I am not reading it correctly

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#1931728 - 06/11/14 09:51 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
raitchjay Online
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You seem to be looking at the CFPB's Reg. H (State-Licensing requirements). You need to look at the CFPB's Reg. G (Federal).
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#1931730 - 06/11/14 09:58 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
raitchjay Online
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Looking back....i'm a bit confused by your posts. As Dani and Matt have stated.......it all comes down to whether you are a federally-regulated institution or not. If you are....look to Reg. G. If you fall under state licensing, then you would look to Reg. H.
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#1931731 - 06/11/14 09:59 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Complianceking Offline
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By any chance could you please provide the link to CFPB's Reg G? (Federal) Our bank has Registered MLOs and not state licensed MLOs. Thanks everyone for their guidance. Obviously, I am not a SAFE Act expert. I inherited this responsibility because our bank cannot find a SAFE Act person to do the job.

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#1931734 - 06/11/14 10:28 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
raitchjay Online
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Go to the front page of Bankers Online, click on "alphabet soup" (to the left side of the page) and you'll see all the lettered regs. You should be able to find it there.
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#1931739 - 06/11/14 11:00 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Complianceking Offline
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West Coast
Okay! Thanks so much for your assistance.

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#1931745 - 06/12/14 01:30 AM Re: MLO TRAINING SAFE ACT - CLARIFICATION raitchjay
Complianceking Offline
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I've been told that our MLOs are not licensed under the state and that they are Registered under the NMLSR (the Registry). Therefore, we would not fall under state licensing. In that case we would fall under Regulation G as we are regulated by the FRB. I believe what's confusing is that I indicated that we are also a state chartered bank.

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#1931789 - 06/12/14 01:37 PM Re: MLO TRAINING SAFE ACT - CLARIFICATION Complianceking
Dani York, CRCM Offline
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TN
Your charter has no bearing on whether your MLOs are licensed or registered. You are a bank regulated by the Federal Resserve, which by default puts you in the federal category (Reg G only).

The only other place you need to look is at your state's SAFE Act and see if they place additional requirements on federally regulated MLOs. Look to the scope to see if federal registerd MLOs are covered. If not, you can stop there.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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