From the ABA Bulletin this morning:
Federal Agencies Propose Rule to Implement SAFE Act Registration Requirements
On June 1, 2009, Federal agencies announced the issuance of proposed rules to implement the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). This proposal would effectuate the SAFE Act’s requirement that agencies jointly develop and maintain a system for registering residential mortgage loan originators who are employees of agency-regulated institutions, including national and State banks, savings associations, credit unions, and Farm Credit System institutions, and certain of their subsidiaries. (Under the SAFE Act, mortgage loan originators employed by depository institutions must be registered with the Nationwide Mortgage Licensing System and Registry (Registry), a database established by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the States.)
The proposal, which is being issued jointly by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision, Farm Credit Administration, and National Credit Union Administration, establishes the registration requirements for mortgage loan originators employed by federally regulated institutions, as well as adoption of policies and procedures to ensure compliance with the S.A.F.E Act and final rule. The proposal requires mortgage loan originators to obtain a unique identifier through the Registry, and requires these originators to provide the identifier to consumers in certain specified circumstances.
According to the announcement, the proposed rule will soon be published in the Federal Register and contain a comment period of 30 days. The Agencies clarify the following important points in the announcement—
(1) Full implementation of the registration requirements will be delayed until 180 days after the Registry becomes operational and available for initial federal registrations.
(2) The proposal sets forth certain de-minimis exemptions for institutions that engage in small origination volumes (5 or less originations per employee, but only in cases where the institution originates 25 or fewer loans per year).
(3) Loan modification activity is proposed to be covered as an “origination activity,” and therefore subject to registration. The Federal agencies solicit industry comment on this definition.
(4) Individual employees will be required to provide the information mandated by the Act, and institutions are specifically ordered to require their originating employees to register. Although employees will attest to the correctness of all information, banking institutions must implement policies and procedures to confirm the adequacy and accuracy of the employee’s information submissions.
(5) Mortgage originators must renew registrations annually.
To access a draft of the proposed rule, go to http://www.federalreserve.gov/newsevents/press/bcreg/20090601a.htm
For more information, contact ABA’s Rod Alba.