We have several MLO's who have not filled out the request for fingerprints. I don't believe we have time to get the paper prints done, so we are now telling the MLO's they need to get the digital prints done. They are balking at this because it's a long drive for some of them. What happens if the whole registration process is not completed by the deadline? Will the bank be fined?

What job will these employees who are balking be doing once the registration date arrives and they are not registered?

Their job depends upon completing the process and the bank should not be using unregistered MLOs at that point.

I agree with Kay. These MLO's will not be able to take or approve mortgage loans until they are completely registered.

When you say 'approve', does that include sitting on a loan committee?

Would/could they fall under a 'temporary exemption' until the fifth mortgage? Wasn't there a provision that a lender did not have to be registered if they approved less than a certain number (I think it was 5) of loans per year?

I'm just trying to imagine being the one to tell the senior lender that one or more of his/her loan officers cannot approve a mortgage, and that some other loan officer is going to have to be identified on the loan.

I personally would not allow them to do anything because they arbitrarily chose not to complete the process, contrary to bank policy.

You have to draw the line somewhere.

Added:

If you do allow it at least make it obvious that this is a big deal. Report the names of those who have not completed the process to the board, make them commit to a date they will be in compliance (personally to the bank president), track those dates.

If you give them loopholes they will be taken and when there is a slip up the bank will be the one criticized in an exam. And you know this will be reviewed closely.

Why reward bad behavior?

I'm presuming that there are not, yet, any published examination procedures for the FDIC to use?

I'm presuming it would fall under a Compliance examination?

Why would that matter? The bank has policies and procedures in place to comply with the law. Your identified staff was to complete all steps to register so that they can work in the industry as an MLO.

The bank will be criticized for not following its own policy, a much greater sin.

A standard quote from regulators: "If you don't comply with your own policies, why should we feel comfortable that you will comply with the reg/law?"

I beleive they would have to have taken 5 or less loan applications in the previous 12 months. We have a few we didn't register because they acted as an MLO less than 5 times over the last 12 months. When renewal comes up, we will reevaluate them and see if they meet the exception again.

I wouldn't wait for renewal to determine that. If you are not registering someone because they meet the de minimis number, you really should have a monitoring system in place to know when they are making covered loans and what number they are on before they hit number 5. Without that, the employee could become a covered MLO during the timeframe between your original determination and the renewal period. They could originate 6 covered loans and your bank is out of compliance on number 6 because they were not registered.

In the Federal Register the Effective date of registrations and renewals is touched upon. In this section it states that


A number of commenters requested further clarification of this
effective date, and specifically requested that the effectiveness of
the registration not be delayed for the processing of a registrant's
fingerprints or receipt of a criminal background check. The Agencies
did not intend to delay the effective date for fingerprint or criminal
background check processing. There is no requirement for the processing
of these fingerprints or the completion of a background check before a
registration becomes effective. Nor, as indicated previously in this
SUPPLEMENTARY INFORMATION section, is the effectiveness of a
registration contingent on Agency or Registry review or approval of the
information submitted to the Registry. Pursuant to the rule, in order
to register, the information required by Sec. ----.103(d) and (e) must
be submitted, and, in order to renew or update a registration, the
information required by Sec. ----.103(b) must be submitted. The
Registry will conduct a completeness check of the information submitted
by or on behalf of the registrant. At the time the Registry determines
all required information has been submitted and all Registry
requirements have been met, such as payment of applicable fees charged
by the Registry, it will transmit notification electronically to the
registrant that he or she is registered or that his or her registration
is renewed or updated, as applicable. The employing institution will be
responsible for reviewing the criminal history background report once
it is completed, and taking any necessary action based on the findings
of this report, pursuant to the institution's policies and procedures,
as required by this final rule. We note that the registrant will obtain
a unique identifier during the registration process and not when the
registration is complete.

So correct me if I am wrong, but the fingerprinting and CBC do not complete the registration and that the MLO can perform those duties after they recieve that email that the registrant is registered.

Any thoughts? Which email would this be? If it is the one that tells them that their registration went from pending to active, I thought that email was sent after successful upload of the fingerprints. Or is it the email that the MLO receives after Authorizing and Attesting?

My understanding is that basically, once the MLO has attested and you've paid for the CBC, the registration is active. It seems that the important part in all of this is that the bank pays its money, not so much that the CBC actually gets performed.

I would agree, except, if you look at the status of the individual in NMLS it is still 'pending' until the completion of the fingerprinting and CBC.

That is where I am getting hung up too, Doug. If it is still pending then to me it is not complete. However after the pending status when the fingerprints and CBC are complete, the account becomes "active" not "complete". Perhaps a matter of semantics but none the less perhaps the recognition from the NMLS to the MLOs after they attest and authorize is when the registration becomes complete.

It sounds like when going through the renewal process, the renewal is complete after the MLO authorizes and attests. Does this sound right?

I didn't read the whole thread but I can assure you I agree with remarks made by Kathleen. If these people aren't registered by the 29th then come the 30th they can no longer participate in any mortgage loan transactions. Period, end of story.

You most likely, in addition to a violation of Federal law, will also have violations of state law. IN does not require MLOs who work for banks to be licensed but it does require them to be registered with NMLS by the 29th.

Let's put it this way. The bank has had plenty of time to get its staff registered by day 1 of the new rules. Let the senior lender explain to the bank's regulator why this was not important enough to make sure the bank got it right the first time out.

Talk about not setting the right tone from the top. These employees should not be allowed to get away with this. They were told to get all of the steps done so that the bank has registered MLOs. So go get registered.

As I used to tell people who were whining to me: you could have had it done by now in all the time you are standing here complaining.

Twisting and turning definitions, looking for loopholes, etc. is what you do to try to convince a regulator it was okay if something slipped through the cracks, or is done by attorneys defending you in court or in the event of an order - it should never be done as a way to give employees an out who did not do what they were supposed to do. Look at the message they are being sent.

I agree with Dan and Kathleen - all of our MLO's did not have a choice; they either followed instructions to attest and be fingerprinted, or had to consider other employment. Allowing them to make their own choices regarding this rule would be too disruptive to the bank and would not have kept the project moving along as scheduled.

What is your opinon if the fingerprints were submitted and could not be read and now the status read "name check" which has been hanging out there for over a month and no resolution. Is there a way to follow up on when the name check will be completed?

I would call Fieldprint and see if they know how long it should take - we had 2 of those and the status was changed to active within 2 weeks. It may be taking longer since it's now down to the wire..... if they don't know, it's possible that the NMLS can open a case for you.

We also had this situation - We contacted the NMLS support line and were informed name checks will take from 2 weeks to 2 months to complete. Ours cleared and were changed to an active status at the 6 week mark.

The NMLS rep told us that the "bank managament could make the decision" to change an MLO to active before the CBC comes in. Has anyone else heard this?

We have 2 people in the same status as concerned, above. Fingerprints could not be read, twice, and names checks are being done. They stated that everything that was required to be submitted by the MLO had been submitted, therefore we the employeer could make make them active without the CBC.

I think I would run that by my regulator... the NMLS folks are simply the record holders/keepers and process movers, they are not the decision makers, nor are they in a position to either waive a requirement, nor review you for compliance.

I would attempt to get my regulators blessing/direction before allowing an LO to act as an LO without a CBC in hand.

I had an employee get her fingerprints done last week and just got the message that she was cleared and 'active' as of today on NMLS. So at least, for now, it doesn't look like it's taking them too long to process them.

Thank you Jay.
That's just what I needed - someone to agree with me

I talked to someone from NMLS and was told that the loan officer could not approve more than 5 real estate loans prior to being registered. Not that I think this is ok but we are close to being in the same boat.