SAFE Act and Mergers

Posted By: Tesla

SAFE Act and Mergers - 04/07/22 07:14 PM

We acquired a bank about a year ago. I just checked and their Institution account is still open. What would have been the appropriate time to make the institution ID inactive? Within 30 days of close of the financial deal or systems conversions? What about MLOs at the previous institution that have taken non-MLO jobs at our institution? Are they required to surrender their MLO status or can they maintain it but just not act as a MLO? If they maintain, are we required to train them and list them as MLOs, even if they are say, commercial lenders who want to keep their MLO status?
Posted By: rlcarey

Re: SAFE Act and Mergers - 04/07/22 08:27 PM

Wow - you are a little late to the party: https://fedregistry.nationwidelicensingsystem.org/Institutions/Pages/MA.aspx
Posted By: Tesla

Re: SAFE Act and Mergers - 04/07/22 08:48 PM

Yep - Compliance is always late to these discussions. However, I am still not clear if we do not convert systems at the same time as we close the deal, when do we do all of this? In other words, the institution we acquired continued to do business as usual until this year because we could not convert systems until now. Also, I checked their MLOs and those that have come over in MLO positions have updated their "represents" section, but what about those that were MLOs at the old institution and are not now? Is it enough to just have their "represents" section say "None" and they maintain their MLO #? Are we obligated to make sure they are trained? I would assume we don't put them on our list of MLOs because they are not acting as a MLO. Thanks for your guidance, as always.
Posted By: rlcarey

Re: SAFE Act and Mergers - 04/07/22 09:00 PM

You need to be talking to your general counsel as the status of the companies after and before merger, when that actually occurred, etc. Were they actually still separate banks under a holding company for a while, etc..
Posted By: Tesla

Re: SAFE Act and Mergers - 04/07/22 09:06 PM

Ok thanks. Why can't anything ever be simple. frown
Posted By: rlcarey

Re: SAFE Act and Mergers - 04/07/22 10:05 PM

I would be looking at your merger and acquisition advisors for an answer as to how this slipped through the cracks. It is not like this is a minor issue for on-going business functions.
Posted By: Tesla

Re: SAFE Act and Mergers - 04/07/22 10:07 PM

Yeah - but what about the MLO moving to a non-MLO position? Do I have to worry about that at all? I am not seeing anything in Reg G on other than if they were to take a MLO position.
Posted By: rlcarey

Re: SAFE Act and Mergers - 04/08/22 11:45 AM

Well, they should have still been transferred and then at the time of annual renewal, you would have let their registration lapse like normal.
Posted By: Tesla

Re: SAFE Act and Mergers - 04/08/22 12:51 PM

OK - thanks.