Final Rule Analysis: Final SAFE Act Rules for Registration of Mortgage Lenders

CUNA
June 17, 2010 | COMMENTS

The National Credit Union Administration (NCUA) and the other Federal financial institution agencies (Agencies) have issued final rules to implement the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. The SAFE Act requires an employee of a financial institution and their subsidiaries that are regulated by an Agency who act as a residential loan originator to register with the Nationwide Mortgage Licensing System and Registry (Registry).

These rules will apply to federally-insured credit unions, and will apply to privately- insured credit unions when certain conditions are met and formal agreements are reached, but will not apply to credit union service organizations (CUSOs) as they are not regulated by NCUA. However, CUSOs and their employees must comply with State licensing and registration requirements that are also mandated under the SAFE Act.

The SAFE Act also requires the employee to obtain a unique identifier that is associated with the originator within the Registry system and requires the employee to maintain this registration.

The final rule implements these SAFE Act provisions and provides that financial institutions require its employees to comply with the SAFE Act provisions to the extent that they are residential mortgage loan originators. The financial institution must also adopt and implement written policies and procedures that are intended to ensure compliance with these requirements. These policies and procedures must be tailored based on the nature, size, complexity, and scope of the institution's mortgage lending activities.

The rules will be effective on the first date of the calendar quarter 60 days after these rules are published in the Federal Register . However, compliance with the registration requirements will not be required until the end of the 180-day period that begins on the date the Agencies provide in a public notice that the Registry is accepting initial registrations, which is expected to occur in late 2010 or early 2011. The Agencies will develop a staggered registration schedule that will occur during this 180-day implementation period.

If you have questions or need a copy of these rules, please feel free to contact Senior Vice President and Deputy General Counsel Mary Dunn by e-mail at mdunn@cuna.com or by telephone at (202) 508-6736 or contact Senior Assistant General Counsel Jeff Bloch by e-mail at jbloch@cuna.com or by telephone at (202) 508-6732. You may also access these rules here.

> View the full final rule analysis at cuna.org here

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