Exactly when banks will be required to comply with registration requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 or which regulator will initially oversee the process is not clear.
The Office of the Comptroller of the Currency released Thursday a copy of a letter sent to the chief executive officers of all national banks as well as some of their executives and employees.
The OCC explained that a final rule was jointly issued with the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision, the Farm Credit Administration and the National Credit Union Administration on July 28.
The rule implemented the SAFE act for loan originators at financial institutions. The regulators are required to jointly maintain a federal registration system for individuals who engage in residential loan originations.
Originators at financial institutions are required to register with the Nationwide Mortgage Licensing System and Registry and provide background information and fingerprints for a background check.
They will be issued a unique identifier which will be available to consumers. The unique identifier stays with the originator even at other employers.
“The SAFE act generally prohibits employees of an agency-regulated institution from originating residential mortgage loans without first registering with the registry,” the OCC said. “The rule provides an exception to these requirements for originators who originate a de minimis number of residential mortgage loans.”
National banks are required to adopt and follow written policies and procedures that ensure compliance with the registration requirements.
While the final rule is effective on Oct. 1, modifications to the registry that are not yet completed. As a result, “national banks and their employees are not required to comply with the final rule’s registration requirements at this time.”
The earliest that the registry might be capable of accepting federal registrations is January 2011, according to the OCC. But the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 transfers the agencies responsibilities under the SAFE act to the Bureau of Consumer Financial Protection no earlier than Jan. 2011. And that deadline could be extended to July 2012.
“If the OCC has jurisdiction to administer the SAFE act on the date when the registry begins accepting federal registrations, it will announce that date in advance and notify national banks and their residential mortgage loan originator employees that they will then have 180 days to comply with the final rule’s initial registration requirements,” the regulator concluded.
