NPRM for the Registration of Mortgage Loan Originators

Tuesday,
June 9, 2009

Part II
Department of the Treasury
Office of the Comptroller of the
Currency

Federal Reserve System
Federal Deposit Insurance
Corporation
Department of the Treasury
Office of Thrift Supervision

Farm Credit Administration
National Credit Union
Administration
12 CFR Parts 34, 208, 365, et al.
Registration of Mortgage Loan
Originators; Proposed Rule

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket ID OCC–2009–0005]
RIN 1557–AD23

FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Docket No. R–1357]

FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 365
RIN 3064–AD43

DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[Docket No. 2009–0004]
RIN 1550–AC33

FARM CREDIT ADMINISTRATION
12 CFR Part 610
RIN 3052–AC52

NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 761
RIN 3133–AD59

Registration of Mortgage Loan
Originators
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); Office of
Thrift Supervision, Treasury (OTS);
Farm Credit Administration (FCA); and
National Credit Union Administration
(NCUA).
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The OCC, Board, FDIC, OTS,
FCA, and NCUA (collectively, the
Agencies) are proposing amendments to
their rules to implement the Secure and
Fair Enforcement for Mortgage
Licensing Act (the S.A.F.E. Act). The
S.A.F.E. Act requires an employee of a
bank, savings association, credit union
or other depository institution and their
subsidiaries regulated by a Federal
banking agency or an employee of an
institution regulated by the FCA

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(collectively, Agency-regulated
institutions) who acts as a residential
mortgage loan originator to register with
the Nationwide Mortgage Licensing
System and Registry (Registry), obtain a
unique identifier, and maintain this
registration. This proposal implements
these requirements. It also provides that
Agency-regulated institutions must
require their employees who act as
residential mortgage loan originators to
comply with the S.A.F.E. Act’s
requirements to register and obtain a
unique identifier and must adopt and
follow written policies and procedures
designed to assure compliance with
these requirements.
DATES: Comments must be received on
or before July 9, 2009. Comments on the
Paperwork Reduction Act analysis set
forth in Part II of the Regulatory
Analysis Section of this Federal
Register notice must be received on or
before August 10, 2009.
ADDRESSES: Commenters that direct
comments to more than one Agency
may send comments to any of the
Agencies and need not send copies of
the same comment letter to all of the
Agencies. Commenters are encouraged
to use the title ‘‘Registration of Mortgage
Loan Originators’’ to facilitate the
organization and distribution of
comments among the Agencies.
Interested parties are invited to submit
written comments to:
Office of the Comptroller of the
Currency: Because paper mail in the
Washington, DC area and at the OCC is
subject to delay, commenters are
encouraged to submit comments by the
Federal eRulemaking Portal or e-mail, if
possible. Please use the title
‘‘Registration of Mortgage Loan
Originators’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to http://
www.regulations.gov, under the ‘‘More
Search Options’’ tab click next to the
‘‘Advanced Docket Search’’ option
where indicated, select ‘‘Comptroller of
the Currency’’ from the agency dropdown menu, then click ‘‘Submit.’’ In the
‘‘Docket ID’’ column, select ‘‘OCC–
2009–0005’’ to submit or view public
comments and to view supporting and
related materials for this proposal. The
‘‘How to Use This Site’’ link on the
Regulations.gov home page provides
information on using Regulations.gov,
including instructions for submitting or
viewing public comments, viewing
other supporting and related materials,
and viewing the docket after the close
of the comment period.

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• E-mail:
regs.comments@occ.treas.gov.
• Mail: Office of the Comptroller of
the Currency, 250 E Street, SW., Mail
Stop 2–3, Washington, DC 20219.
• Fax: (202) 874–5274.
• Hand Delivery/Courier: 250 E
Street, SW., Mail Stop 2–3, Washington,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
Number OCC–2009–0005’’ in your
comment. In general, OCC will enter all
comments received into the docket and
publish them on the Regulations.gov
Web site without change, including any
business or personal information that
you provide such as name and address
information, e-mail addresses, or phone
numbers. Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
enclose any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
proposal by any of the following
methods:
• Viewing Comments Electronically:
Go to http://www.regulations.gov, under
the ‘‘More Search Options’’ tab click
next to the ‘‘Advanced Document
Search’’ option where indicated, select
‘‘Comptroller of the Currency’’ from the
agency drop-down menu, then click
‘‘Submit.’’ In the ‘‘Docket ID’’ column,
select ‘‘OCC–2009–0005’’ to view public
comments for this rulemaking action.
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC, 250 E Street,
SW., Washington, DC. For security
reasons, the OCC requires that visitors
make an appointment to inspect
comments. You may do so by calling
(202) 874–4700. Upon arrival, visitors
will be required to present valid
government-issued photo identification
and submit to security screening in
order to inspect and photocopy
comments.
• Docket: You may also view or
request available background
documents and project summaries using
the methods described above.
Board of Governors of the Federal
Reserve System: You may submit
comments, identified by Docket No. R–
1357, by any of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include the docket number in the
subject line of the message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Address to Jennifer J. Johnson,
Secretary, Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments will be made
available on the Board’s Web site at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons. Accordingly, comments will
not be edited to remove any identifying
or contact information. Public
comments may also be viewed
electronically or in paper in Room MP–
500 of the Board’s Martin Building (20th
and C Streets, NW.) between 9 a.m. and
5 p.m. on weekdays.
Federal Deposit Insurance
Corporation: You may submit
comments, identified by RIN number,
by any of the following methods:
• Agency Web site: http://
www.FDIC.gov/regulations/laws/
federal/notices.html. Follow
instructions for submitting comments
on the Agency Web site.
• E-mail: Comments@FDIC.gov.
Include the RIN number on the subject
line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery: Comments may be
hand delivered to the guard station at
the rear of the 550 17th Street Building
(located on F Street) on business days
between 7 a.m. and 5 p.m.
Instructions: All comments received
must include the agency name and RIN
for this rulemaking and will be posted
without change to http://www.fdic.gov/
regulations/laws/federal/propose.html,
including any personal information
provided.
Office of Thrift Supervision: You may
submit comments, identified by OTS–
2009–0004, by any of the following
methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to http://
www.regulations.gov, under the ‘‘more
Search Options’’ tab click next to the
‘‘Advanced Docket Search’’ option
where indicated, select ‘‘Office of Thrift
Supervision’’ from the agency dropdown menu, then click ‘‘Submit.’’ In the
‘‘Docket ID’’ column, select ‘‘OTS–
2009–0004’’ to submit or view public

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comments and to view supporting and
related materials for this proposed
rulemaking. The ‘‘How to Use This Site’’
link on the Regulations.gov home page
provides information on using
Regulations.gov, including instructions
for submitting or viewing public
comments, viewing other supporting
and related materials, and viewing the
docket after the close of the comment
period.
• E-mail address:
regs.comments@ots.treas.gov. Please
include OTS–2009–0004 in the subject
line of the message and include your
name and telephone number in the
message.
• Mail: Regulation Comments, Chief
Counsel’s Office, Office of Thrift
Supervision, 1700 G Street, NW.,
Washington, DC 20552, Attention: OTS–
2009–0004.
• Facsimile: (202) 906–6518.
• Hand Delivery/Courier: Guard’s
Desk, East Lobby Entrance, 1700 G
Street, NW., from 9 a.m. to 4 p.m. on
business days, Attention: Regulation
Comments, Chief Counsel’s Office,
Attention: OTS–2009–0004.
• Instructions: All submissions
received must include the agency name
and docket number for this rulemaking.
All comments received will be entered
into the docket and posted on
Regulations.gov without change,
including any personal information
provided. Comments, including
attachments and other supporting
materials received, are part of the public
record and subject to public disclosure.
Do not enclose any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
• Viewing Comments On-Site: You
may inspect comments at the Public
Reading Room, 1700 G Street, NW., by
appointment. To make an appointment
for access, call (202) 906–5922, send an
e-mail to public.info@ots.treas.gov, or
send a facsimile transmission to (202)
906–6518. (Prior notice identifying the
materials you will be requesting will
assist us in serving you.) We schedule
appointments on business days between
10 a.m. and 4 p.m. In most cases,
appointments will be available the next
business day following the date we
receive a request.
Farm Credit Administration: We offer
a variety of methods to receive your
comments. For accuracy and efficiency
reasons, commenters are encouraged to
submit comments by e-mail or through
the FCA’s Web site or the Federal
eRulemaking Portal. As faxes are
difficult for us to process and achieve
compliance with section 508 of the
Rehabilitation Act, we are no longer

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accepting comments submitted by fax.
Regardless of the method you use,
please do not submit your comment
multiple times via different methods.
You may submit comments by any of
the following methods:
• E-mail: Send us an e-mail at regcomm@fca.gov.
• FCA Web site: http://www.fca.gov.
Select ‘‘Public Commenters,’’ then
‘‘Public Comments,’’ and follow the
directions for ‘‘Submitting a Comment.’’
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Gary K. Van Meter, Deputy
Director, Office of Regulatory Policy,
Farm Credit Administration, 1501 Farm
Credit Drive, McLean, VA 22102–5090.
You may review copies of comments
we received at our office in McLean,
Virginia, or from our Web site at http:
//www.fca.gov. Once you are in the Web
site, select ‘‘Public Commenters,’’ then
‘‘Public Comments,’’ and follow the
directions for ‘‘Reading Submitted
Public Comments.’’ We will show your
comments as submitted, but for
technical reasons we may omit items
such as logos and special characters.
Identifying information that you
provide, such as phone numbers and
addresses, will be publicly available.
However, we will attempt to remove
e-mail addresses to help reduce Internet
spam.
National Credit Union
Administration: You may submit
comments by any of the following
methods (please send comments by one
method only):
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: http://
www.ncua.gov/
RegulationsOpinionsLaws/
proposed_regs/proposed_regs.html.
Follow the instructions for submitting
comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on Notice of Proposed
Rulemaking Part 761, Registration of
Mortgage Loan Originators’’ in the
e-mail subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Mary Rupp,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, VA 22314–3428.
• Hand Delivery/Courier: Address to
Mary Rupp, Secretary of the Board,
National Credit Union Administration.
Deliver to guard station in the lobby of
1775 Duke Street, Alexandria, VA
22314–3428, on business days between
8 a.m. and 5 p.m.

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• Public inspection: All public
comments are available on the agency’s
Web site at http://www.ncua.gov/
RegulationsOpinionsLaws/comments as
submitted, except as may not be
possible for technical reasons. Public
comments will not be edited to remove
any identifying or contact information.
Paper copies of comments may be
inspected in NCUA’s law library, at
1775 Duke Street, Alexandria, VA
22314, by appointment weekdays
between 9 a.m. and 3 p.m. To make an
appointment, call (703) 518–6546 or
send an e-mail to OGCMail@ncua.gov.
FOR FURTHER INFORMATION CONTACT:
OCC: Michele Meyer, Assistant
Director, and Heidi Thomas, Special
Counsel, Legislative and Regulatory
Activities, (202) 874–5090, and Nan
Goulet, Senior Advisor, Large Bank
Supervision, (202) 874–5224, Office of
the Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
BOARD: Anne Zorc, Counsel, Legal
Division, (202) 452–3876, Virginia
Gibbs, Senior Supervisory Analyst,
(202) 452–2521, and Stanley Rediger,
Supervisory Financial Analyst, (202)
452–2629, Division of Banking
Supervision and Regulation, Board of
Governors of the Federal Reserve
System, 20th and C Streets, NW.,
Washington, DC 20551.
FDIC: Thomas F. Lyons, Examination
Specialist, (202) 898–6850, Victoria
Pawelski, Policy Analyst, (202) 898–
3571, or John P. Kotsiras, Financial
Analyst, (202) 898–6620, Division of
Supervision and Consumer Protection;
or Richard Foley, Counsel, (202) 898–
3784, or Kimberly A. Stock, Counsel,
(202) 898–3815, Legal Division, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
OTS: Charlotte M. Bahin, Special
Counsel (Special Projects), (202) 906–
6452, Vicki Hawkins-Jones, Special
Counsel, Regulations and Legislation
Division, (202) 906–7034, Debbie
Merkle, Project Manager, Credit Risk,
(202) 906–5688, and Rhonda Daniels,
Senior Compliance Program Analyst,
Consumer Regulations, (202) 906–7158,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
FCA: Gary K. Van Meter, Deputy
Director, Office of Regulatory Policy,
Farm Credit Administration, 1501 Farm
Credit Drive, McLean, VA, (703) 883–
4414, TTY (703) 883–4434; Richard A.
Katz, Senior Counsel, Office of General
Counsel, Farm Credit Administration,
McLean, VA 22102–5090, (703) 883–
4020, TTY (703) 883–4020; or Jennifer
Cohn, Senior Counsel, Office of General
Counsel, Farm Credit Administration,
McLean, VA 22102–5090, (703) 883–
4020, TTY (703) 883–4020.

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NCUA: Regina Metz, Staff Attorney,
Office of General Counsel, at the above
address or 703–518–6561; or Roger
Blake, Program Officer, Division of
Supervision, Examination & Insurance,
at the above address or 703–518–6385.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Requirements
The S.A.F.E. Act,1 enacted on July 30,
2008, mandates a nationwide licensing
and/or registration system for mortgage
loan originators. Specifically, the Act
requires all States to provide for a
licensing regime for mortgage loan
originators within one year of enactment
(or two years for States whose
legislatures meet biennially) and
prohibits an individual employed by a
State-regulated institution from
engaging in the business of residential
mortgage loan origination without first
obtaining and maintaining a license and
registration and obtaining a unique
identifier (State licensing).2
With respect to mortgage loan
originators employed by Agencyregulated institutions, the Act requires
the OCC, Board, FDIC, OTS and NCUA,3
through the Federal Financial
Institutions Examination Council
(FFIEC), and the FCA to develop and
maintain a Federal registration system,
and to implement this system by July
29, 2009 (Federal registration). The
S.A.F.E. Act specifically prohibits an
individual employed by an Agencyregulated institution from engaging in
the business of residential mortgage
loan origination without first obtaining
and maintaining annually a registration
as a registered mortgage loan originator
and obtaining a unique identifier. This
rulemaking implements these
1 The S.A.F.E. Act was enacted as part of the
Housing and Economic Recovery Act of 2008,
Public Law 110–289, Division A, Title V, sections
1501–1517, 122 Stat. 2654, 2810–2824 (July 30,
2008), codified at 12 U.S.C. 5101–5116. Citations in
this preamble are to the ‘‘S.A.F.E. Act’’ by section
number in the public law.
2 If the Secretary of Housing and Urban
Development (HUD) determines that any State fails,
within the statutorily prescribed time frame, to
establish a licensing regime that meets the
requirements of the S.A.F.E. Act, the Secretary is
required to establish a system for the licensing and
registration of mortgage loan originators in that
State. S.A.F.E. Act at section 1508. HUD has
reviewed the model legislation developed by the
Conference of State Bank Supervisors and the
American Association of Residential Mortgage
Regulators to assist States in meeting the minimum
requirements of the S.A.F.E. Act and found it to
meet these requirements. See 74 FR 312 (Jan. 5,
2009) and http://www.hud.gov/offices/hsg/sfh/
mps/smlicact.cfm.
3 The OCC, Board, FDIC, OTS, and NCUA are
referred to both in the S.A.F.E. Act and in this
rulemaking as the ‘‘Federal banking agencies.’’

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requirements for Agency-regulated
institutions.
The S.A.F.E. Act requires that Federal
registration and State licensing and
registration must be accomplished
through the Registry. The S.A.F.E. Act
provides that the objectives of the
Registry, among other things, are to
aggregate and improve the flow of
information to and between regulators;
provide increased accountability and
tracking of mortgage loan originators;
enhance consumer protections; reduce
fraud in the residential mortgage loan
origination process; and provide
consumers with easily accessible
information at no charge regarding the
employment history of, and publicly
adjudicated disciplinary and
enforcement actions against, mortgage
loan originators.4
The S.A.F.E. Act specifically requires
the Agencies to jointly develop and
maintain a system for registering
mortgage loan originators employed by
Agency-regulated institutions with the
Registry. In connection with this
registration, the Agencies at a minimum
must furnish or cause to be furnished to
the Registry information concerning the
mortgage loan originator’s identity,
including: (1) Fingerprints for
submission to the Federal Bureau of
Investigation (FBI) and any other
relevant governmental agency for a State
and national criminal background
check; and (2) personal history and
experience, including authorization for
the Registry to obtain information
related to any administrative, civil, or
criminal findings by any governmental
jurisdiction.5
B. Implementing the Requirements for
Federal Registration
The Registry is a Web-based system
developed and maintained by the
Conference of State Bank Supervisors
(CSBS) and the American Association of
Residential Mortgage Regulators
(AARMR). The Registry was launched in
January of 2008 for State licensing and
registration purposes in participating
States.6 Mortgage loan originators in
4 See

S.A.F.E. Act at section 1502.
at section 1507(a).
6 As of the date of this proposal, 26 States use this
system to manage the processing of their mortgage
licenses. This system is owned and operated by the
State Regulatory Registry LLC (SRR), a limitedliability company established by CSBS as a whollyowned subsidiary to develop and operate
nationwide systems for State regulators in the
financial services industry, and has been built and
is maintained by the Financial Industry Regulatory
Authority (FINRA), which operates similar systems
in the securities industry. To obtain more
information on this system, see http://
www.stateregulatoryregistry.org. (For purposes of
this rulemaking, reference to the Registry refers, as
5 Id.

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules
those States complete a single uniform
form (known as the MU4) electronically.
The data provided on the form is stored
electronically in a secure, centralized
repository available to State mortgage
regulators who use it to process license
applications and for supervisory
purposes.
The Federal banking agencies,
through the FFIEC, and the FCA are
working with CSBS to modify the
Registry so that it can accept
registrations from mortgage loan
originators employed by Agencyregulated institutions. As indicated
above, the Registry currently supports
the licensing of State mortgage lending
institutions and their mortgage loan
originators, a process that involves State
authorization of individuals to engage in
mortgage loan origination. It was not
originally designed to support the
Federal registration of Agency-regulated
institution employees, who do not need
additional authorization from the
appropriate Federal agency to engage in
mortgage loan origination activities.
Furthermore, the S.A.F.E. Act requires
new enhancements to the current
system, such as public access to certain
mortgage loan originator data and
processing of fingerprints through the
Registry. These differences between the
current Registry and the Federal
registration system required by the
S.A.F.E. Act, as well as the resulting
modifications necessary to support both
State licensing and Federal registration
functions, require careful analysis and
raise complex legal and system
development issues that the Agencies
are addressing through both this
rulemaking and modifications to the
Registry. These issues include:
Consistency of data requirements for
mortgage loan originators subject to
Agency jurisdiction and those subject to
State jurisdiction; modification to Webpage navigation in the current system;
registration functionality for the
anticipated hundreds of thousands of
Federal registrants; Federal procurement
and contracting issues; data privacy and
security requirements; and protocols for
submitting mortgage loan originators’
fingerprints to the FBI. Furthermore, the
modified system is expected to support
mortgage loan originators who move
between the Federal registration and the
State licensing regimes due to
employment changes or who are
licensed under one or more State
regimes and also registered under the
Federal regime.7 The Agencies and
applicable, to the system itself and to CSBS and
SRR.)
7 The Agencies note that some employees of
Agency-regulated institutions may also be subject to

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CSBS have made substantial progress in
resolving these issues, and the Agencies
expect to enter into an agreement with
the Registry that will provide for
appropriate consultation between the
Agencies and the Registry concerning
registrant information requirements and
fees, system functionality and security,
and other operational matters. However,
final determination of system costs,
funding, design, development and
deployment will not be completed until
after the Agencies adopt a final rule
establishing registration requirements.
This proposal provides for a 180-day
period within which to complete initial
registrations after the Registry is capable
of accepting registrations from
employees of Agency-regulated
institutions. During this period,
employees of Agency-regulated
institutions would not be subject to
sanctions if they originate residential
mortgage loans without having
completed their registration. The
Agencies expect that this time period
would provide mortgage loan
originators and the Agency-regulated
institutions that employ them adequate
opportunity to prepare for the
registrations required under this
proposal. The Agencies intend to make
a formal public announcement, in
advance, of the date when the Registry
will begin accepting registrations from
employees of Agency-regulated
institutions.
When fully operational, mortgage loan
originators and their Agency-regulated
institution employers are expected to
have access to the Registry, seven days
a week, to establish and maintain their
registrations. Furthermore, the CSBS
plans to phase-in system enhancements
to provide consumers with access to
certain information from the Registry in
order for them to obtain information on
State-licensed and Federally-registered
mortgage loan originators.
As indicated above, and consistent
with the S.A.F.E. Act, the Registry will
not screen or approve registrations
received from employees of Agencyregulated institutions. Instead, it will be
the repository of, and conduit for,
information on those employees who
are mortgage loan originators at Agencyregulated institutions. As provided in
§ __.104(d) and (h) of the proposed rule,
it will be the responsibility of the
Agency-regulated institution to review
its employees’ submissions as well as
any reports received from the Registry.
the State licensing and registration regime. For
example, employees who act as mortgage loan
originators for a bank and a nondepository
subsidiary of a bank holding company would be
subject to both regimes.

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II. Overview of the Proposal
The proposed rule implements the
S.A.F.E. Act’s requirements with respect
to Agency-regulated institutions. It
requires individuals employed by these
institutions who act as mortgage loan
originators to register with the Registry,
obtain unique identifiers, and maintain
their registrations. The proposal also
directs Agency-regulated institutions to
require compliance with these
requirements. Furthermore, the proposal
requires Agency-regulated institutions
to adopt and follow written policies and
procedures to assure such compliance.
A detailed section-by-section
description of this proposal with a
request for comments is set forth below.
III. Section-by-Section Description of
the Proposed Rule
Section __.101—Authority, Purpose,
and Scope
Section __.101 8 states that this rule
implements the S.A.F.E. Act’s Federal
registration requirements, which apply
to individuals who originate residential
mortgage loans, and describes the
objectives of the S.A.F.E. Act’s
registration mandate. This section also
identifies the entities that employ
individual mortgage loan originators—
entities referred to in this preamble
discussion as Agency-regulated
institutions—and that also are covered
by this proposal. Under the S.A.F.E.
Act, a mortgage loan originator must be
Federally-registered if that individual is
an employee of a depository institution,
an employee of any subsidiary owned
and controlled by a depository
institution and regulated by a Federal
banking agency, or an employee of an
institution regulated by the FCA.
Collectively, the Agencies’ proposed
rule applies to a depository institution,
any subsidiary of a depository
institution that is regulated by a Federal
banking agency, and an institution
regulated by the FCA. Section 1503(2) of
the S.A.F.E. Act provides that
‘‘depository institution’’ has the same
meaning as in section 3 of the Federal
Deposit Insurance Act (FDI Act),9 and
8 Because each Agency’s proposed rule will
amend a different part of the Code of Federal
Regulations but will have a similar numbering,
relevant sections are cited, for example, as
‘‘§ __.101’’ unless otherwise noted.
9 Section 3 of the FDI Act defines ‘‘depository
institution’’ as any bank or savings association. The
term ‘‘bank’’ in section 3 of the FDI Act means any
national bank, State bank, Federal branch, and
insured branch and includes any former savings
association. The term ‘‘savings association’’ means
any Federal savings association, state savings
association, and any corporation other than a bank
that the FDIC and the OTS jointly determine to be

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includes any credit union. The Agencies
note that because the definition of
‘‘depository institution’’ in the FDI Act
and in the S.A.F.E. Act does not include
bank or savings association holding
companies or their non-depository
subsidiaries, employees of these entities
who act as mortgage loan originators are
not covered by the Federal registration
requirement and, therefore, must
comply with State registration and
licensing requirements.
Each Agency’s proposed rule
indicates the specific entities covered by
the proposal. With respect to the OCC,
this rule applies to national banks,
Federal branches and agencies of foreign
banks, their operating subsidiaries, and
their employees who are mortgage loan
originators.10 For the Board, this rule
applies to member banks of the Federal
Reserve System (other than national
banks), their respective subsidiaries that
are not functionally regulated within the
meaning of section 5(c)(5) of the Bank
Holding Company Act, as amended (12
U.S.C. 1844(c)(5)); and branches and
agencies of foreign banks (other than
Federal branches, Federal agencies and
insured State branches of foreign banks)
and commercial lending companies
owned or controlled by foreign banks 11
and their employees who act as
mortgage loan originators. For the FDIC,
this rule applies to insured State
operating in substantially the same manner as a
savings association. 12 U.S.C. 1813.
10 The S.A.F.E. Act’s definition of depository
institution includes Federal branches of foreign
banks but not Federal agencies of foreign banks.
However, the OCC has applied the Federal
registration requirements to these entities because
they are Federally regulated and have the authority
to originate residential mortgage loans and,
therefore, should not be treated differently from
other Federally regulated or Federally insured
institutions.
11 The Board notes that it proposes to cover
branches and agencies of foreign banks (other than
Federal branches, Federal agencies and insured
State branches of foreign banks); and commercial
lending companies owned or controlled by foreign
banks pursuant to its authority under the
International Banking Act (IBA) (Chapter 32 of Title
12) to issue such rules it deems necessary in order
to perform its respective duties and functions under
the chapter and to administer and carry out the
provisions and purposes of the chapter and prevent
evasions thereof. 12 U.S.C. 3108(a). The Board notes
that the IBA provides, in relevant part, that the
above entities shall conduct their operations in the
United States in full compliance with provisions of
any law of the United States which imposes
requirements that protect the rights of consumers in
financial transactions, to the extent that the branch,
agency, or commercial lending company engages in
activities that are subject to such laws, and apply
to State-chartered banks, doing business in the State
in which such branch or agency or commercial
lending company, as the case may be, is doing
business. 12 U.S.C. 3106a(b)(1). Under the Board’s
proposal the above entities would be subject to the
same Federal registration requirements as Federal
branches, Federal agencies and insured State
branches of foreign banks, which are covered in the
OCC and FDIC rules, respectively.

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nonmember banks (including Statelicensed insured branches of foreign
banks) and their subsidiaries (except
brokers, dealers, persons providing
insurance, investment companies, and
investment advisers) and their
employees who are mortgage loan
originators. For the OTS, this rule
applies to savings associations and their
operating subsidiaries, and their
employees who are mortgage loan
originators. For the FCA, this rule
applies to Farm Credit System (FCS or
System) institutions that originate
residential mortgage loans under
sections 1.9(3), 1.11 and 2.4(a)(2) and (b)
of the Farm Credit Act of 1971, as
amended, 12 U.S.C. 2017(3), 2019, and
2075(a)(2) and (b), and their employees
who are mortgage loan originators.12 For
the NCUA, this rule applies to
Federally-insured credit unions and
their employees who are mortgage loan
originators.
Section 1507 of the S.A.F.E. Act
requires the Federal banking agencies to
make such de minimis exceptions ‘‘as
may be appropriate’’ to the Act’s
requirements to register and obtain a
unique identifier.13 Section
___.101(c)(2) of the proposed rule states
that these registration requirements do
not apply to an employee of an Agencyregulated institution if during the last 12
months: (1) The employee acted as a
mortgage loan originator for 5 or fewer
residential mortgage loans; and (2) the
Agency-regulated institution employs
mortgage loan originators who, while
excepted from registration pursuant to
this section, in the aggregate, acted as a
mortgage loan originator in connection
with 25 or fewer residential mortgage
loans.14 An employee must register with
12 Some FCS associations may not exercise their
statutory authority to make residential mortgage
loans, and FCS banks no longer engage in
residential mortgage origination activities because
they have transferred their direct lending authority
to their affiliated associations. The FCA emphasizes
that employees of FCS banks and associations that
do not engage in residential mortgage loan
origination activities are not subject to the
registration requirements of the S.A.F.E. and these
regulations. The Federal Agricultural Mortgage
Corporation (Farmer Mac) is an FCS institution that
among other activities operates a secondary market
for rural residential mortgage loans. The FCA
determines that Farmer Mac employees are not
subject to the registration requirements of the
S.A.F.E. Act and these implementing regulations
because Farmer Mac does not engage in mortgage
loan origination activities for rural residents. The
Farmer Mac secondary market is modeled after
Fannie Mae and Freddie Mac, and the provisions
of the S.A.F.E. Act do not expressly apply to
employees at Fannie Mae and Freddie Mac.
13 See S.A.F.E. Act at sections 1507(c) (de
minimis exceptions), 1504(a)(1)(A) (requirement to
register), 1504(a)(2) (requirement to obtain a unique
identifier).
14 For example, assume an Agency-regulated
institution has six employees, A, B, C, D, E, and F

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the Registry prior to engaging in
mortgage loan origination activity that
exceeds either the individual or
aggregate limit. The Agencies solicit
comment on whether the proposed
exception adequately and appropriately
covers circumstances that are truly de
minimis and whether any de minimis
exception is appropriate. 15
In addition, the Agencies specifically
invite comment on: whether the
individual and institution-wide limits
on the number of residential mortgage
loans for which employees may act as
a mortgage loan originator without
registering and obtaining a unique
identifier are appropriate; whether the
proposed exception is adequately
structured to prevent manipulation or
‘‘gaming’’ of the registration
requirements; whether an institution
should aggregate its residential mortgage
loans with its subsidiaries when
calculating the number of mortgage
loans originated for purposes of this
exception; whether monitoring for
compliance with the proposed
exception would be unduly burdensome
for Agency-regulated institutions, and if
so, how such burden could be
minimized; and whether the proposed
exception is consistent with the
who are not registered loan originators for an
Agency-regulated institution. Employees A, B, C,
and D have acted as mortgage loan originators on
five mortgage loans each during the same 12-month
period, while employee E has acted as a mortgage
loan originator with respect to four mortgage loans
during this same time. Employee F has not acted
as a mortgage loan originator during this 12-month
period. The institution has not exceeded its
aggregate exception limit of 25 mortgage loans.
Employees A, B, C, and D must register before
acting as a mortgage loan originator with respect to
any additional mortgage loan during this 12-month
period because any one of them would exceed the
individual exception limit of five mortgage loans
each. Employee E, who has acted as a mortgage loan
originator with respect to four loans may act as a
mortgage loan originator with respect to one more
loan because he or she would not exceed the
individual exception limit of five mortgage loans
and the institution would not exceed the aggregate
exception limit of 25 mortgage loans. After
employee E acts as a mortgage loan originator with
respect to his or her fifth loan, and the 25th loan
for the institution, the exception in ___.101(c) is no
longer available to any employee (A, B, C, D, E, or
F) who acts as a mortgage loan originator at the
institution during this 12-month period.
15 The FCA joins the Federal banking agencies in
proposing a de minimis exception pursuant to its
authority under section 5.17(a)(11) of the Farm
Credit Act of 1971, as amended, 12 U.S.C.
2252(a)(11) to ‘‘exercise such incidental powers as
may be necessary or appropriate to fulfill its duties
* * *’’ In this case, the FCA is exercising its
incidental powers to fulfill the requirement in the
S.A.F.E. Act that it work together the Federal
banking agencies to develop and maintain a system
for registering residential mortgage loan originators
at Agency-regulated institutions with the Registry.
A coordinated and uniform approach to the de
minimis exception among the Agencies is
appropriate because it best fulfills the objectives of
the S.A.F.E. Act.

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules
consumer protection and fraud
prevention purposes of the S.A.F.E. Act.
The Agencies also solicit comment on
whether an asset-based threshold is
appropriate or whether other types of
limits or thresholds, or other ways of
structuring a de minimis exception,
would be more appropriate. For
example, should the proposed de
minimis exception be applicable only to
Agency-regulated institutions with total
assets that do not exceed the amount
that the Board establishes annually for
banks, savings associations, and credit
unions as an exception from the Home
Mortgage Disclosure Act (HMDA)? 16
Furthermore, please provide comment
on whether alternatively, or in addition
to the foregoing, a de minimis exception
should be crafted to be event specific.
For example, a de minimis exception
might provide that the registration
requirements would not apply to an
employee who does not regularly
function as a mortgage loan originator
and who originates no more than a
small number of loans within a 12month period during the absence (such
as vacation or illness) of the individual
that regularly functions as the Agencyregulated institution’s mortgage loan
originator.
The Agencies note that the de
minimis exception contained in the
proposed rule would be voluntary; it
would not prevent a mortgage loan
originator who meets the criteria for the
exception from registering with the
Registry if the originator chooses to do
so or if his or her employer requires
registration.
Section ___.102—Definitions
Section __.102 defines the various
terms used in the proposal. If a term is
defined in the S.A.F.E. Act, the proposal
generally incorporates that definition.
The proposal has adopted other
definitions used by the Registry in order
to promote consistency and
comparability, insofar as is feasible,
between Federal registration
requirements and the States’ licensing
requirements.
Annual renewal period. The proposal
requires that a mortgage loan originator
renew his or her registration annually
during the annual renewal period. The
annual renewal period is November 1
through December 31 of each calendar
year and a registered mortgage loan
originator must renew during this
16 For 2009, that amount is $39 million. See 73
FR 78616 (Dec. 23, 2008). Pursuant to the HMDA
(12 U.S.C. 2808) and Board Regulation C (12 CFR
203.2(e)(1)(i)), the asset-size threshold is adjusted
annually based on year-to-year changes in the
Consumer Price Index for Urban Wage Earners and
Clerical Workers.

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period regardless of the date of the
initial registration. For example, an
employee who registered in October
2010 would have to renew between
November 1, 2010 and December 31,
2010. This is the same annual renewal
period provided to State mortgage loan
originators by the Registry. However,
the Agencies and the Registry are
discussing whether an alternate annual
renewal period for Agency-regulated
institutions at a different time of year
from the annual renewal period of the
State mortgage loan originators may be
more desirable from a technical and
operational standpoint. For example the
final rule may designate the annual
renewal period during another twomonth time period during the year
instead of the proposed renewal period.
Furthermore, the Agencies are
considering whether the rule should
provide for a method in which the rule’s
registration requirements may be
temporarily waived, or the initial
registration or renewal period extended,
in case of emergency, systems
malfunction, or other event beyond the
control of the Agency-regulated
institution or the mortgage loan
originator.
Mortgage loan originator. The
proposed definition of ‘‘mortgage loan
originator’’ is based on the definition of
the term ‘‘loan originator’’ included in
the S.A.F.E. Act at section 1503(3).
Specifically, this term means an
individual who takes a residential
mortgage loan application and offers or
negotiates terms of a residential
mortgage loan for compensation or gain.
The term does not include: (1) Any
individual who performs purely
administrative or clerical tasks on behalf
of an individual who is a mortgage loan
originator; (2) any individual
performing only real estate brokerage
activities (as defined in section
1503(3)(D) of the S.A.F.E. Act) 17 and is
17 The S.A.F.E. Act defines ‘‘real estate brokerage
activity’’ to mean any activity that involves offering
or providing real estate brokerage services to the
public, including: (i) Acting as a real estate agent
or real estate broker for a buyer, seller, lessor, or
lessee of real property; (ii) bringing together parties
interested in the sale, purchase, lease, rental, or
exchange of real property; (iii) negotiating, on
behalf of any party, any portion of a contract
relating to the sale, purchase, lease, rental, or
exchange of real property (other than in connection
with providing financing with respect to any such
transaction); (iv) engaging in any activity for which
a person engaged in the activity is required to be
registered or licensed as a real estate agent or real
estate broker under any applicable law; and (v)
offering to engage in any activity, or act in any
capacity, described in clause (i), (ii), (iii), or (iv).
S.A.F.E. Act at § 1503(3)(D). Nothing in this
proposal would constitute an authorization for
Agency-regulated institutions to engage in real
estate brokerage, or any other activity, for which the

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27391

licensed or registered as a real estate
broker in accordance with applicable
State law, unless the individual is
compensated by a lender, a mortgage
broker, or other loan originator or by
any agent of such lender, mortgage
broker, or other mortgage loan
originator, and meets the definition of
mortgage loan originator; or (3) any
individual or entity solely involved in
extensions of credit related to timeshare
plans, as that term is defined in 11
U.S.C. 101(53D).18 For purposes of this
definition, the proposal defines
‘‘administrative or clerical tasks’’ to
mean: (1) The receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan; and (2)
communication with a consumer to
obtain information necessary for the
processing or underwriting of a
residential mortgage loan. The Agencies
note that the appendix to the proposal
includes examples of the types of
activities the Agencies consider to be
both within and outside the scope of
residential mortgage loan origination
activities.
To the extent it is within the scope of
the S.A.F.E. Act, the Agencies are
requesting comment on whether the
definition of ‘‘mortgage loan originator’’
should cover individuals who modify
existing residential mortgage loans. If
so, the Agencies seek comment on
whether these individuals should be
excluded from the definition. For
example, the Agencies are considering
whether the final rule should exclude
from this definition persons who modify
an existing residential mortgage loan,
pursuant to applicable law, provided
this modification does not constitute a
refinancing (that is, the satisfaction or
extinguishment of the original
obligation and replacement by a new
obligation) and is completed in
accordance with a contract between the
parties, including any workout
agreement.
institution does not have independent authority
pursuant to Federal or State law, as applicable.
18 ‘‘Timeshare plan’’ is defined in 11 U.S.C. 101
(53D) as an interest purchased in any arrangement,
plan, scheme, or similar device, but not including
exchange programs, whether by membership,
agreement, tenancy in common, sale, lease, deed,
rental agreement, license, right to use agreement, or
by any other means, whereby a purchaser, in
exchange for consideration, receives a right to use
accommodations, facilities, or recreational sites,
whether improved or unimproved, for a specific
period of time less than a full year during any given
year, but not necessarily for consecutive years, and
which extends for a period of more than three years.
A ‘‘timeshare interest’’ is that interest purchased in
a timeshare plan which grants the purchaser the
right to use and occupy accommodations, facilities,
or recreational sites, whether improved or
unimproved, pursuant to a timeshare plan.

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The Agencies seek comment on
whether an exclusion for individuals
who modify existing residential
mortgage loans would be appropriate in
light of the S.A.F.E. Act’s objectives of
providing increased accountability and
tracking of the mortgage loan
originators, enhancing consumer
protection, reducing fraud in the
residential mortgage loan origination
process, and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.
Comment is also requested on whether
the final rule should delay the
registration requirement for individuals
engaged in loan modifications for only
a specified period in light of current
economic conditions and the national
importance of encouraging mortgage
lenders to engage in foreclosure
mitigation activities.
Moreover, the Agencies solicit
comment on whether individuals who
engage in approving mortgage loan
assumptions should be excluded from
the proposed definition of ‘‘mortgage
loan originator’’ and whether such
approach is consistent with the S.A.F.E.
Act’s objectives.
In particular, commenters are
encouraged to: (1) Describe the extent to
which loan modification and
assumption activities are staffed and
managed separately from loan
origination activities within the
institution; (2) provide the number of
employees who engage in loan
modifications or assumptions and do
not otherwise act as mortgage loan
originators; (3) describe the types of
contact that staff engaged only in
modifications or assumptions has with
customers and the extent to which such
staff initiate contact with customers; (4)
discuss whether loan modification staff
ever process loan refinancings; and (5)
discuss the extent of the information
that is gathered from customers in the
context of the loan modifications and
assumptions. With respect to loan
modifications, describe what staff
would handle the transaction if the
modification process becomes a
refinancing of a loan or if a new
borrower is added in addition to the
original borrower (i.e., adding a
cosigner).
With respect to assumptions,
describe: (1) Whether the loan
transactions offered by your institution
are typically assumable; (2) the types of
assumptions that are permitted, if any;
(3) the type of contact between the
employee and the new borrower; and (4)
differences, if any, between

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underwriting practices for a loan
assumption transaction and a new loan
origination. Comment is also
specifically requested on whether the
exclusion of personnel solely engaged in
loan modifications and loan
assumptions affects a consumer’s ability
to assess the competency and
credentials of these personnel, keeping
in mind the consumer protection and
fraud prevention purposes of the
S.A.F.E. Act.
To the extent it is within the scope of
the S.A.F.E. Act, the Agencies also seek
comment on whether individuals who
engage in certain refinancing
transactions should be excluded from
the definition of mortgage loan
originator (and, correspondingly
whether certain types of refinancing
transactions should be excluded from
the definition of residential mortgage
loan). Specifically, should an individual
who engages in refinancings that do not
involve a cash-out and are with the
same lender be excluded from the
definition of mortgage loan originator?
With respect to these specific types of
refinancing transactions, the Agencies
request comment on: (1) Whether such
transactions have similar results for
borrowers as loan modifications; (2)
whether employees engaged in such
refinancing transactions also engage in
other mortgage loan origination
activities; (3) the types of contact that
employees who engage in these types of
refinancings have with customers; (4)
the extent to which such staff initiate
contact with customers; and (5) the
extent of the information that is
gathered from customers in the context
of these types of refinancing
transactions.
Furthermore, the Agencies seek
comment on whether individuals who
engage in loan modification and limited
refinancing activities should be
excluded from the definition of
mortgage loan originator only if the
transactions meet additional criteria.
For example, should an individual who
engages only in loan modification
activities be excluded from the
definition of mortgage loan originator
only if the modification meets specific
criteria such as a lower interest rate,
reduced payment, elimination of an
impending adjustment to the rate, or
reduction in principal? Comment is
requested on criteria that should be
considered by the Agencies, if any.
Nationwide Mortgage Licensing
System and Registry or Registry. The
proposal’s definition of these terms is
based on the definition included in the
S.A.F.E. Act. Specifically, these terms
mean the system developed and
maintained by the CSBS and the

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AARMR for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act. The
Registry currently supports the licensing
and registration of State mortgage loan
originators. As explained above, the
Agencies are working with the CSBS to
modify the Registry to support the
registration of mortgage loan originators
employed by Agency-regulated
institutions.
Registered mortgage loan originator.
Pursuant to section 1503(7) of the
S.A.F.E. Act, the proposal defines this
term to mean any individual who meets
the definition of mortgage loan
originator and is an employee of an
Agency-regulated institution and is
registered pursuant to the requirements
of this rule with, and maintains a
unique identifier through, the Registry.
This definition is the same as that
included in the S.A.F.E. Act, except that
the Agencies have modified it to apply
only to individuals registered pursuant
to regulations issued by the Agencies.
Residential mortgage loan. As in the
S.A.F.E. Act, the proposal defines
‘‘residential mortgage loan’’ as any loan
primarily for personal, family, or
household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act
(TILA) 19 or residential real estate upon
which is constructed or intended to be
constructed a dwelling. In addition, the
proposal specifically includes in this
definition refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
secured by a dwelling in order to clarify
that originators of these types of loans
are covered by the rule’s requirements.
The FCA emphasizes that section
1503(8) of the S.A.F.E. Act and __.102(f)
do not amend or supersede sections
1.11(b) and 2.4(b) of the Farm Credit Act
of 1971, as amended, 12 U.S.C. 2019(b)
and 2075(b), and their implementing
regulation, 12 CFR 613.3030(c), which
establish the purposes for which FCS
institutions may originate residential
mortgage loans for eligible rural home
borrowers.
19 TILA defines ‘‘dwelling’’ as a residential
structure or mobile home which contains one-tofour family housing units, or individual units of
condominiums or cooperatives. 15 U.S.C. 1602(v).
Board regulations and commentary include in this
definition any residential structure that contains
one to four units, whether or not that structure is
attached to real property, and includes an
individual condominium unit, cooperative unit,
mobile home, trailer, and boat if they are in fact
used as a residence. See 12 CFR 226.2(a)(19)
(Regulation Z).

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules
Unique Identifier. The proposal’s
definition of this term is identical to
that included in section 1503(12) of the
S.A.F.E. Act. Specifically, the proposal
defines ‘‘unique identifier’’ to mean a
number or other identifier that: (1)
Permanently identifies a registered
mortgage loan originator; (2) is assigned
by protocols established by the Registry
and the Agencies to facilitate electronic
tracking of mortgage loan originators,
and uniform identification of, and
public access to, the employment
history of, and the publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators; and
(3) must not be used for purposes other
than those set forth in the S.A.F.E. Act.
In section __.103(d), the proposal uses
the terms ‘‘control’’ and ‘‘financial
services-related’’ in the descriptions of
the information that is required of an
employee who is a mortgage loan
originator. These terms are currently
defined in the web-based form
collecting information on State-licensed
mortgage loan originators. In order to
promote consistency of the information
collected for Agency-regulated and
State-licensed mortgage loan originators,
the Agencies intend that the Registry’s
definitions of those terms will also be
used in the web-based form collecting
information on Agency-regulated
mortgage loan originators and, therefore
have not defined them in this
rulemaking.20
Section __.103—Registration of
Mortgage Loan Originators
The S.A.F.E. Act specifically prohibits
an individual who is an employee of an
Agency-regulated institution from
engaging in the business of a loan
20 The Registry currently defines ‘‘control’’ as the
power, directly or indirectly, to direct the
management or policies of a company or business,
whether through ownership of securities, by
contract, or otherwise. Any person who is a general
partner or executive officer, including Chief
Executive Officer, Chief Financial Officer, Chief
Operations Officer, Chief Legal Officer, Chief
Compliance Officer, Director and individuals with
similar status or functions; directly or indirectly has
the right to vote 10 percent or more of a class of
a voting security or has the power to sell or direct
the sale of 10 percent or more of a class of voting
securities; or, in the case of a partnership, has the
right to receive upon dissolution, or has
contributed, 10 percent or more of the capital, is
presumed to control that company. The Agencies
have requested that this definition be revised to
include ‘‘Chief Credit Officer.’’ The Registry’s
current definition of ‘‘Financial services-related’’
means pertaining to securities, commodities,
banking, insurance, consumer lending, or real estate
(including, but not limited to, acting or being
associated with a bank or savings association, credit
union, mortgage lender, mortgage broker, real estate
salesperson or agent, closing agent, title company,
or escrow agent). The Agencies have requested that
this definition be revised to include ‘‘Farm Credit
System institution’’ and ‘‘appraiser.’’

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originator without registering as a loan
originator with the Registry,
maintaining annually such registration,
and obtaining a unique identifier
through the Registry.21 As described
more specifically below, under § __.103
of the proposal, both the individual
employee and the employing institution
are responsible for complying with
these requirements. In addition, the
proposal requires that both the
employee and the employing institution
must submit information to the Registry
for each registration to be complete.
Employee registration requirement. In
general, proposed § __.103(a)(1) requires
employees of Agency-regulated
institutions who act as a mortgage loan
originator to register with the Registry,
maintain their registration, and obtain a
unique identifier. The Agencies note
that this requirement would not apply if
the employee is subject to a de minimis
exception. This section further provides
that any employee who is not in
compliance with the registration and
unique identifier requirements set forth
in this subpart, by the expiration of the
implementation periods specified in
§ __.103(a)(3) and (a)(4)(ii), as
applicable, is in violation of the S.A.F.E.
Act and this rule. The OCC, Board,
FDIC, and OTS have the authority to
take enforcement actions against their
respective Agency-regulated institutions
and individual employees of those
institutions who violate the S.A.F.E. Act
and the final rule, pursuant to 12 U.S.C.
1818. The FCA has authority to take
enforcement actions against Farm Credit
System institutions and individual
employees who violate the S.A.F.E. Act
and the final rule pursuant to title V,
Part C of the Farm Credit Act of 1971,
as amended, 12 U.S.C. 2261 et seq. The
NCUA has the authority to take
enforcement actions against federallyinsured credit unions and their
employees who violate the S.A.F.E. Act
and the final rule under 12 U.S.C. 1786.
Institution requirement. Unless the de
minimis exception applies, paragraph
(a)(2) of § __.103 provides that an
Agency-regulated institution must
require its employees who are mortgage
loan originators to register with the
Registry, maintain this registration, and
obtain a unique identifier in compliance
with this subpart. This provision also
prohibits an Agency-regulated
institution from permitting its
employees to act as mortgage loan
originators unless registered with the
Registry pursuant to this subpart, after
the implementation periods specified in
§§ __.103(a)(3) and (a)(4)(ii), as
applicable, expire.
21 See

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27393

Implementation period for initial
registrations. The proposal provides a
grace period for initial registrations.
Pursuant to paragraph (a)(3) of this
section, an employee is not required to
register, and therefore can continue to
originate residential mortgage loans
without complying with the rule’s
registration requirement, for 180 days
from the date the Agencies provide
public notice that the Registry is
accepting initial registrations. After this
180-day period expires, any existing
employee or newly hired employee of
an Agency-regulated institution who is
subject to the registration requirements
is prohibited from originating
residential mortgage loans without first
meeting the registration requirements.
The Registry, in consultation with the
Agencies, is considering a staggered
registration process for some of the
larger Agency-regulated institutions in
order to spread out the registration of
mortgage loan originators throughout
this implementation period. This could
reduce the number of originators
registering at any one time, thereby
enabling the Registry to accommodate
all registrations in a timely and efficient
manner.
The Agencies seek comment on
whether the 180-day implementation
period will provide Agency-regulated
institutions and their employees with
adequate time to complete the initial
registration process. The Agencies also
inquire as to whether an alternative
schedule for implementation and initial
registrations would be appropriate, what
such an alternative schedule should be,
and why it is more appropriate than the
implementation period proposed by the
Agencies. In addition, the Agencies
request comment on whether, and how,
a staggered registration process should
be developed.
The Agencies recognize that Agencyregulated institutions and mortgage loan
originators need certainty as to when
the Registry is available to start
accepting registrations and the date that
the 180-day clock starts to run.
Therefore, the Agencies will provide a
coordinated and simultaneous advance
notice to Agency-regulated institutions
of when the Registry will begin
accepting Federal registrations through
appropriate means, such as a Federal
Register publication, Web-site notice, or
agency bulletin.
Special rule for previously registered
employees. Under paragraph (a)(4) of
§ __.103, properly registered or licensed
mortgage loan originators will not have
to re-register when they change
employment by moving from one
Agency-regulated institution to another
or from a State-regulated institution to

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an Agency-regulated institution,
regardless of whether the change in
employment is made voluntarily,
through an acquisition or merger of the
employee’s prior employer, or through a
reorganization where previously Statelicensed mortgage loan originators
become subject to the registration
requirements of Agency-regulated
institutions. Specifically, this provision
provides that if a new employee of an
Agency-regulated institution had
previously registered with, and obtained
a unique identifier from, the Registry
prior to becoming an employee of that
institution and has maintained that
registration (or license, if previously
employed by a State-regulated entity),
the registration requirements of this
subpart are deemed to be met provided
that: (1) The employee’s employment
information in the Registry is updated;
(2) new fingerprints of the employee are
provided to the Registry for a new
background check, except in the case of
mergers, acquisitions or reorganizations;
(3) information concerning the new
employing institution is provided to the
Registry pursuant to § __.103(e)(1)(i), to
the extent the institution has not
previously met these requirements, and
(e)(2)(i) ; 22 and (4) the registration is
maintained pursuant to the
requirements of paragraph (b) of this
section as of the date that the employee
is employed by the institution.
In order to reduce regulatory burden
and to prevent an interruption in
mortgage origination activity, this
provision provides a 60-day grace
period to comply with these
requirements when a registered
mortgage loan originator becomes an
employee of an Agency-regulated
institution as a result of an acquisition,
merger, or reorganization. The Agencies
seek comment on whether this grace
period is appropriate.
Continuing a mortgage loan
originator’s registration from one
employer to another will reduce
regulatory burden on Agency-regulated
institutions as well as the residential
mortgage industry. In addition, because
an employee’s unique identifier and
background information in the Registry
will remain the same, consumers will be
able to locate a mortgage loan originator
who has changed employers. The
Agencies note that the registration of a
22 These provisions require: The institution’s
name, main office address, IRS Employer Tax
Identification Number, Research Statistics
Supervision Discount (RSSD) number; primary
Federal regulator, contact information for
individuals at the institution for Registry purposes;
and confirmation that it employs the registrant.
Information regarding an institution’s RSSD number
is available from the Board.

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mortgage loan originator who leaves any
employer will be inactive until he or she
is hired by a new institution, his or her
record is updated in accordance with
the final rule’s requirements, and the
new employer acknowledges employing
the mortgage loan originator through the
Registry. The individual will be
prohibited from acting as a mortgage
loan originator at an Agency-regulated
institution until such time as the
registration is reactivated, unless
covered by the 60-day grace period.
Maintaining Registration. Under
§ __.103(b), a registered mortgage loan
originator must renew his or her
registration with the Registry during the
annual renewal period (November 1–
December 31). To renew, the employee
must confirm that the information
previously submitted to the Registry
remains accurate and complete,
updating any information as needed.
Any registration that is not renewed
during this period will become inactive
and the individual will be prohibited
from acting as a mortgage loan
originator at an Agency-regulated
institution until such time as the
registration requirements are met. All
employee data that has been provided to
the Registry about the employee will
remain in the Registry even when the
employee is in inactive status. Inactive
mortgage loan originators will not be
assigned a new unique identifier if they
reregister.
In addition to the annual renewal, a
registration must be updated within 30
days of the occurrence of any of the
following events: (1) A change in the
employee’s name, (2) the registrant
ceases to be an employee of the
institution; or (3) any of the employee’s
responses to the information required
for registration pursuant to paragraphs
(d)(1)(iii) through (xi) become
inaccurate. These annual renewal and
updating requirements are similar to
what is required currently for Statelicensed mortgage loan originators.
This paragraph also provides that any
employee who registers with the
Registry must maintain his or her
registration unless the employee is no
longer a mortgage loan originator. As a
result of this provision, once an
employee registers as a loan originator
with the Registry, the employee will be
required to continue this registration
until he or she is no longer engaged in
the activity of a mortgage loan
originator, even if, in any particular
year, the employee originates fewer
mortgage loans than the number
specified in the de minimis exception
provision. The purpose of this
requirement is to avoid the creation of
a timing loophole that could allow

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mortgage loan originators to avoid
registration requirements.
The Agencies specifically request
comment on whether the proposed
initial registration requirements as well
as the requirements for maintaining
registration are adequate and feasible for
Agency-regulated institutions and their
employees who are mortgage loan
originators, yet serve the consumer
protection purposes enumerated in the
S.A.F.E. Act.
Effective date of registrations and
renewals. Paragraph (c) of this section
provides that an initial registration is
effective on the date that the registrant
receives notification from the Registry
that all employee and institution
information required by paragraphs (d)
and (e) of this section has been
submitted and the registration is
complete.
A renewal or update pursuant to
paragraph (b) is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) of
this section has been submitted and the
renewal or update is complete.
Except as provided by the 180-day
implementation period in § __.103(a)(3)
or the 60-day grace period provided in
§ __.103(a)(4), an employee must not
engage in mortgage origination if his or
her registration is not yet effective or
has not been renewed pursuant to this
rule.
Required employee information.
Paragraph (d) of § __.103 lists the
categories of information that mortgage
loan originators, or the employing
Agency-regulated institution on behalf
of the mortgage loan originator, will be
required to submit to the Registry. The
Registry’s registration form will more
specifically identify the information
required.
Specifically, the proposal requires the
employee to submit information
regarding his or her identity (name and
former names, Social Security number,
gender, date of birth, and place of birth)
and home and business contact
information; date the employee became
an employee of the Agency-regulated
institution; financial services-related
employment and financial history for
the past 10 years; criminal history
involving felonies and certain
misdemeanors; history of financial
services-related civil actions,
arbitrations and regulatory and
disciplinary actions or orders; financial
services-related professional license
revocations or suspensions; voluntary or
involuntary employment terminations
based on violations of law or industry
standards of conduct; and certain
actions listed above that are pending

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against the employee. As explained
below, the Agency-regulated institution
must have policies and procedures in
place for confirming the adequacy and
accuracy of employee registrations.
The employee also must provide
fingerprints, in digital form if
practicable, and any appropriate
identifying information to the Registry
for submission to the FBI and any other
Federal or State governmental agency or
entity authorized to do a criminal
history background check.23 The
Agencies expect that the Registry will
submit fingerprints to the FBI for a
criminal history background check in
connection with the registration of each
mortgage loan originator of an Agencyregulated institution. The Agencies,
however, are not requiring employees to
obtain new fingerprints for submission
to the Registry if the employing Agencyregulated institution has the employee’s
fingerprints on file, provided that the
fingerprints submitted to the Registry
were taken less than three years prior to
the employee’s registration with the
Registry. If the Agency-regulated
institution has such fingerprints on file,
the Registry plans to use these
fingerprints to run the required criminal
history background check on the
mortgage loan originator.
It is the Agencies’ understanding that
the Registry plans to support digital
fingerprinting by October 2009 and
likely before the initiation of the
proposed rule’s implementation period.
As digital fingerprints are preferable to
paper fingerprints, the proposed rule
provides that registrants should submit
digital fingerprints to the Registry, if
practicable. If digital fingerprints are not
available, the Registry will accept
fingerprint cards, and will convert these
cards to a digital format. The Agencies
encourage the use of digital fingerprints
and note that the proposal’s permission
to submit fingerprints in paper form is
intended to enable smaller institutions
without the capability or feasibility to
obtain digital fingerprints to comply
with this requirement.
The Agencies specifically seek
comment on whether the three-year age
limit for existing fingerprints is
appropriate and whether Agencyregulated institutions currently have
fingerprints of their employees on file,
and if so, whether they are in digital or
paper form.
Employee authorization and
attestation. Paragraph (d)(2) of § __.103
requires the employee, not the
23 Further information on the Registry’s
fingerprint and background check procedures may
be found on the Registry’s Web site at http://
www.stateregulatoryregistry.org/NMLS/.

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employing Agency-regulated institution,
to attest to the correctness of all such
information submitted to the Registry
pursuant to paragraph (d)(1), and to
provide authorization for the Registry
and the employing Agency-regulated
institution to obtain information related
to any administrative, civil or criminal
findings to which the employee is a
party.
In order to provide relevant
information to consumers and to
implement the purposes of the S.A.F.E.
Act, paragraph (d)(2) requires the
employee, not the employing Agencyregulated institution, to authorize the
Registry to make available to the public
the following information submitted to
the Registry: His or her name; other
names used; name of current
employer(s); current principal business
location(s) and business contact
information; 10 years of relevant
employment history; and publicly
adjudicated or pending disciplinary and
enforcement actions and arbitrations
against the employee. The Agencies
envision that this information will be
made public in two phases. The first
phase, implemented at the time the
Registry begins accepting Federal
registrations, would provide for public
accessibility of the employee’s name;
other names used; name of current
employer(s); current principal business
location(s) and business contact
information; and employment history.
The remaining categories of information
(publicly adjudicated or pending
disciplinary and enforcement actions
and arbitrations against the employee)
would be made public at a later date,
once the Registry, in consultation with
the Agencies, has designed and
implemented a system through which
the registrant may provide additional
explanatory information to accompany a
positive response to any of the
disclosure questions regarding criminal
history or the other information
requested in paragraphs (d)(1)(iii)
through (xi). The Agencies note that
once the Registry makes this
enhancement, registered mortgage loan
originators can provide this explanatory
language at any time or during the
annual renewal process, and that this
explanatory language may be made
public. Additionally, relevant nonpublic
information submitted to the Registry
will be accessible to the Agencies and
State mortgage regulators, as
appropriate.
The institution may provide the
employee information required under
§ __.103(d)(1) to the Registry or require
the employee to provide the information
to the Registry. Regardless of the
manner that the information is

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27395

provided, the requirements of the rule
remain the same: The employee must
attest to the correctness of the
information required by § __.103(d) and
the institution must implement policies
and procedures to confirm the adequacy
and accuracy of employee registrations,
including updates and renewals.
The Agencies have limited the
required information to what is
necessary to meet the objectives of the
S.A.F.E. Act for the registration of
residential mortgage loan originators
employed by Agency-regulated
institutions and to what is required by
the Registry’s current data collection
form for State mortgage loan originators,
Form MU4. The Agencies believe that
both the State-licensing and Agencyregistration requirements should collect
similar information from mortgage loan
originators in order to effectively track
loan originators, reduce regulatory
burden on mortgage loan originators
who move between institutions with
differing charters and regulators, and
permit consumers to review similar
information on mortgage loan
originators regardless of the originator’s
regulator. The Agencies and CSBS have
worked together to identify what
information should be required for
registration and will continue to do so
going forward.
The Agencies seek comment on the
employee data that is proposed to be
collected, the employee data that is
proposed to be made public, and
whether any other additional data
should be collected or made public.
Required Agency-regulated institution
information. Paragraph (e)(1) of
§ ll.103 requires the employing
Agency-regulated institution to submit
certain information to the Registry as a
base record in connection with the
initial registration of one or more
mortgage loan originators. Specifically,
the Agency-regulated institution must
provide its name, main office address,
primary Federal regulator, Employer
Identification Number (EIN) issued by
the Internal Revenue Service, primary
point of contact information, and
contact information for ‘‘system
administrators.’’ If the Agency-regulated
institution is a subsidiary, it also must
indicate that it is a subsidiary and
provide the name of its parent
institution, as explained further below.
System administrators will have the
authority to enter data required in
paragraph (e) of this section on the
Registry and will be responsible for
keeping institution information and the
list of employees registered with the
Registry current, provided these
individuals do not act as mortgage loan
originators. The system administrators

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may delegate their authority and assign
as many additional system users as
necessary to comply with the
registration requirements of the S.A.F.E.
Act and the final rule, provided the
delegated administrators meet this
paragraph’s requirements. The primary
point of contact also can be one of the
system administrators.
In addition, paragraph (e)(1) requires
an Agency-regulated institution to
provide its Research Statistics
Supervision Discount (RSSD) number.
The RSSD database is maintained by the
Board. The Agencies expect to provide
the Registry with an extract of the
Board’s database, indexed by RSSD
number, to facilitate an Agencyregulated institution’s authorized access
to the Registry and its establishment of
a new base record. Upon receiving the
information for a new base record from
an Agency-regulated institution, the
Registry will confirm the information by
comparing the application with data
supplied by the Agencies. The Agencies
will establish a mechanism by which
Agency-regulated institutions that do
not have an RSSD number will be added
to the RSSD database. However, an
operating subsidiary of an Agencyregulated institution will not be
required to obtain an RSSD number.
Instead, if an operating subsidiary does
not have an RSSD number, the operating
subsidiary will provide its parent
institution’s RSSD number and indicate
that it is an operating subsidiary of the
parent. The Agencies seek comment on
the proposal to require Agencyregulated institutions to submit their
RSSD number, and operating
subsidiaries, if necessary, to submit
their parent institution’s RSSD number,
to facilitate an Agency-regulated
institution’s authorized access to the
Registry and its establishment of a base
record, and as identifying data for
validating the base record.
Paragraph (e)(1)(ii) of this section
requires the Agency-regulated
institution to update any information it
has submitted within 30 days of the date
that the information becomes
inaccurate.
Paragraph (e)(2) of this section
requires an Agency-regulated institution
to provide information to the Registry
for each employee who acts as a
mortgage loan originator. The Agencyregulated institution must: (1) After all
the information required by paragraph
(d) of this section has been submitted to
the Registry, confirm that it employs the
registrant; and (2) within 30 days of the
date the registrant ceases to be an
employee of the institution, provide
notification that it no longer employs
the registrant and the date the registrant

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ceased being an employee. This
information will link the registering
mortgage loan originator to the Agencyregulated institution in order to confirm
that the registration of the employee is
valid and legitimate. The Agencies note
that the Registry’s system protocols will
not permit the Agency-regulated
institution to confirm that it employs
the registrant unless all of the
employee’s information required by
paragraph (d) of this section has been
submitted to the Registry.
The Agencies anticipate that some
Agency-regulated institutions may
select one or more individuals to submit
the required employee information on
behalf of each of their mortgage loan
originators to facilitate this registration
process. The Agencies also recognize
the initial volume of new registrants
could be burdensome on both the
registrants and on the staff charged with
completing the registrations. To mitigate
this burden, the Agencies are
considering whether to modify the
Registry to permit a ‘‘batch’’ process for
Agency-regulated institutions to submit,
in bulk, some or all of the required
employee and institution data.
However, such a process would not
eliminate completely an individual
employee’s role in the registration
process or the employee’s responsibility
to attest to the accuracy of the data
submitted on the employee’s behalf.
Typical automated human resources
systems likely will not contain all of the
employee information required to be
submitted to the Registry Under
§ll.103(d) of this proposed rule. As a
result, the institution would need to
gather the missing information from
each potential registrant and then
format it for the batch processing, which
may create some registration burden on
administrative staff and lead to possible
delays, errors, or omissions.
Alternatively, if the Agencies specify a
limited set of standard data elements
that are likely to be contained in an
institution’s automated human
resources system, such as name and
employment date, for the batch file,
individual employees would still be
required to access the Registry to
provide any missing information and
complete the registration process. In
either case, employees would still be
responsible for accessing their record in
the Registry to attest to the accuracy of
the information submitted on their
behalf by the employing institution and
authorize background checks and public
access to certain employee information.
The Agencies seek comment on batch
processing and welcome suggestions for
workable alternative approaches that
could mitigate the initial registration

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burden on Agency-regulated institutions
and their employees. Comment is also
sought on the appropriateness of having
one employee input registration
information into the Registry on another
employee’s behalf.
Section ll.104 Policies and
Procedures
Proposed § ll.104 requires Agencyregulated institutions that employ
mortgage loan originators to adopt and
follow written policies and procedures
designed to assure compliance with the
requirements of the final rule. This
requirement applies to all Agencyregulated institutions that employ
individuals who act as mortgage loan
originators, regardless of the application
of any de minimis exception to their
employees. This section requires that
these policies and procedures must be
appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the Agencyregulated institution and must at a
minimum include the following eight
provisions.
First, these policies and procedures
must establish a process for identifying
which employees of the institution are
required to be registered mortgage loan
originators.
Second, the policies and procedures
must require that all employees of the
institution who are mortgage loan
originators be informed of the
registration requirements of the S.A.F.E.
Act and this rule and be instructed on
how to comply with these requirements
and procedures, including registering as
a mortgage loan originator prior to
engaging in any mortgage loan
origination activity.
Third, the policies and procedures
must establish procedures to comply
with the unique identifier requirements
in § ll.105.
Fourth, these policies and procedures
must establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparison with the institution’s
records. The Agencies do not expect
Agency-regulated institutions, however,
to obtain private database searches on
their pre-existing employees to confirm
employee information. Instead,
institutions should compare the
information supplied by the employee
for purposes of registering with the
Registry with the information contained
in the institution’s own records.
Fifth, these policies and procedures
must establish reasonable procedures
and tracking systems for monitoring
compliance with registration
requirements and procedures. Agency-

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regulated institutions will be expected
to be able to demonstrate compliance
with the requirements of the S.A.F.E.
Act and the final rule, such as by
maintaining appropriate records.
Sixth, the policies and procedures
must provide for periodic independent
testing of the Agency-regulated
institution’s policies and procedures for
compliance with the S.A.F.E. Act and
the final rule, including the registration
and renewal requirements, and for such
testing to be conducted by institution
personnel or by an outside party.
Seventh, the policies and procedures
must provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
rule, or the related policies and
procedures of the institution, including
prohibiting such employees from acting
as mortgage loan originators or other
appropriate disciplinary actions.
Eighth, the policies and procedures
must establish a process for reviewing
the criminal background history reports
on employees received from the FBI
through the Registry and taking
appropriate action consistent with
applicable law and rules with respect to
these reports. Moreover, an Agencyregulated institution must maintain
such records or reports and document
any action taken with respect to
applicable employees. Institutions
should maintain these records
consistent with applicable
recordkeeping requirements, if any.
The Agencies specifically request
comment on the difficulty of
establishing suitable policies and
procedures including the amount of
time and resources needed for their
adoption and implementation. The
Agencies note that these policies and
procedures should be in place at an
institution prior to the registration of its
employees pursuant to this rule.
Section ll.105 Use of Unique
Identifier
Section ll.105(a) of the proposal
requires an Agency-regulated institution
to make the unique identifier(s) of its
registered mortgage loan originator(s)
available to consumers in a manner and
method practicable to the institution.
The Agencies note that an Agencyregulated institution may comply with
this requirement in a number of ways.
For example, the institution may choose
to direct consumers to a listing of
registered mortgage loan originators and
their unique identifiers on its Web site;
post this information prominently in a
publicly accessible place, such as a
branch office lobby or lending office
reception area; or establish a process to

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ensure that institution personnel
provide the unique identifier of a
registered mortgage loan originator to
consumers who request it from
employees other than the mortgage loan
originator.24
Section ll.105(b) requires a
registered mortgage loan originator to
provide the originator’s unique
identifier to a consumer upon request,
before acting as a mortgage loan
originator, and through the originator’s
initial written communication with a
consumer, if any. The Agencies intend
§ ll.105(b)(3) of the rule to cover
written communication from the
originator specifically for his or her
customers and not written materials
distributed by the Agency-regulated
institution for general use by its
customers.
Although a mortgage loan originator
may change his or her name, change
employment, or move, the unique
identifier assigned to the originator by
the Registry at the originator’s initial
registration will remain the same. Once
public access to the Registry is fully
functional, the unique identifier will
enable consumer access to an individual
mortgage loan originator’s profile stored
in the Registry, including the mortgage
loan originator’s registration
information, any State licenses held
(active or inactive), employment history
and other information of interest to the
consumer. If a mortgage loan originator
is simultaneously employed by more
than one State or Agency-regulated
institution, that information also will be
readily visible to the consumer.
Therefore, as this unique identifier will
enable a consumer to obtain important
information concerning a mortgage loan
originator from the Registry, a mortgage
loan originator and the employing
institution must ensure that the
consumer has access to it.
The Agencies seek comment regarding
the adequacy and appropriateness of
these unique identifier requirements
with respect to the consumer protection
and anti-fraud purposes of the S.A.F.E.
Act. The Agencies also seek comment
on whether the proposed rule
adequately ensures that consumers will
be made aware that they have the
opportunity to access information about
the employment history of, and publicly
adjudicated disciplinary and
enforcement actions against, a
prospective, current, or former mortgage
24 The Agencies note that the Federal Housing
Finance Agency (FHFA) has directed Fannie Mae
and Freddie Mac to require all mortgage loan
applications taken on and after January 1, 2010 to
include the mortgage loan originator’s unique
identifier. See FNMA LL 02–2009: New Mortgage
Loan Data Requirements (02/13/09).

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27397

loan originator. Furthermore, the
Agencies seek comment on the specific
difficulties that an institution or its
employees may have in complying with
these requirements and whether there
may be circumstances when a registered
mortgage loan originator would not be
able to provide the unique identifier to
a consumer before acting as a mortgage
loan originator.
Appendix—Examples of Mortgage Loan
Originators
As an aid in the understanding, and
to provide examples of the definition of
mortgage loan originator, the proposed
rule includes an Appendix that provides
examples of the type of activities that
would cause an employee to fall within
or outside the definition of mortgage
loan originator. The examples in this
Appendix are not all inclusive; they
illustrate only the issue described and
do not illustrate any other issues that
may arise in this proposal. The Agencies
request comment on whether the
examples are helpful, and if other
examples should be added to this
Appendix or provided to the public by
other means.
The Agencies also request comment
on whether there are mortgage loans for
which there may be no mortgage loan
originator. Are there situations where a
consumer applies for and is offered a
loan through an automated process
(such as a prescreened offer extended to
a consumer as part of a mass mailing or
an automated loan approval in response
to an online application) without
contact with a mortgage loan originator?
To the extent there are such situations,
please describe the contact and
communication that a consumer would
have with the institution and its
employees. The Agencies also seek
comment on: (1) The activities
conducted by employees with respect to
mortgage loan pre-approval; and (2) the
typical duties of fulfillment staff that do
not involve mortgage loan origination
activities.
IV. Request for Comments
The Agencies encourage comment on
any aspect of this proposal and
especially on those issues specifically
noted in this preamble.
Agency-regulated institutions are
encouraged to identify how many of
their employees would qualify as
residential mortgage loan originators
under this definition, and therefore,
would be required to register under this
proposed rule. Please provide specific
information on the number of
employees engaged in mortgage loan
origination, with both actual count and
as a percentage of total employees, and

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the number of full-time equivalents
(FTEs) engaged in this activity as
reported on an institution’s
Consolidated Reports of Condition and
Income (Call reports) or Thrift Financial
Reports, as applicable. It would also be
very helpful for Agency-regulated
institutions to identify the internal
departments to which these employees
are assigned, and whether they are
engaged in activities other than
residential mortgage loan origination.
Specifically, please discuss the
estimated numbers of employees who
act as mortgage loan originators who
work in the mortgage loan function and
those that work in divisions outside of
the mortgage loan origination function.
Please also describe any activities
related to mortgage loan origination in
which the staff outside the mortgage
loan function engages. Please describe
whether fulfillment staff or other
employees who are not loan officers act
as mortgage loan originators, and the
estimated numbers of such employees
that the institution would need to
register under the proposed rule. This
information will enable the Agencies to
estimate the number of employees who
will seek registration for purposes of
evaluating system administration needs
and determining if the proposed 180day implementation period is adequate
to allow for initial registration. This
information will also assist the Agencies
in preparing final analyses of the impact
of these registrations under the
Regulatory Flexibility Act, Paperwork
Reduction Act, Executive Order 12866,
and the Unfunded Mandates Reform Act
of 1995, as applicable.
Solicitation of Comments on Use of
Plain Language
Section 722 of the Gramm-LeachBliley Act, Public Law 106–102, sec.
722, 113 Stat. 1338, 1471 (Nov. 12,
1999), requires the Federal banking
agencies to use plain language in all
proposed and final rules published after
January 1, 2000. The Agencies invite
your comments on how to make this
proposal easier to understand. For
example:
• Have we organized the material to
suit your needs? If not, how could this
material be better organized?
• Are the requirements in the
proposed regulation clearly stated? If
not, how could the regulation be more
clearly stated?
• Does the proposed regulation
contain language or jargon that is not
clear? If so, which language requires
clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulation

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easier to understand? If so, what
changes to the format would make the
regulation easier to understand?
• What else could we do to make the
regulation easier to understand?
Regulatory Analysis
A. Regulatory Flexibility Act
OCC: Pursuant to § 605(b) of the
Regulatory Flexibility Act, 5 U.S.C.
605(b) (RFA), the regulatory flexibility
analysis otherwise required under § 604
of the RFA is not required if the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities and
publishes its certification and a short,
explanatory statement in the Federal
Register along with its rule.
We have estimated that this proposal
will not have a significant economic
impact on a substantial number of small
entities. Specifically, we estimate that
653 small national banks are likely to be
impacted by the NPRM, with an average
total compliance cost per bank
estimated at $18,800. We base this
analysis using the impact of the
proposed rule on compliance costs as a
percent of labor costs, as well as
compliance costs as a percent of
noninterest expenses. Therefore,
pursuant to § 605(b) of the RFA, the
OCC hereby certifies that this proposal
will not have a significant economic
impact on a substantial number of small
entities. Accordingly, a regulatory
flexibility analysis is not needed.
Board: Pursuant to § 605(b) of the
Regulatory Flexibility Act, 5 U.S.C.
605(b) (RFA), the regulatory flexibility
analysis otherwise required under § 603
of the RFA is not required if the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities and
publishes its certification and a short,
explanatory statement in the Federal
Register along with its rule.
The proposed rule applies to all banks
that are members of the Federal Reserve
System (other than national banks) and
certain of their respective subsidiaries,
branches and Agencies of foreign banks
(other than Federal branches, Federal
agencies, and insured State branches of
foreign banks), and commercial lending
companies owned or controlled by
foreign banks. Under regulations issued
by the Small Business Administration,25
a small entity includes banking
organizations with assets of $175
million or less (a small banking
organization). As of December 31, 2008,
there were approximately 501 of the
institutions listed above that are small
25 See

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banking organizations. The Board
believes that there is no significant
economic impact. Compliance costs are
estimated to be less than 4% of profits
for state member banks. For the other
small banking organizations, the Board
believes these entities would fall below
the de miminis exceptions in Section
ll.101(c)(2) of the proposed rule since
originating residential mortgages is not
part of their primary business. The
agencies proposed the de minimis
exception in an effort to reduce
compliance costs on small businesses.
Therefore, pursuant to § 605(b) of the
RFA, the Board hereby certifies that this
proposal will not have a significant
economic impact on a substantial
number of small entities. Accordingly, a
regulatory flexibility analysis is not
needed.
FDIC: In accordance with the
Regulatory Flexibility Act, 5 U.S.C. 601–
612 (RFA), an agency must publish an
initial regulatory flexibility analysis
with its proposed rule, unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities
(defined for purposes of the RFA to
include banks with less than $175
million in assets). The FDIC hereby
certifies that the proposed rule would
not have a significant economic impact
on a substantial number of small
entities.
Approximately 3,274 FDIC-supervised
banks are small entities. However, the
proposed rule would not apply to
approximately 2,430 of those small
entities because they originate 25 or
fewer residential mortgage loans
annually and therefore would qualify
for the de minimis exception. Only
approximately 844 small entities
supervised by the FDIC—about 26% of
FDIC-supervised small entities—would
be subject to the requirements of the
proposed rule. For those 844 small
entities, the estimated initial costs for
complying with the proposed rule
would represent, on average,
approximately 0.7% of total non-interest
expenses, and the annual compliance
costs would represent, on average,
approximately 0.3% of total non-interest
expenses.
OTS: Pursuant to § 605(b) of the
Regulatory Flexibility Act, 5 U.S.C.
605(b) (RFA), the regulatory flexibility
analysis otherwise required under § 604
of the RFA is not required if the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities and
publishes its certification and a short,
explanatory statement in the Federal
Register along with its rule.

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We have estimated that this proposal
will not have a significant economic
impact on a substantial number of small
entities. Specifically, we estimate that
385 small savings associations are likely
to be impacted by the NPRM, with an
average total compliance cost per
savings association estimated at
$13,311. Therefore, pursuant to § 605(b)
of the RFA, the OTS hereby certifies that
this proposal will not have a significant
economic impact on a substantial
number of small entities. Accordingly, a
regulatory flexibility analysis is not
needed.
FCA: Pursuant to section 605(b) of the
Regulatory Flexibility Act, 5 U.S.C. 601
et seq., FCA hereby certifies that the
proposed rule will not have a significant
economic impact on a substantial
number of small entities. Each of the
banks in the Farm Credit System,
considered together with its affiliated
associations, has assets and annual
income in excess of the amounts that
would qualify them as small entities.
Therefore, System institutions are not
‘‘small entities’’ as defined in the
Regulatory Flexibility Act.
NCUA: In accordance with the
Regulatory Flexibility Act, 5 U.S.C. 601–
612 (RFA), an agency must publish an
initial regulatory flexibility analysis
with its proposed rule, unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities
(defined for purposes of the RFA to
include federally insured credit unions
with less than $10 million in assets).
NCUA hereby certifies that the proposed
rule would not have a significant
economic impact on a substantial
number of small entities.
Approximately 3,231 federally
insured credit unions are small entities.
However, the proposed rule would not
apply to approximately 3,190 of those
small entities because they originate 25
or fewer residential mortgage loans
annually and therefore would qualify
for the de minimis exception. Only
approximately 41 small federally
insured credit unions, about 1.3% of
small entities, would be subject to the
requirements of the proposed rule.
B. Paperwork Reduction Act
Request for Comment on Proposed
Information Collection
In accordance with section 3512 of
the Paperwork Reduction Act of 1995,
44 U.S.C. 3501–3521 (‘‘PRA’’), the
Federal banking agencies may not
conduct or sponsor, and the respondent
is not required to respond to, an
information collection unless it displays
a currently valid Office of Management

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and Budget (‘‘OMB’’) control number.
The information collection requirements
contained in this joint notice of
proposed rulemaking have been
submitted by the OCC, FDIC, OTS, and
NCUA to OMB for review and approval
under section 3506 of the PRA and
§ 1320.11 of OMB’s implementing
regulations (5 CFR part 1320). The FCA
collects information from Farm Credit
System institutions, which are Federal
instrumentalities, in the FCA’s capacity
as their safety and soundness regulator,
and, therefore, OMB approval is not
required for this collection. The Board
reviewed the proposed rule under the
authority delegated to the Board by the
Office of Management and Budget. The
proposed rule contains requirements
subject to the PRA. The requirements
are found in 12 CFR ll.103(a)–(b),
(d)–(e), ll.104, and ll.105.
Comments are invited on:
(a) Whether the collection of
information is necessary for the proper
performance of the Federal banking
agencies’ functions, including whether
the information has practical utility;
(b) The accuracy of the estimates of
the burden of the information
collection, including the validity of the
methodology and assumptions used;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected;
(d) Ways to minimize the burden of
the information collection on
respondents, including through the use
of automated collection techniques or
other forms of information technology;
and
(e) Estimates of capital or startup costs
and costs of operation, maintenance,
and purchase of services to provide
information.
NCUA: Request for comments related
to the number of respondents who are
mortgage loan originators—Some
federally insured credit unions use a
credit committee comprised of unpaid
volunteers to make lending decisions,
including decisions on mortgage loans
to members. NCUA requests comments
on whether these credit committee
members who work for a credit union in
an unpaid capacity and approve
mortgage loans must register. In
addition, NCUA requests comments on
whether only some of these credit
committee members must register, and
if so, which ones and why.
All comments will become a matter of
public record. Comments should be
addressed to:
OCC: Communications Division,
Office of the Comptroller of the
Currency, Public Information Room,
Mailstop 1–5, Attention: 1557–AD23,
250 E Street, SW., Washington, DC

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20219. In addition, comments may be
sent by fax to (202) 874–5274, or by
electronic mail to
regs.comments@occ.treas.gov. You can
inspect and photocopy comments at the
OCC, 250 E Street, SW., Washington, DC
20219. For security reasons, the OCC
requires that visitors make an
appointment to inspect comments. You
may do so by calling (202) 874–4700.
Upon arrival, visitors will be required to
present valid government-issued photo
identification and submit to security
screening in order to inspect and
photocopy comments.
Board: You may submit comments,
identified by Docket No. R–1357, by any
of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments
on the http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• FAX: 202–452–3819 or 202–452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551. All public comments are
available from the Board’s Web site at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons. Accordingly, your comments
will not be edited to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper in Room MP–
500 of the Board’s Martin Building (20th
and C Streets, NW.) between 9 a.m. and
5 p.m. on weekdays.
FDIC: You may submit written
comments, identified by the RIN, by any
of the following methods:
• Agency Web Site: http://
www.fdic.gov/regulations/laws/federal/
propose.html. Follow the instructions
for submitting comments on the FDIC
Web site.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail: Comments@FDIC.gov.
Include RIN 3064–AD43 on the subject
line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, FDIC,
550 17th Street, NW., Washington, DC
20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street

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Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
Instructions: All comments received
will be posted generally without change
to http://www.fdic.gov/regulations/laws/
federal/propose/html including any
personal information provided.
OTS: Information Collection
Comments, Chief Counsel’s Office,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552;
send a facsimile transmission to (202)
906–6518; or send an e-mail to
infocollection.comments@ots.treas.gov.
OTS will post comments and the related
index on the OTS Internet site at http://
www.ots.treas.gov. In addition,
interested persons may inspect the
comments at the Public Reading Room,
1700 G Street, NW., by appointment. To
make an appointment, call (202) 906–
5922, send an e-mail to
public.info@ots.treas.gov, or send a
facsimile transmission to (202) 906–
7755.
NCUA: You may submit comments by
any of the following methods (Please
send comments by one method only):
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: http://
www.ncua.gov/
RegulationsOpinionsLaws/
proposedregs/proposedregs.html.
Follow the instructions for submitting
comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on Notice of Proposed
Rulemaking Part 761 Registration of
Mortgage Loan Originators’’ in the email subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Jeryl Fish, Deputy
Chief Information Officer, National
Credit Union Administration, 1775
Duke Street, Alexandria, VA 22314–
3428.
• Hand Delivery/Courier: Same as
mail address. Additionally, you should
send a copy of your comments to the
OMB Desk Officer for the Federal
banking agencies, by mail to U.S. Office
of Management and Budget, 725 17th
Street, NW., 10235, Washington, DC
20503, or by fax to (202) 395–6974.
Proposed Information Collection
Title of Information Collection:
Registration of Mortgage Loan
Originators.
Frequency of Response: On occasion;
Annual.
Affected Public:
OCC: National banks, Federal
branches and agencies of foreign banks,

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their operating subsidiaries, and
employees who are loan originators.
Board: Member banks of the Federal
Reserve System (other than national
banks), their respective subsidiaries that
are not functionally regulated within the
meaning of section 5(c)(5) of the Bank
Holding Company Act; and branches
and agencies of foreign banks (other
than Federal branches, Federal agencies
and insured State branches of foreign
banks) and commercial lending
companies owned or controlled by
foreign banks and their employees who
act as mortgage loan originators.
FDIC: State nonmember banks
(including State-licensed insured
branches of foreign banks) and their
subsidiaries (except brokers, dealers,
persons providing insurance,
investment companies, and investment
advisers) and their employees who are
mortgage loan originators.
OTS: Savings associations and their
operating subsidiaries, and their
employees who are mortgage loan
originators.
NCUA: Federally chartered credit
unions and their employees who are
mortgage loan originators.
Abstract:
Unless the de minimis exception or a
different implementation period
applies, §__.103(a) would require an
employee of a depository institution
who engages in the business of a
mortgage loan originator (MLO) to
register with the Registry, maintain such
registration, and obtain an unique
identifier. Under §__.103(b), a
depository institution would require
each such registration to be renewed
annually and updated within 30 days of
the occurrence of specified events.
Section __.103(d) describes the
categories of information that an
employee, or the employing depository
institution on the employee’s behalf,
must submit to the Registry, with the
employee’s attestation as to the
correctness of the information supplied,
and his/her authorization to obtain
further information. Section __.103(e)
specifies institution and employee
information that a depository institution
would submit to the Registry in
connection with the initial registration
of one or more MLOs, and thereafter to
update. Section __.104 would require
that an agency-regulated institution
employing MLOs adopt and follow
written policies and procedures, at a
minimum addressing certain specified
areas, but otherwise appropriate to the
nature, size and complexity of their
mortgage lending activities. Section
__.105 would require a depository
institution to make the unique
identifier(s) of its registered MLO(s)

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available to consumers in a manner and
method practicable to the institution. It
would also require a registered MLO to
provide his or her unique identifier to
a consumer upon request, before acting
as a MLO, and through the originator’s
initial written communication with a
consumer, if any.
Estimated Burden:
OCC
Number of Bank Respondents: 1,771
(1,464 national banks; 307 operating
subsidiaries).
Burden per Bank for Initial Set up:
351 hours (220 hours to implement
policies and procedures and establish
tracking and compliance systems; 131
hours to establish reporting, filing, and
information dissemination systems).
Total Bank Burden for Initial Set up:
621,621.
Number of MLO Employees for Initial
Set up: 117,772.
Burden per MLO Employee for Initial
Set up: 3.50 hours (2.50 hours to
provide information to Registry, and 1
hour to provide Unique Identifier to a
consumer, upon request and at initial
contact).
Total Burden for MLO Employees for
Initial Set up: 412,202 hours.
Number of MLO Employees for
Registration Update: 58,886.
Burden per MLO Employee for
Registration Update: 0.25 hours.
Total Burden for MLO Employees for
Registration Update: 14,721.5 hours.
Total OCC Annual Burden:
1,048,544.5 hours.
Board
Number of Bank Respondents: 2,382.
Burden per Bank for Initial Set up:
351 hours (220 hours to implement
policies and procedures and establish
tracking and compliance systems; 131
hours to establish reporting, filing, and
information dissemination systems).
Total Bank Burden for Initial Set up:
836,082 hours.
Number of MLO Employees for Initial
Set up: 27,000.
Burden per MLO Employee for Initial
Set up: 3.50 hours (2.50 hours to
provide information to Registry, and 1
hour to provide Unique Identifier to a
consumer).
Total Burden for MLO Employees for
Initial Set up: 94,500 hours.
Number of MLO Employees for
Registration Update: 13,500.
Burden per MLO Employee for
Registration Update: 0.25 hours.
Total Burden for MLO Employees for
Registration Update: 3,375 hours.
Total Board Annual Burden: 933,957
hours.

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FDIC
Number of Bank Respondents: 5,371.
Burden per Bank for Initial Set up:
351 hours (220 hours to implement
policies and procedures and establish
tracking and compliance systems; 131
hours to establish reporting, filing, and
information dissemination systems).
Total Bank Burden for Initial Set up:
1,885,221 hours.
Number of MLO Employees for Initial
Set up: 49,719.
Burden per MLO Employee for Initial
Set up: 3.50 hours (2.50 hours to
provide information to Registry, and 1
hour to provide Unique Identifier to a
consumer, upon request and at initial
contact).
Total Burden for MLO Employees for
Initial Set up: 174,016.5 hours.
Number of MLO Employees for
Registration Update: 24,860.
Burden per MLO Employee for
Registration Update: 0.25 hours.
Total Burden for MLO Employees for
Registration Update: 6,215 hours.
Total FDIC Annual Burden:
2,065,452.5 hours.
OTS
Number of Savings Association
Respondents: 1,022 (802 savings
associations; 220 operating
subsidiaries).
Burden per Savings Association for
Initial Set up: 351 hours (220 hours to
implement policies and procedures and
establish tracking and compliance
systems; 131 hours to establish
reporting, filing, and information
dissemination systems).
Total Savings Association Burden for
Initial Set up: 358,722.
Number of MLO Employees for Initial
Set up: 48,958.
Burden per MLO Employee for Initial
Set up: 3.50 hours (2.50 hours to
provide information to Registry, and 1
hour to provide Unique Identifier to a
consumer, upon request and at initial
contact).
Total Burden for MLO Employees for
Initial Set up: 171,353 hours.
Number of MLO Employees for
Registration Update: 24,479.
Burden per MLO Employee for
Registration Update: 0.25 hours.
Total Burden for MLO Employees for
Registration Update: 6,120 hours.
Total OTS Annual Burden: 536,195
hours.
NCUA
Number of Credit Union Respondents:
2,834 credit unions.
Burden per Credit Union for Initial
Set up: 351 hours (220 hours to
implement policies and procedures and

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establish tracking and compliance
systems; 131 hours to establish
reporting, filing, and information
dissemination systems).
Total Credit Union Burden for Initial
Set up: 994,734 hours.
Number of MLO Employees for Initial
Set up: 23,539.
Burden per MLO Employee for Initial
Set up: 3.50 hours (2.25 hours to
provide information to Registry, and 1
hour to provide Unique Identifier to a
consumer, upon request and at initial
contact).
Total Burden for MLO Employees for
Initial Set up: 82,386.5 hours.
Number of MLO Employees for
Registration Update: 11,770.
Burden per MLO Employee for
Registration Update: 0.25 hours.
Total Burden for MLO Employees for
Registration Update: 2,942.50 hours.
Total NCUA Annual Burden:
1,080,063 hours.
C. OCC AND OTS Executive Order
12866 Determination
The OCC and the OTS have
determined that this proposal is not a
significant regulatory action under
Executive Order 12866. We have
concluded that the changes made by
this rule will not have an annual effect
on the economy of $100 million or
more. The OCC and the OTS further
conclude that this proposal does not
meet any of the other standards for a
significant regulatory action set forth in
Executive Order 12866.
D. OCC and OTS Unfunded Mandates
Reform Act of 1995 Determination
Section 202 of the Unfunded
Mandates Reform Act of 1995 (2 U.S.C.
1532), requires the OCC and OTS to
prepare a budgetary impact statement
before promulgating a rule that includes
a Federal mandate that may result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year. However, this
requirement does not apply to
regulations that incorporate
requirements specifically set forth in
law. Because this proposed rule
implements the S.A.F.E. Act, the OTS
and OCC have not conducted an
Unfunded Mandates Analysis for this
rulemaking.
E. NCUA Executive Order 13132
Determination
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles, the
NCUA, an independent regulatory

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agency as defined in 44 U.S.C. 3502(5)
voluntarily complies with the Executive
Order. The proposed rule applies to
federally insured credit unions and
would not have substantial direct effects
on the states, on the connection between
the national government and the states,
or on the distribution of power and
responsibilities among the various
levels of government. The NCUA has
determined that the proposed rule does
not constitute a policy that has
federalism implications for purposes of
the Executive Order.
F. NCUA: The Treasury and General
Government Appropriations Act, 1999—
Assessment of Federal Regulations and
Policies on Families
The NCUA has determined that this
proposed rule would not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act, 1999,
Public Law 105–277, 112 Stat. 2681
(1998).
List of Subjects
12 CFR Part 34
Mortgages, National banks, Reporting
and recordkeeping requirements.
12 CFR Part 208
Accounting, Agriculture, Banks,
Banking, Confidential business
information, Consumer protection,
Crime, Currency, Insurance,
Investments, Mortgages, Reporting and
recordkeeping requirements, Securities.
12 CFR Part 365
Banks, Banking, Mortgages.
12 CFR Part 563
Accounting, Administrative practice
and procedure, Advertising, Conflict of
interests, Crime, Currency, Holding
companies, Investments, Mortgages,
Reporting and recordkeeping
requirements, Savings associations,
Securities, Surety bonds.
12 CFR Part 610
Banks, Banking, Consumer protection,
Loan programs—housing and
community development, Mortgages,
Reporting and recordkeeping
requirements, Rural areas.
12 CFR Part 761
Credit unions, Mortgages, Reporting
and recordkeeping requirements.

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Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set forth in the
preamble, chapter I of title 12 of the
Code of Federal Regulations is proposed
to be amended as follows:
PART 34—REAL ESTATE LENDING
AND APPRAISALS
1. The authority citation for part 34 is
revised to read as follows:
Authority: 12 U.S.C. 1 et seq., 29, 93a, 371,
1701j-3, 1828(o), 3331 et seq., and 5101 et
seq.

2. Add Subpart F to part 34 to read
as follows:
Subpart F—Registration of Residential
Mortgage Loan Originators
Sec.
34.101 Authority, purpose, and scope.
34.102 Definitions.
34.103 Registration of mortgage loan
originators.
34.104 Policies and procedures.
34.105 Use of unique identifier.
Appendix A to Subpart F of Part 34—
Examples of Mortgage Loan Originator
Activities

Subpart F—Registration of Residential
Mortgage Loan Originators
§ 34.101

Authority, purpose, and scope.

(a) Authority. This subpart is issued
pursuant to the Secure and Fair
Enforcement for Mortgage Licensing Act
of 2008, title V of the Housing and
Economic Recovery Act of 2008
(S.A.F.E. Act) (Pub. L. 110–289, 122
Stat. 2654, 12 U.S.C. 5101 et seq.).
(b) Purpose. This subpart implements
the S.A.F.E. Act’s Federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of mortgage
loan originators; enhancing consumer
protections; reducing fraud in the
residential mortgage loan origination
process; and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.
(c) Scope—(1) In general. This subpart
applies to national banks, Federal
branches and agencies of foreign banks,
their operating subsidiaries (collectively
referred to in this subpart as national
banks), and their employees who act as
mortgage loan originators.

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(2) Exception. (i) This subpart and the
requirements of sections 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply
to any employee of a national bank if
during the past 12 months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The national bank employs
mortgage loan originators who, while
excepted from registration pursuant to
paragraph (c)(2)(i)(A) of this section, in
the aggregate, acted as a mortgage loan
originator in connection with 25 or
fewer residential mortgage loans.
(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, a national bank
employee must register with the
Registry pursuant to this subpart.
§ 34.102

Definitions.

For purposes of this subpart F, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 3
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable State law,
unless the individual is compensated by
a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a consumer to
3 The Appendix to this subpart provides
examples of activities that would, and would not,
cause an employee to fall within this section’s
definition of mortgage loan originator.

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obtain information necessary for the
processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act.
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is an employee of a
national bank; and
(2) Is registered pursuant to this
subpart with, and maintains a unique
identifier through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act, 15
U.S.C. 1602(v)) or residential real estate
upon which is constructed or intended
to be constructed a dwelling, and
includes refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
that meet the qualifications listed in this
definition.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those set forth under the
S.A.F.E. Act.
§ 34.103 Registration of mortgage loan
originators.

(a) Registration requirement—(1)
Employee registration. Each employee of
a national bank who acts as a mortgage
loan originator must register with the
Registry, obtain a unique identifier, and
maintain this registration in accordance
with the requirements of this subpart.
Any such employee who is not in
compliance with the registration and

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unique identifier requirements set forth
in this subpart is in violation of the
S.A.F.E. Act and this subpart.
(2) National bank requirement—(i) In
general. A national bank that employs
one or more individuals who act as a
residential mortgage loan originator
must require each employee who is a
mortgage loan originator to register with
the Registry, maintain this registration,
and obtain a unique identifier in
accordance with the requirements of
this subpart.
(ii) Prohibition. A national bank must
not permit an employee of the bank who
is subject to the registration
requirements of this subpart to act as a
mortgage loan originator unless such
employee is registered with the Registry
pursuant to this subpart.
(3) Implementation period for initial
registration. An employee of a national
bank who is a mortgage loan originator
must complete an initial registration
with the Registry pursuant to this
subpart within 180 days from the date
that the OCC provides public notice that
the Registry is accepting registrations.
(4) Employees previously registered or
licensed through the Registry—(i) In
general. If an employee of a national
bank was registered or licensed through,
and obtained a unique identifier from,
the Registry prior to becoming an
employee of the bank and has
maintained this registration or license,
the registration requirements of the
S.A.F.E. Act and this subpart are
deemed to be met, provided that:
(A) The employment information in
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
this section is updated and the
requirements of paragraph (d)(2) of this
section are met;
(B) New fingerprints of the employee
are submitted to the Registry for a
background check, as required by
paragraph (d)(1)(xii) of this section;
(C) The national bank information
required in paragraphs (e)(1)(i) (to the
extent the bank has not previously met
these requirements) and (e)(2)(i) of this
section is submitted to the Registry; and
(D) The registration is maintained
pursuant to paragraphs (b) and (e)(1)(ii)
of this section, as of the date that the
employee is employed by the bank.
(ii) Implementation period for certain
acquisitions, mergers or reorganizations.
When registered or licensed mortgage
loan originators become national bank
employees as a result of an acquisition,
merger or reorganization transaction, the
bank and employees must comply with
the requirements of paragraphs
(a)(4)(i)(A), (C), and (D) of this section
within 60 days from the effective date
of the acquisition, merger, or
reorganization.

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(b) Maintaining registration. (1) A
mortgage loan originator who is
registered with the Registry pursuant to
paragraph (a) of this section must:
(i) Renew the registration during the
annual renewal period, confirming the
responses set forth in paragraphs
(d)(1)(i) through (xi) of this section
remain accurate and complete, and
updating this information, as
appropriate; and
(ii) Update the registration within 30
days of any of the following events:
(A) A change in the name of the
registrant;
(B) The registrant ceases to be an
employee of the national bank; or
(C) The information required under
paragraphs (d)(1)(iii) through (xi) of this
section becomes inaccurate, incomplete,
or out-of-date.
(2) A registered mortgage loan
originator must maintain his or her
registration, notwithstanding the
originator’s subsequent qualification for
the exception set forth in § 34.101(c)(2),
unless the individual is no longer
engaged in the activity of a mortgage
loan originator.
(c) Effective dates—(1) Initial
registration. An initial registration
pursuant to paragraph (a) of this section
is effective on the date the registrant
receives notification from the Registry
that all information required by
paragraphs (d) and (e) of this section has
been submitted and the registration is
complete.
(2) Renewals or updates. A renewal or
update pursuant to paragraph (b) of this
section is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) of
this section has been submitted and the
renewal or update is complete.
(d) Required employee information—
(1) In general. For purposes of the
registration required by this section, a
national bank must require each
employee who is a mortgage loan
originator to submit to the Registry, or
must submit on behalf of the employee,
the following categories of information
to the extent this information is
collected by the Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years
prior to the date of registration or

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renewal, including the date the
employee became an employee of the
bank;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or
unsatisfied judgments or liens against
the employee;
(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a State or
Federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a
financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a State or
Federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an
attorney, accountant, or State or Federal
contractor;

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(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;
(xi) Any pending actions against the
employee that could result in an action
listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing institution less than three
years prior to registration and any
appropriate identifying information for
submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
State and national criminal history
background check.
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this subpart
must:
(i) Authorize the Registry and the
employing institution to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing bank; and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv)–(ix) and (xi) of this
section.
(e) Required bank information. A
national bank must submit the following
information to the Registry.
(1) Bank record. (i) In connection with
the initial registration of one or more
mortgage loan originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board of Governors of the Federal
Reserve System;
(D) Identification of its primary
Federal regulator;
(E) Name(s) and contact information
of the individual(s) with authority to act
as the bank’s primary point of contact
for the Registry;

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(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
bank employees, provided this
individual and any delegated employee
does not act as a mortgage loan
originator; and
(G) If a subsidiary of a national bank,
indication that it is a subsidiary and the
name of its parent bank.
(ii) A national bank must update the
information required by this paragraph
(e) within 30 days of the date that this
information becomes inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be an employee of
the bank, notification that it no longer
employs the registrant and the date the
registrant ceased being an employee.
§ 34.104

Policies and procedures.

A national bank that employs
mortgage loan originators must adopt
and follow written policies and
procedures designed to assure
compliance with this subpart. These
policies and procedures must be
appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the bank. At a
minimum, these policies and
procedures must:
(a) Establish a process for identifying
which employees of the bank are
required to be registered mortgage loan
originators;
(b) Require that all employees of the
national bank who are mortgage loan
originators be informed of the
registration requirements of the S.A.F.E.
Act and this subpart and be instructed
on how to comply with such
requirements and procedures;
(c) Establish procedures to comply
with the unique identifier requirements
in § 34.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this subpart to be
conducted by bank personnel or by an
outside party;

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(g) Provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
subpart, or the bank’s related policies
and procedures, including prohibiting
such employees from acting as mortgage
loan originators or other appropriate
disciplinary actions; and
(h) Establish a process for reviewing
employee criminal history background
reports received from the Registry in
connection with § 34.103(d)(1)(xii),
taking appropriate action consistent
with applicable law and rules with
respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 34.105

Use of unique identifier.

(a) The national bank shall make the
unique identifier(s) of its registered
mortgage loan originator(s) available to
consumers in a manner and method
practicable to the institution.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a
consumer, if any.
Appendix A to Subpart F of Part 34—
Examples of Mortgage Loan Originator
Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause an employee of a national bank to fall
within or outside the definition of mortgage
loan originator. The examples in this
Appendix are not all inclusive. They
illustrate only the issue described and do not
illustrate any other issues that may arise
under this subpart. For the purposes of the
examples below, the term ‘‘loan’’ refers to a
residential mortgage loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes or does not take, a loan
application.
(1) Taking an application includes:
Receiving information that is sufficient to
determine whether the consumer qualifies for
a loan, even if the employee has had no
contact with the consumer and is not
responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a consumer to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a consumer who is filling out
an application by clarifying what type of

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information is necessary for the application
or otherwise explaining the loan application
process in response to consumer inquiries.
(b) Offering or negotiating terms of a loan:
The following examples are designed to
illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:
(i) Presenting a loan offer to a consumer for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a consumer’s request for
a lower rate or lower points on a pending
loan application by presenting to the
consumer a revised loan offer, either verbally
or in writing, that includes a lower interest
rate or lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to consumer queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the national
bank);
(ii) In response to a consumer’s request,
informing a consumer of the loan rates that
are publicly available such as on the national
bank’s Web site for specific types of loan
products without communicating to the
consumer whether qualifications are met for
that loan product;
(iii) Collecting information about a
consumer in order to provide the consumer
with information on loan products for which
the consumer generally may qualify, without
presenting a specific loan offer to the
consumer for acceptance, either verbally or
in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a consumer about those
arrangements, provided that communication
with the consumer only verifies loan terms
already offered or negotiated; or
(v) Providing a consumer with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the bank.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain.’’
(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out
employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the national bank.

Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the
preamble, chapter II of title 12 of the

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Code of Federal Regulations is proposed
to be amended as follows:
PART 208—MEMBERSHIP OF STATE
BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
(REGULATION H)
1. The authority citation for part 208
is revised to read as follows:
Authority: 12 U.S.C. 24, 36, 92a, 93a,
248(a), 248(c), 321–338a, 371d, 461, 481–486,
601, 611, 1814, 1816, 1820(d)(9), 1823(j),
1828(o), 1831, 1831o, 1831p–1, 1831r–1,
1831w, 1831x, 1835a, 1882, 2901–2907,
3105, 3106a(b)(1), 3108(a), 3310, 3331–3351,
and 3906–3909, 5101 et seq., 15 U.S.C. 78b,
78l(b), 78l(g), 78l(i), 780–4(c)(5), 78q, 78q–1,
78w, 1681s, 1681w, 6801 and 6805; 31 U.S.C.
5318, 42 U.S.C. 4012a, 4104a, 4104b, 4106,
and 4128.

2. Subpart I, consisting of §§ 208.100
and 208.101, is redesignated as Subpart
J, consisting of §§ 208.110 and 208.111.
3. New subpart I is added to read as
follows:
Subpart I—Registration of Residential
Mortgage Loan Originators
Sec.
208.101 Authority, purpose, and scope.
208.102 Definitions.
208.103 Registration of mortgage loan
originators.
208.104 Policies and procedures.
208.105 Use of unique identifier.
Appendix A to Subpart I of Part 208—
Examples of Mortgage Loan Originator
Activities

Subpart I—Registration of Residential
Mortgage Loan Originators
§ 208.101

Authority, purpose, and scope.

(a) Authority. This subpart is issued
by the Board of Governors of the Federal
Reserve System (Board) pursuant to the
Secure and Fair Enforcement for
Mortgage Licensing Act of 2008, title V
of the Housing and Economic Recovery
Act of 2008 (S.A.F.E. Act) (Pub. L. 110–
289, 122 Stat. 2654, 12 U.S.C. 5101 et
seq.), 12 U.S.C. 248(a), 3106a(b)(1), and
3108(a).
(b) Purpose. This subpart implements
the S.A.F.E. Act’s Federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of mortgage
loan originators; enhancing consumer
protections; reducing fraud in the
residential mortgage loan origination
process; and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.

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(c) Scope—(1) In general. This subpart
applies to member banks of the Federal
Reserve System (other than national
banks); their respective subsidiaries that
are not functionally regulated within the
meaning of section 5(c)(5) of the Bank
Holding Company Act, as amended (12
U.S.C. 1844(c)(5)); branches and
agencies of foreign banks (other than
federal branches, Federal agencies and
insured state branches of foreign banks),
and commercial lending companies
owned or controlled by foreign banks
(collectively referred to in this subpart
as banks), and their employees who act
as mortgage loan originators.
(2) Exception. (i) This subpart and the
requirements of sections 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply
to any employee of a bank if during the
past 12 months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The bank employs mortgage loan
originators who, while excepted from
registration pursuant to paragraph
(c)(2)(i)(A) of this section, in the
aggregate, acted as a mortgage loan
originator in connection with 25 or
fewer residential mortgage loans.
(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, a bank employee must
register with the Registry pursuant to
this subpart.
§ 208.102

Definitions.

For purposes of this subpart, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 7
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable State law,
unless the individual is compensated by
7 The Appendix to this subpart provides
examples of activities that would, and would not,
cause an employee to fall within this section’s
definition of mortgage loan originator.

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a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a consumer to
obtain information necessary for the
processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act.
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is an employee of a
bank; and
(2) Is registered pursuant to this
subpart with, and maintains a unique
identifier through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act, 15
U.S.C. 1602(v)) or residential real estate
upon which is constructed or intended
to be constructed a dwelling, and
includes refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
that meet the qualifications listed in this
definition.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated

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disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those set forth under the
S.A.F.E. Act.

(D) The registration is maintained
pursuant to paragraphs (b) and (e)(1)(ii)
of this section, as of the date that the
employee is employed by the bank.
(ii) Implementation period for certain
acquisitions, mergers or reorganizations.
§ 208.103 Registration of mortgage loan
When registered or licensed mortgage
originators.
loan originators become bank employees
(a) Registration requirement—(1)
as a result of an acquisition, merger or
Employee registration. Each employee of reorganization transaction, the bank and
a bank who acts as a mortgage loan
employees must comply with the
originator must register with the
requirements of paragraphs (a)(4)(i)(A),
Registry, obtain a unique identifier, and (C), and (D) of this section within 60
maintain this registration in accordance days from the effective date of the
with the requirements of this subpart.
acquisition, merger, or reorganization.
Any such employee who is not in
(b) Maintaining registration. (1) A
compliance with the registration and
mortgage loan originator who is
unique identifier requirements set forth
registered with the Registry pursuant to
in this subpart is in violation of the
paragraph (a) of this section must:
S.A.F.E. Act and this subpart.
(i) Renew the registration during the
(2) Bank requirement—(i) In general.
annual renewal period, confirming the
A bank that employs one or more
responses set forth in paragraphs
individuals who act as a residential
(d)(1)(i) through (xi) of this section
mortgage loan originator must require
remain accurate and complete, and
each employee who is a mortgage loan
updating this information, as
originator to register with the Registry,
appropriate; and
maintain this registration, and obtain a
(ii) Update the registration within 30
unique identifier in accordance with the days of any of the following events:
requirements of this subpart.
(A) A change in the name of the
(ii) Prohibition. A bank must not
registrant;
permit an employee of the bank who is
(B) The registrant ceases to be an
subject to the registration requirements
employee of the bank; or
of this subpart to act as a mortgage loan
(C) The information required under
originator unless such employee is
paragraphs (d)(1)(iii) through (xi) of this
registered with the Registry pursuant to
section becomes inaccurate, incomplete,
this subpart.
or out-of-date.
(3) Implementation period for initial
(2) A registered mortgage loan
registration. An employee of a bank who originator must maintain his or her
is a mortgage loan originator must
registration, notwithstanding the
complete an initial registration with the originator’s subsequent qualification for
Registry pursuant to this subpart within the exception set forth in
180 days from the date that the Board
§ 208.101(c)(2), unless the individual is
provides public notice that the Registry
no longer engaged in the activity of a
is accepting registrations.
mortgage loan originator.
(c) Effective dates—(1) Initial
(4) Employees previously registered or
registration. An initial registration
licensed through the Registry—(i) In
pursuant to paragraph (a) of this section
general. If an employee of a bank was
is effective on the date the registrant
registered or licensed through, and
receives notification from the Registry
obtained a unique identifier from, the
Registry prior to becoming an employee that all information required by
paragraphs (d) and (e) of this section has
of the bank and has maintained this
been submitted and the registration is
registration or license, the registration
complete.
requirements of the S.A.F.E. Act and
(2) Renewals or updates. A renewal or
this subpart are deemed to be met,
update pursuant to paragraph (b) of this
provided that:
section is effective on the date the
(A) The employment information in
registrant receives notification from the
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
Registry that all applicable information
this section is updated and the
required by paragraphs (b) and (e) of
requirements of paragraph (d)(2) of this
this section has been submitted and the
section are met;
(B) New fingerprints of the employee
renewal or update is complete.
(d) Required employee information—
are submitted to the Registry for a
(1) In general. For purposes of the
background check, as required by
registration required by this section, a
paragraph (d)(1)(xii) of this section;
bank must require each employee who
(C) The bank information required in
is a mortgage loan originator to submit
paragraphs (e)(1)(i) (to the extent the
to the Registry, or must submit on behalf
bank has not previously met these
of the employee, the following
requirements) and (e)(2)(i) of this
section is submitted to the Registry; and categories of information to the extent

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules
this information is collected by the
Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years
prior to the date of registration or
renewal, including the date the
employee became an employee of the
bank;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or
unsatisfied judgments or liens against
the employee;
(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a State or
Federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a

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financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a State or
Federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an
attorney, accountant, or State or Federal
contractor;
(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;
(xi) Any pending actions against the
employee that could result in an action
listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing institution less than three
years prior to registration and any
appropriate identifying information for
submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
State and national criminal history
background check.
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this subpart
must:
(i) Authorize the Registry and the
employing institution to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing bank; and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv)–(ix) and (xi) of this
section.
(e) Required bank information. A
bank must submit the following
information to the Registry.

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(1) Bank record. (i) In connection with
the initial registration of one or more
mortgage loan originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board;
(D) Identification of its primary
Federal regulator;
(E) Name(s) and contact information
of the individual(s) with authority to act
as the bank’s primary point of contact
for the Registry;
(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
bank employees, provided this
individual and any delegated employee
does not act as a mortgage loan
originator; and
(G) If a subsidiary of a bank,
indication that it is a subsidiary and the
name of its parent bank.
(ii) A bank must update the
information required by this paragraph
(e) within 30 days of the date that this
information becomes inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be an employee of
the bank, notification that it no longer
employs the registrant and the date the
registrant ceased being an employee.
§ 208.104

Policies and procedures.

A bank that employs mortgage loan
originators must adopt and follow
written policies and procedures
designed to assure compliance with this
subpart. These policies and procedures
must be appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the bank. At a
minimum, these policies and
procedures must:
(a) Establish a process for identifying
which employees of the bank are
required to be registered mortgage loan
originators;
(b) Require that all employees of the
bank who are mortgage loan originators
be informed of the registration
requirements of the S.A.F.E. Act and
this subpart and be instructed on how
to comply with such requirements and
procedures;

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(c) Establish procedures to comply
with the unique identifier requirements
in § 208.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this subpart to be
conducted by bank personnel or by an
outside party;
(g) Provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
subpart, or the bank’s related policies
and procedures, including prohibiting
such employees from acting as mortgage
loan originators or other appropriate
disciplinary actions; and
(h) Establish a process for reviewing
employee criminal history background
reports received from the Registry in
connection with § 208.103(d)(1)(xii),
taking appropriate action consistent
with applicable law and rules with
respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 208.105

Use of unique identifier.

(a) The bank shall make the unique
identifier(s) of its registered mortgage
loan originator(s) available to consumers
in a manner and method practicable to
the institution.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a
consumer, if any.
Appendix A to Subpart I of Part 208—
Examples of Mortgage Loan Originator
Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause an employee of a bank to fall within
or outside the definition of mortgage loan
originator. The examples in this Appendix
are not all inclusive. They illustrate only the
issue described and do not illustrate any
other issues that may arise under this
subpart. For the purposes of the examples
below, the term ‘‘loan’’ refers to a residential
mortgage loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes, or does not take, a loan
application.

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(1) Taking an application includes:
receiving information that is sufficient to
determine whether the consumer qualifies for
a loan, even if the employee has had no
contact with the consumer and is not
responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a consumer to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a consumer who is filling out
an application by clarifying what type of
information is necessary for the application
or otherwise explaining the loan application
process in response to consumer inquiries.
(b) Offering or negotiating terms of a loan:
The following examples are designed to
illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:
(i) Presenting a loan offer to a consumer for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a consumer’s request for
a lower rate or lower points on a pending
loan application by presenting to the
consumer a revised loan offer, either verbally
or in writing, that includes a lower interest
rate or lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to consumer queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the bank);
(ii) In response to a consumer’s request,
informing a consumer of the loan rates that
are publicly available such as on the bank’s
Web site for specific types of loan products
without communicating to the consumer
whether qualifications are met for that loan
product;
(iii) Collecting information about a
consumer in order to provide the consumer
with information on loan products for which
the consumer generally may qualify, without
presenting a specific loan offer to the
consumer for acceptance, either verbally or
in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a consumer about those
arrangements, provided that communication
with the consumer only verifies loan terms
already offered or negotiated; or
(v) Providing a consumer with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the bank.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain.’’

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(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out
employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the bank.

4. Section 208.111 is amended by
redesignating footnotes 7 and 8 as
footnotes 8 and 9, respectively, and by
revising newly designated footnote 9 to
read as follows:
§ 208.111 Obligations concerning
institutional customers.

*

*

*

*

*

9 See

footnote 8 in paragraph (d) of this
section.

Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the
preamble, the Federal Deposit Insurance
Corporation proposes to amend
subchapter B of chapter III of title 12 of
the Code of Federal Regulations by
amending part 365 as follows:
PART 365—REAL ESTATE LENDING
STANDARDS
1. The authority citation for part 365
is revised to read as follows:
Authority: 12 U.S.C. 1828(o) and 5101 et
seq.

2. Sections 365.1 and 365.2 and
Appendix A are placed under a new
subpart A, and the heading for new
subpart A is added to read as follows:
Subpart A—Real Estate Lending
Standards
§ 365.1

[Amended]

3. Section 365.1 is amended by
removing ‘‘part’’ and adding ‘‘subpart’’
in its place.
4. Appendix A to Part 365 is
redesignated as Appendix A to Subpart
A of Part 365, and the heading is revised
to read as follows:
Appendix A to Subpart A of Part 365—
Interagency Guidelines for Real Estate
Lending Policies
5. New subpart B is added to read as
follows:
Subpart B—Registration of Mortgage Loan
Originators
Sec.
365.101 Authority, purpose, and scope.
365.102 Definitions.
365.103 Registration of mortgage loan
originators.

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365.104 Policies and procedures.
365.105 Use of unique identifier.
Appendix A to Subpart B of Part 365—
Examples of Mortgage Loan Originator
Activities.

Subpart B—Registration of Residential
Mortgage Loan Originators
§ 365.101

Authority, purpose, and scope.

(a) Authority. This subpart is issued
pursuant to the Secure and Fair
Enforcement for Mortgage Licensing Act
of 2008, title V of the Housing and
Economic Recovery Act of 2008
(S.A.F.E. Act) (Pub. L. 110–289, 122
Stat. 2654, 12 U.S.C. 5101 et seq.).
(b) Purpose. This subpart implements
the S.A.F.E. Act’s Federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of mortgage
loan originators; enhancing consumer
protections; reducing fraud in the
residential mortgage loan origination
process; and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.
(c) Scope—(1) In general. This subpart
applies to insured state nonmember
banks (including state-licensed insured
branches of foreign banks) and their
subsidiaries (except brokers, dealers,
persons providing insurance,
investment companies, and investment
advisers) (collectively referred to in this
subpart as insured state nonmember
banks), and their employees who act as
mortgage loan originators.
(2) Exception. (i) This subpart and the
requirements of sections 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply
to any employee of an insured state
nonmember bank if during the past 12
months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The insured state nonmember
bank employs mortgage loan originators
who, while excepted from registration
pursuant to paragraph (c)(2)(i)(A) of this
section, in the aggregate, acted as a
mortgage loan originator in connection
with 25 or fewer residential mortgage
loans.
(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, an insured state
nonmember bank employee must
register with the Registry pursuant to
this subpart.

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§ 365.102

Definitions.

For purposes of this subpart, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 1
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable State law,
unless the individual is compensated by
a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a consumer to
obtain information necessary for the
processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act.
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is an employee of an
insured state nonmember bank; and
1 The Appendix to this subpart provides
examples of activities that would, and would not,
cause an employee to fall within this section’s
definition of mortgage loan originator.

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(2) Is registered pursuant to this
subpart with, and maintains a unique
identifier through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act, 15
U.S.C. 1602(v)) or residential real estate
upon which is constructed or intended
to be constructed a dwelling, and
includes refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
that meet the qualifications listed in this
definition.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those set forth under the
S.A.F.E. Act.
§ 365.103 Registration of mortgage loan
originators.

(a) Registration requirement—(1)
Employee registration. Each employee of
an insured state nonmember bank who
acts as a mortgage loan originator must
register with the Registry, obtain a
unique identifier, and maintain this
registration in accordance with the
requirements of this subpart. Any such
employee who is not in compliance
with the registration and unique
identifier requirements set forth in this
subpart is in violation of the S.A.F.E.
Act and this subpart.
(2) Insured state nonmember bank
requirement—(i) In general. An insured
state nonmember bank that employs one
or more individuals who act as a
residential mortgage loan originator
must require each employee who is a
mortgage loan originator to register with
the Registry, maintain this registration,
and obtain a unique identifier in
accordance with the requirements of
this subpart.
(ii) Prohibition. An insured state
nonmember bank must not permit an
employee of the bank who is subject to
the registration requirements of this
subpart to act as a mortgage loan

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originator unless such employee is
registered with the Registry pursuant to
this subpart.
(3) Implementation period for initial
registration. An employee of an insured
state nonmember bank who is a
mortgage loan originator must complete
an initial registration with the Registry
pursuant to this subpart within 180 days
from the date that the FDIC provides
public notice that the Registry is
accepting registrations.
(4) Employees previously registered or
licensed through the Registry—(i) In
general. If an employee of an insured
state nonmember bank was registered or
licensed through, and obtained a unique
identifier from, the Registry prior to
becoming an employee of the bank and
has maintained this registration or
license, the registration requirements of
the S.A.F.E. Act and this subpart are
deemed to be met, provided that:
(A) The employment information in
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
this section is updated and the
requirements of paragraph (d)(2) of this
section are met;
(B) New fingerprints of the employee
are submitted to the Registry for a
background check, as required by
paragraph (d)(1)(xii) of this section;
(C) The insured state nonmember
bank information required in paragraphs
(e)(1)(i) (to the extent the bank has not
previously met these requirements) and
(e)(2)(i) of this section is submitted to
the Registry; and
(D) The registration is maintained
pursuant to paragraphs (b) and (e)(1)(ii)
of this section, as of the date that the
employee is employed by the bank.
(ii) Implementation period for certain
acquisitions, mergers or reorganizations.
When registered or licensed mortgage
loan originators become insured state
nonmember bank employees as a result
of an acquisition, merger or
reorganization transaction, the bank and
employees must comply with the
requirements of paragraphs (a)(4)(i)(A),
(C), and (D) of this section within 60
days from the effective date of the
acquisition, merger, or reorganization.
(b) Maintaining registration. (1) A
mortgage loan originator who is
registered with the Registry pursuant to
paragraph (a) of this section must:
(i) Renew the registration during the
annual renewal period, confirming the
responses set forth in paragraphs
(d)(1)(i) through (xi) of this section
remain accurate and complete, and
updating this information, as
appropriate; and
(ii) Update the registration within 30
days of any of the following events:
(A) A change in the name of the
registrant;

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(B) The registrant ceases to be an
employee of the insured state
nonmember bank; or
(C) The information required under
paragraphs (d)(1)(iii) through (xi) of this
section becomes inaccurate, incomplete,
or out-of-date.
(2) A registered mortgage loan
originator must maintain his or her
registration, notwithstanding the
originator’s subsequent qualification for
the exception set forth in
§ 365.101(c)(2), unless the individual is
no longer engaged in the activity of a
mortgage loan originator.
(c) Effective dates—(1) Initial
registration. An initial registration
pursuant to paragraph (a) of this section
is effective on the date the registrant
receives notification from the Registry
that all information required by
paragraphs (d) and (e) of this section has
been submitted and the registration is
complete.
(2) Renewals or updates. A renewal or
update pursuant to paragraph (b) of this
section is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) of
this section has been submitted and the
renewal or update is complete.
(d) Required employee information—
(1) In general. For purposes of the
registration required by this section, an
insured state nonmember bank must
require each employee who is a
mortgage loan originator to submit to
the Registry, or must submit on behalf
of the employee, the following
categories of information to the extent
this information is collected by the
Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years
prior to the date of registration or
renewal, including the date the
employee became an employee of the
bank;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or
unsatisfied judgments or liens against
the employee;

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(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a State or
Federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a
financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a State or
Federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an
attorney, accountant, or State or Federal
contractor;
(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;
(xi) Any pending actions against the
employee that could result in an action

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listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing institution less than three
years prior to registration and any
appropriate identifying information for
submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
State and national criminal history
background check.
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this subpart
must:
(i) Authorize the Registry and the
employing institution to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing bank; and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv)–(ix) and (xi) of this
section.
(e) Required bank information. An
insured state nonmember bank must
submit the following information to the
Registry.
(1) Bank record. (i) In connection with
the initial registration of one or more
mortgage loan originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board of Governors of the Federal
Reserve System;
(D) Identification of its primary
Federal regulator;
(E) Name(s) and contact information
of the individual(s) with authority to act
as the bank’s primary point of contact
for the Registry;
(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
bank employees, provided this
individual and any delegated employee
does not act as a mortgage loan
originator; and
(G) If a subsidiary of an insured state
nonmember bank, indication that it is a
subsidiary and the name of its parent
bank.

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(ii) An insured state nonmember bank
must update the information required
by this paragraph (e) within 30 days of
the date that this information becomes
inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be an employee of
the bank, notification that it no longer
employs the registrant and the date the
registrant ceased being an employee.
§ 365.104

Policies and procedures.

An insured state nonmember bank
that employs mortgage loan originators
must adopt and follow written policies
and procedures designed to assure
compliance with this subpart. These
policies and procedures must be
appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the bank. At a
minimum, these policies and
procedures must:
(a) Establish a process for identifying
which employees of the bank are
required to be registered mortgage loan
originators;
(b) Require that all employees of the
insured state nonmember bank who are
mortgage loan originators be informed of
the registration requirements of the
S.A.F.E. Act and this subpart and be
instructed on how to comply with such
requirements and procedures;
(c) Establish procedures to comply
with the unique identifier requirements
in § 365.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this subpart to be
conducted by bank personnel or by an
outside party;
(g) Provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
subpart, or the bank’s related policies
and procedures, including prohibiting
such employees from acting as mortgage
loan originators or other appropriate
disciplinary actions; and
(h) Establish a process for reviewing
employee criminal history background

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reports received from the Registry in
connection with § 365.103(d)(1)(xii),
taking appropriate action consistent
with applicable law and rules with
respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 365.105

Use of unique identifier.

(a) An insured state nonmember bank
shall make the unique identifier(s) of its
registered mortgage loan originator(s)
available to consumers in a manner and
method practicable to the institution.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a
consumer, if any.
Appendix A to Subpart B of Part 365—
Examples of Mortgage Loan Originator
Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause an employee of an insured state
nonmember bank to fall within or outside the
definition of mortgage loan originator. The
examples in this Appendix are not all
inclusive. They illustrate only the issue
described and do not illustrate any other
issues that may arise under this subpart. For
the purposes of the examples below, the term
‘‘loan’’ refers to a residential mortgage loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes or does not take, a loan
application.
(1) Taking an application includes:
Receiving information that is sufficient to
determine whether the consumer qualifies for
a loan, even if the employee has had no
contact with the consumer and is not
responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a consumer to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a consumer who is filling out
an application by clarifying what type of
information is necessary for the application
or otherwise explaining the loan application
process in response to consumer inquiries.
(b) Offering or negotiating terms of a loan:
The following examples are designed to
illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:

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(i) Presenting a loan offer to a consumer for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a consumer’s request for
a lower rate or lower points on a pending
loan application by presenting to the
consumer a revised loan offer, either verbally
or in writing, that includes a lower interest
rate or lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to consumer queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the insured state
nonmember bank);
(ii) In response to a consumer’s request,
informing a consumer of the loan rates that
are publicly available such as on the insured
state nonmember bank’s Web site for specific
types of loan products without
communicating to the consumer whether
qualifications are met for that loan product;
(iii) Collecting information about a
consumer in order to provide the consumer
with information on loan products for which
the consumer generally may qualify, without
presenting a specific loan offer to the
consumer for acceptance, either verbally or
in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a consumer about those
arrangements, provided that communication
with the consumer only verifies loan terms
already offered or negotiated; or
(v) Providing a consumer with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the bank.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain.’’
(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out
employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the insured state nonmember
bank.

Office of Thrift Supervision
12 CFR Chapter V
Authority and Issuance
For the reasons set forth in the
preamble, chapter V of title 12 of the
Code of Federal Regulations is proposed
to be amended as follows:
PART 563—SAVINGS
ASSOCIATIONS—OPERATIONS
1. The authority citation for part 563
is revised to read as follows:

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Authority: 12 U.S.C. 375b, 1462, 1462a,
1463, 1464, 1467a, 1468, 1817, 1820, 1828,
1831o, 3806, 5101 et seq.; 31 U.S.C. 5318; 42
U.S.C. 4106.

2. Add Subpart D to part 563 to read
as follows:
Subpart D—Registration of Residential
Mortgage Loan Originators
Sec.
563.101 Authority, purpose, and scope.
563.102 Definitions.
563.103 Registration of mortgage loan
originators.
563.104 Policies and procedures.
563.105 Use of unique identifier.
Appendix A to Subpart D of Part 563—
Examples of Mortgage Loan Originator
Activities.

Subpart D—Registration of Residential
Mortgage Loan Originators
§ 563.101

Authority, purpose, and scope.

(a) Authority. This subpart is issued
pursuant to the Secure and Fair
Enforcement for Mortgage Licensing Act
of 2008, title V of the Housing and
Economic Recovery Act of 2008
(S.A.F.E. Act) (Pub. L. 110–289, 122
Stat. 2654, 12 U.S.C. 5101 et seq.).
(b) Purpose. This subpart implements
the S.A.F.E. Act’s Federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of mortgage
loan originators; enhancing consumer
protections; reducing fraud in the
residential mortgage loan origination
process; and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.
(c) Scope—(1) In general. This subpart
applies to savings associations and their
operating subsidiaries (collectively
referred to in this subpart as savings
associations), and their employees who
act as mortgage loan originators.
(2) Exception. (i) This subpart and the
requirements of section 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply
to any employee of a savings association
if during the past 12 months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The savings association does not
employ mortgage loan originators who,
while excepted from registration
pursuant to paragraph (c)(2)(i)(A) of this
section, in the aggregate, acted as a
mortgage loan originator in connection
with more than 25 residential mortgage
loans.

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(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, a savings association
employee must register with the
Registry pursuant to this subpart.
§ 563.102

Definitions.

For purposes of this subpart D, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 1
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable State law,
unless the individual is compensated by
a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a consumer to
obtain information necessary for the
processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act.
1 The Appendix to this subpart provides
examples of activities that would, and would not,
cause an employee to fall within this section’s
definition of mortgage loan originator.

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association who is subject to the
registration requirements of this subpart
to act as a mortgage loan originator
unless such employee is registered with
the Registry pursuant to this subpart.
(3) Implementation period for initial
registration. An employee of a savings
association who is a mortgage loan
originator must complete an initial
registration with the Registry pursuant
to this subpart within 180 days from the
date that the OTS provides public notice
that the Registry is accepting
registrations.
(4) Employees previously registered or
licensed through the Registry—(i) In
general. If an employee of a savings
association was registered or licensed
through, and obtained a unique
identifier from, the Registry prior to
becoming an employee of the
association and has maintained this
registration or license, the registration
requirements of the S.A.F.E. Act and
this subpart are deemed to be met,
provided that:
(A) The employment information in
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
this section is updated and the
requirements of paragraph (d)(2) of this
section are met;
(B) New fingerprints of the employee
are submitted to the Registry for a
background check, as required by
paragraph (d)(1)(xii);
(C) The savings association
information required in paragraphs
(e)(1)(i) (to the extent the association has
not previously met these requirements)
and (e)(2)(i) of this section is submitted
to the Registry; and
(D) The registration is maintained
pursuant to paragraphs (b) and (e)(1)(ii)
§ 563.103 Registration of mortgage loan
of this section, as of the date that the
originators.
employee is employed by the
(a) Registration requirement—(1)
association.
Employee registration. Each employee of
(ii) Implementation period for certain
a savings association who acts as a
acquisitions, mergers or reorganizations.
mortgage loan originator must register
When registered or licensed mortgage
with the Registry, obtain a unique
loan originators become savings
identifier, and maintain this registration association employees as a result of an
in accordance with the requirements of
acquisition, merger or reorganization
this subpart. Any such employee who is transaction, the association and
not in compliance with the registration
employees must comply with the
and unique identifier requirements set
requirements of paragraphs (a)(4)(i)(A),
forth in this subpart is in violation of
(C), and (D) of this section within 60
the S.A.F.E. Act and this subpart.
days from the effective date of the
(2) Savings association requirement— acquisition, merger, or reorganization.
(i) In general. A savings association that
(b) Maintaining registration. (1) A
employs one or more individuals who
mortgage loan originator who is
act as a residential mortgage loan
registered with the Registry pursuant to
originator must require each employee
paragraph (a) of this section must:
(i) Renew the registration during the
who is a mortgage loan originator to
annual renewal period, confirming the
register with the Registry, maintain this
responses set forth in paragraphs
registration, and obtain a unique
(d)(1)(i) through (xi) of this section
identifier in accordance with the
remain accurate and complete, and
requirements of this subpart.
updating this information, as
(ii) Prohibition. A savings association
appropriate; and
must not permit an employee of the
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is an employee of a
savings association; and
(2) Is registered pursuant to this
subpart with, and maintains a unique
identifier through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act) or
residential real estate upon which is
constructed or intended to be
constructed a dwelling, and includes
refinancings, reverse mortgages, home
equity lines of credit and other first and
second lien loans that meet the
qualifications listed in this definition.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those set forth under the
S.A.F.E. Act.

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27413

(ii) Update the registration within 30
days of any of the following events:
(A) A change in the name of the
registrant;
(B) The registrant ceases to be an
employee of the savings association; or
(C) The information required under
paragraphs (d)(1)(iii) through (xi) of this
section becomes inaccurate, incomplete,
or out-of-date.
(2) A registered mortgage loan
originator must maintain his or her
registration, notwithstanding the
originator’s subsequent qualification for
the exception set forth in
§ 563.101(c)(2), unless the individual is
no longer engaged in the activity of a
mortgage loan originator.
(c) Effective dates—(1) Initial
registration. An initial registration
pursuant to paragraph (a) of this section
is effective on the date the registrant
receives notification from the Registry
that all information required by
paragraphs (d) and (e) of this section has
been submitted and the registration is
complete.
(2) Renewals or updates. A renewal or
update pursuant to paragraph (b) of this
section is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) and
of this section has been submitted and
the renewal or update is complete.
(d) Required employee information—
(1) In general. For purposes of the
registration required by this section, a
savings association must require each
employee who is a mortgage loan
originator to submit to the Registry, or
must submit on behalf of the employee,
the following categories of information
to the extent this information is
collected by the Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years
prior to the date of registration or
renewal, including the date the
employee became an employee of the
association;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or

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unsatisfied judgments or liens against
the employee;
(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a State or
Federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a
financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a State or
Federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an
attorney, accountant, or State or Federal
contractor;
(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;

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(xi) Any pending actions against the
employee that could result in an action
listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing savings association less
than three years prior to registration and
any appropriate identifying information
for submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
State and national criminal history
background check;
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this subpart
must:
(i) Authorize the Registry and the
employing institution to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing savings association;
and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv), (v), (vi), (vii), (viii),
(ix), and (xi) of this section.
(e) Required savings association
information. A savings association must
submit the following information to the
Registry.
(1) Savings association record. (i) In
connection with the initial registration
of one or more mortgage loan
originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board of Governors of the Federal
Reserve System;
(D) Identification of its primary
Federal regulator;
(E) Name(s) and contact information
of the individual(s) with authority to act
as the savings association’s primary
point of contact for the Registry;
(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
savings association employees, provided
this individual and any delegated
employee does not act as a mortgage
loan originator;

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(G) If an operating subsidiary of a
savings association, indication that it is
a subsidiary and the name of its parent
savings association.
(ii) A savings association must update
the information required by this
paragraph (e) within 30 days of the date
that this information becomes
inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be an employee of
the savings association, notification that
it no longer employs the registrant and
the date the registrant ceased being an
employee.
§ 563.104

Policies and procedures.

A savings association that employs
mortgage loan originators must adopt
and follow written policies and
procedures designed to assure
compliance with this subpart. These
policies and procedures must be
appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the savings
association. At a minimum, these
policies and procedures must:
(a) Establish a process for identifying
which employees of the savings
association are required to be registered
mortgage loan originators;
(b) Require that all employees of the
savings association who are mortgage
loan originators be informed of the
registration requirements of the S.A.F.E.
Act and this subpart and be instructed
on how to comply with such
requirements and procedures;
(c) Establish procedures to comply
with the unique identifier requirements
in § 563.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this subpart to be
conducted by savings association
personnel or by an outside party;
(g) Provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
subpart, or the savings association’s
related policies and procedures,

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including prohibiting such employees
from acting as mortgage loan originators
or other appropriate disciplinary
actions; and
(h) Establish a process for reviewing
employee criminal history background
reports received from the Registry in
connection with § 563.103(d)(1)(xii) of
this section, taking appropriate action
consistent with applicable law and rules
with respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 563.105

Use of unique identifier.

(a) The savings association shall make
the unique identifier(s) of its registered
mortgage loan originator(s) available to
consumers in a manner and method
practicable to the institution.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a
consumer, if any.
Appendix A to Subpart D of Part 563—
Examples of Mortgage Loan Originator
Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause an employee of a savings association to
fall within or outside the definition of
mortgage loan originator. The examples in
this Appendix are not all inclusive. They
illustrate only the issue described and do not
illustrate any other issues that may arise
under this subpart. For the purposes of the
examples below, the term ‘‘loan’’ refers to a
residential mortgage loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes or does not take, a loan
application.
(1) Taking an application includes:
receiving information that is sufficient to
determine whether the consumer qualifies for
a loan, even if the employee has had no
contact with the consumer and is not
responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a consumer to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a consumer who is filling out
an application by clarifying what type of
information is necessary for the application
or otherwise explaining the loan application
process in response to consumer inquiries.
(b) Offering or negotiating terms of a loan:
The following examples are designed to

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illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:
(i) Presenting a loan offer to a consumer for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a consumer’s request for
a lower rate or lower points on a pending
loan application by presenting to the
consumer a revised loan offer, either verbally
or in writing, that includes a lower interest
rate or lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to consumer queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the savings
association);
(ii) In response to a consumer’s request,
informing a consumer of the loan rates that
are publicly available such as on the savings
association’s Web site for specific types of
loan products without communicating to the
consumer whether qualifications are met for
that loan product;
(iii) Collecting information about a
consumer in order to provide the consumer
with information on loan products for which
the consumer generally may qualify, without
presenting a specific loan offer to the
consumer for acceptance, either verbally or
in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a consumer about those
arrangements, provided that communication
with the consumer only verifies loan terms
already offered or negotiated; or
(v) Providing a consumer with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the savings association.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain.’’
(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out
employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the savings association.

Farm Credit Administration
12 CFR Chapter VI
Authority and Issuance
For the reasons set forth in the
preamble, chapter VI of title 12 of the
Code of Federal Regulations is proposed
to be amended by adding new part 610
to chapter VI to read as follows:

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27415

PART 610—REGISTRATION OF
MORTGAGE LOAN ORIGINATORS
Sec.
610.101 Authority, purpose, and scope.
610.102 Definitions.
610.103 Registration of mortgage loan
originators.
610.104 Policies and procedures.
610.105 Use of unique identifier.
Appendix A to Part 610—Examples of
Mortgage Loan Originator Activities
Authority: Secs. 1.5, 1.7, 1.9, 1.10, 1.11,
1.13, 2.2, 2.4, 2.12, 5.9, 5.17, 7.2, 7.6, 7.8 of
the Farm Credit Act (12 U.S.C. 2013, 2015,
2017, 2018, 2019, 2021, 2073, 2075, 2093,
2243, 2252, 2279a–2, 2279b, 2279c–10); and
Secs. 1501 et seq. of the S.A.F.E. Act (12
U.S.C. 5101 et seq.)
§ 610.101

Authority, purpose, and scope.

(a) Authority. This part is issued
pursuant to the Secure and Fair
Enforcement for Mortgage Licensing Act
of 2008, title V of the Housing and
Economic Recovery Act of 2008
(S.A.F.E. Act) (Pub. L. 110–289, 122
Stat. 2654 (2008), 12 U.S.C. 5101 et
seq.).
(b) Purpose. This part implements the
S.A.F.E. Act’s Federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of mortgage
loan originators; enhancing consumer
protections; reducing fraud in the
residential mortgage loan origination
process; and providing consumers with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, mortgage loan originators.
(c) Scope—(1) In general. This part
applies to any Farm Credit System
lending institution that actually
originates residential mortgage loans
pursuant to its authority under sections
1.9(3), 1.11, or 2.4(a) and (b) of the Farm
Credit Act of 1971, as amended, and
their employees who act as mortgage
loan originators.
(2) Exception. (i) This part and the
requirements of sections 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply
to any employee of a Farm Credit
System institution if during the past 12
months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The Farm Credit System
institution employs mortgage loan
originators who, while excepted from
registration pursuant to paragraph
(c)(2)(i)(A) of this section, in the

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aggregate, acted as a mortgage loan
originator in connection with 25 or
fewer residential mortgage loans.
(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, a Farm Credit System
institution employee must register with
the Registry pursuant to this part.
§ 610.102

Definitions.

For purposes of this part, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 1
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable State law,
unless the individual is compensated by
a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a consumer to
obtain information necessary for the
processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the State licensing and
registration of State-licensed mortgage
loan originators and the registration of
1 The Appendix to this part provides examples of
activities that would, and would not, cause an
employee to fall within this section’s definition of
mortgage loan originator.

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mortgage loan originators pursuant to
section 1507 of the S.A.F.E. Act.
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is an employee of a
Farm Credit System institution; and
(2) Is registered pursuant to this part
with, and maintains a unique identifier
through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act, 15
U.S.C. 1602(v)) or residential real estate
upon which is constructed or intended
to be constructed a dwelling, and
includes refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
that meet the qualifications listed in this
definition. This definition does not
amend or supersede § 613.3030(c) of
this chapter.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those set forth under the
S.A.F.E. Act.

mortgage loan originator to register with
the Registry, maintain this registration,
and obtain a unique identifier in
accordance with the requirements of
this part.
(ii) Prohibition. A Farm Credit System
institution must not permit an employee
who is subject to the registration
requirements of this part to act as a
mortgage loan originator unless such
employee is registered with the Registry
pursuant to this part.
(3) Implementation period for initial
registration. An employee of a Farm
Credit System institution who is a
mortgage loan originator must complete
an initial registration with the Registry
pursuant to this part within 180 days
from the date that the Farm Credit
Administration provides public notice
that the Registry is accepting
registrations.
(4) Employees previously registered or
licensed through the Registry—(i) In
general. If an employee of a Farm Credit
System institution was registered or
licensed through, and obtained a unique
identifier from, the Registry prior to
becoming an employee of the Farm
Credit System institution and has
maintained this registration or license,
the registration requirements of the
S.A.F.E. Act and this part are deemed to
be met, provided that:
(A) The employment information in
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
this section is updated and the
requirements of paragraph (d)(2) of this
section are met;
(B) New fingerprints of the employee
are submitted to the Registry for a
background check, as required by
paragraph (d)(1)(xii) of this section;
(C) The Farm Credit System
institution information required in
paragraphs (e)(1)(i) (to the extent the
Farm Credit System institution has not
previously met these requirements) and
§ 610.103 Registration of mortgage loan
originators.
(e)(2)(i) of this section is submitted to
the Registry; and
(a) Registration requirement—(1)
(D) The registration is maintained
Employee registration. Each employee of
pursuant to paragraphs (b) and (e)(1)(ii)
a Farm Credit System institution who
of this section, as of the date that the
acts as a mortgage loan originator must
employee is employed by the Farm
register with the Registry, obtain a
Credit System institution.
unique identifier, and maintain this
(ii) Implementation period for certain
registration in accordance with the
acquisitions, mergers or reorganizations.
requirements of this part. Any such
When registered or licensed mortgage
employee who is not in compliance
loan originators become employees of
with the registration and unique
another Farm Credit System institution
identifier requirements set forth in this
as a result of a consolidation, merger or
part is in violation of the S.A.F.E. Act
reorganization transaction, the Farm
and this part.
Credit System institution and employee
(2) Farm Credit System institution
must comply with the requirements of
requirement—(i) In general. A Farm
paragraphs (a)(4)(i)(A), (C), and (D) of
Credit System institution that employs
this section within 60 days from the
one or more individuals who act as a
effective date of the consolidation,
residential mortgage loan originator
merger, or reorganization.
must require each employee who is a

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(b) Maintaining registration. (1) A
mortgage loan originator who is
registered with the Registry pursuant to
paragraph (a) of this section must:
(i) Renew the registration during the
annual renewal period, confirming the
responses set forth in paragraphs
(d)(1)(i) through (xi) of this section
remain accurate and complete, and
updating this information, as
appropriate; and
(ii) Update the registration within 30
days of any of the following events:
(A) A change in the name of the
registrant;
(B) The registrant ceases to be an
employee of the Farm Credit System
institution; or
(C) The information required under
paragraphs (d)(1)(iii) through (xi) of this
section becomes inaccurate, incomplete,
or out-of-date.
(2) A registered mortgage loan
originator must maintain his or her
registration, notwithstanding the
originator’s subsequent qualification for
the exception set forth in
§ 610.101(c)(2), unless the individual is
no longer engaged in the activity of a
mortgage loan originator.
(c) Effective dates—(1) Initial
registration. An initial registration
pursuant to paragraph (a) of this section
is effective on the date the registrant
receives notification from the Registry
that all information required by
paragraphs (d) and (e) of this section has
been submitted and the registration is
complete.
(2) Renewals or updates. A renewal or
update pursuant to paragraph (b) of this
section is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) of
this section has been submitted and the
renewal or update is complete.
(d) Required employee information—
(1) In general. For purposes of the
registration required by this section, a
Farm Credit System institution must
require each employee who is a
mortgage loan originator to submit to
the Registry, or must submit on behalf
of the employee, the following
categories of information to the extent
this information is collected by the
Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years

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prior to the date of registration or
renewal, including the date the
employee became an employee of the
Farm Credit System institution;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or
unsatisfied judgments or liens against
the employee;
(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a State or
Federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a
financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a State or
Federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an

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attorney, accountant, or State or Federal
contractor;
(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;
(xi) Any pending actions against the
employee that could result in an action
listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing institution less than three
years prior to registration and any
appropriate identifying information for
submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
State and national criminal history
background check.
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this part
must:
(i) Authorize the Registry and the
employing institution to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing Farm Credit System
institution; and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv)–(ix) and (xi) of this
section.
(e) Required information. A Farm
Credit System institution must submit
the following information to the
Registry.
(1) Farm Credit System institution
record. (i) In connection with the initial
registration of one or more mortgage
loan originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board of Governors of the Federal
Reserve System;
(D) Identification of its primary
Federal regulator;

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(E) Name(s) and contact information
of the individual(s) with authority to act
as the Farm Credit System institution’s
primary point of contact for the
Registry;
(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
employees of the Farm Credit System
institution, provided this individual and
any delegated employee does not act as
a mortgage loan originator; and
(G) If an operating subsidiary of an
agricultural credit association,
indication that it is a subsidiary and the
name of its parent agricultural credit
association.
(ii) A Farm Credit System institution
must update the information required
by this paragraph (e) within 30 days of
the date that this information becomes
inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be an employee of
the Farm Credit System institution,
notification that it no longer employs
the registrant and the date the registrant
ceased being an employee.
§ 610.104

Policies and procedures.

A Farm Credit System institution that
employs mortgage loan originators must
adopt and follow written policies and
procedures designed to assure
compliance with this part. These
policies and procedures must be
appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the Farm Credit
System institution. At a minimum, these
policies and procedures must:
(a) Establish a process for identifying
which employees of the Farm Credit
System institution are required to be
registered mortgage loan originators;
(b) Require that all employees of the
Farm Credit System institution who are
mortgage loan originators be informed of
the registration requirements of the
S.A.F.E. Act and this part and be
instructed on how to comply with such
requirements and procedures;
(c) Establish procedures to comply
with the unique identifier requirements
in § 610.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,

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including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this part to be
conducted by Farm Credit System
institution personnel or by an outside
party;
(g) Provide for appropriate action in
the case of any employee who fails to
comply with the registration
requirements of the S.A.F.E. Act, this
part, or the Farm Credit System
institution’s related policies and
procedures, including prohibiting such
employees from acting as mortgage loan
originators or other appropriate
disciplinary actions; and
(h) Establish a process for reviewing
employee criminal history background
reports received from the Registry in
connection with § 610.103(d)(1)(xii),
taking appropriate action consistent
with applicable law and rules with
respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 610.105

Use of unique identifier.

(a) The Farm Credit System
institution shall make the unique
identifier(s) of its registered mortgage
loan originator(s) available to consumers
in a manner and method practicable to
the institution.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a
consumer, if any.
Appendix A to Part 610—Examples of
Mortgage Loan Originator Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause an employee of a Farm Credit System
institution to fall within or outside the
definition of mortgage loan originator. The
examples in this Appendix are not all
inclusive. They illustrate only the issue
described and do not illustrate any other
issues that may arise under this part. For the
purposes of the examples below, the term
‘‘loan’’ refers to a residential mortgage loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes or does not take, a loan
application.
(1) Taking an application includes:
receiving information that is sufficient to
determine whether the consumer qualifies for
a loan, even if the employee has had no
contact with the consumer and is not

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responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a consumer to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a consumer who is filling out
an application by clarifying what type of
information is necessary for the application
or otherwise explaining the loan application
process in response to consumer inquiries.
(b) Offering or negotiating terms of a loan:
The following examples are designed to
illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:
(i) Presenting a loan offer to a consumer for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a consumer’s request for
a lower rate or lower points on a pending
loan application by presenting to the
consumer a revised loan offer, either verbally
or in writing, that includes a lower interest
rate or lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to consumer queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the Farm Credit
System institution);
(ii) In response to a consumer’s request,
informing a consumer of the loan rates that
are publicly available such as on the Farm
Credit System institution’s Web site for
specific types of loan products without
communicating to the consumer whether
qualifications are met for that loan product;
(iii) Collecting information about a
consumer in order to provide the consumer
with information on loan products for which
the consumer generally may qualify, without
presenting a specific loan offer to the
consumer for acceptance, either verbally or
in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a consumer about those
arrangements, provided that communication
with the consumer only verifies loan terms
already offered or negotiated; or
(v) Providing a consumer with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the Farm Credit System institution.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain.’’
(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out

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employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the Farm Credit System
institution.

National Credit Union Administration
12 CFR Chapter VII
Authority and Issuance
For the reasons stated in the
preamble, the National Credit Union
Administration proposes to amend
chapter VII of title 12 of the Code of
Federal Regulations to add a new part
761 as follows:
PART 761—REGISTRATION OF
RESIDENTIAL MORTGAGE LOAN
ORIGINATORS

§ 761.102

Sec.
761.101 Authority, purpose, and scope.
761.102 Definitions.
761.103 Registration of mortgage loan
originators.
761.104 Policies and procedures.
761.105 Use of unique identifier.
Appendix A to Part 761—Examples of
Mortgage Loan Originator Activities.
Authority: 12 U.S.C. 1751 et seq. and 5101
et seq.
§ 761.101

Authority, purpose, and scope.

(a) Authority. The National Credit
Union Administration is issuing part
761 under the Secure and Fair
Enforcement for Mortgage Licensing Act
of 2008, title V of the Housing and
Economic Recovery Act of 2008
(S.A.F.E. Act) (Pub. L. 110–289, 122
Stat. 2654, 12 U.S.C. 5101 et seq.).
(b) Purpose. This part implements the
S.A.F.E. Act’s federal registration
requirement for mortgage loan
originators. The S.A.F.E. Act provides
that the objectives of this registration
include aggregating and improving the
flow of information to and between
regulators; providing increased
accountability and tracking of loan
originators; enhancing member
protections; reducing fraud in the
residential mortgage loan origination
process; and providing members with
easily accessible information at no
charge regarding the employment
history of, and publicly adjudicated
disciplinary and enforcement actions
against, loan originators.
(c) Scope—(1) In general. This part
applies to federally insured credit
unions and their employees who act as
mortgage loan originators.
(2) Exception. (i) This part and the
requirements of section 1504(a)(1)(A)
and (2) of the S.A.F.E. Act do not apply

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to any employee of a federally insured
credit union if during the past 12
months:
(A) The employee acted as a mortgage
loan originator for 5 or fewer residential
mortgage loans; and
(B) The credit union employs
mortgage loan originators who, while
excepted from registration under
paragraph (c)(2)(i)(A) of this section, in
the aggregate, acted as a mortgage loan
originator in connection with 25 or
fewer residential mortgage loans.
(ii) Prior to engaging in mortgage loan
origination activity that exceeds either
the individual or the aggregate
exception limit, a credit union
employee must register with the
Registry under this part.
Definitions.

For purposes of this part, the
following definitions apply:
(a) Annual renewal period means
November 1 through December 31 of
each year.
(b)(1) Mortgage loan originator 1
means an individual who:
(i) Takes a residential mortgage loan
application; and
(ii) Offers or negotiates terms of a
residential mortgage loan for
compensation or gain.
(2) The term mortgage loan originator
does not include:
(i) An individual who performs
purely administrative or clerical tasks
on behalf of an individual who is
described in paragraph (b)(1) of this
section;
(ii) An individual who only performs
real estate brokerage activities (as
defined in section 1503(3)(D) of the
S.A.F.E. Act) and is licensed or
registered as a real estate broker in
accordance with applicable state law,
unless the individual is compensated by
a lender, a mortgage broker, or other
mortgage loan originator or by any agent
of such lender, mortgage broker, or other
mortgage loan originator, and meets the
definition of mortgage loan originator in
paragraph (b)(1) of this section; or
(iii) An individual or entity solely
involved in extensions of credit related
to timeshare plans, as that term is
defined in 11 U.S.C. 101(53D).
(3) Administrative or clerical tasks
means the receipt, collection, and
distribution of information common for
the processing or underwriting of a
residential mortgage loan and
communication with a member to
obtain information necessary for the
1 The Appendix to this part provides examples of
activities that would, and would not, cause an
employee to fall within this section’s definition of
mortgage loan originator.

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processing or underwriting of a
residential mortgage loan.
(c) Nationwide Mortgage Licensing
System and Registry or Registry means
the system developed and maintained
by the Conference of State Bank
Supervisors and the American
Association of Residential Mortgage
Regulators for the state licensing and
registration of state-licensed mortgage
loan originators and the registration of
mortgage loan originators under section
1507 of the S.A.F.E. Act.
(d) Registered mortgage loan
originator or registrant means any
individual who:
(1) Meets the definition of mortgage
loan originator and is a credit union
employee; and
(2) Is registered under this part with,
and maintains a unique identifier
through, the Registry.
(e) Residential mortgage loan means
any loan primarily for personal, family,
or household use that is secured by a
mortgage, deed of trust, or other
equivalent consensual security interest
on a dwelling (as defined in section
103(v) of the Truth in Lending Act (15
U.S.C. 1602(v))) or residential real estate
upon which is constructed or intended
to be constructed a dwelling, and
includes refinancings, reverse
mortgages, home equity lines of credit
and other first and second lien loans
that meet the qualifications listed in this
definition.
(f) Unique identifier means a number
or other identifier that:
(1) Permanently identifies a registered
mortgage loan originator;
(2) Is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry, the
Federal banking agencies, and the Farm
Credit Administration to facilitate:
(i) Electronic tracking of mortgage
loan originators; and
(ii) Uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against mortgage loan originators; and
(3) Must not be used for purposes
other than those under the S.A.F.E. Act.
§ 761.103 Registration of mortgage loan
originators.

(a) Registration requirement—(1)
Employee registration. Each credit
union employee who acts as a mortgage
loan originator must register with the
Registry, obtain a unique identifier, and
maintain this registration in accordance
with the requirements of this part. Any
such employee who is not in
compliance with the registration and
unique identifier requirements in this
part is in violation of the S.A.F.E. Act
and this part.

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(2) Credit union requirement—(i) In
general. A credit union that employs
one or more individuals who act as a
residential mortgage loan originator
must require each employee who is a
mortgage loan originator to register with
the Registry, maintain this registration,
and obtain a unique identifier in
accordance with the requirements of
this part.
(ii) Prohibition. A credit union must
not permit its employee who is subject
to this part’s registration requirements
to act as a mortgage loan originator
unless such employee is registered with
the Registry under this part.
(3) Implementation period for initial
registration. A credit union employee
who is a mortgage loan originator must
complete an initial registration with the
Registry under this part within 180 days
from the date that the National Credit
Union Administration provides public
notice that the Registry is accepting
registrations.
(4) Employees previously registered or
licensed through the Registry—(i) In
general. If a credit union employee was
registered or licensed through, and
obtained a unique identifier from, the
Registry prior to becoming a credit
union employee and has maintained
this registration or license, the
registration requirements of the S.A.F.E.
Act and this part are deemed to be met,
provided that:
(A) The employment information in
paragraphs (d)(1)(i)(C) and (d)(1)(ii) of
this section is updated and the
requirements of paragraph (d)(2) of this
section are met;
(B) New fingerprints of the employee
are submitted to the Registry for a
background check, as required by
paragraph (d)(1)(xii) of this section;
(C) The credit union information
required in paragraphs (e)(1)(i) (to the
extent the credit union has not
previously met these requirements) and
(e)(2)(i) of this section is submitted to
the Registry; and
(D) The registration is maintained
under paragraphs (b) and (e)(1)(ii) of
this section, as of the date that the
employee is employed by the credit
union.
(ii) Implementation period for certain
acquisitions, mergers or reorganizations.
When registered or licensed mortgage
loan originators become credit union
employees as a result of an acquisition,
merger or reorganization transaction, the
credit union and employee must comply
with the requirements of paragraphs
(a)(4)(i)(A), (C), and (D) of this section
within 60 days from the effective date
of the acquisition, merger, or
reorganization.

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(b) Maintaining registration. (1) A
mortgage loan originator who is
registered with the Registry under
paragraph (a) of this section must:
(i) Renew the registration during the
annual renewal period, confirming the
responses set forth in paragraphs
(d)(1)(i) through (xi) of this section
remain accurate and complete, and
updating this information, as
appropriate; and
(ii) Update the registration within 30
days of any of the following events:
(A) A change in the name of the
registrant;
(B) The registrant ceases to be a credit
union employee; or
(C) The information required under
paragraphs (d)(1)(iii) through (xi) of this
section becomes inaccurate, incomplete,
or out of date.
(2) A registered mortgage loan
originator must maintain his or her
registration, notwithstanding the
originator’s subsequent qualification for
the exception in § 761.101(c)(2), unless
the individual is no longer engaged in
the activity of a mortgage loan
originator.
(c) Effective dates—(1) Initial
registration. An initial registration
under paragraph (a) of this section is
effective on the date the registrant
receives notification from the Registry
that all information required by
paragraphs (d) and (e) of this section has
been submitted and the registration is
complete.
(2) Renewals or updates. A renewal or
update under paragraph (b) of this
section is effective on the date the
registrant receives notification from the
Registry that all applicable information
required by paragraphs (b) and (e) of
this section has been submitted and the
renewal or update is complete.
(d) Required employee information—
(1) In general. For purposes of the
registration required by this section, a
credit union must require each
employee who is a mortgage loan
originator to submit to the Registry, or
must submit on behalf of the employee,
the following categories of information
to the extent this information is
collected by the Registry:
(i) Identifying information, including
the employee’s:
(A) Name and any other names used;
(B) Home address;
(C) Address of the employee’s
principal business location and business
contact information;
(D) Social security number;
(E) Gender; and
(F) Date and place of birth;
(ii) Financial services-related
employment history for the 10 years
prior to the date of registration or

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renewal, including the date the
employee became a credit union
employee;
(iii) Financial information for the 10
years prior to the date of registration or
renewal constituting a history of any
personal bankruptcy; business
bankruptcy based upon events that
occurred while the employee exercised
control over an organization; denied,
paid out, or revoked bonds; or
unsatisfied judgments or liens against
the employee;
(iv) Felony convictions or other final
criminal actions involving a felony
against the employee or organizations
controlled by the employee; or
misdemeanor convictions or other final
misdemeanor actions against the
employee or organizations controlled by
the employee involving financial
services, a financial services-related
business, dishonesty, or breach of trust;
(v) Civil judicial actions against the
employee in connection with financial
services-related activities, dismissals
with settlements, judicial findings that
the employee violated financial
services-related statutes or regulations,
except for actions dismissed without a
settlement agreement;
(vi) Actions or orders by a state or
federal regulatory agency or foreign
financial regulatory authority that:
(A) Found the employee to have made
a false statement or omission or been
dishonest, unfair or unethical; to have
been involved in a violation of a
financial services-related regulation or
statute; or to have been a cause of a
financial services-related business
having its authorization to do business
denied, suspended, revoked or
restricted;
(B) Are entered against the employee
in connection with a financial servicesrelated activity;
(C) Denied, suspended, or revoked the
employee’s registration or license to
engage in a financial services-related
activity; disciplined the employee or
otherwise by order prevented the
employee from associating with a
financial services-related business or
restricted the employee’s activities; or
(D) Barred the employee from
association with an entity regulated by
the agency or authority or from engaging
in a financial services-related business;
(vii) Final orders issued by a state or
federal regulatory agency or foreign
financial regulatory authority based on
violations of any law or regulation that
prohibits fraudulent, manipulative or
deceptive conduct;
(viii) Revocation or suspension of the
employee’s authorization to act as an
attorney, accountant, or state or federal
contractor;

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(ix) Customer-initiated financial
services-related arbitration or civil
action against the employee that
required action, including settlements;
(x) Disclosure of any voluntary or
involuntary employment terminations
resulting from allegations accusing the
employee of violating a statute,
regulation, or industry standard of
conduct; fraud; dishonesty; theft; or the
wrongful taking of property;
(xi) Any pending actions against the
employee that could result in an action
listed in paragraphs (d)(1)(iii) through
(ix) of this section; and
(xii) Fingerprints of the employee, in
digital form if practicable, collected by
the employing credit union less than
three years prior to registration and any
appropriate identifying information for
submission to the Federal Bureau of
Investigation and any governmental
agency or entity authorized to receive
such information in connection with a
state and national criminal history
background check;
(2) Employee authorization and
attestation. An employee registering as
a mortgage loan originator or renewing
his or her registration under this part
must:
(i) Authorize the Registry and the
employing credit union to obtain
information related to any
administrative, civil or criminal
findings, to which the employee is a
party, made by any governmental
jurisdiction;
(ii) Attest to the correctness of all
information required by paragraph (d) of
this section, whether submitted by the
employee or on behalf of the employee
by the employing credit union; and
(iii) Authorize the Registry to make
available to the public information
required by paragraphs (d)(1)(i)(A) and
(C), (d)(1)(ii), (iv)–(ix) and (xi) of this
section.
(e) Required credit union information.
A credit union must submit the
following information to the Registry:
(1) Credit union record. (i) In
connection with the initial registration
of one or more mortgage loan
originators:
(A) Name and main office address;
(B) Internal Revenue Service
Employer Tax Identification Number
(EIN);
(C) Research Statistics Supervision
and Discount (RSSD) number, as issued
by the Board of Governors of the Federal
Reserve System;
(D) Identification of the National
Credit Union Administration as its
primary Federal regulator;
(E) Name(s) and contact information
of the individual(s) with authority to act

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as the credit union’s primary point of
contact for the Registry;
(F) Name(s) and contact information
of the individual(s) with authority to
enter data required in paragraph (e) of
this section on the Registry and who
may delegate this authority to other
credit union employees, provided this
individual and any delegated employee
does not act as a mortgage loan
originator.
(ii) A credit union must update the
information required by this paragraph
(e) within 30 days of the date that this
information becomes inaccurate.
(2) Employee information. In
connection with the registration of each
employee who acts as a mortgage loan
originator:
(i) After the information required by
paragraph (d) of this section has been
submitted to the Registry, confirmation
that it employs the registrant; and
(ii) Within 30 days of the date the
registrant ceases to be a credit union
employee, notification that it no longer
employs the registrant and the date the
registrant ceased being an employee.
§ 761.104

Policies and procedures.

A credit union that employs mortgage
loan originators must adopt and follow
written policies and procedures
designed to assure compliance with this
part. These policies and procedures
must be appropriate to the nature, size,
complexity and scope of the mortgage
lending activities of the credit union. At
a minimum, these policies and
procedures must:
(a) Establish a process for identifying
which credit union employees are
required to be registered mortgage loan
originators;
(b) Require that all credit union
employees who are mortgage loan
originators be informed of the
registration requirements of the S.A.F.E.
Act and this part and be instructed on
how to comply with such requirements
and procedures;
(c) Establish procedures to comply
with the unique identifier requirements
in § 761.105;
(d) Establish reasonable procedures
for confirming the adequacy and
accuracy of employee registrations,
including updates and renewals, by
comparisons with its own records;
(e) Establish reasonable procedures
and tracking systems for monitoring
compliance with registration and
renewal requirements and procedures;
(f) Provide for independent testing for
compliance with this part to be
conducted by credit union personnel or
by an outside party;
(g) Provide for appropriate action in
the case of any employee who fails to

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comply with the registration
requirements of the S.A.F.E. Act, this
part, or the credit union’s related
policies and procedures, including
prohibiting such employees from acting
as mortgage loan originators or other
appropriate disciplinary actions; and
(h) Establish a process for reviewing
employee criminal history background
reports received from the Registry in
connection with § 761.103(d)(1)(xii),
taking appropriate action consistent
with applicable law and rules with
respect to these reports, and for
maintaining records of these reports and
actions taken with respect to applicable
employees.
§ 761.105

Use of unique identifier.

(a) The credit union shall make the
unique identifier(s) of its registered
mortgage loan originator(s) available to
members in a manner and method
practicable to the credit union.
(b) A registered mortgage loan
originator shall provide his or her
unique identifier to a member:
(1) Upon request;
(2) Before acting as a mortgage loan
originator; and
(3) Through the originator’s initial
written communication with a member,
if any.
Appendix A to Part 761—Examples of
Mortgage Loan Originator Activities
This Appendix provides examples to aid in
the understanding of activities that would
cause a credit union employee to fall within
or outside the definition of mortgage loan
originator. The examples in this Appendix
are not all inclusive. They illustrate only the
issue described and do not illustrate any
other issues that may arise under this part.
For the purposes of the examples below, the
term ‘‘loan’’ refers to a residential mortgage
loan.
(a) Taking a loan application: The
following examples illustrate when an
employee takes or does not take, a loan
application.
(1) Taking an application includes:
receiving information that is sufficient to
determine whether the member qualifies for
a loan, even if the employee has had no
contact with the member and is not
responsible for further verification of
information.
(2) Taking an application does not include
any of the following activities performed
solely or in combination:
(i) Contacting a member to verify the
information in the loan application by
obtaining documentation, such as tax returns
or payroll receipts;
(ii) Receiving a loan application through
the mail and forwarding it, without review,
to loan approval personnel; or
(iii) Assisting a member who is filling out
an application by clarifying what type of
information is necessary for the application
or otherwise explaining the loan application
process in response to member inquiries.

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Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Proposed Rules

(b) Offering or negotiating terms of a loan:
The following examples are designed to
illustrate when an employee offers or
negotiates terms of a loan, and conversely,
what does not constitute offering or
negotiating terms of a loan.
(1) Offering or negotiating the terms of a
loan includes:
(i) Presenting a loan offer to a member for
acceptance, either verbally or in writing,
even if further verification of information is
necessary and the offer is conditional; or
(ii) Responding to a member’s request for
a lower rate or lower points on a pending
loan application by presenting to the member
a revised loan offer, either verbally or in
writing, that includes a lower interest rate or
lower points than the original offer.
(2) Offering or negotiating terms of a loan
does not include solely or in combination:
(i) Providing general explanations in
response to member queries regarding
qualification for a specific loan product, such
as explaining loan terminology (i.e., debt-toincome ratio) or lending policies (i.e., the
loan-to-value ratio policy of the credit
union);
(ii) In response to a member’s request,
informing a member of the loan rates that are
publicly available such as on the credit
union’s Web site for specific types of loan
products without communicating to the
member whether qualifications are met for
that loan product;

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(iii) Collecting information about a member
in order to provide the member with
information on loan products for which the
member generally may qualify, without
presenting a specific loan offer to the member
for acceptance, either verbally or in writing;
(iv) Arranging the loan closing or other
aspects of the loan process, including
communicating with a member about those
arrangements, provided that communication
with the member only verifies loan terms
already offered or negotiated; or
(v) Providing a member with information
unrelated to loan terms, such as the best days
of the month for scheduling loan closings at
the credit union.
(c) The following examples illustrate when
an employee does or does not offer or
negotiate terms of a loan ‘‘for compensation
or gain’’:
(1) Offering or negotiating terms of a loan
for compensation or gain includes engaging
in any of the activities in paragraph (b)(1) of
this Appendix in the course of carrying out
employment duties, even if the employee
does not receive a referral fee or commission
or other special compensation for the loan.
(2) Offering or negotiating terms of a loan
for compensation or gain does not include
engaging in a seller-financed transaction for
the employee’s personal property that does
not involve the credit union.

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Dated: May 27, 2009.
John C. Dugan,
Comptroller of the Currency.
By the order of the Board of Governors of
the Federal Reserve System, May 28, 2009.
Robert deV. Frierson,
Deputy Secretary of the Board.
By order of the Board of Directors.
Dated at Washington, DC, the 29th day of
May 2009.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
Dated: May 28, 2009.
By the Office of Thrift Supervision,
John E. Bowman,
Acting Director.
Dated: May 28, 2009.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
By the National Credit Union
Administration Board on May 26, 2009.
Mary Rupp,
Secretary of the Board.
[FR Doc. E9–13058 Filed 6–8–09; 8:45 am]
BILLING CODE 4810–33–P, 6210–01–P; 6714–01–P;
6720–01–P; 6705–01–P; 7535–01–P

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