FINAL_3133-0181_Supporting_Statement_S-A-F-E_012720

National Credit Union Administration

SUPPORTING STATEMENT

Registration of Mortgage Loan Originators

OMB No. 3133-0181

1. JUSTIFICATION

1. Circumstances that make the collection of information necessary.

On July 28, 2010, the OCC, Board, FDIC, OTS, NCUA, and FCA (collectively the Agencies) issued a joint rule titled Registration of Mortgage Loan Originators (75 FR 44656). The rule implemented the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act) (Pub. L. 110–289, 122 Stat. 2654, 12 U.S.C. 5101 et seq.)

On July 21, 2011, Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for the S.A.F.E. Act from the Agencies to the Consumer Financial Protection Bureau (CFPB). On

December 19, 2011, the CFPB codified the S.A.F.E. Act regulations to under 12 CFR Part 1007 (76 FR 78483), establishing a new Regulation G, S.A.F.E. Mortgage Licensing Act–Federal Registration of Residential Mortgage Loan Originators.

The S.A.F.E. Act requires an employee of a bank, savings association, or credit union and their subsidiaries regulated by a Federal banking agency or an employee of an institution regulated by the Farm Credit Act (Agency-Regulated Institution) who engages in the business of a residential mortgage loan originator (MLO) to register with the Nationwide Mortgage Licensing System and Registry (Registry) and obtain a unique identifier. Agency-Regulated Institutions must require their employees who act as residential MLOs to comply with the Act’s requirements to register and obtain a unique identifier and also to adopt and follow written policies and procedures to assure compliance with these requirements.

Sections 761.1 and 741.223 of the NCUA regulations were amended to cross reference 12 CFR Part 1007.

2. Purpose and use of the information collected.

The objectives of the 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; supporting anti-fraud measures; 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. The registration and licensing requirements are administered, in part, through the Nationwide Mortgage Licensing System and Registry (Registry).

Third-Party Disclosure Requirements

Unless the de minimis exception or a different implementation period applies, section 1007.103(a) requires an employee of an institution that is engaged in the business of a MLO to register with the Registry, maintain such registration, and obtain a unique identifier. Under section 1007.103(b), an institution must require each such registration to be renewed annually and updated within 30 days of the occurrence of specified events. Section 1007.103(d) sets forth the categories of information that an employee, or the employing institution on the employee’s behalf, must submit to the Registry, along with the employee’s attestation as to the correctness of the information supplied, and an authorization to obtain further information. Section 1007.103(e) specifices the institution and employee information that an Agency-Regulated Institution must submit to the Registry in connection with the initial registration of one or more MLOs.

Section 1007.105 requires the MLO to provide the unique identifier to a consumer upon request and in situations as prescribed by §1007.105(b) and financial institutions to make the unique identifier of MLOs available to consumers in a manner and method practicable to the institution. . 

Recordkeeping Requirements

Section 1007.104 requires that a institution employing MLOs to:

• 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.

• Establish reasonable procedures and tracking systems for monitoring registration compliance; and 

• Establish a process for, and maintain records related to, employee criminal history background reports and actions taken with respect thereto.

3. Use of information technology.

Federal registration and state licensing and registration must be completed through the Nationwide Mortgage Licensing System and Registry; a web-based system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage regulators jointly through the State Regulatory Registry LLC. The electronic form is stored in a secured, centralized repository. NCUA does not gather this information electronically, but reviews compliance while onsite for examinations.

4. Duplication of information.

There is no duplication of efforts evident. The information is not available from any other source.

5. Efforts to reduce burden on small entities.

When a MLO employee originates five or fewer residential mortgage loans, the S.A.F.E. Act regulation provides an exception to the MLO registration requirements for any employee of a covered financial institution who has never been registered or licensed through the Registry as an MLO if during the past 12 months. In this case, the institution can rely on the de minimis exemption. When an institution relies on the de minimis exemption in lieu of registration, the MLO employee must register prior to originating the sixth residential mortgage loan within 12 months. Covered financial institutions are prohibited from engaging in any acts or practices to evade the registration requirement.

6. Consequences of not conducting the collection.

The consequences of not conducting the collection would include decreased flow of information to and between regulators; decreased accountability and tracking of mortgage loan originators; reduced consumer protections; higher fraud incidents; and lack of accessible information or increased cost of information for consumers regarding the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators.

7. Inconsistencies with guidelines in 5 CFR 1320.5(d)(2).

This collection is consistent with the guidelines.

8. Efforts to consult with persons outside the agency.

A 60-day notice was published in the Federal Register on November 20, 2019, at 84 FR 64111, soliciting comments from the public. No comments were received in response to this notice.

9. Payment or gifts to respondents.

No payment or gifts for information collected is provided.

10. Assurance of confidentiality.

The information will be kept confidential to extent permitted by law.

11. Questions of a sensitive nature.

The Dodd-Frank Wall Street Reform and Consumer Protection Act amended the S.A.F.E. Act and transferred responsibility for this system of records from the Federal banking agencies to the CFPB. A system of records notice (SORN) for CFPB.019, Nationwide Mortgage Licensing System and Registry, was published in the Federal Register on May 21, 2018, at 83 FR 23435.

12. Burden of information collection.

Individual MLO		Third-party Disclosure
12 CFR	Information Collection	# Respondents	# Responses Per Respondent	# Annual Responses	Hours Per Response	Total Burden
1007.103(a)	MLO Initial Registration (1)	9,820	1	9,820	2.5	24,551
1007.103(b)	MLO Annual Registration (2)	55,649	1	55,649	0.25	13,912
1007.103(b)	MLO Change in Circumstances Update (3)	13,094	1	13,094	0.25	3,273
1007.105(b)	Disclosure of unique identifier by registered MLO.	65,469	1	65,469	0.25	16,367
TOTAL (4)		65,469	2.21	144,032	0.43	58,104
Financial Institution		Third-party Disclosure
1007.103(e)	Institution submission of information to Registry (5)	3,567	1	3,567	1.5	5,351
1007.105(a)	Disclosure of unique identifier by financial institution.	3,567	1	3,567	0.25	892
TOTAL		3,567	2	7,134	0.88	6,243
Financial Institution		Recordkeeping
1007.104	Policies and procedures; Tracking and compliance system	3,567	1	3,567	5.5	19,619
TOTAL		3,567	1	3,567	5.5	19,619
BURDEN SUMMARY
Annual No. Responses		154,733
Total Burden		83,965
(1) estimated based on proportion of new applications processed given total individual unique entities for state-licensed entitities (15%)
(2) annual registration = total - initial registration (65,469 - 9,820)
(3) estimated at 20% of total registrations
(4) NMLS Mortgage Industry Report 2018Q4 Update - NCUA
(5) NCUA call report data shows 3,567 federall insured credit unions granted real estate loans in 2018 and would be required to comply with the SAFE Act.

Based on the labor rate of $35 per hour, the total cost to respondents is $2,938,775.

13. Capital start-up or on-going operation and maintenance costs.

Institution registration/annual

processing fee 3,567 @ $100 = $ 356,700

Individual MLO registration/annual

processing fee 65,469 @ $ 30 = $ 1,964,070

$ 2,320,770

14. Annualized costs to Federal government.

There is no cost to the Federal Government for this collection. NCUA reviews compliance with the S.A.F.E. Act as part of the normal examination process.

15. Changes in burden.

An increase 7,761 burden hours is an adjustment to reflect the current number of respondent. A total of 83,965 burden hours is requested.

16. Information collection planned for statistical purposes.

The information collection is not used for statistical purposes.

17. Request non-display the expiration date of the OMB control number.

The information collection requirements under this collection are recordkeeping and third-party disclosure requirement. There is no collection instrument. The OMB control number and expiration date associated with this PRA submission we be displayed on OMB’s Information Collection Review site at www.reginfo.gov.

18. Exceptions to the Certification for Paperwork Reduction Act Submission.

There are no exeptions to the certification statement.

2. Collections of Information Employing Statistical Methods

This collection does not involve statistical methods.

OMB #3133-0181; January 2020 20