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CUNA SAFE Act rule proposals need changes
WASHINGTON (7/10/09)--In a comment letter published on Thursday the Credit Union National Association (CUNA) said that rules proposed by the National Credit Union Administration (NCUA) and other federal regulators that would implement the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act need to be tweaked before final implementation. Under the SAFE Act, employees of financial institutions or their subsidiaries that act as residential loan originators would be required to register with the Nationwide Mortgage Licensing System and Registry. These proposed guidelines would apply to federally insured credit unions. While CUNA does not believe that privately insured credit unions should necessarily be subject to these guidelines, they should “have the same access to the Registry as all other financial institutions that are subject to the proposed rules,” and that access should “not be affected or dependent on whether they are subject to these rules.” CUNA also called for credit union service organizations that are owned by one or more credit unions to be included under the SAFE Act rules “to the extent that their employees engage in mortgage lending activities.” Failure to do so would subject CUSOs to state registration and licensing requirements, resulting in “significant, additional burdens” that would “place them at a competitive disadvantage” when compared to “subsidiaries of other financial institutions.” CUNA does not believe it is necessary to require all employees to renew their registration during the time period from Nov. 1 and Dec. 31 each year since it would require employees to register twice within the first calendar year. The better approach, CUNA said, is to allow employees to renew one year after their initial registration, or better, the agencies should consider requiring renewals once every other year instead. Finally, CUNA said the rules should not apply to loan modifications. However, the comment letter added, the SAFE Act rules should apply to mortgage originators that refinance existing loans. Use the resource link below to access the complete CUNA comment letter.


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