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Washington
CUs have just one week to comply with Registry rule
WASHINGTON (7/22/11)—With the compliance deadline just one week away for a statutory requirement that credit unions and their employees who are “mortgage loan originators” (MLOs) must register on a nationwide licensing system, some credit unions may be contacted by their federal or state regulator just double-checking that they are on top of the requirements, said Kathy Thompson, head of the Credit Union National Association‘s compliance department. Effective July 29, the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires MLOs to have registered on the Nationwide Mortgage Licensing System & Registry (NMLS), and for MLOs to start putting their unique NMLS-assigned identifier number on appropriate mortgage documents. As a brief refresher, Thompson reminds that if a credit union offers residential mortgage loans and employs individuals required to be federally registered as mortgage loan originators, the credit union must be registered with NMLS. Residential mortgage loans include first mortgages, second mortgages, home equity lines of credit (HELOCs), refinanced mortgage loans, reverse mortgages and land purchased for the construction of a residence. A credit union must determine what employees meet the definition of mortgage loan originator, a term that is defined as an individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain. These MLOs must disclose their identifying number to members applying for a loan. The SAFE Act does provide a de minimus exception from registration if someone who would otherwise be an MLO makes five or fewer mortgage loans during a 12-month period. Thompson added, “If credit unions have any compliance questions about the new requirements, there are plenty of resources available, and their league certainly is ready to help with any implementation issues.” Thompson noted that effective Aug. 1, consumers will be able to get some information about the loan officer from the NMLS public site based on the MLO identifier number, so it’s very important that credit unions that make mortgage loans are ready to go starting in a week. Use the resource links below for more information. Also, visit CUNA's CompBlog, which features a July 21 Safe Act posting, to be followed by another this morning.
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