WASHINGTON (8/22/08)—Title V of the Housing and Economic Recovery Act brings new licensing and registration requirements for mortgage originators and the Credit Union National Association (CUNA) is advising credit unions on just what that means. The housing recovery measure was signed into law in July and is the result of problems with mortgage lending in recent years, especially with subprime mortgage loans. Under the new law, any individual who originates residential mortgage loans as an employee of any state or federal credit union will have to annually register with the “Nationwide Mortgage Licensing System and Registry” as a “registered loan originator.” The law calls for the federal banking agencies and the National Credit Union Administration to develop and maintain a system for registering the appropriate employees of banks and credit unions in conjunction with the Conference of State Banking Supervisors (CSBS) system, and this agency program has to be in place by August 2009. Credit union mortgage lending staff will have to provide fingerprints for a criminal background check, provide a personal employment history and authorization for the CSBS system to obtain information about any administrative, civil or criminal rulings, and be assigned a "unique identified" number that will facilitate electronic tracking and public access to this information. CSBS has had its licensing system and registry up and running since Jan. 2, and with some minor tweaks they will soon meet the Title V requirements, according to Valerie Moss, CUNA’s director of compliance information. Generally under the CSBS plan, if a state does not take necessary action to participate in the system by August 2009, then HUD is required to develop a system of licensing and registration for state-licensed loan originators in those states not participating. The law does give the Department of Housing and Urban Development(HUD) the authority to wait up to an additional two years if it feels the state is making a good faith effort to take state action. HUD is also authorized to step in at some future time if it feels the system is not working in one or more states. And who must be registered? Moss says any individual who originates residential mortgage loans as an employee of any state or federal credit union will have to annually enroll as a “registered loan originator.” “Other people who originate residential mortgage loans will have to be licensed and registered as ‘state-licensed loan originators.’ “And employees working for a ‘subsidiary that is owned and controlled by’ a credit union and that is regulated by NCUA doing residential mortgage loan originations will also be subject to registration, but it’s unclear if any CUSOs will fit into this definition,” according to CUNA’s Moss. Use the resource link below to access more information on credit union employee registration, licensed loan originators, and other provisions of the new law, which affect credit unions.