Alert November 17, 2009

FDIC Adopts Final Rule Implementing SAFE Act Requirements

The FDIC adopted a final rule implementing the Secure and Fair Enforcement for Mortgage Licensing Act. The SAFE Act requires employees of depository institutions (and certain depository institution subsidiaries) regulated by one of the federal banking agencies to (1) register with the Nationwide Mortgage Licensing System and Registry, (2) obtain a unique identifier, and (3) maintain this registration in order to act as a residential mortgage loan originator. To be registered with the Registry, an employee must submit fingerprints for background check purposes, as well as information on personal history and experience. The rule provides an exception to the registration requirement for employees of agency-regulated institutions who have never been registered or licensed through the Registry as a mortgage loan originator and who have acted as a mortgage loan originator for five or fewer residential mortgage loans during the last 12 months. The rule also provides that employees who engage in loan modification activities are not considered mortgage loan originators and, therefore, are not required to register, provided that these employees do not otherwise act as mortgage loan originators. Employees are not required to obtain registrations until the Registry has been modified to accommodate these types of registrations. Once modified, employees must register within 180 days. The rule will be issued jointly by the FDIC, OCC, FRB, OTS and NCUA. Click here for a draft of the rule.