Consumer Financial Services Alert - August 10, 2010 August 10, 2010
In This Issue

Federal Banking Agencies Issue Final SAFE Act Rule

The federal banking agencies issued a final rule concerning the registration of employees who act as mortgage loan originators for banks, savings associations, credit unions, and certain of their subsidiaries. The rule is implemented under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which requires mortgage loan originators employed by banking institutions to register with the Nationwide Mortgage Licensing System and Registry. The rule generally defines a mortgage loan originator as an individual who (1) takes a residential mortgage loan application and (2) offers or negotiates terms of a residential mortgage loan for compensation or gain. Notably, this definition is more narrow than the definition of a mortgage loan originator contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule excludes from its registration requirement both individuals engaged in mortgage loan modifications and assumptions as well as individuals who service mortgage loans, provided that such individuals do not also originate new loans. The rule will be effective October 1, 2010; however, the federal banking agencies do not expect that the Nationwide Mortgage Licensing System and Registry will be ready to accept mortgage loan originator applications before January 28, 2011. Mortgage loan originator employees of banking institutions will have 180 days to register after the Nationwide Mortgage Licensing System and Registry begins accepting applications. Click here for the rule.

Credit Card Act Amended to Delay Certain Gift Card Disclosures

President Obama signed into law HR 5502, an act amending the effective date of certain gift card disclosure provisions contained in the Credit Card Accountability Responsibility and Disclosure Act. The amendment applies to gift cards produced before April 1, and postpones until January 31, 2011 certain on-card disclosure requirements. Click here for the amendment.