THE CFPB INHERITS REGULATIONS G & H

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) provides for the licensing and/or registration of mortgage loan originators. The SAFE Act requires mortgage loan originators to register with the Nationwide Mortgage Licensing System and Registry, obtain a unique identifier, and maintain this registration. The SAFE Act further requires states to adopt minimum standards for licensing residential mortgage loan originators.

The Federal registration requirements of the SAFE Act have been implemented through a coordinated rulemaking of the Federal banking agencies and the Farm Credit Administration with authority over Federal registration requirements under the SAFE Act (collectively, the Federal registry agencies). Further, prior to July 21, 2011, the SAFE Act charged the Department of Housing and Urban Development (HUD) with evaluation of states’ compliance with the SAFE Act and with establishing and maintaining a licensing and registration system for a state or territory that does not have a system in place for licensing loan originators that meets the requirements of the SAFE Act.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)   transferred rulemaking authority for the SAFE Act from the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the National Credit Union Administration, the Federal Deposit Insurance Corporation, and the Department of Housing and Urban Development to the Bureau of Consumer Financial Protection (Bureau), effective July 21, 2011.   The Dodd-Frank Act also granted the Bureau rulemaking authority pursuant to the SAFE Act with respect to employees of institutions regulated by the Farm Credit Administration.  The Bureau is publishing for public comment an interim final rule establishing:

  • A new Regulation G, SAFE Mortgage Licensing Act – Federal Registration of Residential Mortgage Loan Originators, 12 CFR part 1007, implementing the Federal registration requirements of the SAFE Act; and
  • A new Regulation H, SAFE Mortgage Licensing Act – State Compliance and Bureau Registration System, 12 CFR part 1008, implementing the requirements with respect to states’ compliance with the SAFE Act and the maintenance of a licensing and registration system for a state or territory that does not have a system in place for licensing loan originators that meets the requirements of the SAFE Act.

The interim final rules substantially duplicates the existing rules, making only certain non-substantive, technical, formatting, and stylistic changes. To minimize any potential confusion, the Bureau is preserving the past numbering systems of the Federal registry agencies and HUD, other than the new part numbers and, with respect to Regulation G, the enumeration of the individual definitions in section 1007.102. The interim final rule does not impose any new substantive obligations on regulated entities.

References to the respective banking agencies and HUD have been replaced with references to the Bureau in the new regulations. Conforming edits have been made to internal cross-references. Conforming edits have also been made to reflect the scope of the Bureau’s authority pursuant to the requirements of the SAFE Act, as amended by the Dodd-Frank Act. For example, references to the Federal registry agencies and HUD and their respective administrative structures have been replaced with references to the Bureau and its administrative structure. Conforming edits have been made to internal cross-references and addresses. Historical references that are no longer applicable, and references to effective dates that have passed, have been removed.

Regulated entities and their employees that were registered with the Nationwide Mortgage Licensing System and Registry and had obtained unique identifiers pursuant to the regulations of the Federal registry agencies as of the effective date of this Regulation G will be considered by the Bureau to have registered pursuant to the new Regulation G.

A copy of revised Regulation G is located at: https://www.jackscomplianceresource.com/CFPB-Reg-G-SAFE-Act.html  A copy of revised Regulation H is located at: https://www.jackscomplianceresource.com/CFPB-Reg-H-SAFE-Act#_1008.23_ The Federal Register copy is available at: https://www.jackscomplianceresource.com/CFPB-The-Inherited-Regulations.html

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