Written by Bernadette Clair, Senior Regulatory Compliance Counsel
First off, I hope everyone had a great Thanksgiving holiday, spending time with friends and family!
This is the time to update and renew loan originator registrations. The SAFE Act renewal period, which began November 1st, will expire on December 31, 2013. Remember that under the SAFE Act, all credit unions and their MLOs must renew their registration during the annual renewal period each year (there is an exception for MLOs registering for the first time less than six months prior to the end of the annual renewal period). If a credit union and its MLOs do not renew their registration, they would be prohibited from originating residential mortgage loans until their status has been reactivated.
From 12 CFR 1007.103(a)(2):
“§ 1007.103 Registration of mortgage loan originators.
(2) Covered financial institution requirement —(i) In general. A covered financial institution that employs one or more individuals who act as a residential mortgage loan originator must require each such employee to register with the Registry, maintain this registration, and obtain a unique identifier in accordance with the requirements of this part.
(ii) Prohibition. A covered financial institution must not permit an employee who is subject to the registration requirements of this part to act as a mortgage loan originator for the covered financial institution unless such employee is registered with the Registry pursuant to this part.”
If the institution’s MLO(s) misses the December 31 deadline for annual renewal, the MLO’s status goes inactive. During the period of inactivity, the MLO cannot originate loans, but as soon as the MLO renews his/her registration, he/she will go back to active status and may begin originating again.