Comptroller of the Currency
Administrator of National Banks

The Office of the Comptroller of the Currency, along with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, the Farm Credit Administration and the National Credit Union Administration (collectively, the agencies), issued a joint proposed rule on June 9, 2009, to implement the S.A.F.E. Mortgage Licensing Act of 2008 (the S.A.F.E. Act).

The S.A.F.E. Act requires the agencies to develop and maintain jointly a federal registration system for individuals employed by banks, thrifts, credit unions, and Farm Credit System institutions, and certain of their subsidiaries, who engage in the business of residential mortgage loan origination. These mortgage loan originators must be registered with the Nationwide Mortgage Licensing System and Registry (registry), a database established by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators. As part of this registration process, mortgage loan originators must furnish to the registry background information and fingerprints for a background check. The S.A.F.E. Act generally prohibits employees of an agency-regulated institution from originating residential mortgage loans without first registering with the registry.

The attached proposed rule amends 12 CFR 34 to implement these requirements with respect to national banks, federal branches and agencies of foreign banks, and their operating subsidiaries (national banks). Each of the other agencies has proposed identical rules for their regulated entities as part of this joint rulemaking.

Specifically, the proposal requires mortgage loan originators employed by national banks to register with the registry and maintain their registration. Pursuant to the S.A.F.E. Act, the mortgage loan originators also would be required to obtain a unique identifier through the registry that will remain with that originator, regardless of changes in employment. The proposal requires mortgage loan originators (and national banks) to provide these unique identifiers to consumers in certain circumstances. The proposal provides an exception to these requirements for originators and national banks who originate a de minimis number of residential mortgage loans.

The proposal provides that a national bank must require its employees who are mortgage loan originators to comply with these requirements and specifically prohibits the bank from permitting its employees to act as mortgage loan originators unless registered with the registry pursuant to the proposal and the S.A.F.E. Act. Furthermore, the proposal requires national banks to adopt and follow written policies and procedures to assure compliance with the registration requirements.

The registry currently supports the licensing of state mortgage lending institutions and their mortgage loan originators and was not originally designed to support the registration of mortgage loan originators employed by agency-regulated institutions. Modifications to the registry to enable it to accept federal registrations involve complex legal and system development issues, which the Agencies currently are working to address. The proposed rule provides for a delay in implementation of the registration requirements of the final rule until 180 days after the registry becomes operational and available for initial federal registrations. Therefore, there is no registration requirement in effect for national banks at this time, and the OCC, along with the other Agencies, intends to make an advance public announcement of the date when the registry will begin accepting registrations from employees of agency-regulated institutions.

The proposed rule was published in the Federal Register on June 9, 2009, with a 30-day comment period. The comment period ends on July 9, 2009.

For further information, contact Michele Meyer, Assistant Director, or Heidi M. Thomas, Special Counsel, in the Legislative and Regulatory Activities Division at (202) 874-5090.