Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to


Download 49.27 Kb.
NamePurposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to
A typeDocumentation

SAMPLE

Secure and Fair Enforcement (S.A.F.E.) for Mortgage Licensing Act of 2008

Policy and Procedures for Compliance with the

Federal Registration Requirement

for Agency-Regulated institutions and their employees

The S.A.F.E. Act mandated nationwide licensing and/or registration for individuals who act as mortgage loan originators (MLOs). Under the S.A.F.E. Act, an individual generally is prohibited from engaging in the business of mortgage loan origination without first obtaining and maintaining a unique identifier and, either a license and registration as a state-licensed MLO, or a registration as a federally registered MLO1.
Because [the Bank does not have a Bank holding company or a nonbank subsidiary], [there are no employees of the Bank Holding Company who are subject to the Act], the Bank must only register its employee mortgage loan originators within the Nationwide Mortgage Licensing System and Registry (“Registry”).
The procedures within this Policy are designed to ensure compliance, and are required by [OCC regulations at 12 C.F.R. Part 34], [Federal Reserve Board regulations at 12 C.F.R. Part 208], [FDIC regulations at 12 C.F.R. Part 365, Subpart B], [OTS regulations at 12 C.F.R. Part 563, Subpart D], [NCUA regulations at 12 C.F.R. Part 761]. This Policy and its procedures are effective October 1, 2010, however, registration cannot be accomplished until the Registry begins to accept applications, expected late-January 2011; registration is required within 180 days of this date. Procedures may need to be modified to address additional guidance expected from the agencies at that time (on web security, batch processing, fingerprint handling, etc).
It is our Policy to properly register MLOs and to provide the unique identifier of each registered MLO as required, and for no other purpose than compliance with these requirements. Our Policy prohibits engaging in any act or practice designed to evade the Act’s registration requirements.
Employees who are not properly Registered are prohibited from acting as MLOs. The Board appoints the [Director of HR] [Senior Loan Officer] [Compliance Officer] with responsibility for compliance with the Act. The [Director of HR] [Senior Loan Officer] [Compliance Officer] may also act as NMLS System Administrator(s) for purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a MLO, in accordance with these procedures.


  1. Process to Identify Bank employees that are required to register:




  1. The [Director of HR] [Senior Loan Officer] [Compliance Officer] is responsible for identifying any new hire or existing employee that is required to register as a MLO, and for ensuring the registrations are updated or renewed as necessary.




    1. “Mortgage Loan” is a loan primarily for personal, family, or household use that is secured by a mortgage [deed of trust] in a dwelling, or residential real estate upon which there is constructed or intended to be constructed a dwelling. Mortgage Loan includes 1st and junior liens, refinancings, reverse mortgages, and HELOCs.




    1. A “Mortgage Loan Originator” (“MLO”) is an employee who takes a Mortgage Loan application and offers or negotiates terms of the loan for compensation.

      1. It excludes an employee who solely performs administrative or clerical tasks on behalf of an MLO (communicates with the applicant, and receives and distributes information without review).

      2. It excludes an employee who has never been registered as a MLO who, during the past 12 months, acted as a MLO in 5 or fewer residential mortgage loans (“de minimis” exception)

      3. It excludes an employee engaged solely in modifying the terms of an existing residential mortgage loan to a borrower as part of our loss mitigation efforts;

      4. It excludes an employee engaged solely in making underwriting decisions with respect to mortgage loans who do not meet the rule’s definition of an MLO.

      5. Taking an application - includes receiving information for the application, even if received indirectly (i.e. through broker), or entering it into an automated underwriting for decision making.

      6. Offers or negotiates terms – includes providing TILA disclosures




    1. As a matter of convenience, the Bank will register all [Residential Loan Officers] [Loan Officers] [Loan Processors] [Loan Assistants] [Credit Officers].




  1. Process to Inform all MLOs of the registration requirements and how to register:




    1. The [Director of HR] [Senior Loan Officer] [Compliance Officer] is responsible for educating any employee that is required to register as a MLO on the procedures for doing so. A copy of this Policy and Procedure will be provided to all lending personnel (not just those required to register), who will have an ongoing obligation to ensure their actions comply with its provisions. Formal training will be provided at new hire and at-least annually thereafter.



    1. Once the system becomes operational, The System Administrator(s) will establish a ‘base’ record in the Registry and request an account for the Bank. Specific instructions for creating a base record and establishing institution administrators will become available on the NMLS website: http://mortgage.nationwidelicensingsystem.org/fedreg/.




    1. Required employee information (see form MU4R attached):

          1. Employee’s *name(s), home address, *principal business location and business contact information, SSN, gender, date and place of birth;

          2. *Financial services-related employment history for prior 10 years;

          3. *Prior judicial action or regulatory discipline in connection with financial services activities, such as (list not exhaustive):

            1. Conviction or pretrial agreement for a crime involving dishonesty, breach of trust, or money laundering (whether against the employee or his/her prior employer);

            2. Customer-initiated civil action resulting in settlement or judgment; judicial or State/federal regulatory finding that the employee violated financial services-related statutes or regulations, or laws prohibiting fraudulent, manipulative, or deceptive conduct;

            3. State/federal regulatory finding that the employee made a false statement or omission, or been dishonest, unfair or unethical; to have caused a financial service-related business to have its license denied, suspended, revoked or restricted; or to have had his/her registration or license denied, suspended, or revoked.

          4. Fingerprints in digital form if practicable, and any appropriate ID information for submission to the FBI and any government agency in connection with a State and national criminal history background check (fingerprints provided to the Registry within prior 3 years satisfies).

          5. Employee must:

            1. Authorize the registry and the Bank to obtain information from a government jurisdiction related to sanctions/findings in any administrative, civil or criminal action to which the employee is a party;

            2. Attest to the accuracy of all information submitted (whether submitted by the employee or the Bank on his/her behalf; and

            3. Authorize the Registry to make public the information with * above.




    1. Required Bank Information (see From MU1R attached):

      1. Name, main office address, and business contact information;

      2. EIN (IRS issued) & RSSD (Federal Reserve issued) numbers;

      3. ID primary federal regulator;

      4. Primary point of Bank contact for Registry purposes (NMLS Administrator);

      5. Name of Bank employee who has been authorized to enter information to the Registry or to delegate the authority to others.

    2. New Employees with Prior registration: If a new employee has maintained a previous registration or license through the Registry and obtained a unique identifier, the employee need only:

      1. update the principal business location address & business contact information;

      2. update the date of Bank employment (as part of the 10-year history);

      3. provide new digital fingerprints (unless prior were less than 3 years old).

If the employee became a Bank employee as a result of a merger or acquisition, the information must be updated within 60 days of the merger/acquisition.


  1. Process to verify employee registrations, including updates and renewals:




    1. The [Director of HR] [Senior Loan Officer] [Compliance Officer] is responsible for confirming the registration against the Bank’s own records, by printing out the registration, comparing it to our records, initialing and dating. The form will be retained in the employee’s [personnel] [MLO] file with all updates and renewals as necessary.

    2. Updates:

      1. The [Director of HR] [Senior Loan Officer] [Compliance Officer] is responsible for updating the Registry within 30 days of a change in the Registrant’s employment status.

      2. The Employee is responsible for updating the Registry within 30 days of a change in the Registrant’s name or the status of judicial action or regulatory discipline in connection with financial services activities (non-exhaustive list of examples provided above).

    3. Renewals:

      1. Registrations (MLO and Bank) must be renewed between November 1 and December 31 each year, except:

      2. Registrations on or after July 1st each year need not be renewed that year.




  1. Process to review criminal history reports and take necessary action:

Individuals convicted of crimes involving dishonesty, breach of trust, or money laundering, are prohibited from participating, directly or indirectly, in the affairs of a bank without the written consent of the FDIC. Refer to Section 19 of the Federal Deposit Insurance Act (http://www.fdic.gov/regulations/laws/rules/1000-2100.html#fdic1000sec19) for full and specific discussion of the prohibition, exceptions, and penalties for violation.

The results of the background check will be provided to the employing bank once completed. The [Director of HR] [Senior Loan Officer] [Compliance Officer] will review the results and advise the CEO of any findings. Criminal conviction or other issues involving allegations of dishonesty will result in appropriate action, which may include termination of employment.


  1. Process to Secure and Use Unique Identifier:




    1. The [Director of HR] [Senior Loan Officer] [Compliance Officer] and the MLO shall provide the MLO’s Unique Identifier upon request.




    1. The MLO shall provide his/her unique Identifier:

      1. in their signature on all New e-mail Messages (Outlook parameter);

      2. on their business cards; and

      3. in their initial written communication with an applicant (e.g. on early disclosure letter)




  1. Process to respond to non-compliance with registration requirements:


Any employee who is required to be registered but who fails to comply with the registration requirements is prohibited from acting as a MLO. Disciplinary action, up to and including dismissal, will be taken as appropriate.


  1. Process to oversee third party MLOs:


The [Senior Loan Officer] [Compliance Officer] is responsible for ensuring that third parties with whom the Bank contracts for Mortgage Loan Origination (such as processors) have procedures in place to comply with the S.A.F.E. Act including appropriate licensing/registration of individuals acting as MLOs (See Appendix A, regarding Florida’s licensing requirements for individuals who are not an employee of an agency-regulated institution.), and that all contracts with applicable third parties include a provision attesting to compliance with the S.A.F.E. Act.


  1. Process to Monitor compliance with registration and renewal


The Director of Human Resources will check registration requirements at each new hire or acquisition. The [Senior Loan Officer] [Compliance Officer] will monitor employee activities on an ongoing basis to ensure that the Bank does not allow non-registered employees to conduct any activities associated with mortgage loan origination.


  1. Annual Independent Testing:


Compliance with the SAFE Act and this Policy’s requirements will be tested at least annually during the independent [Governance Internal Audit] [Loan Compliance Review].





S.A.F.E. Act Examples of Mortgage Loan Originator Activities


This Appendix, provided by the banking regulatory agencies, provides examples to aid in the understanding of activities that would cause an employee of a bank to fall within or outside the definition of mortgage loan originator. The examples in this Appendix are not all inclusive. They illustrate only the issue described and do not illustrate any other issues that may arise under this subpart.

For the purposes of the examples below, the term “loan” refers to a residential mortgage loan

(a) Taking a loan application: The following examples illustrate when an employee takes, or does not take, a loan application

(1) Taking an application includes: receiving information provided in connection with a request for a loan to be used to determine whether the consumer qualifies for a loan, even if the employee

(i) has received the consumer’s information indirectly in order to make an offer or negotiate a loan;

(ii) is not responsible for further verification of information;

(iii) is inputting information into an online application or other automated system on behalf of the consumer; or

(iv) is not engaged in approval of the loan, including determining whether the consumer qualifies for the loan

(2) Taking an application does not include any of the following activities performed solely or in combination:

(i) Contacting a consumer to verify the information in the loan application by obtaining documentation, such as tax returns or payroll receipts;

(ii) Receiving a loan application through the mail and forwarding it, without review, to loan approval personnel;

(iii) Assisting a consumer who is filling out an application by clarifying what type of information is necessary for the application or otherwise explaining the qualifications or criteria necessary to obtain a loan product;

(iv) Describing the steps that a consumer would need to take to provide information to be used to determine whether the consumer qualifies for a loan or otherwise explaining the loan application process;

(v) In response to an inquiry regarding a prequalified offer that a consumer has received from a bank, collecting only basic identifying information about the consumer and forwarding the consumer to a loan originator; or

(vi) Receiving information in connection with a modification to the terms of an existing loan to a borrower as part of the bank’s loss mitigation efforts when the borrower is reasonably likely to default

Continued, next page

(b) Offering or negotiating terms of a loan. The following examples are designed to illustrate when an employee offers or negotiates terms of a loan, and conversely, what does not constitute offering or negotiating terms of a loan

(1) Offering or negotiating the terms of a loan includes:

(i) Presenting a loan offer to a consumer for acceptance, either verbally or in writing, including, but not limited to, providing a disclosure of the loan terms after application under the Truth in Lending Act, even if: (A) further verification of information is necessary; (B) the offer is conditional; (C) other individuals must complete the loan process; or (D) only the rate approved by the bank’s loan approval mechanism function for a specific loan product is communicated without authority to negotiate the rate

(ii) Responding to a consumer’s request for a lower rate or lower points on a pending loan application by presenting to the consumer a revised loan offer, either verbally or in writing, that includes a lower interest rate or lower points than the original offer

(2) Offering or negotiating terms of a loan does not include solely or in combination:

(i) Providing general explanations or descriptions in response to consumer queries regarding qualification for a specific loan product, such as explaining loan terminology (i.e., debt-to income ratio); lending policies (i.e., the loan-to-value ratio policy of the bank); or product-related services;

(ii) In response to a consumer’s request, informing a consumer of the loan rates that are publicly available such as on the bank’s Web site for specific types of loan products without communicating to the consumer whether qualifications are met for that loan product;

(iii) Collecting information about a consumer in order to provide the consumer with information on loan products for which the consumer generally may qualify, without presenting a specific loan offer to the consumer for acceptance, either verbally or in writing;

(iv) Arranging the loan closing or other aspects of the loan process, including communicating with a consumer about those arrangements, provided that communication with the consumer only verifies loan terms already offered or negotiated;

(v) Providing a consumer with information unrelated to loan terms, such as the best days of the month for scheduling loan closings at the bank;

(vi) Making an underwriting decision about whether the consumer qualifies for a loan;

(vii) Explaining or describing the steps or process that a consumer would need to take in order to obtain a loan offer, including qualifications or criteria that would need to be met without providing guidance specific to that consumer’s circumstances; or

(viii) Communicating on behalf of a mortgage loan originator that a written offer, including disclosures provided pursuant to the Truth in Lending Act, has been sent to a consumer without providing any details of that offer

(c) The following examples illustrate when an employee does or does not offer or negotiate terms of a loan “for compensation or gain.”

(1) Offering or negotiating terms of a loan for compensation or gain includes engaging in any of the activities in paragraph (b)(1) of this Appendix in the course of carrying out employment duties, even if the employee does not receive a referral fee or commission or other special compensation for the loan

(2) Offering or negotiating terms of a loan for compensation or gain does not include engaging in a seller-financed transaction for the employee’s personal property that does not involve the bank.

1 The Act imposes additional requirements on MLOs who are not employees of agency-regulated institutions, including state licensure and testing requirements and character and fitness standards. In this regard, employees of bank holding companies and their nonbank subsidiaries who act as MLOs are subject to state licensure and associated state regulation.
2 Banks with 10 or less FTE: The System Administrator may also serve as a MLO, as long as there are alternative controls to ensure that s/he performs his/her duties appropriately, given the level of access to confidential information of co-workers.


Share in:

Related:

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconThe following Employee Manual is for example and educational purposes...

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconIs a Volunteer an Employee For Discrimination Law Purposes?

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconThis letter is to certify that we are using the services of (employee...

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconHenry County Water Authority employee handbook 1695 Hwy. 20 West McDonough, ga 30253

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconEmployee Details Employee Name John Roger

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconEmployee Retirement Income and Security Act of 1974

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to icon5b. Bank Secrecy Act Internal Audit Procedures Checklist

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconIn consideration of the mutual covenants set forth below, Employer...

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconChecklist 10. 1: Sample abc finance Compliance Review Procedures for Bank Secrecy Act

Purposes of providing Employee and Bank information to the Registry, or may delegate that authority to another employee who do not him/herself act as a mlo, in accordance with these procedures. Process to iconThis template is intended to provide sample content for an information...




forms and shapes


When copying material provide a link © 2017
contacts
filling-form.info
search