S.A.F.E. Mortgage Licensing Act (Regulations G & H), 78483-78499 [2011-31730]

Agencies

• BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 76, Number 243 (Monday, December 19, 2011)]
[Rules and Regulations]
[Pages 78483-78499]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31730]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1007 and 1008

[Docket No. CFPB-2011-0023]
RIN 3170-AA06


S.A.F.E. Mortgage Licensing Act (Regulations G & H)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Interim final rule with request for public comment.

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SUMMARY: Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) transferred rulemaking authority for a 
number of consumer financial protection laws from seven Federal 
agencies to the Bureau of Consumer Financial Protection (Bureau) as of 
July 21, 2011. The Bureau is in the process of republishing the 
regulations implementing those laws with technical and conforming 
changes to reflect the transfer of authority and certain other changes 
made by the Dodd-Frank Act. In light of the transfer to the Bureau of 
the rulemaking authority of 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 for the Secure and Fair 
Enforcement for Mortgage Licensing Act (S.A.F.E. Act), the Bureau is 
publishing for public comment an interim final rule establishing a new 
Regulation G (S.A.F.E. Mortgage Licensing Act--Federal Registration of 
Residential Mortgage Loan Originators) and a new

[[Page 78484]]

Regulation H (S.A.F.E. Mortgage Licensing Act--State Compliance and 
Bureau Registration System). This interim final rule also covers 
employees of institutions regulated by the Farm Credit Administration. 
This interim final rule does not impose any new substantive obligations 
on persons subject to the existing S.A.F.E. Act regulations.

DATES: This interim final rule is effective on December 30, 2011. 
Comments must be received on or before February 17, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-
0023 or RIN 3170-AA06, by any of the following methods:
     Electronic: https://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1500 Pennsylvania Avenue NW., 
(Attn: 1801 L Street), Washington, DC 20220.
     Hand Delivery/Courier in Lieu of Mail: Monica Jackson, 
Office of the Executive Secretary, Bureau of Consumer Financial 
Protection, 1700 G Street NW., Washington, DC 20006.
    All submissions must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. In general, 
all comments received will be posted without change to https://www.regulations.gov. In addition, comments will be available for public 
inspection and copying at 1700 G Street NW., Washington, DC 20006, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Time. You can make an appointment to inspect the documents by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or social 
security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Mitchell E. Hochberg or Joseph Devlin, 
Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 
(S.A.F.E. Act) provides for the licensing and/or registration of 
mortgage loan originators. The S.A.F.E. Act requires employees of 
depository institutions, employees of subsidiaries that are owned and 
controlled by a depository institution and regulated by a Federal 
banking agency, or employees of institutions regulated by the Farm 
Credit Administration who act as residential mortgage loan originators 
to register with the Nationwide Mortgage Licensing System and Registry, 
obtain a unique identifier, and maintain this registration. The 
S.A.F.E. Act further requires states to adopt minimum standards for 
licensing residential mortgage loan originators.
    Historically, the Federal registration requirements of the S.A.F.E. 
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 S.A.F.E. Act 
(collectively, the Federal registry agencies).\1\ Further, prior to 
July 21, 2011, the S.A.F.E. Act charged the Department of Housing and 
Urban Development (HUD) with evaluation of states' compliance with the 
S.A.F.E. 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 S.A.F.E. Act.
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    \1\ 75 FR 44656 (July 28, 2010). The rules were promulgated by 
the Office of the Comptroller of the Currency (12 CFR part 34); the 
Federal Reserve System (12 CFR parts 208 and 211); the Federal 
Deposit Insurance Corporation (12 CFR part 365); the Office of 
Thrift Supervision (12 CFR part 563); the Farm Credit Administration 
(12 CFR part 610); and the National Credit Union Administration (12 
CFR parts 741 and 761).
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    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act) \2\ amended a number of consumer financial protection 
laws, including the S.A.F.E. Act. In addition to minor amendments, the 
Dodd-Frank Act transferred rulemaking authority for the S.A.F.E. 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.\3\ See sections 1061 and 
1100 of the Dodd-Frank Act. The Dodd-Frank Act also granted the Bureau 
rulemaking authority pursuant to the S.A.F.E. Act with respect to 
employees of institutions regulated by the Farm Credit Administration. 
See section 1100 of the Dodd-Frank Act. Pursuant to the Dodd-Frank Act 
and the S.A.F.E. Act, as amended, the Bureau is publishing for public 
comment an interim final rule establishing a new Regulation G, S.A.F.E. 
Mortgage Licensing Act--Federal Registration of Residential Mortgage 
Loan Originators, 12 CFR part 1007, implementing the Federal 
registration requirements of the S.A.F.E. Act and a new Regulation H, 
S.A.F.E. Mortgage Licensing Act--State Compliance and Bureau 
Registration System, 12 CFR Part 1008, implementing the requirements 
with respect to states' compliance with the S.A.F.E. 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 S.A.F.E. Act.
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    \2\ Public Law 111-203, 124 Stat. 1376 (2010).
    \3\ Dodd-Frank section 1029 generally excludes from this 
transfer of authority, subject to certain exceptions, any rulemaking 
authority over a motor vehicle dealer that is predominantly engaged 
in the sale and servicing of motor vehicles, the leasing and 
servicing of motor vehicles, or both.
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II. Summary of the Interim Final Rule

A. General

    The interim final rule substantially duplicates the Federal 
registry agencies' largely identical coordinated rules as the Bureau's 
new Regulation G, 12 CFR part 1007, making only certain non-
substantive, technical, formatting, and stylistic changes. The interim 
final rule also substantially duplicates HUD's rule as the Bureau's new 
Regulation H, 12 CFR part 1008. 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. While this interim final rule generally 
incorporates and consolidates the largely identical rules of the 
Federal registry agencies and HUD, the rule has been edited as 
necessary to reflect nomenclature and other technical amendments 
required by the Dodd-Frank Act. Notably, this interim final rule does 
not impose any new substantive obligations on regulated entities. 
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.

B. Specific Changes

    The new Regulation G consolidates the regulations of the Office of 
the Comptroller of the Currency (12 CFR part 34); the Federal Reserve 
System (12

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CFR parts 208 and 211); the Federal Deposit Insurance Corporation (12 
CFR part 365); the Office of Thrift Supervision (12 CFR part 563); the 
Farm Credit Administration (12 CFR part 610); and the National Credit 
Union Administration (12 CFR parts 741 and 761) pursuant to the 
conforming changes in section 1100 of the Dodd-Frank Act. Further, the 
new Regulation H has been changed to effect technical, non-substantive 
changes to HUD's existing regulatory text of 24 CFR part 3400.
    For both Regulations G and H, 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 S.A.F.E. 
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.

III. Legal Authority

A. Rulemaking Authority

    The Bureau is issuing this interim final rule pursuant to its 
authority under the S.A.F.E. Act and the Dodd-Frank Act.\4\ Effective 
July 21, 2011, section 1061 of the Dodd-Frank Act transferred to the 
Bureau the ``consumer financial protection functions'' previously 
vested in certain other Federal agencies. The term ``consumer financial 
protection function'' is defined to include ``all authority to 
prescribe rules or issue orders or guidelines pursuant to any Federal 
consumer financial law, including performing appropriate functions to 
promulgate and review such rules, orders, and guidelines.'' \5\ The 
S.A.F.E. Act is a ``Federal consumer financial law.'' \6\ Additionally, 
section 1061 transferred to the Bureau all of the HUD Secretary's 
consumer protection functions relating to the S.A.F.E. Act, which 
includes rulemaking authority. The Dodd-Frank Act also granted the 
Bureau rulemaking authority pursuant to the S.A.F.E. Act with respect 
to employees of institutions regulated by the Farm Credit 
Administration.\7\ Accordingly, effective July 21, 2011, the Bureau has 
rulemaking authority for the S.A.F.E. Act.\8\
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    \4\ In addition, the Bureau also relies on section 1402 of the 
Dodd-Frank Act, which amends the Truth in Lending Act (TILA) to 
provide the Bureau with specific rulemaking authority over mortgage 
originator qualifications, among other things. The Bureau also has 
authority to make adjustments and exceptions with respect to 
consumer credit transactions pursuant to TILA rulemaking authority. 
See 15 U.S.C. 1604(a), 1639b.
    \5\ Public Law 111-203, section 1061(a)(1). Effective on the 
designated transfer date, July 21, 2011, the Bureau was also granted 
``all powers and duties'' vested in certain other Federal agencies, 
relating to the consumer financial protection functions, on the day 
before the designated transfer date. Until this and other interim 
final rules take effect with respect to the functions transferred 
pursuant to section 1061, existing regulations for which rulemaking 
authority transferred to the Bureau continue to govern persons 
covered by this rule. See 76 FR 43569 (July 21, 2011).
    \6\ Public Law 111-203, section 1002(14) (defining ``Federal 
consumer financial law'' to include the ``enumerated consumer 
laws''); id. Section 1002(12) (defining ``enumerated consumer laws'' 
to include the S.A.F.E. Act).
    \7\ Public Law 111-203, section 1100.
    \8\ Section 1066 of the Dodd-Frank Act grants the Secretary of 
the Treasury interim authority to perform certain functions of the 
Bureau. Pursuant to that authority, Treasury is publishing this 
interim final rule on behalf of the Bureau.
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    The S.A.F.E. Act, as amended, authorizes the Bureau to ``develop 
and maintain a system for registering employees of a depository 
institution, employees of a subsidiary that is owned and controlled by 
a depository institution and regulated by a Federal banking agency, or 
employees of an institution regulated by the Farm Credit 
Administration, as registered loan originators with the Nationwide 
Mortgage Licensing System and Registry.'' \9\ The S.A.F.E. Act also 
authorizes the Bureau to make such de minimis exceptions to the 
registration requirements as may be appropriate.\10\ Further, under the 
S.A.F.E. Act, if the Bureau determines that a state's loan origination 
licensing system does not meet the minimum requirements of the S.A.F.E. 
Act, the Bureau is charged with establishing and implementing a system 
for all loan originators in that state. Additionally, if at any time 
the Bureau determines that the nationwide mortgage licensing system and 
registry is failing to meet the S.A.F.E. Act's requirements, the Bureau 
is charged with establishing and maintaining a licensing and registry 
database for loan originators.\11\ Regulations G and H are issued in 
accordance with these authorities.
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    \9\ Public Law 111-203, section 1100(5)(A).
    \10\ 12 U.S.C. 5106(c).
    \11\ 12 U.S.C. 5107-5108.
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B. Authority To Issue an Interim Final Rule Without Prior Notice and 
Comment

    The Administrative Procedure Act (APA) \12\ generally requires 
public notice and an opportunity to comment before promulgation of 
regulations.\13\ The APA provides exceptions to notice-and-comment 
procedures, however, where an agency for good cause finds that such 
procedures are impracticable, unnecessary, or contrary to the public 
interest or when a rulemaking relates to agency organization, 
procedure, and practice.\14\ The Bureau finds that there is good cause 
to conclude that providing notice and opportunity for comment would be 
unnecessary and contrary to the public interest under these 
circumstances. In addition, substantially all the changes made by this 
interim final rule, which were necessitated by the Dodd-Frank Act's 
transfer of S.A.F.E. Act authority to the Bureau, relate to agency 
organization, procedure, and practice and are thus exempt from the 
APA's notice-and-comment requirements.
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    \12\ 5 U.S.C. 551 et seq.
    \13\ 5 U.S.C. 553(b), (c).
    \14\ 5 U.S.C. 553(b)(B).
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    The Bureau's good cause findings are based on the following 
considerations. As an initial matter, the Federal registry agencies and 
HUD's existing regulations were a result of notice-and-comment 
rulemaking to the extent required. Moreover, the interim final rule 
published today does not impose any new, substantive obligations on 
regulated entities. Rather, the interim final rule makes only non-
substantive, technical changes to the existing text of the regulations, 
such as renumbering, changing internal cross-references, replacing 
appropriate nomenclature to reflect the transfer of authority to the 
bureau, and updating to reflect the expiration of certain deadlines. 
Given the technical nature of these changes, and the fact that the 
interim final rule does not impose any additional substantive 
requirements on covered entities, an opportunity for prior public 
comment is unnecessary. In addition, recodifying the Federal registry 
agencies' and HUD's regulations to reflect the transfer of authority to 
the Bureau will help facilitate compliance with the S.A.F.E. Act and 
its implementing regulations, and the new regulations will help reduce 
uncertainty regarding the applicable regulatory framework. Using 
notice-and-comment procedures would delay this process and thus be 
contrary to the public interest.
    The APA generally requires that rules be published not less than 30 
days

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before their effective dates. See 5 U.S.C. 553(d). As with the notice 
and comment requirement, however, the APA allows an exception when 
``otherwise provided by the agency for good cause found and published 
with the rule.'' 5 U.S.C. 553(d)(3). The Bureau finds that there is 
good cause for providing less than 30 days notice here. A delayed 
effective date would harm consumers and regulated entities by 
needlessly perpetuating discrepancies between the amended statutory 
text and the implementing regulation, thereby hindering compliance and 
prolonging uncertainty regarding the applicable regulatory 
framework.\15\
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    \15\ This interim final rule is one of 14 companion rulemakings 
that together restate and recodify the implementing regulations 
under 14 existing consumer financial laws (part III.C, below, lists 
the 14 laws involved). In the interest of proper coordination of 
this overall regulatory framework, which includes numerous cross-
references among some of the regulations, the Bureau is establishing 
the same effective date of December 30, 2011 for those rules 
published on or before that date and making those published 
thereafter (if any) effective immediately.
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    In addition, delaying the effective date of the interim final rule 
for 30 days would provide no practical benefit to regulated entities in 
this context and in fact could operate to their detriment. As discussed 
above, the interim final rule published today does not impose any new, 
substantive obligations on regulated entities. Instead, the rule makes 
only non-substantive, technical changes to the existing text of the 
regulation. Thus, regulated entities that are already in compliance 
with the existing rules will not need to modify business practices as a 
result of this rule.

C. Section 1022(b)(2) of the Dodd-Frank Act

    In developing the interim final rule, the Bureau has conducted an 
analysis of potential benefits, costs, and impacts.\16\ The Bureau 
believes that the interim final rule will benefit consumers and covered 
persons by updating and recodifying in Regulations G and H the Federal 
registry agencies' and HUD's S.A.F.E. Act regulations to reflect the 
transfer of authority to the Bureau and certain other changes mandated 
by the Dodd-Frank Act. This will help facilitate compliance with the 
S.A.F.E. Act and its implementing regulations and help reduce any 
uncertainty regarding the applicable regulatory framework. The interim 
final rule will not impose any new substantive obligations on consumers 
or covered persons and is not expected to have any impact on consumers' 
access to consumer financial products and services.
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    \16\ Section 1022(b)(2)(A) of the Dodd-Frank Act addresses the 
consideration of the potential benefits and costs of regulation to 
consumers and covered persons, including the potential reduction of 
access by consumers to consumer financial products or services; the 
impact on depository institutions and credit unions with $10 billion 
or less in total assets as described in section 1026 of the Dodd-
Frank Act; and the impact on consumers in rural areas. Section 
1022(b)(2)(B) requires that the Bureau ``consult with the 
appropriate prudential regulators or other Federal agencies prior to 
proposing a rule and during the comment process regarding 
consistency with prudential, market, or systemic objectives 
administered by such agencies.'' The manner and extent to which 
these provisions apply to interim final rules and to costs, 
benefits, and impacts that are compelled by statutory changes rather 
than discretionary Bureau action is unclear. Nevertheless, to inform 
this rulemaking more fully, the Bureau performed the described 
analyses and consultations.
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    Although not required by the interim final rule, covered entities 
may incur some costs in updating compliance manuals and related 
materials to reflect the new numbering and other technical changes 
reflected in the new Regulations G and H. The Bureau has worked to 
reduce any such burden by preserving the existing numbering to the 
extent possible and believes that such costs will likely be minimal. 
These changes could be handled in the short term by providing a short, 
standalone summary alerting users to the changes and in the long term 
could be combined with other updates at the covered entities' 
convenience. The Bureau intends to continue investigating the possible 
costs to affected entities of updating manuals and related materials to 
reflect these changes and solicits comments on this and other issues 
discussed in this section.
    The interim final rule will have no unique impact on depository 
institutions or credit unions with $10 billion or less in assets 
described in section 1026(a) of the Dodd-Frank Act. Also, the interim 
final rule will have no unique impact on rural consumers.
    In undertaking the process of updating and recodifying in 
Regulations G and H the Federal registry agencies' and HUD's S.A.F.E. 
Act regulations, as well as regulations implementing thirteen other 
existing consumer financial laws,\17\ the Bureau consulted the Federal 
Deposit Insurance Corporation, the Office of the Comptroller of the 
Currency, the National Credit Union Administration, the Board of 
Governors of the Federal Reserve System, the Federal Trade Commission, 
and the Department of Housing and Urban Development, including with 
respect to consistency with any prudential, market, or systemic 
objectives that may be administered by such agencies.\18\ The Bureau 
also consulted the Farm Credit Administration regarding the 
recodification of Regulation G and consulted with the Office of 
Management and Budget for technical assistance. The Bureau expects to 
have further consultations with the appropriate Federal agencies during 
the comment period.
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    \17\ The fourteen laws implemented by this and its companion 
rulemakings are: the Consumer Leasing Act, the Electronic Fund 
Transfer Act (except with respect to section 920 of that Act), the 
Equal Credit Opportunity Act, the Fair Credit Reporting Act (except 
with respect to sections 615(e) and 628 of that act), the Fair Debt 
Collection Practices Act, Subsections (b) through (f) of section 43 
of the Federal Deposit Insurance Act, sections 502 through 509 of 
the Gramm-Leach-Bliley Act (except for section 505 as it applies to 
section 501(b)), the Home Mortgage Disclosure Act, the Real Estate 
Settlement Procedures Act, the S.A.F.E. Mortgage Licensing Act, the 
Truth in Lending Act, the Truth in Savings Act, section 626 of the 
Omnibus Appropriations Act, 2009, and the Interstate Land Sales Full 
Disclosure Act.
    \18\ In light of the technical but voluminous nature of this 
recodification project, the Bureau focused the consultation process 
on a representative sample of the recodified regulations, while 
making information on the other regulations available. The Bureau 
expects to conduct differently its future consultations regarding 
substantive rulemakings.
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IV. Request for Comment

    Although notice and comment rulemaking procedures are not required, 
the Bureau invites comments on this notice. Commenters are specifically 
encouraged to identify any technical issues raised by the rule. The 
Bureau is also seeking comment in response to a notice published at 76 
FR 75825 (Dec. 5, 2011) concerning its efforts to identify priorities 
for streamlining regulations that it has inherited from other Federal 
agencies to address provisions that are outdated, unduly burdensome, or 
unnecessary.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires each 
agency to consider the potential impact of its regulations on small 
entities, including small businesses, small governmental units, and 
small not-for-profit organizations.\19\ The RFA generally requires an 
agency to conduct an initial regulatory flexibility analysis (IRFA) and 
a final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities.\20\ The Bureau also is subject to 
certain additional procedures under the RFA

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involving the convening of a panel to consult with small business 
representatives prior to proposing a rule for which an IRFA is 
required.\21\
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    \19\ 5 U.S.C. 601 et seq.
    \20\ 5 U.S.C. 603, 604.
    \21\ 5 U.S.C. 609.
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    The IRFA and FRFA requirements described above apply only where a 
notice of proposed rulemaking is required,\22\ and the panel 
requirement applies only when a rulemaking requires an IRFA.\23\ As 
discussed above in part III, a notice of proposed rulemaking is not 
required for this rulemaking.
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    \22\ 5 U.S.C. 603(a), 604(a); 5 U.S.C. 553(b)(B).
    \23\ 5 U.S.C. 609(b).
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    In addition, as discussed above, this interim final rule has only a 
minor impact on entities subject to Regulations G and H. The rule 
imposes no new, substantive obligations on covered entities. 
Accordingly, the undersigned certifies that this interim final rule 
will not have a significant economic impact on a substantial number of 
small entities.

VI. Paperwork Reduction Act

    The Bureau may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
Regulation G contains information collection requirements under the 
Paperwork Reduction Act (PRA), which have been previously approved by 
OMB, and the ongoing PRA burden for which is unchanged by this rule. 
There are no new information collection requirements in this interim 
final rule. The Bureau's OMB control number for this information 
collection is 3170-0005.

List of Subjects in 12 CFR Parts 1007 and 1008

    Accounting, Administrative practice and procedure, Advertising, 
Agriculture, Bank deposit insurance, Banks, Banking, Confidential 
business information, Conflict of interests, Consumer protection, 
Credit unions, Crime, Currency, Exports, Foreign banking, Grant 
programs--housing and community development, Holding companies, 
Insurance, Investments, Loan programs--housing and community 
development, Licensing, Mortgages, National banks, Penalties, 
Registration, Reporting and recordkeeping requirements, Rural areas, 
Savings associations, Securities, Surety bonds.

Authority and Issuance

    For the reasons set forth above, the Bureau of Consumer Financial 
Protection adds Parts 1007 and 1008 to Chapter X in Title 12 of the 
Code of Federal Regulations to read as follows:

PART 1007--S.A.F.E. MORTGAGE LICENSING ACT--FEDERAL REGISTRATION OF 
RESIDENTIAL MORTGAGE LOAN ORIGINATORS (REGULATION G)

Sec.
1007.101 Authority, purpose, and scope of this part.
1007.102 Definitions applicable to this part.
1007.103 Registration of mortgage loan originators.
1007.104 Policies and procedures.
1007.105 Use of Unique Identifier.
Appendix A to Part 1007--Examples of Mortgage Loan Originator 
Activities

    Authority: 12 U.S.C. 5101-5116; 15 U.S.C. 1604(a), 1639b; Pub. 
L. 111-203, 124 Stat. 1376.


Sec.  1007.101  Authority, purpose, and scope.

    (a) Authority. This part, known as Regulation G, is issued by the 
Bureau of Consumer Financial Protection pursuant to the Secure and Fair 
Enforcement for Mortgage Licensing Act of 2008, title V of the Housing 
and Economic Recovery Act of 2008 (S.A.F.E. Act) (Pub. L. 110-289, 122 
Stat. 2654, 12 U.S.C. 5101 et seq.), 12 U.S.C. 5512, 5581, 15 U.S.C. 
1604(a), 1639b.
    (b) Purpose. This part implements the S.A.F.E. Act's Federal 
registration requirement for mortgage loan originators. The S.A.F.E. 
Act provides that the objectives of this registration include 
aggregating and improving the flow of information to and between 
regulators; providing increased accountability and tracking of mortgage 
loan originators; enhancing consumer protections; supporting anti-fraud 
measures; and providing consumers with easily accessible information at 
no charge regarding the employment history of, and publicly adjudicated 
disciplinary and enforcement actions against, mortgage loan 
originators.
    (c) Scope--(1) In general. This part applies to:
    (i) National banks, Federal branches and agencies of foreign banks, 
their operating subsidiaries (collectively referred to in this part as 
national banks), and their employees who act as mortgage loan 
originators;
    (ii) Member banks of the Federal Reserve System; their respective 
subsidiaries that are not functionally regulated within the meaning of 
section 5(c)(5) of the Bank Holding Company Act, as amended (12 U.S.C. 
1844(c)(5)); branches and agencies of foreign banks; commercial lending 
companies owned or controlled by foreign banks (collectively referred 
to in this part as member banks); and their employees who act as 
mortgage loan originators;
    (iii) Insured state nonmember banks (including state-licensed 
insured branches of foreign banks), their subsidiaries (except brokers, 
dealers, persons providing insurance, investment companies, and 
investment advisers) (collectively referred to in this part as insured 
state nonmember banks), and employees of such banks or subsidiaries who 
act as mortgage loan originators;
    (iv) Savings associations, their operating subsidiaries 
(collectively referred to in this part as savings associations), and 
their employees who act as mortgage loan originators;
    (v) Farm Credit System lending institutions that actually originate 
residential mortgage loans pursuant to sections 1.9(3), 1.11 or 2.4(a) 
and (b) of the Farm Credit Act of 1971 (collectively referred to in 
this part as Farm Credit System institutions), and their employees who 
act as mortgage loan originators; and
    (vi) Any federally insured credit union and its employees, 
including volunteers, who act as mortgage loan originators. This part 
also applies to non-federally insured credit unions and their 
employees, including volunteers, who act as mortgage loan originators, 
subject to the conditions in paragraph (c)(3) of this section.
    (2) De minimis exception. (i) This part and the requirements of 12 
U.S.C. 5103(a)(1)(A) and (2) of the S.A.F.E. Act do not apply to any 
employee of a national bank, member bank, insured state nonmember bank, 
savings association, Farm Credit System institution, or credit union 
who has never been registered or licensed through the Registry as a 
mortgage loan originator if during the past 12 months the employee 
acted as a mortgage loan originator for 5 or fewer residential mortgage 
loans.
    (ii) Prior to engaging in mortgage loan origination activity that 
exceeds the exception limit in paragraph (c)(2)(i) of this section, an 
employee must register with the Registry pursuant to this part.
    (iii) Evasion. National banks, member banks, insured state 
nonmember banks, savings associations, Farm Credit System institutions, 
and credit unions are prohibited from engaging in any act or practice 
to evade the limits of the de minimis exception set forth in paragraph 
(c)(2)(i) of this section.
    (3) For non-federally insured credit unions. A non-federally 
insured credit union in a state identified on the

[[Page 78488]]

National Credit Union Administration's Web site (NCUA.gov) as one where 
the appropriate state supervisory authority has executed a Memorandum 
of Understanding (MOU) with the National Credit Union Administration 
may register under this rule provided that any Nationwide Mortgage 
Licensing System and Registry listing of the non-federally insured 
credit union and its employees contains a clear and conspicuous 
statement that the non-federally insured credit union is not insured by 
the National Credit Union Share Insurance Fund, and the state 
supervisory authority where the non-federally insured credit union is 
located maintains an agreement with the National Credit Union 
Administration for this registration process and oversight. If the 
state supervisory authority where the non-federally insured credit 
union is located fails to maintain such an agreement, the non-federally 
insured credit union and its employees in that state may not register 
or maintain registration under the Federal system. They instead must 
use the appropriate state licensing and registration system, or if the 
state does not have such a system, the licensing and registration 
system established by the Bureau for mortgage loan originators and 
their employees.


Sec.  1007.102  Definitions.

    For purposes of this part, the following definitions apply:
    Administrative or clerical tasks means the receipt, collection, and 
distribution of information common for the processing or underwriting 
of a loan in the residential mortgage industry and communication with a 
consumer to obtain information necessary for the processing or 
underwriting of a residential mortgage loan.
    Annual renewal period means November 1 through December 31 of each 
year.
    Bureau means the Bureau of Consumer Financial Protection.
    Covered financial institution means any national bank, member bank, 
insured state nonmember bank, savings association, Farm Credit System 
institution, or federally insured credit union as any such term is 
defined in Sec.  1007.101(c)(1). Covered financial institution also 
includes a non-federally insured credit union that registers subject to 
the conditions of Sec.  1007.101(c)(3).
    Mortgage loan originator means
    (1) An individual who:
    (i) Takes a residential mortgage loan application; and
    (ii) Offers or negotiates terms of a residential mortgage loan for 
compensation or gain.
    (2)(i) The term mortgage loan originator does not include:
    (A) An individual who performs purely administrative or clerical 
tasks on behalf of an individual who is described as a mortgage loan 
originator in this section;
    (B) An individual who only performs real estate brokerage 
activities (as defined in 12 U.S.C. 5102(4)(D)) and is licensed or 
registered as a real estate broker in accordance with applicable state 
law, unless the individual is compensated by a lender, a mortgage 
broker, or other mortgage loan originator or by any agent of such 
lender, mortgage broker, or other mortgage loan originator, and meets 
the definition of mortgage loan originator in this section; or
    (C) An individual or entity solely involved in extensions of credit 
related to timeshare plans, as that term is defined in 11 U.S.C. 
101(53D).
    (ii) Examples of activities that would, and would not, result in an 
employee meeting the definition of mortgage loan originator are 
provided in Appendix A to this part.
    Nationwide Mortgage Licensing System and Registry or Registry means 
the system developed and maintained by the Conference of State Bank 
Supervisors and the American Association of Residential Mortgage 
Regulators for the state licensing and registration of state-licensed 
mortgage loan originators and the registration of mortgage loan 
originators pursuant to 12 U.S.C. 5107.
    Registered mortgage loan originator or registrant means any 
individual who:
    (1) Meets the definition of mortgage loan originator and is an 
employee of a covered financial institution; and
    (2) Is registered pursuant to this part with, and maintains a 
unique identifier through, the Registry.
    Residential mortgage loan means any loan primarily for personal, 
family, or household use that is secured by a mortgage, deed of trust, 
or other equivalent consensual security interest on a dwelling (as 
defined in section 103(v) of the Truth in Lending Act, 15 U.S.C. 
1602(v)) or residential real estate upon which is constructed or 
intended to be constructed a dwelling, and includes refinancings, 
reverse mortgages, home equity lines of credit and other first and 
additional lien loans that meet the qualifications listed in this 
definition. This definition does not amend or supersede 12 CFR 
613.3030(c) with respect to Farm Credit System institutions.
    Unique identifier means a number or other identifier that:
    (1) Permanently identifies a registered mortgage loan originator;
    (2) Is assigned by protocols established by the Nationwide Mortgage 
Licensing System and Registry and the Bureau to facilitate:
    (i) Electronic tracking of mortgage loan originators; and
    (ii) Uniform identification of, and public access to, the 
employment history of and the publicly adjudicated disciplinary and 
enforcement actions against mortgage loan originators; and
    (3) Must not be used for purposes other than those set forth under 
the S.A.F.E. Act.


Sec.  1007.103  Registration of mortgage loan originators.

    (a) Registration requirement--(1) Employee registration. Each 
employee of a covered financial institution who acts as a mortgage loan 
originator must register with the Registry, obtain a unique identifier, 
and maintain this registration in accordance with the requirements of 
this part. Any such employee who is not in compliance with the 
registration and unique identifier requirements set forth in this part 
is in violation of the S.A.F.E. Act and this part.
    (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.
    (3) [Reserved]
    (4) Employees previously registered or licensed through the 
Registry--(i) In general. If an employee of a covered financial 
institution was registered or licensed through, and obtained a unique 
identifier from, the Registry and has maintained this registration or 
license before the employee becomes subject to this part at the current 
covered financial institution, then the registration requirements of 
the S.A.F.E. Act and this part are deemed to be met, provided that:
    (A) The employment information in paragraphs (d)(1)(i)(C) and 
(d)(1)(ii) of this section is updated and the

[[Page 78489]]

requirements of paragraph (d)(2) of this section are met;
    (B) New fingerprints of the employee are submitted to the Registry 
for a background check, as required by paragraph (d)(1)(ix) of this 
section, unless the employee has fingerprints on file with the Registry 
that are less than 3 years old;
    (C) The covered financial institution information required in 
paragraphs (e)(1)(i) (to the extent the covered financial institution 
has not previously met these requirements) and (e)(2)(i) of this 
section is submitted to the Registry; and
    (D) The registration is maintained pursuant to paragraphs (b) and 
(e)(1)(ii) of this section, as of the date that the employee becomes 
subject to this part.
    (ii) Rule for certain acquisitions, mergers, or reorganizations. 
When registered or licensed mortgage loan originators become covered 
financial institution employees as a result of an acquisition, 
consolidation, merger, or reorganization, only the requirements of 
paragraphs (a)(4)(i)(A), (C), and (D) of this section must be met, and 
these requirements must be met within 60 days from the effective date 
of the acquisition, merger, or reorganization.
    (b) Maintaining registration. (1) A mortgage loan originator who is 
registered with the Registry pursuant to paragraph (a) of this section 
must:
    (i) Except as provided in paragraph (b)(3) of this section, renew 
the registration during the annual renewal period, confirming the 
responses set forth in paragraphs (d)(1)(i) through (viii) of this 
section remain accurate and complete, and updating this information, as 
appropriate; and
    (ii) Update the registration within 30 days of any of the following 
events:
    (A) A change in the name of the registrant;
    (B) The registrant ceases to be an employee of the covered 
financial institution; or
    (C) The information required under paragraphs (d)(1)(iii) through 
(viii) of this section becomes inaccurate, incomplete, or out-of-date.
    (2) A registered mortgage loan originator must maintain his or her 
registration, unless the individual is no longer engaged in the 
activity of a mortgage loan originator.
    (3) The annual registration renewal requirement set forth in 
paragraph (b)(1) of this section does not apply to a registered 
mortgage loan originator who has completed his or her registration with 
the Registry pursuant to paragraph (a)(1) of this section less than 6 
months prior to the end of the annual renewal period.
    (c) Effective dates--(1) Registration. A registration pursuant to 
paragraph (a)(1) of this section is effective on the date the Registry 
transmits notification to the registrant that the registrant is 
registered.
    (2) Renewals or updates. A renewal or update pursuant to paragraph 
(b) of this section is effective on the date the Registry transmits 
notification to the registrant that the registration has been renewed 
or updated.
    (d) Required employee information--(1) In general. For purposes of 
the registration required by this section, a covered financial 
institution must require each employee who is a mortgage loan 
originator to submit to the Registry, or must submit on behalf of the 
employee, the following categories of information, to the extent this 
information is collected by the Registry:
    (i) Identifying information, including the employee's:
    (A) Name and any other names used;
    (B) Home address and contact information;
    (C) Principal business location address and business contact 
information;
    (D) Social security number;
    (E) Gender; and
    (F) Date and place of birth;
    (ii) Financial services-related employment history for the 10 years 
prior to the date of registration or renewal, including the date the 
employee became an employee of the covered financial institution;
    (iii) Convictions of any criminal offense involving dishonesty, 
breach of trust, or money laundering against the employee or 
organizations controlled by the employee, or agreements to enter into a 
pretrial diversion or similar program in connection with the 
prosecution for such offense(s);
    (iv) Civil judicial actions against the employee in connection with 
financial services-related activities, dismissals with settlements, or 
judicial findings that the employee violated financial services-related 
statutes or regulations, except for actions dismissed without a 
settlement agreement;
    (v) Actions or orders by a state or Federal regulatory agency or 
foreign financial regulatory authority that:
    (A) Found the employee to have made a false statement or omission 
or been dishonest, unfair or unethical; to have been involved in a 
violation of a financial services-related regulation or statute; or to 
have been a cause of a financial services-related business having its 
authorization to do business denied, suspended, revoked, or restricted;
    (B) Are entered against the employee in connection with a financial 
services-related activity;
    (C) Denied, suspended, or revoked the employee's registration or 
license to engage in a financial services-related activity; disciplined 
the employee or otherwise by order prevented the employee from 
associating with a financial services-related business or restricted 
the employee's activities; or
    (D) Barred the employee from association with an entity or its 
officers regulated by the agency or authority or from engaging in a 
financial services-related business;
    (vi) Final orders issued by a state or Federal regulatory agency or 
foreign financial regulatory authority based on violations of any law 
or regulation that prohibits fraudulent, manipulative, or deceptive 
conduct;
    (vii) Revocation or suspension of the employee's authorization to 
act as an attorney, accountant, or state or Federal contractor;
    (viii) Customer-initiated financial services-related arbitration or 
civil action against the employee that required action, including 
settlements, or which resulted in a judgment; and
    (ix) Fingerprints of the employee, in digital form if practicable, 
and any appropriate identifying information for submission to the 
Federal Bureau of Investigation and any governmental agency or entity 
authorized to receive such information in connection with a state and 
national criminal history background check; however, fingerprints 
provided to the Registry that are less than 3 years old may be used to 
satisfy this requirement.
    (2) Employee authorizations and attestation. An employee 
registering as a mortgage loan originator or renewing or updating his 
or her registration under this part, and not the employing covered 
financial institution or other employees of the covered financial 
institution, must:
    (i) Authorize the Registry and the employing institution to obtain 
information related to sanctions or findings in any administrative, 
civil, or criminal action, to which the employee is a party, made by 
any governmental jurisdiction;
    (ii) Attest to the correctness of all information required by 
paragraph (d) of this section, whether submitted by the employee or on 
behalf of the employee by the employing covered financial institution; 
and
    (iii) Authorize the Registry to make available to the public 
information required by paragraphs (d)(1)(i)(A) and (C), and (d)(1)(ii) 
through (viii) of this section.

[[Page 78490]]

    (3) Submission of information. A covered financial institution may 
identify one or more employees of the covered financial institution who 
may submit the information required by paragraph (d)(1) of this section 
to the Registry on behalf of the covered financial institution's 
employees provided that this individual, and any employee delegated 
such authority, does not act as a mortgage loan originator, consistent 
with paragraph (e)(1)(i)(F) of this section. In addition, a covered 
financial institution may submit to the Registry some or all of the 
information required by paragraphs (d)(1) and (e)(2) of this section 
for multiple employees in bulk through batch processing in a format to 
be specified by the Registry, to the extent such batch processing is 
made available by the Registry.
    (e) Required covered financial institution information. A covered 
financial institution must submit the following categories of 
information to the Registry:
    (1) Covered financial institution record. (i) In connection with 
the registration of one or more mortgage loan originators:
    (A) Name, main office address, and business contact information;
    (B) Internal Revenue Service Employer Tax Identification Number 
(EIN);
    (C) Research Statistics Supervision and Discount (RSSD) number, as 
issued by the Board of Governors of the Federal Reserve System;
    (D) Identification of its primary Federal regulator;
    (E) Name(s) and contact information of the individual(s) with 
authority to act as the covered financial institution's primary point 
of contact for the Registry;
    (F) Name(s) and contact information of the individual(s) with 
authority to enter the information required by paragraphs (d)(1) and 
(e) of this section to the Registry and who may delegate this authority 
to other individuals. For the purpose of providing information required 
by paragraph (e) of this section, this individual and their delegates 
must not act as mortgage loan originators unless the covered financial 
institution has 10 or fewer full time or equivalent employees and is 
not a subsidiary; and
    (G) If a subsidiary of a national bank, member bank, savings 
association, or insured state nonmember bank, indication that it is a 
subsidiary and the RSSD number of the parent institution; if an 
operating subsidiary of an agricultural credit association, indication 
that it is a subsidiary, and the RSSD number of the parent agricultural 
credit association.
    (ii) Attestation. The individual(s) identified in paragraphs 
(e)(1)(i)(E) and (F) of this section must comply with Registry 
protocols to verify their identity and must attest that they have the 
authority to enter data on behalf of the covered financial institution, 
that the information provided to the Registry pursuant to this 
paragraph (e) is correct, and that the covered financial institution 
will keep the information required by this paragraph (e) current and 
will file accurate supplementary information on a timely basis.
    (iii) A covered financial institution must update the information 
required by this paragraph (e) of this section within 30 days of the 
date that this information becomes inaccurate.
    (iv) A covered financial institution must renew the information 
required by paragraph (e) of this section on an annual basis.
    (2) Employee information. In connection with the registration of 
each employee who acts as a mortgage loan originator:
    (i) After the information required by paragraph (d) of this section 
has been submitted to the Registry, confirmation that it employs the 
registrant; and
    (ii) Within 30 days of the date the registrant ceases to be an 
employee of the covered financial institution, notification that it no 
longer employs the registrant and the date the registrant ceased being 
an employee.


Sec.  1007.104  Policies and procedures.

    A covered financial institution that employs one or more mortgage 
loan originators must adopt and follow written policies and procedures 
designed to assure compliance with this part. These policies and 
procedures must be appropriate to the nature, size, complexity, and 
scope of the mortgage lending activities of the covered financial 
institution, and apply only to those employees acting within the scope 
of their employment at the covered financial institution. At a minimum, 
these policies and procedures must:
    (a) Establish a process for identifying which employees of the 
covered financial institution are required to be registered mortgage 
loan originators;
    (b) Require that all employees of the covered financial institution 
who are mortgage loan originators be informed of the registration 
requirements of the S.A.F.E. Act and this part and be instructed on how 
to comply with such requirements and procedures;
    (c) Establish procedures to comply with the unique identifier 
requirements in Sec.  1007.105;
    (d) Establish reasonable procedures for confirming the adequacy and 
accuracy of employee registrations, including updates and renewals, by 
comparisons with its own records;
    (e) Establish reasonable procedures and tracking systems for 
monitoring compliance with registration and renewal requirements and 
procedures;
    (f) Provide for independent testing for compliance with this part 
to be conducted at least annually by covered financial institution 
personnel or by an outside party;
    (g) Provide for appropriate action in the case of any employee who 
fails to comply with the registration requirements of the S.A.F.E. Act, 
this part, or the covered financial institution's related policies and 
procedures, including prohibiting such employees from acting as 
mortgage loan originators or other appropriate disciplinary actions;
    (h) Establish a process for reviewing employee criminal history 
background reports received pursuant to this part, taking appropriate 
action consistent with applicable Federal law, including section 19 of 
the Federal Deposit Insurance Act (12 U.S.C. 1829), section 206 of the 
Federal Credit Union Act (12 U.S.C. 1786(i)), and section 5.65(d) of 
the Farm Credit Act of 1971, as amended (12 U.S.C. 2277a-14(d)), and 
implementing regulations with respect to these reports, and maintaining 
records of these reports and actions taken with respect to applicable 
employees; and
    (i) Establish procedures designed to ensure that any third party 
with which the covered financial institution has arrangements related 
to mortgage loan origination has policies and procedures to comply with 
the S.A.F.E. Act, including appropriate licensing and/or registration 
of individuals acting as mortgage loan originators.


Sec.  1007.105  Use of unique identifier.

    (a) The covered financial institution shall make the unique 
identifier(s) of its registered mortgage loan originator(s) available 
to consumers in a manner and method practicable to the institution.
    (b) A registered mortgage loan originator shall provide his or her 
unique identifier to a consumer:
    (1) Upon request;
    (2) Before acting as a mortgage loan originator; and
    (3) Through the originator's initial written communication with a 
consumer, if any, whether on paper or electronically.

[[Page 78491]]

Appendix A to Part 1007--Examples of Mortgage Loan Originator 
Activities

    This appendix provides examples to aid in the understanding of 
activities that would cause an employee of a covered financial 
institution 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 part. For 
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 verifying 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 covered financial institution, 
collecting only basic identifying information about the consumer and 
forwarding the consumer to a mortgage 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 covered 
financial institution's loss mitigation efforts when the borrower is 
reasonably likely to default.
    (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 covered financial 
institution'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 (e.g., debt-to-income 
ratio); lending policies (e.g., the loan-to-value ratio policy of 
the covered financial institution); 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 
covered financial institution'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 covered financial institution;
    (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) Offering or negotiating a loan for compensation or gain. 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 covered 
financial institution.

PART 1008--S.A.F.E. MORTGAGE LICENSING ACT--STATE COMPLIANCE AND 
BUREAU REGISTRATION SYSTEM (REGULATION H)

Sec.
1008.1 Purpose.
1008.3 Confidentiality of information.
Subpart A--General
1008.20 Scope of this subpart.
1008.23 Definitions.
Subpart B--Determination of State Compliance With the S.A.F.E. Act
1008.101 Scope of this subpart.
1008.103 Individuals required to be licensed by states.
1008.105 Minimum loan originator license requirements.
1008.107 Minimum annual license renewal requirements.
1008.109 Effective date of state requirements imposed on 
individuals.
1008.111 Other minimum requirements for state licensing systems.
1008.113 Performance standards.
1008.115 Determination of noncompliance.
Subpart C--Bureau's Loan Originator Licensing System and Bureau's 
Nationwide Mortgage Licensing and Registry System
1008.201 Scope of this subpart.
1008.203 Bureau's establishment of loan originator licensing system.
1008.205 Bureau's establishment of nationwide mortgage licensing 
system and registry.
Subpart D--Minimum Requirements for Administration of the NMLSR
1008.301 Scope of this subpart.
1008.303 Financial reporting.
1008.305 Data security.
1008.307 Fees.
1008.309 Absence of liability for good-faith administration.
Subpart E--Enforcement of Bureau Licensing System
1008.401 Bureau's authority to examine loan originator records.
1008.403 [Reserved].
1008.405 [Reserved].
Appendix A to Part 1008--Examples of Mortgage Loan Originator 
Activities
Appendix B to Part 1008--Engaging in the Business of a Loan 
Originator: Commercial Context and Habitualness
Appendix C to Part 1008--Independent Contractors and Loan Processor 
and Underwriter Activities That Require a State Mortgage Loan 
Originator License
Appendix D to Part 1008--Attorneys: Circumstances that Require a 
State Mortgage Loan Originator License


[[Page 78492]]


    Authority: 12 U.S.C. 5101-5116; Pub. L. 111-203, 124 Stat. 1376.


Sec.  1008.1  Purpose.

    (a) Authority. This part, known as Regulation H, is issued by the 
Bureau of Consumer Financial Protection to implement the Secure and 
Fair Enforcement for Mortgage Licensing Act of 2008, title V of the 
Housing and Economic Recovery Act of 2008 (S.A.F.E. Act) (Pub. L. 110-
289, 122 Stat. 2654, 12 U.S.C. 5101 et seq.).
    (b) Purpose. The purpose of this part is to enhance consumer 
protection and reduce fraud by directing states to adopt minimum 
uniform standards for the licensing and registration of residential 
mortgage loan originators and to participate in a nationwide mortgage 
licensing system and registry database of residential m