Are You Compliant? State Regulators Release SAFE Act Examination Guidelines

Mortgage regulators now have SAFE Act Examination Guidelines (SEGs) with which to monitor and ensure mortgage loan originators are properly licensed and registered in the states where they are doing business. The Multi-State Mortgage Committee under the Conference of State Bank Supervisors (CSBS) released the new guidelines Wednesday for use by state non-depository mortgage regulators.

“The primary purpose of the SEGs is to ensure that all individuals acting as MLOs are properly licensed and registered under the SAFE Act in all states in which they are conducting business,” said John Ducrest, commissioner of the Louisiana Office of Financial Institutions and Chairman of CSBS. “These guidelines provide a standardized set of examination procedures that will result in a thorough review of an entity’s compliance with state licensing through NMLS and individual MLO compliance with state law and the SAFE Act.”

The SAFE (Secure and Fair Enforcement for Mortgage Licensing Act of 2008) Act established minimum standards for states to license and register mortgage loan originators. While it is primary limited to covering individuals, state law further encompasses licensing of mortgage institutions through the Nationwide Mortgage Licensing System and Registry (NMLSR).

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State regulators can choose to use all or portions of the guidelines, and the guidelines are not required. However, they should allow state agencies to determine compliance with the SAFE Act, and should provide uniform guidelines for in-house compliance and audit departments doing state compliance reviews, CSBS said.

“By making the SEGs public and available to those entities we supervise, state mortgage regulators are increasing the transparency of mortgage supervision and letting the industry know what we expect of them,” said Darin Domingue, Deputy Chief Examiner of the Louisiana Office of Financial Institutions and President of AARMR.

View the SAFE Act examination guidelines.

Written by Elizabeth Ecker

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  • “…John Ducrest, commissioner of the Louisiana Office of Financial Institutions and Chairman of CSBS. ‘These guidelines provide a standardized set of examination procedures that will result in a thorough review of an entity’s compliance with state licensing through NMLS and individual MLO compliance with state law and the SAFE Act.'”
    One of the key words in the title of the SAFE Act is FAIR.  How is it FAIR for there to be two classes of originators?  One who is required to know at least something about lending compliance and those who are exempt.

    What standardization can there be if one set of originators have to be licensed, take CPE, etc. and the other does not?

    John, excuse me but you are hypocritical by calling what you do as standardized.  Maybe you ought to look up the meaning of that word and try to apply it to registered and licensed originators who provide mortgages in YOUR own state.  What you do is discriminatory testing of originators, plain and simple.

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