While not on the radar of many credit unions, the SAFE Act, which goes into effect on Oct. 1, could have a major impact on mortgage lending by credit union service organizations, or CUSOs.
The Act mandates that all depositories and other companies register any and all employees involved in real estate, but the regulations governing non-depositories are more onerous.
"The CUSOs are not depository institutions so everybody in a CUSO will not have to just be registered but be licensed and have FBI background checks. They are the ones really in harm's way," explained ACUMA President/CEO Bob Dorsa. "The one thing nobody really knows is what the states are going to charge in fees to register these people."
Registered employees will be given an identifier number for the national registry that "will allow consumers access to information about the loan originator she or he is working with," Joy Audet, political communications coordinator with the Arizona CU League, told Credit Union Journal.
The Act officially goes into effect in October, but the registry is not expected to go live until 2011. While the law was intended to homogenize state registries, the execution has been quite different. The licensing requirements and fees are different in every state, which will make it difficult for CUSOs to conduct business across the country, creating a "licensing quagmire," according to Dave Toepp, President/CEO of Southfield, Mich.-based Mortgage Center.
CUJ is a sister publication to National Mortgage News.
