The Massachusetts Department of Banking told a credit union-owned mortgage lender in a new legal opinion that its mortgage officers must obtain state licenses under the SAFE Act.
The state banking department informed Central One Federal Credit Union in Shrewsbury, Mass., that neither NCUA nor the banking department have legal authority over the credit union service organization, therefore it is required to register with the state regulator as a mortgage broker and all of its lenders are subject to licensing requirements under the new law.
Central One owns 95% of Alcorn Allocations LLC, which in CU parlance is called a ‘service organization’ or CUSO.
The new law also requires all mortgage lenders at federally insured credit unions and banks to register with the department, a less stringent requirement.
“This is pretty consistent with what NCUA is telling people,” said Katherine Webber, a Philadelphia lawyer with the CUSO experts Messick and Webber. “NCUA has always taken the position that they don’t regulate CUSOs, that they’re regulated by whatever agency that oversees their activity.”
