Feds Weigh In on Loan Officer Registration

Federal banking regulators have issued a proposed rule that sets parameters for federally supervised banks and their subsidiaries to register their loan officers through a national licensing system developed by state regulators. As required by the Secure and Fair Enforcement for Mortgage Licensing Act, mortgage originators working for federally chartered banks and thrifts are required to file background information and fingerprints with the Nationwide Mortgage Licensing System and Registry. Once registered, the loan originator will be assigned a unique identifier that they will carry like a Social Security number for the rest of their careers. The federal agencies are proposing de minimis rules that will exempt institutions that make 25 or fewer single-family mortgages at year from registering their employees. Employees that originate five or fewer loans a year or only engage in loan modifications would be exempt. State licensed originators in 26 states have completed or are in the midst of registering. Once the federal regulators finalize registration requirements, the system will be expanded for federal mortgage originators.