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May 30, 2008 - The Federal Housing Finance Regulatory Reform Act of 2008, passed May 20 in the Senate Banking, Housing and Urban Affairs Committee, contains provisions that would include credit unions in registration requirements of a national mortgage licensing system.
Title VI of the Act would apply the Nationwide Mortgage Licensing System and Registry (NLMS) to the nation’s residential mortgage industry, a system developed by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators. The NLMS is an online system providing streamlined and consistent standards for applying, amending, updating or renewing a mortgage license.
The legislation includes credit unions in its definition of depository institutions that would follow NLMS requirements. The term state-licensed loan originator includes loan originators who are not employees of a depository institution or a subsidiary of a depository institution. Credit union employees will not have to be licensed as loan originators because they are employees of a depository institution. However, the requirements for licensing and registration are different; employees of credit unions will have to follow the registration requirements.
The legislation requires that Federal banking agencies shall jointly, through the Federal Financial Institutions Examination Council, use a system to register employees of depository institutions or subsidiaries of depository institutions as registered loan originators with the NLMS. The registration requirements also ask that the appropriate federal banking agency provide information concerning an employee’s identity to the NMLS. A number of state regulators have been participating in the NLMS in coordination with CSBS since its launch January 2008.
NASCUS is further researching the amendment to understand its full impact on state-chartered credit unions. The Senate is expected to vote on the legislation as soon as next week. Additional information will be presented on the NASCUS Web site.
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