Initial Registration Period for SAFE Act is Now Open

On Monday, January 31, the federal bank, thrift, and credit union regulatory agencies, along with the Farm Credit Administration began accepting federal registrations for licensing under the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act.

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Under the SAFE Act, originators of residential mortgage loans employed by banks, savings, associations, credit unions, or Farm Credit System institutions must register with the registry, obtain a unique identifier from the registry, and maintain their registrations.

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The SAFE Act was enacted in July 2008 and mandates a nationwide licensing and registration system for mortgage loan originators.

It requires all states to provide a licensing and registration regime for state-regulated mortgage loan originators, and requires certain financial agencies to develop and maintain a system for registering mortgage loan originators employed by agency-regulated institutions.

It prohibits an individual from engaging in loan origination without first obtaining and maintaining a state license or federal registration.

In July 2010 the agencies published a final rule to implement the SAFE Act. Though the rule was effective on October 1, 2010, agency-related institutions and their employees were not required to comply with the requirements until January 31, 2011.

Now that the agencies have begun accepting registrations, there will be a 180-day initial registration period, set to expire on July 29, 2011. After the expiration, any employee of an agency-related institution subject to the registration requirements will be prohibited from originating residential mortgage loans without meeting those requirements.