Federal Reserve Finalizes Rule to Repeal Regulations that Incorporated SAFE Act

The Federal Reserve Board issued final amendments to its regulations to reflect the transfer of the Board’s rulemaking authority for the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) to the CFPB – the CFPB incorporated the SAFE Act into its Regulations G and H.  Entities that are currently covered by the SAFE Act are subject to the CFPB’s rules, as applicable.

The SAFE Act orders a nationwide licensing and registration system for residential mortgage loan originators, generally requiring, among other things, registration with the NMLSR for residential mortgage loan originators that are employed by depository institutions, subsidiaries that are owned or controlled by a depository institution and regulated by a federal banking agency, and institutions regulated by the Farm Credit Administration (FCA).  Effective July 21, 2011, the Dodd-Frank Act transferred rulemaking authority for the SAFE Act to the CFPB from the Board, the other federal banking agencies, and the FCA.  The CFPB has already issued a final rule that is substantially identical to the Board’s regulations that incorporate the SAFE Act, and the Board now is repealing the relevant provisions of Regulation H (Membership of State Banking Institutions in the Federal Reserve System) and Regulation K (International Banking Operations).

The final rule is effective June 14, 2019.