[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Rules and Regulations]
[Pages 21691-21692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09948]
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FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 211
[Docket No. R-1622 and RIN 7100 AF-16]
Regulations H and K: Registration of Mortgage Loan Originators
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
is repealing its regulations that incorporated the Secure and Fair
Enforcement for Mortgage Licensing Act (the S.A.F.E. Act). Title X of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) transferred rulemaking authority for a number of consumer
financial protection laws, including the S.A.F.E. Act, from the Board
to the Bureau of Consumer Financial Protection (Bureau). In December
2011, the Bureau published an interim final rule, incorporating the
S.A.F.E. Act into its Regulations G and H. In April 2016, the Bureau
finalized the interim final rule. Accordingly, the Board is repealing
its S.A.F.E. Act regulations.
DATES: The final rule is effective June 14, 2019.
FOR FURTHER INFORMATION CONTACT: Clinton Chen, Senior Attorney, (202)
452-3952, Justyna Bolter, Attorney, (202) 452-2686, Legal Division,
Board of Governors of the Federal Reserve System, 20th and C Streets
NW, Washington, DC 20551. For users of Telecommunications Device for
the Deaf (TDD) only, contact (202) 263-4869.
SUPPLEMENTARY INFORMATION:
I. Background
The S.A.F.E. Act mandates a nationwide licensing and registration
system for residential mortgage loan originators.\1\ The S.A.F.E. Act
requires residential mortgage loan originators employed by depository
institutions, subsidiaries that are owned and controlled by a
depository institution and regulated by a federal banking agency, and
institutions regulated by the Farm Credit Administration (FCA) to
register with the Nationwide Mortgage Licensing System and Registry,
obtain a unique identifier, and maintain such registration. Originally,
the federal registration requirements of the S.A.F.E. Act were
implemented through a coordinated rulemaking of the federal banking
agencies and the FCA, the agencies with authority over the federal
registration requirements under the S.A.F.E. Act (the ``federal
registry agencies'').\2\ The Board incorporated the S.A.F.E. Act in its
Regulation H, 12 CFR part 208, subpart I, and Regulation K, 12 CFR
211.24(k).
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\1\ 12 U.S.C. 5101 et seq.
\2\ 75 FR 44656 (July 28, 2010). The rules were promulgated by
the Board; the Office of the Comptroller of the Currency (OCC); the
Federal Deposit Insurance Corporation (FDIC); the Office of Thrift
Supervision, Treasury (OTS); the FCA; and the National Credit Union
Administration (NCUA).
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Title X of the Dodd-Frank Act amended a number of consumer
financial protection laws, including the S.A.F.E. Act.\3\ The Dodd-
Frank Act
[[Page 21692]]
transferred rulemaking authority for the S.A.F.E. Act from the federal
registry agencies to the Bureau, effective July 21, 2011.\4\ In
connection with the transfer of rulemaking authority for the S.A.F.E.
Act to the Bureau, the Bureau published an interim final rule to
incorporate the S.A.F.E. Act into its own Regulations G and H, 12 CFR
parts 1007 and 1008 (Bureau Interim Final Rule).\5\ In April 2016, the
Bureau finalized the Bureau Interim Final Rule as part of a larger
initiative of finalizing interim final rules.\6\ The Bureau's
regulations that incorporate the S.A.F.E. Act substantially duplicate
the federal registry agencies' coordinated rules and cover the entities
that were previously subject to the federal registry agencies' rules.
In September 2018, the Board published a proposal to repeal its
regulations that incorporated the S.A.F.E. Act (Proposed Rule).\7\
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\3\ Public Law 111-203, 124 Stat. 1376 (2010).
\4\ See Public Law 111-203, sections 1061 & 1100. The Dodd-Frank
Act generally excludes from this transfer of authority, subject to
certain exceptions, any rulemaking authority over a motor vehicle
dealer that is predominantly engaged in the sale and servicing of
motor vehicles, the leasing and servicing of motor vehicles, or
both. Public Law 111-203, section 1029. The rulemaking authority
retained by the Board under Section 1029 of the Dodd-Frank Act does
not extend to residential mortgages. Thus, all rulemaking authority
under the S.A.F.E. Act, which pertains only to mortgage loan
originator registrations, was transferred to the Bureau.
\5\ 76 FR 78483 (Dec. 19, 2011).
\6\ 81 FR 25323 (April 28, 2016).
\7\ 83 FR 48402 (Sept. 25, 2018).
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II. Discussion
The Board received two comments on the Proposed Rule. One commenter
supported the Proposed Rule, while the other urged the Board to retain
the regulations that it proposed to repeal. For reasons discussed
below, the Board is finalizing the repeal of its regulations that
incorporated the S.A.F.E. Act as proposed.
The commenter that supported the Proposed Rule stated that the
registration of mortgage loan originators is burdensome for a small
community bank that originates only a handful of mortgage loans each
year. The Board notes that, although it is repealing its regulations
that incorporated the S.A.F.E. Act, the statutory requirement to
register mortgage loan originators still exists in the S.A.F.E. Act, as
incorporated into the Bureau's regulations.
The commenter that opposed the Proposed Rule urged the Board to
retain its regulations that incorporated the S.A.F.E. Act in order to
retain the ability to issue any S.A.F.E. Act rules in the future. The
Board's authority to issue rules, however, is determined by statute. If
Congress were to amend the S.A.F.E. Act in the future to restore
rulemaking authority to the Board, the Board could adopt rules under
that authority at that time. Accordingly, the Board is finalizing the
repeal of its regulations that incorporated the S.A.F.E. Act as
proposed.
III. Final Regulatory Flexibility Analysis
An initial regulatory flexibility analysis (IRFA) was included in
the proposal in accordance with section 3(a) of the Regulatory
Flexibility Act (RFA), 5 U.S.C. 601 et seq. In the IRFA, the Board
requested comment on the effect of the Proposed Rule on small entities
and on any significant alternatives that would reduce the regulatory
burden on small entities. The Board did not receive any comments. The
RFA requires an agency to prepare a final regulatory flexibility
analysis (FRFA) unless the agency certifies that the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities. In accordance with section 3(a) of the RFA, the
Board has reviewed the final regulation. Based on its analysis, and for
the reasons stated below, the Board certifies that the rule will not
have a significant economic impact on a substantial number of small
entities.
The final rule is intended to reflect Congress's transfer of
rulemaking authority for the S.A.F.E. Act from the Board to the Bureau
by repealing the Board's regulations that incorporated the S.A.F.E.
Act. The repeal does not impose any recordkeeping, reporting, or
compliance requirements on any entities. Any entity that is currently
covered by the S.A.F.E. Act is subject to the rules issued by the
Bureau, located in 12 CFR part 1007 and 1008. Accordingly, the Board
does not expect this final rule to have a significant economic impact
on a substantial number of small entities.
IV. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule
under the authority delegated to the Federal Reserve by the Office of
Management and Budget (OMB). The final rule contains no collections of
information under to the PRA. See 44 U.S.C. 3502(3). Accordingly, there
is no paperwork burden associated with the final rule.
List of Subjects
12 CFR Part 208
Accounting, Agriculture, Banks, Banking, Confidential business
information, Consumer protection, Crime, Currency, Insurance,
Investments, Mortgages, Reporting and recordkeeping requirements,
Securities.
12 CFR Part 211
Exports, Foreign banking, Holding companies, Investments, Reporting
and recordkeeping requirements.
Authority and Issuance
For the reasons set forth in the preamble, chapter II of title 12
of the Code of Federal Regulations is amended as follows:
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
RESERVE SYSTEM (REGULATION H)
0
1. The authority citation for part 208 continues to read as follows:
Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a,
371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d)(9), 1833(j),
1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882,
2901-2907, 3105, 3310, 3331-3351, 3353, and 3906-3909; 15 U.S.C.
78b, 781(b), 78l(i), 780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w,
6801 and 6805, 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104b, 4106, and
4128.
Subpart I--[Removed and Reserved]
0
2. Subpart I, consisting of Sec. Sec. 208.101 through 208.105 and
appendix A to subpart I, is removed and reserved.
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)
0
3. The authority citation for part 211 continues to read as follows:
Authority: 12 U.S.C. 221 et seq., 1818, 1835a, 1841 et seq.,
3101 et seq., 3901 et seq., and 5101 et seq.; 15 U.S.C. 1681s,
1681w, 6801 and 6805.
Sec. 211.24 [Amended]
0
4. In Sec. 211.24, paragraph (k) is removed.
By order of the Board of Governors of the Federal Reserve
System, May 9, 2019.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2019-09948 Filed 5-14-19; 8:45 am]
BILLING CODE 6210-01-P