[Federal Register Volume 78, Number 161 (Tuesday, August 20, 2013)]
[Rules and Regulations]
[Pages 51046-51048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-20276]


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FARM CREDIT ADMINISTRATION

12 CFR Part 610

RIN 3052-AC78


Registration of Mortgage Loan Originators

AGENCY: Farm Credit Administration.

ACTION: Interim rule with request for comments.

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SUMMARY: The Farm Credit Administration (FCA, we or us) is repealing 
its regulations that govern the registration of residential mortgage 
loan originators employed by Farm Credit System (FCS or System) 
institutions. We are repealing these regulations because the Bureau of 
Consumer Financial Protection (CFPB), pursuant to its authority under 
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act), is consolidating and recodifying the regulations that six 
Federal agencies jointly enacted to implement the Secure and Fair 
Enforcement for Mortgage Licensing Act (S.A.F.E. Act), which require 
residential mortgage loan originators at banks, savings associations, 
credit unions, FCS institutions, and their subsidiaries to register 
with the National Mortgage Licensing System and Registry (NMLSR or 
Registry) and obtain a unique identifier. Repealing these regulations 
avoids duplication, which is likely to cause confusion at FCS 
institutions.

DATES: This interim rule will become effective 30 days after 
publication in the Federal Register during which either or both Houses 
of Congress are in session. We will publish notice of the effective 
date in the Federal Register. Please send your comments to us by 
September 19, 2013.

ADDRESSES: We offer a variety of methods for you to submit your 
comments. For accuracy and efficiency, commenters are encouraged to 
submit comments by email or through the FCA's Web site. As facsimiles 
(fax) are difficult for us to process and achieve compliance with 
section 508 of the Rehabilitation Act, we are no longer accepting 
comments submitted by fax. Regardless of the method you use, please do 
not submit your comment multiple times via different methods. You may 
submit comments by any of the following methods:
     Email: Send us an email at [email protected].
     FCA Web site: http://www.fca.gov. Select ``Public 
Comments'' and follow the directions for ``Submitting a Comment.''
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Gary K. Van Meter, Director, Office of Regulatory 
Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 
22102-5090.
    You may review copies of comments we receive at our office in 
McLean, Virginia, or from our Web site at http://www.fca.gov. Once you 
are in the Web site, select ``Public Commenters,'' then ``Public 
Comments,'' and follow the directions for ``Reading Submitted Public 
Comments.'' We will show your comments as submitted, but for technical 
reasons we may omit items such as logos and special characters. 
Identifying information that you provide, such as phone numbers and 
addresses, will be publicly available. However, we will attempt to 
remove

[[Page 51047]]

email addresses to help reduce Internet spam.

FOR FURTHER INFORMATION CONTACT: 
Gaylon J. Dykstra, Assistant to the Director, Office of Regulatory 
Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 
22102-5090, (703) 883-4498, TTY (703) 883-4056; or
Richard A. Katz, Senior Counsel, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4056.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 30, 2008, Congress enacted the S.A.F.E. Act,\1\ which 
mandated a nationwide system for licensing and/or registering all 
residential mortgage loan originators in the United States. The 
S.A.F.E. Act requires all residential mortgage loan originators at 
depository institutions, FCS institutions, and their federally 
regulated subsidiaries to: (1) Register with the NMLSR; (2) obtain a 
unique identifier; and (3) maintain their registration.\2\ Originally, 
section 1507 of the S.A.F.E. Act required the Comptroller of the 
Currency, the Board of Governors of the Federal Reserve System, the 
Federal Deposit Insurance Corporation, the former Office of Thrift 
Supervision, and the National Credit Union Administration (collectively 
the Federal banking agencies) and the FCA to jointly develop and 
maintain a system for registering residential mortgage loan originators 
at the institutions they supervise and regulate. The six agencies 
decided to implement section 1507 of the S.A.F.E. Act through a joint 
rulemaking. The six agencies jointly published a proposed rule on June 
9, 2009.\3\ A joint final rule was issued on July 28, 2010,\4\ and it 
became effective on October 1, 2010. However, actual registration with 
the NMLSR did not begin until the Registry became operational on 
January 31, 2011. The six agencies announced that the initial 
registration period for Federal registrations required by the S.A.F.E. 
Act and the final regulations would run from January 31, 2011, through 
July 29, 2011.\5\
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    \1\ The S.A.F.E. Act is title V of the Housing and Economic 
Recovery Act of 2008. Public Law 100-289, Division A, Title V, 
sections 1501-1517, 122 Stat. 264, 2810-2824 (July 30, 2008), 
codified at 12 U.S.C. 5101-5116.
    \2\ Separately, other provisions of the S.A.F.E. Act require 
every State to enact laws for licensing individuals who originate 
residential mortgages for State-regulated lenders. Residential 
mortgage loan originators who are licensed by one or more States 
must also register with the NMLSR, obtain a unique identifier, and 
maintain their licenses and registrations.
    \3\ 74 FR 27386 (June 9, 2009).
    \4\ 75 FR 44656 (July 28, 2009). The entire preamble to the 
final rule was reprinted at 75 FR 51623 (Aug. 23, 2010) because the 
footnotes in the preamble that was published on July 28, 2009 were 
not correctly numbered.
    \5\ The agencies issued a joint press release on January 31, 
2011, and they subsequently published the announcement in the 
Federal Register on 76 FR 6185 (Feb. 3, 2011).
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    Title X of the Dodd-Frank Act created the CFPB as the Federal 
agency that is primarily responsible for various Federal consumer 
financial protection laws.\6\ Since July 21, 2011, the CFPB has 
authority to prescribe rules or issue orders or guidelines pursuant to 
Federal consumer financial laws.\7\ The S.A.F.E. Act is an enumerated 
consumer financial law under the Dodd-Frank Act \8\ and, therefore, the 
CFPB now has primary regulatory authority over it. Additionally, 
section 1100 of the Dodd-Frank Act amended section 1507 of the S.A.F.E. 
Act to transfer authority to develop and maintain the Registry from the 
FCA and the Federal banking agencies to the CFPB. As stated earlier, 
the FCA and the Federal banking agencies jointly enacted regulations to 
implement section 1507 of the S.A.F.E. Act.
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    \6\ Public Law 111-203, title X, 124 Stat. 1376, 1955-2113, 
(July 21, 2010).
    \7\ Section 1061 of the Dodd-Frank Act transferred the 
``consumer financial protection functions'' of the Federal banking 
agencies, the Department of Housing and Urban Development (HUD), and 
the Federal Trade Commission to the CFPB. The ``consumer financial 
protection functions'' that transferred to the CFPB under section 
1061(a)(1) of the Dodd-Frank Act include ``all authority to 
prescribe rules or issues orders or guidelines pursuant to any 
Federal consumer financial law. . . .''
    \8\ See section 1002(12)(N) of the Dodd-Frank Act, which 
classifies the S.A.F.E. Act as one of the ``enumerated consumer 
laws,'' and section 1002(14), which includes these ``enumerated 
consumer laws'' within the definition of a ``Federal consumer 
financial law.''
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    Pursuant to its authorities under title X of the Dodd-Frank Act, 
the CFPB has consolidated and recodified the S.A.F.E. Act regulations 
of the FCA and the Federal banking agencies.\9\ The CFPB recently 
published an interim rule in the Federal Register.\10\ Instead of 
substantively amending the current regulations, the CFPB has made only 
certain technical, formatting, and stylistic changes.\11\
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    \9\ The CFPB also has recodified the regulations that HUD 
promulgated under the S.A.F.E. Act to coordinate State compliance 
with the S.A.F.E. Act, and establish and maintain a licensing and 
registration system for residential mortgage loan originators in a 
State or territory that does not have one in place that meets the 
requirements of the S.A.F.E. Act.
    \10\ See 76 FR 78483 (December 19, 2011). The interim rule 
became effective on December 30, 2011, and the comment period 
expired on February 17, 2012.
    \11\ See 76 FR 78484 (December 19, 2011).
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    The CFPB consulted with the FCA and the Federal banking agencies 
when it drafted the interim rule. The CFPB has addressed all of the 
FCA's concerns, and it has gone to great lengths to ensure that the 
consolidated and recodified rule does not inadvertently conflict with 
provisions of the Farm Credit Act of 1971, as amended, and FCA 
regulations and other guidance that govern the lending authorities and 
corporate structure of FCS institutions. Additionally, the CFPB's 
interim rule does not impose any new substantive obligations on System 
institutions or their employees who are subject to the registration 
requirements of the S.A.F.E. Act.\12\ As stated in the preamble to its 
interim rule, the CFPB considers employees of FCS associations who 
previously registered with the NMLSR and obtained unique identifiers in 
accordance the FCA's S.A.F.E. Act regulations to remain registered 
under its new regulations.\13\
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    \12\ Id.
    \13\ Id.
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    Under these circumstances, the CFPB's consolidation and 
recodification of S.A.F.E. Act regulations causes no concerns to the 
FCA. Three provisions in title X of the Dodd-Frank Act pertain to the 
FCA's rulemaking authority over the S.A.F.E Act,\14\ while section 1022 
of the Dodd-Frank Act grants the CFPB primary rulemaking authority over 
consumer financial laws.
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    \14\ Section 1027(k) of the Dodd-Frank Act states ``No provision 
of this title [X] shall be construed as altering, amending, or 
affecting the authority of the Farm Credit Administration to adopt 
rules, initiate enforcement proceedings, or take any other action 
with respect to a [Farm Credit System institution].'' (Emphasis 
added). Second, section 1100 of the Dodd-Frank Act retained the 
FCA's authority under section 1510 of the S.A.F.E. Act to ``charge 
reasonable fees to cover the costs of maintaining and providing 
access to information from the Nationwide Mortgage Licensing System 
and Registry, to the extent that such fees are not charged to 
consumers for access to such system and registry.'' If the FCA were 
to assess such fees, it would do so only after a notice and comment 
rulemaking. Finally, the FCA, in contrast to the Federal banking 
agencies, is not a ``transferor agency'' under section 1061 of the 
Dodd-Frank Act.
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    The FCA is repealing its S.A.F.E. Act regulations at 12 CFR part 
610 in order to avoid confusion and unnecessary duplication. The CFPB's 
regulation at 12 CFR part 1007 will now govern the registration of 
residential mortgage loan originators at FCS institutions. To assist 
FCS institutions in locating part 1007, rescinded part 610 will retain 
its original heading and include a cross cite to the CFPB's rules 
governing the Federal registration of residential mortgage loan 
originators (Regulation G).
    The FCA will continue to examine and enforce compliance by FCS

[[Page 51048]]

institutions and their employees with the requirements of the S.A.F.E. 
Act and its implementing regulations pursuant to its authorities under 
the Farm Credit Act of 1971 and sections 1024(f) and 1027(k) of the 
Dodd-Frank Act.

II. Administrative Procedure Act

    The Administrative Procedure Act (APA) \15\ generally requires 
Federal agencies to give public notice that it is proposing to adopt, 
amend, or repeal a regulation, and then afford all interested parties 
an opportunity to comment before promulgating a final rule. However, a 
provision of the APA \16\ authorizes waiver of notice and comment 
rulemaking when an agency, for good cause, finds that notice and 
comment are impracticable, unnecessary, or contrary to the public 
interest.
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    \15\ 5 U.S.C. 551 et seq.
    \16\ 5 U.S.C. 553(b).
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    The FCA finds good cause for waiving notice and comment in this 
situation. Section 1100 of the Dodd-Frank Act amended section 1507 of 
the S.A.F.E. Act by granting the CFPB authority to develop and maintain 
the Registry that the FCA and the Federal banking agencies previously 
exercised. Since the FCA and Federal banking agencies implemented the 
S.A.F.E. Act by jointly enacting regulations, the CFPB assumed 
responsibility for these regulations, by operation of law, on July 21, 
2011. The CFPB is now exercising its new authority under title X of the 
Dodd-Frank Act by consolidating and recodifying the S.A.F.E. Act 
regulations of the FCA and the Federal banking agencies without 
substantive change. Under the circumstances, repeal of the FCA's 
regulations in part 610 conforms with title X of the Dodd-Frank Act. 
For these reasons, the FCA finds that notice and comment rulemaking 
procedures for the repeal of the FCA's regulations in part 610 are 
impractical, unnecessary, and contrary to the public interest because 
the CFPB, not the FCA, now has primary rulemaking authority over 
S.A.F.E. Act, which the CFPB is now exercising.
    Although notice and comment rulemaking is not required in this 
situation, we invite your comments. We will respond to any comments we 
receive when we publish the final rule.

III. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the FCA certifies that the interim rule will not 
have a significant economic impact on a substantial number of small 
entities. Each of the banks in the System, considered together with its 
affiliated associations, has assets and annual income in excess of the 
amounts that would qualify them as small entities. Therefore, System 
institutions are not ``small entities'' as defined in the Regulatory 
Flexibility Act.

List of Subjects in 12 CFR Part 610

    Banks, banking, Consumer protection, Loan programs--housing and 
community development, Mortgages, Reporting and recordkeeping 
requirements, Rural areas.

0
For the reasons stated in the preamble, part 610 of chapter VI, title 
12 of the Code of Federal Regulations is revised to read as follows:

PART 610--REGISTRATION OF MORTGAGE LOAN ORIGINATORS

    Authority: Secs. 1.5, 1.7, 1.9, 1.10, 1.11, 1.13, 2.2, 2.4, 
2.12, 5.9, 5.17, 7.2, 7.6, 7.8 of the Farm Credit Act (12 U.S.C. 
2013, 2015, 2017, 2018, 2019, 2021, 2073, 2075, 2093, 2243, 2252, 
2279a-2, 2279b, 2279c-10); and secs. 1501 et seq. of Pub. L. 110-
289, 122 Stat. 2654.


Sec.  610.101  Cross reference.

    The rules formerly at 12 CFR part 610 have been recodified by the 
Consumer Financial Protection Bureau at 12 CFR part 1007, ``S.A.F.E. 
Mortgage Licensing Act--Federal Registration of Residential Mortgage 
Loan Originators (Regulation G)''.

    Dated: August 14, 2013.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2013-20276 Filed 8-19-13; 8:45 am]
BILLING CODE 6705-01-P