[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