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if they do not have to be licensed under
the SAFE Act?
If you are a loan originator organization
that is not a government agency or a state
housing finance agency, you have three
duties with respect to each of your
individual loan originator employees who is
not required to be licensed and is not
licensed as a loan originator pursuant to
Regulation H (12 CFR 1008.103) or state
SAFE Act implementing law.
(§ 1026.36(f)(3))
These three duties, which are discussed in
the three following questions, include
collecting information about the employee,
determining that the employee is qualified,
and making sure the employee is properly
trained. These duties help make sure that
loan originator employees who are not
required to be licensed are qualified,
trustworthy, and properly trained.
In contrast to the requirement to make sure
the individual loan originators who work for
you obtain any licenses or registrations
required by the SAFE Act and state SAFE
Act implementing law, these additional requirements only apply to your employees (not
originators who operate under a brokerage agreement with your organization).
What background information must loan
originator organizations collect about
Individual loan originators who are not
subject to SAFE Act licensing generally
include employees of depository institutions
and their federally-regulated subsidiaries as
well as employees of bona fide nonprofit
organizations that a state has exempted from
licensing under the criteria in 12 CFR
1008.103(e)(7). (Comment 36(f)(3)-1)
The SAFE Act imposes qualification
requirements on loan originators who must
be licensed under the SAFE Act. The
qualification requirements in this rule
applicable to employees who are not required
to be licensed are similar to the qualification
requirements in the SAFE Act that apply to
originators who must be licensed.
Note that as explained in the 2019
Interpretive Rule, if an individual loan
originator has temporary authority to act as a
loan originator in a particular state under the
SAFE Act, a loan originator organization
does not need to satisfy the screening and
training requirements in § 1026.36(f)(3) with
regard to that individual’s loan origination
activities in that state.