|Violations of SAFE requirements will be cited in the examination report and require corrective action. Any significant deficiencies in the institution's SAFE Act regulation policies and procedures or independent compliance tests will be documented in the examiner's workpapers and discussed in the examination report together with suggested corrective actions taken.|
A covered financial institution should expect an examiner to request documents involving procedures relating to:
1) Whether the financial institution, or any of its subsidiaries, has one or more MLO employees.
2) Whether the institution has adopted written policies and procedures and conducts annual independent compliance tests to assure compliance with the SAFE Act regulation.
In the course of the examination, the examiner will conduct the following analysis:
Determine that the financial institution has written policies and procedures, including the annual independent compliance tests, and assure that the institution has taken appropriate steps to implement compliance with the SAFE Act.
At minimum, the examiner will ask:
Has a process been established for identifying which employees of the financial institution are required to be registered MLOs?
Are all employees of the financial institution who are MLOs required to be informed of the registration requirements of the SAFE Act and the SAFE Act regulation and be instructed on how to comply with such requirements and procedures?
Are procedures established to comply with the unique identifier requirements in Section 105 of the SAFE Act regulation?
Are there reasonable procedures for confirming the adequacy and accuracy of employee registrations, including updates and renewals, by comparisons with its own records?
What procedures have been established to tracking systems for monitoring compliance with registration and renewal requirements and procedures?
Does the institution provide for independent testing for compliance with the SAFE Act regulation conducted annually by institution personnel or by an outside party?
What measures are taken by the institution in the case of an employee who fails to comply with the registration requirements of the SAFE Act, the SAFE Act regulation, or the financial institution's policies and procedures, including prohibiting such employees from acting as an MLO or other appropriate disciplinary action?
Has the institution established a process for reviewing employee criminal history background reports received pursuant to the SAFE Act regulation, taking appropriate action consistent with applicable federal law and implementing regulations with respect to these reports, and maintaining records of these reports and actions taken with respect to applicable employees?
What are the established procedures designed to ensure that any third party with which the institution has arrangements related to mortgage loan origination has policies and procedures to comply with the SAFE Act, including appropriate licensing and/or registration of individuals acting as MLOs?