Essentially cleaning up its regulatory roster, the Federal Reserve Friday proposed rule changes that reflect the transferal of its jurisdiction over certain mortgage-licensing related rules to the federal consumer financial protection agency. The Fed is accepting comments until Nov. 26.
The Fed said it is proposing to amend both its Regulation H (membership of state banking institutions in the Fed), and Regulation K (international banking operations) to repeal provisions in both that incorporate the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). The statute mandates a nationwide licensing and registration system for residential mortgage loan originators. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) transferred rulemaking authority for the statute from the Fed (and a number of other agencies) to the Bureau of Consumer Financial Protection (BCFP, formerly known as the CFPB).
Even though authority was transferred, that doesn’t mean that all of the Fed’s rules were necessarily changed to reflect the move – which is apparently the case with Regs H and K. The Fed, in its release, noted that the bureau has already issued a final rule that is substantially identical to Fed regulations incorporating the S.A.F.E. Act. As a result, the Fed said, it is proposing to repeal its versions of those regulations.
Federal Register notice (Sept. 25, 2018)