Regulation G, promulgated by the Consumer Financial Protection Bureau (CFPB), establishes registration requirements for residential mortgage loan originators (MLOs) employed by covered financial institutions, including certain federally regulated depository institutions. This regulation aims to enhance consumer protection in the mortgage lending process by ensuring that MLOs meet specific standards and qualifications.
Key Facts
- Regulation G is governed by the Consumer Financial Protection Bureau (CFPB).
- It includes registration requirements for residential mortgage loan originators.
- The regulation applies to covered financial institutions, such as certain federally regulated depository institutions.
- Mortgage loan originators employed by federally regulated mortgage lenders must comply with the requirements outlined in Regulation G.
- The regulation aims to ensure that mortgage loan originators meet certain standards and qualifications to protect consumers in the mortgage lending process.
Scope and Applicability
Regulation G applies to MLOs who engage in activities related to residential mortgage loans, such as originating, soliciting, negotiating, or arranging loans secured by residential property. Covered financial institutions under the regulation include federally regulated depository institutions, such as banks, savings associations, and credit unions.
Registration Requirements
MLOs employed by covered financial institutions must register with the Nationwide Mortgage Licensing System (NMLS) and obtain a unique identifier. The registration process involves providing personal information, education and experience details, and passing a background check. MLOs must also complete continuing education requirements to maintain their registration.
Policies and Procedures
Covered financial institutions are responsible for implementing policies and procedures to ensure compliance with Regulation G. These policies should address MLO training, supervision, and recordkeeping requirements. Institutions must also establish a process for handling consumer complaints related to MLO conduct.
Enforcement
The CFPB is responsible for enforcing Regulation G. The Bureau may take enforcement actions against MLOs or covered financial institutions that violate the regulation’s requirements. Penalties may include fines, suspension or revocation of registration, and other appropriate sanctions.
Conclusion
Regulation G plays a crucial role in protecting consumers in the mortgage lending process. By requiring MLOs to meet certain standards and qualifications, the regulation helps ensure that consumers receive fair and responsible lending practices. Covered financial institutions are responsible for implementing and adhering to the requirements of Regulation G to protect consumers and maintain compliance.
Sources
- 12 CFR Part 1007 – S.A.F.E. Mortgage Licensing Act—Federal Registration of Residential Mortgage Loan Originators (Regulation G)
- 12 CFR Part 1007 – S.A.F.E. Mortgage Licensing Act—Federal Registration of Residential Mortgage Loan Originators (Regulation G)
- SAFE Mortgage Licensing Act Regulations G and H
FAQs
Who is covered by Regulation G?
Regulation G applies to mortgage loan originators (MLOs) employed by covered financial institutions, such as federally regulated depository institutions (e.g., banks, savings associations, credit unions).
What activities are covered by Regulation G?
Regulation G covers activities related to residential mortgage loans, including originating, soliciting, negotiating, or arranging loans secured by residential property.
How do MLOs register under Regulation G?
MLOs must register with the Nationwide Mortgage Licensing System (NMLS) and obtain a unique identifier. The registration process involves providing personal information, education and experience details, and passing a background check.
What are the continuing education requirements for MLOs?
MLOs must complete continuing education requirements to maintain their registration. The specific requirements vary depending on the state in which the MLO is licensed.
What are the responsibilities of covered financial institutions under Regulation G?
Covered financial institutions are responsible for implementing policies and procedures to ensure compliance with Regulation G. These policies should address MLO training, supervision, and recordkeeping requirements. Institutions must also establish a process for handling consumer complaints related to MLO conduct.
Who enforces Regulation G?
The Consumer Financial Protection Bureau (CFPB) is responsible for enforcing Regulation G. The Bureau may take enforcement actions against MLOs or covered financial institutions that violate the regulation’s requirements.
What are the penalties for violating Regulation G?
Penalties for violating Regulation G may include fines, suspension or revocation of registration, and other appropriate sanctions.
What is the purpose of Regulation G?
Regulation G aims to protect consumers in the mortgage lending process by ensuring that MLOs meet certain standards and qualifications. This helps ensure that consumers receive fair and responsible lending practices.