Compliance Blog

On Friday, I was lucky enough to attend a SAFE Act briefing held by the Conference of State Banking Supervisors.   This group has the unenviable job of managing both the SAFE Act state licensing systems, as well as the SAFE Act federal registration system.  Here's some information from the meeting that should help you as you prepare your credit union to comply with the SAFE Act registration requirements.

• The registration system will be open as early as January 28, 2011.  The folks at CSBS are gunning for that date to have everything ready.
• Here's the federal registration webpage.  As you'll see, there's no action needed yet.
• Each credit union will need to open an account as an organization.  You'll need a RSSD number (from the Fed) to do so. Note, the bottom link on this NCUA SAFE Act page should allow you to locate your number
• In addition, each credit union will need to name an account administrator.  The administrator will have access to nearly all the information that has been filed for the credit union’s MLOs.  
• While individual originators at each credit union will have the possibility of registering themselves, CSBS really recommends that the credit union manage the entire process.  Your credit union will be able to upload a batch of individuals and manage their progress along the way.  (Details on how to do this will be coming soon.)  A draft “batch” form will be released soon, so credit unions will be able to look at that form to see what information needs to be gathered.  Note that your credit union won’t be able to start uploading until the registry becomes active. 
• Your credit union will complete form MU1R, and individuals will complete MU4R.   These forms will be available in the next few weeks. Again, both the credit union and prospective MLOs can look at these to see what information must be gathered in anticipation of the registry opening.
• For individuals, they’ll need to be fingerprinted.  The recommended way is via one of 900 regional electronic fingerprinting stations. There will be thousands of paper fingerprinting stations in the network as well, but they take more time and lead to more “denied” fingerprints due to blurriness, etc.  There will be a ton of information about the fingerprinting process released in the near future.
• The fingerprinting will trigger a criminal background test. 
• Fees.  There will be 3 types of fees.  A processing fee, a background test fee, and a fee for the administrator.  The CSBS will issue proposed fees shortly and invite public comment.  The credit union will be able to pay for all MLOs.   But until the fees are paid for a given MLO, registration is not possible. 

Other points that came up:

CUSOs.  Credit unions will need to determine if a CUSO employee ever acts as an MLO for the credit union under an “employee” relationship.  If so, that person may need to be both a licensed MLO (for the CUSO) and a registered MLO for the credit union. 

Training, guidance, and other help. There will be a ton of resources and help to guide you through the registration process.  The CSBS has managed 48 state registration deadlines so far, so they really know what they are doing.  They will release registration guidelines that touch on every aspect of the registration process. In addition, there will be a call center (currently there, just not open to federal institutions until the registry opens) that will be staffed  from 9 a.m. to 7 p.m., Monday through Friday, to answer registration-related questions.  

Register early.  CSBS officials indicated that problems do pop up from time to time (bad fingerprints, etc.), so that if a credit union waits until day 170, or 175, it may not meet the 180 deadline. CSBS officials indicated that this has happened at every state licensing  deadline so far.  With that in mind, they urge institutions to begin the registration process as early as possible.