As credit unions work to comply with the new requirements from the CFPB, it is important to note the direct connection of the MLO compensation requirements to that of the MLO and audit requirements under the SAFE Act.
The Dodd-Frank Act transferred rulemaking authority for the SAFE Act from the Federal Reserve Board, the Comptroller of Currency, the NCUA, the FDIC and the Department of Housing and Urban Development to the CFPB, effective July 21, 2011. Regulation G implements the SAFE Act for federally licensed MLOs.
Part 1007.104(f) requires the establishment of policies and procedures that provide for independent testing of the credit union’s policies and procedures for compliance with the SAFE Act. The rule requires for such testing to be conducted at least annually and to be completed by covered financial institution personnel or by an outside third party.