[Vicki Kramer]

Our new Chief Lending Officer is not registered in the national NMLS Registry for MLOs. He currently is considered a commercial lender. However, with his duties as CLO wouldn’t he be required to be registered because of his involvement in negotiating mortgage loan rates if the originating loan officer needs to get his approval before varying from our rate sheet? Thanks in advance for your help!

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[rcooper]

It will depend on the specific circumstances and actions of the CLO, but I will say that I think most people in this position are registered because they will likely be acting as an MLO and will not meet the deminis exception. You will need to look at the definition of MLO below (also see Appendix A for examples of taking application and offering/negotiating terms) as well as the de minis exception. Your conclusion needs to be well documented. Again, I think you would find that most CLOs are registered. The appendix linked above should be very helpful when evaluating his expected actions/duties.

An MLO is:
(1) An individual who:

(i) Takes a residential mortgage loan application; and

(ii) Offers or negotiates terms of a residential mortgage loan for compensation or gain.

There is a de minis exception:

(2) De minimis exception. (i) This part and the requirements of 12 U.S.C. 5103(a)(1)(A) and (2) of the S.A.F.E. Act do not apply to any employee of a national bank, member bank, insured state nonmember bank, savings association, Farm Credit System institution, or credit union who has never been registered or licensed through the Registry as a mortgage loan originator if during the past 12 months the employee acted as a mortgage loan originator for 5 or fewer residential mortgage loans.

(ii) Prior to engaging in mortgage loan origination activity that exceeds the exception limit in paragraph (c)(2)(i) of this section, an employee must register with the Registry pursuant to this part.

(iii) Evasion. National banks, member banks, insured state nonmember banks, savings associations, Farm Credit System institutions, and credit unions are prohibited from engaging in any act or practice to evade the limits of the de minimis exception set forth in paragraph (c)(2)(i) of this section.

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