After looking at this again, I want to clarify a few points:
1) If you have an LO who is an MLO and registered under the SAFE Act you can use that background information. If you have LO who is not an MLO then you’ll need to obtain the criminal background check through local law enforcement or a private provider.
2) Reg Z does not specifically mandate fingerprinting. You’ll need to check with local law enforcement or your private background check provider to determine if they need back fingerprints in order to run the national background check – I have since heard that some may be able to provide the criminal background check without fingerprinting.
As you know the waters become muddy when one requirement is referencing another but they are not exactly the same.