Page 1 of 2

CA 15-5 

September 17, 2015 

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS 

SECTIONS:

Applicability to Community Banking Organizations: This guidance applies to 

institutions supervised by the Federal Reserve with total consolidated assets of $10 

billion or less that are not affiliates of insured depository institutions with total assets of 

more than $10 billion. 

SUBJECT: Transfer of SAFE Act Supervisory Responsibilities and Publication of 

SAFE Act Examination Procedures

As of October 1, 2015, responsibility for examining Federal Reserve-supervised 

institutions for compliance with the Consumer Financial Protection Bureau’s (Bureau) 

rule1 implementing the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE 

Act)2 will transfer from safety-and-soundness examiners to consumer compliance 

examiners. This transfer is intended to better align System supervisory responsibilities 

within the appropriate line of business. This transfer will not impose new requirements 

on supervised institutions. 

Consumer compliance examiners will employ the principles contained in the 

Community Bank Risk-Focused Consumer Compliance Supervision Program to 

determine if they should include a review of SAFE Act compliance in an examination. If 

SAFE Act compliance is included in the examination scope, examiners will use the same 

1 See 12 C.F.R. 1007 (Regulation G); 76 Fed. Reg. 78483 (December 19, 2011). The Bureau’s Federal 

Register notice may be found at http://www.gpo.gov/fdsys/pkg/FR-2011-12-19/pdf/2011-31730.pdf. 

2 See 12 USC 5101-5116, Title V of the Housing and Economic Recovery Act of 2008 (Pub. L. 110-289, 

122 Stat. 2654, 12 USC 5101 et seq.) as amended by Title X of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Pub. L. No. 111-203, 124 Stat. 1376) (Dodd-Frank Act).
Page 2 of 2

examination procedures previously used by safety-and-soundness examiners to conduct 

SAFE Act reviews. The examination procedures, which are attached to this letter, were 

developed and issued on an interagency basis by the Federal Financial Institutions 

Examination Council (FFIEC) member agencies3

in March 2012 to assist supervisory 

staff in reviewing supervised institutions’ compliance with federal mortgage loan 

originator (MLO) registration requirements under the SAFE Act. 

The SAFE Act rule requires covered entities to adopt written policies and

procedures to ensure that their MLO employees are registered and that their registration

information, as reflected in the institution’s records, is accurate. These policies and 

procedures should be appropriate to the nature, size, complexity, and scope of residential 

mortgage lending activities of each institution. Additionally, the SAFE Act rule requires 

covered entities to conduct independent testing, at least annually, to review compliance

with the rule. Such independent compliance testing may be conducted by an institution’s 

internal audit function, compliance (or similar function), or an outside party. 

When SAFE Act compliance is included in an examination’s scope, the 

examination procedures will assist Federal Reserve consumer compliance examiners in

reviewing the required policies and procedures and independent compliance testing. 

Based on this review, Federal Reserve examiners will determine whether there are any

violations of the SAFE Act rule or significant deficiencies identified by the independent 

compliance testing that need to be corrected.

Reserve Banks are asked to distribute this letter to supervised institutions in their 

districts, consumer compliance examiners, and other appropriate supervisory staff. 

Questions regarding this letter should be directed to Tim Robertson, Manager, at (202) 

452-2565 (operational questions), or Amal Patel, Senior Supervisory Consumer Financial 

Services Analyst, at (202) 912-7879 (general questions). In addition, institutions may 

send questions via the Board’s public website.4

 

Sincerely,

Attachments:

• SAFE Act General Overview

• SAFE Act Examination Procedures for Depository Institutions

3 The Board, the Bureau, the Federal Deposit Insurance Corporation, the National Credit Union 

Administration, and the Office of the Comptroller of the Currency. The Chair of the State Liaison 

Committee is also a voting member of the FFIEC.

4 See http://www.federalreserve.gov/apps/contactus/feedback.aspx