3170-0005 Supporting Statement 30-day_20150610_Final (2)

BUREAU OF CONSUMER FINANCIAL PROTECTION
PAPERWORK REDUCTION ACT SUBMISSION
INFORMATION COLLECTION REQUEST
SUPPORTING STATEMENT PART A
REGISTRATION OF MORTGAGE LOAN ORIGINATORS
(REGULATION G) 12 CFR 1007
(OMB CONTROL NUMBER: 3170-0005)

OMB TERMS OF CLEARANCE:
Not applicable. The Office of Management and Budget (OMB) did not provide Terms of
Clearance when approved this information collection on June 11, 2012.
ABSTRACT:
Regulation G implements the Secure and Fair Enforcement for Mortgage Licensing Act
(the S.A.F.E. Act), federal registration requirement with respect to any covered financial
institutions, and their employees who act as residential mortgage loan originators (MLOs), to
register with the Nationwide Mortgage Licensing System and Registry, obtain a unique
identifier, maintain this registration, and disclose to consumers the unique identifier. The rule
also requires the covered financial institutions employing these MLOs to adopt and follow
written policies and procedures to ensure their employees comply with these requirements and to
disclose the unique identifiers of their MLOs.

A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
On October 1, 2010, the Office of the Comptroller of the Currency (OCC), the Board of
Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation
(FDIC), the Office of Thrift Supervision (OTS), the Farm Credit Administration (FCA), and the
National Credit Union Administration (NCUA) (collectively, the Federal Registry Agencies)
issued a joint rule titled Registration of Mortgage Loan Originators (75 FR 51623). The rule
implemented the Secure and Fair Enforcement for Mortgage Licensing Act (the S.A.F.E. Act),
enacted June 30, 2008. The FDIC maintains this approval for this information collection under
OMB Control number 3064-0171and the Federal Reserve board’s control number for this
collection is 7100-0328. The OCC and NCUA previously maintained approval for this
collection under OMB control numbers 1557-0243 and 3064-0171 respectively. The Dodd-Frank
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended a number of
consumer financial protection laws, including the S.A.F.E. Act. In addition to minor
amendments, the Dodd-Frank Act transferred certain rulemaking authority for the S.A.F.E. Act
to the CFPB, effective July 21, 2011, and also granted the Bureau rulemaking authority pursuant
to the S.A.F.E. Act with respect to employees of institutions regulated by the Farm Credit

Administration. The CFPB regulation implementing the S.A.F.E. Act, known as Regulation G,
has been added to 12 CFR Part 1007.
Regulation G implements the S.A.F.E. Act's federal registration requirement with respect
to any covered financial institutions, and their employees who act as residential mortgage loan
originators (MLOs), to register with the Nationwide Mortgage Licensing System and Registry,
obtain a unique identifier, maintain this registration, and disclose to consumers the unique
identifier. The rule also requires the covered financial institutions employing these MLOs to
adopt and follow written policies and procedures to ensure their employees comply with these
requirements and to disclose the unique identifiers of their MLOs.
NMLSR was created by the Conference of State Bank Supervisors (CSBS) and the
American Association of Residential Mortgage Regulators. It is operated by the State
Regulatory Registry LLC, a wholly owned subsidiary of Conference of State Bank Supervisors.
The S.A.F.E. Act provides that the objectives of this registration include aggregating and
improving the flow of information to and between regulators; providing increased accountability
and tracking of mortgage loan originators (MLOs); enhancing consumer protections; supporting
anti-fraud measures; and providing consumers with easily accessible information at no charge
regarding the employment history of, and publicly adjudicated disciplinary and enforcement
actions against, MLOs. The information is used by employers to ascertain whether MLOs are
prohibited from being hired due to violations of other financial statutory requirements, or in
general whether an individual is fit for employment by the institution. The information is also
used by consumers, as described above. Finally, Federal regulatory agencies use this information
to ascertain whether employers are meeting the requirements of using this system’s information
to make judgments on MLO hires; the information also gives agencies an improved means of
tracking MLOs and taking appropriate action in cases of consumer harm.
2. Use of the Information
The data collected in the registry are described in more detail in 12 CFR Part 1007, as
well as in the supplementary documents attached to this supporting statement, and include
information and supporting documentation to the extent required by the registry. In particular,
the information collected includes specific identifying information including name, home
address, business contact information, social security number, gender, and date and place of
birth; financial services-related employment history for the past ten years, including convictions
and civil actions of the individual related to financial services-related activities; action orders
regarding breaches of trust, dishonesty, or unfair or unethical actions; suspensions of authority to
act as an attorney, accountant, or state or Federal contractor; and fingerprints of the individual
for use in criminal history background checks. The confidentiality of this information, except the
information provided to the public, is secured by 12 USC 15111(a), which essentially extends
any existing privacy protections provided by state or federal laws to the information submitted to
NMLSR.
Part of the information is made available to general public, following S.A.F.E. Act's goal
of providing consumers with information regarding individual MLO’s. In accordance with 12

USC 15111(d), information available to the public includes: name, phone number, work address,
employment history (including self-reported employment history not related to mortgage
origination), currently held state licenses, as well as state regulatory actions, if any.

This information is submitted in electronic form from MLOs and their employers and
reported to the Nationwide Mortgage Licensing System and Registry (NMLSR), a web-based
system developed and maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage regulators jointly through the State Regulatory
Registry LLC.
The information is used primarily by employers to ascertain whether MLOs are
prohibited from being hired due to violations of other financial statutory requirements, or in
general whether an individual is fit for employment by the institution. The information is also
used by consumers, who are able to go onto the Consumer Access website for NMLSR and
check the employment history and disciplinary records of MLOs, primarily in connection with
one whom the consumer is considering using as an agent to obtain a mortgage. A secondary use
is for Federal regulatory agencies to ascertain whether employers are meeting the requirements
of using this system’s information to make judgments on MLO hires, and gives them an
improved means of tracking MLOs and taking appropriate action in cases of consumer harm.
3. Use of Information Technology
Section 1502 of the S.A.F.E. Act (12 USC 5101) establishes the Nationwide Mortgage
Licensing System and Registry, with a specific requirement that consumers have access to the
Registry through the Internet. Although the Act does not specifically call for electronic means of
registration, in practice all submissions of information collections are made using the web
interface of the Nationwide Mortgage Licensing System and Registry, a web-based system
developed and maintained by the State Regulatory Registry LLC. The electronic form is stored
in a secured, centralized repository.
4. Efforts to Identify Duplication
Substantially all of the information collected is not otherwise available.
5. Efforts to Minimize Burdens on Small Entities
This collection of information imposes on covered entities, regardless of size, only the
minimum burden necessary to accomplish the program objectives discussed in Items 1 and 2.
Though small entities will be required to take steps to ensure compliance with the rule, the rule
does contain an exception from registration as a mortgage loan originator for an employee of any
covered entity if, during the preceding 12 month period, the employee acted as a mortgage loan
originator for 5 or fewer residential mortgage loans.

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
Compliance with Regulation G requires timely registration, annual registration renewals
and maintaining the accuracy of the information supplied. A less frequent collection will
undermine the quality of information. Currently every effort is made to reduce the burden of
information submission, such as batch processing for employers, as well as auto-completion of
individual forms whereby an individual MLO needs to provide information only if material
circumstances have changed.
7. Circumstances Requiring Special Information Collection
Regulation G’s information collection components are consistent with the applicable
guidelines contained in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency
In accordance with 5 CFR §1320.8(d)(1), the Bureau has published a notice Federal
Register allowing the public 60 days to comment on this proposed the extension (renewal) of this
currently approved collection of information. No comments were received in response to this
notice. Further and in accordance with 5 CFR §1320.5(a)(1)(iv), the Bureau also published a
notice in the Federal Register allowing the public 30 days to comment on the submission of this
information collection request to the Office of Management and Budget.
In addition, we have consulted with the Conference of State Bank Supervisors to confirm
our understanding of the costs and counts relevant to the PRA burden of this regulation.
9. Payments or Gifts to Respondents
No payments or gifts are provided to respondents.
10. Assurances of Confidentiality
Generally, the confidentiality of information collected by the Registry is provided by 12
USC 5111.
The respondents submit information directly into NMLSR, while CFPB obtains data from
NMLSR under an MOU agreement with the State Regulatory Registry LLC, on organization that
maintains NMLSR. The current NMLSR user agreements and privacy policies can be found at
http://mortgage.nationwidelicensingsystem.org/about/Pages/Policies.aspx.
Whenever CFPB receives information obtained through NMLSR, CFPB shall treat the
information in accordance with applicable federal law, including but not limited to the Bureau’s
confidentiality rules, 12 C.F.R. Part 1070, and the federal laws and regulations that apply to
federal agencies for the protection of privacy, confidentiality, security and integrity.
The information collected under this information collection includes direct identifying
personally identifiable information (PII) in order to meet objectives set by Regulation G. The

NMLSR and the federal registry are authorized by the S.A.F.E. Act as amended by the DoddFrank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, Title X, Section 1100,
codified at 12 U.S.C. § 5101 et seq. The CFPB.019 Nationwide Mortgage Licensing System &
Registry, 77 FR 35359 System of Records Notice (SORN), and the Nationwide Mortgage
Licensing System & Registry Privacy Impact Assessment (PIA) cover the use of administrative
data. The SORNs and PIAs will be updated as appropriate, and details regarding information
handling will be specified in individual submissions under this generic clearance.
This information collection implicates privacy concerns because a breach of
confidentiality could result in an individual suffering harm. To reduce the risk of breaches of
confidentiality, CFPB uses appropriate security controls to protect information in the database
and disclosed to consumers. There is risk related to misuse of information collected. Misuse
might involve secondary types of use that are incompatible with the purposes of the initial
collection, or a use of the information that individuals do not understand or to which they have
not provided consent. To reduce the risk of misuse, the CFPB minimizes access to PII based on
the need-to-know basis. The Bureau treats the information received through NMLSR in a manner
consistent with our confidentiality regulations, and all data and analyses are subject to legal and
privacy review prior to their release. The Bureau also evaluates the potential privacy risk and
harm to individuals relative to the authorized purpose, and vets any research proposals using
these data to ensure that they serve an authorized purpose. Disclosure conducted under any
studies using these data will be consistent with the Privacy Act and the E-Government Act.
11. Justification for Sensitive Questions
Questions regarding prior misconduct are the most sensitive among the data that is being
collected. However, answers to these questions are essential for meeting the objectives of
Regulation G. This information is used by employers to ascertain whether certain MLOs are
prohibited from being hired due to violations of other financial statutory requirements, or in
general whether an individual is fit for employment by the institution. The information is also
used by consumers to ascertain the trustworthiness of the MLO they are transacting with. Finally,
Federal regulatory agencies use this information to ascertain whether employers are meeting the
requirements of using this system’s information to make judgments on MLO hires.

12. Estimated Burden of Information Collection
The following table summarizes the burden related to information collections required by
Regulation G from institutions and individual MLO’s. The counts of annual responses for each
information collection are based on the actual records obtained from NMLSR. The average
response time is based on interviews with industry experts.
No. of
Respondents

Annual
Frequency

Annual
Responses

Average
Response
Time (hrs.)

Annual
Burden
Hours

Hourly
Rate 1

Labor
Costs

139

1

139

3.00

417

$14.74

$6,147

0.0% 3

3,180

20.47 4

65,099

0.02

1,085

$14.74

$15,993

61.0%

10,566

1

10,566

0.50

5,283

$14.74

$77,871

1.4% 5

Initial registration

78,543

1

78,543

2.75

215,993

$28.76

$6,211,966

61.0%

Joining an institution

65,099

1

65,099

0.30

19,530

$28.76

$561,674

61.0%

398,492

1

398,492

0.50

199,246

$28.76

$5,730,315

61.0%

Information collection
requirement
Federally registered
institutions
Initial registration
New employee registration
Annual renewal

CFPB
share 2

Federally registered MLO's

Annual renewal
Summary
Total hours:

441,554

CFPB allocated hours

265,944

Total labor cost:

$12,603,966

CFPB allocated labor cost

$7,638,251

No. of respondents - institutions

10,566

CFPB respondents - institutions

147

No. of respondents - MLO's

398,492

CFPB respondents - MLOs

243,080

No. of respondents - total

409,058

CFPB respondents - total

243,227

The CFPB estimates that the total ongoing recordkeeping and disclosure costs for the
market under Regulation G are 441,554 hours, implying the associated labor cost of
$12,603,966. For purposes of PRA, the CFPB allocates to itself 265,944 hours, implying the
associated labor cost of $7,638,251 dollars. The CFPB share in the total burden is calculated
as follows.
According to the Dodd-Frank Act assignment of supervisory authority, CPPB is
allocated burden for 147 depository institutions (116 depository institutions with total assets
of more than $10 billion and 31 affiliates) over which CFPB has primary enforcement
authority with respect to Regulation G. Working with data provided by the Conference of
State Bank Supervisors, we found that the share of individual federally registered MLO’s for
these institutions is 61% of the overall market. We apply this share to the total burden to
obtain the burden allocated to CFPB.
1

Hourly rate labor costs are the median hourly wages from the Bureau of Labor and Statistics (BLS) for affected
occupational groups. Occupational groups for the PRA burden of regulation G are defined as loan officers
(http://www.bls.gov/ooh/business-and-financial/loan-officers.htm#tab-5) and information clerks
(http://www.bls.gov/ooh/office-and-administrative-support/information-clerks.htm).
2
CFPB allocated labor hours and costs are calculated by multiplying the share by the totals
3
All CFPB institutions are already in the system
4
Represents the average number of new hires per institution each year.
5
Reflects 147 out of total 10,566 federally registered institutions that are supervised by CFPB

13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
NMLSR collects processing fees from both institutions and individual MLO’s at various
stages of the registration process and renewal. Using the available data and fee information, we
calculate the approximate total cost to respondents, in the table below.
Description of costs

Unit Cost

Units

Total Cost

Federally registered institutions
Initial registration fee
Annual processing fee

$100
$100

139
10,566

$13,900
$1,056,600

Initial registration fee
Annual processing fee
Change of employment fee

$60
$30
$30

78,543
398,492
65,099

$4,712,580
$11,954,760
$1,952,970

Total cost:
CFPB share

$19,690,810
61%

CFPB costs

$11,928,701

Federally registered MLO's

Summary

The total annual non-labor cost burden to respondents is $19,690,810 dollars. Using the
same methodology as in 12, the CFPB allocates 61% of the total non-labor cost burden to itself,
amounting to $11,928,701.
14. Estimated Cost to the Federal Government
There are no additional costs to the Federal Government.
15. Program Changes or Adjustments
Total
Respondents
Total Annual Burden
Requested

Annual
Responses

Burden Hours

Cost Burden
(O & M)

243,227

617,938

265,944

$11,928,701

180

33,656

15,183

$0

243,047

584,282

250,761
0

$11,928,701
$0

Discretionary

0

$0

New Statute

0

$0

0

$0

250,761

$11,928,701

Current OMB
Inventory
Difference (+/-)
Program Change

Violation
Adjustment

243,047

584,282

The changes in burden and costs are the result of an improved methodology of
calculating costs as opposed to any regulation change. In particular the Bureau realized that the
previous estimates in inherited counted only the number of institutions responding to this
information collection, and not also the individuals who are required to respond. Therefore the
new requests should be seen as a more accurate representation of the true costs and burdens of
Regulation G.
16. Plans for Tabulation, Statistical Analysis, and Publication
The public will have access to information in the Registry about a MLO’s employment
history, work address, state regulatory actions.
17. Display of Expiration Date
The OMB control number and expiration date associated with this PRA submission will
be displayed on the Federal government’s electronic PRA docket at www.reginfo.gov.
18. Exceptions to the Certification Requirement
The Bureau certifies that this collection of information is consistent with the requirements
of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an
exemption to these certification requirements.