3170-0005 MLO 2018 renewal-30-dayFRN_OMB

30-day Federal Register version (2018 Renewal)
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 September 15, 2016
ABSTRACT:
Regulation G implements the Secure and Fair Enforcement for Mortgage Licensing Act
(the S.A.F.E. Act, 12 U.S.C §5101 et sq.) , 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
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
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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 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 5111(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 MLOs. In accordance with 12
USC 5111(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
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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 of Consumer Financial Protection
(Bureau) has published a notice Federal Register allowing the public 60 days to comment on this
proposed extension (renewal) of this currently approved collection of information. The Bureau
received no comments in response to this notice. Further, in accordance with 5 CFR
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§1320.5(a)(1)(iv) the Bureau has 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.
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 BCFP 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 BCFP receives information obtained through NMLSR, BCFP 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 BCFP.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.
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, BCFP 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 BCFP 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.

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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 MLOs. 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

31

1

31

3.00

93

$16.19

$1,506

0.0% 3

New employee registration

4,282

10 4

40,691

0.02

678

$16.19

10,980

62.0%

Annual renewal

9,750

1

9,750

0.50

4,875

$16.19

$78,926

1.5% 5

Initial registration

65,000

1

65,000

2.75

178,750

$31.09

$5,557,338

62.0%

Joining an institution

40,691

1

40,691

0.30

12,207

$31.09

$379.525

62.0%

422,703

1

422,703

0.50

210,872

$31.09

$6,555,995

62.0%

Information collection
requirement
Federally registered
institutions
Initial registration

BCFP
share 2

Federally registered MLOs

Annual renewal
Summary
Total hours:

407,475

BCFP allocated hours

249,628

Total labor cost:

$12,584,269

BCFP allocated labor cost

$7,753,569

No. of respondents - institutions

9,750

BCFP respondents - institutions

158

No. of respondents - MLOs

421,743

BCFP respondents - MLOs

261,480

No. of respondents - total

431,493

BCFP respondents - total

261,638

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
BCFP allocated labor hours and costs are calculated by multiplying the share by the totals
3
All BCFP institutions are already in the system
4
Represents the average number of new hires per institution each year.
5
Reflects 158 out of total 9,750 federally registered institutions that are supervised by CFPB
1

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The BCFP estimates that the total ongoing recordkeeping and disclosure costs for the
market under Regulation G are 407,745 hours, implying the associated labor cost of
$12,584,269. For purposes of PRA, the BCFP allocates to itself 249,628 hours, implying the
associated labor cost of $7,753,569. The BCFP share in the total burden is calculated as
follows.
According to the Dodd-Frank Act assignment of supervisory authority, CPPB is
allocated burden for 158 depository institutions (127 depository institutions with total assets
of more than $10 billion and 31 affiliates) over which BCFP has primary enforcement
authority with respect to Regulation G. Working with data provided by NMLSR, we found
that the share of individual federally registered MLOs for these institutions is 62% of the
overall market. We apply this share to the total burden to obtain the burden allocated to
BCFP.
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
NMLSR collects processing fees from both institutions and individual MLOs 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

$100

31

$3,100

Annual processing fee

$100

9,750

$975,000

Initial registration fee

$60

65,000

$3,900,000

Federally registered MLOs
Annual processing fee

$30

421,743

$12,652,290

Change of employment fee

$30

40,691

$1,220,730

Total cost:

$18,751,120

Summary
BCFP share

62%

BCFP costs

$11,625,694

The total annual non-labor cost burden to respondents is $18,751,120. Using the same
methodology as in 12, the BCFP allocates 62% of the total non-labor cost burden to itself,
amounting to $11,625,694.
14. Estimated Cost to the Federal Government
There are no additional costs to the Federal Government.

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15. Program Changes or Adjustments
Total
Respondents

Annual
Responses

Burden Hours

Cost Burden (

Total Annual Burden
Requested

261,638

574,073

249,628

$11,625,694

Current OMB
Inventory

243,277

617,938

265,944

$11,928,701

0

0

0

0

+18,361

-43,865

-16,316
0

-$303,007
$0

0

$0

-16,316

-$303,007

Difference (+/-)
Program Change
Discretionary
New Statute
Violation
Adjustment

+18,361

-43,865

The Bureau estimates that respondents will be required to provide fewer responses than
previously stated, and adjusts burden allocation appropriately. Although there are more
respondents in 2018 than 2015, fewer responses reduces the number of burden hours and cost
burden associated with the regulation of mortgage loan originators.
16. Plans for Tabulation, Statistical Analysis, and Publication
The public will have access to information in the Registry about a MLOs 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.

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