NATIONAL HARBOR, Md. – New CFPB regulations for mortgage loan originators, effective Jan. 10, 2014, willrequire credit unions to expand the screening of new hires, provideperiodic training and disclose originator information on loandocuments.

JiJi Bahhur, NAFCU regulatory compliance counsel, reviewed thenew rules with attendees at the trade's Regulatory ComplianceSchool on Thursday.

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The new loan originator rules apply to any credit union employeewho, in general, is compensated for taking a mortgage applicationfor a closed-end loan secured by a member's dwelling.

Employees who assist in applications for home equity lines ofcredit are excluded from the rule, according to NAFCU'shandouts.

Loan originators must be licensed under the SAFE Act; however, Bahhur said unlicensed originators can stillmeet CFPB qualifications if a credit union documents that they havepassed a criminal background check, meet credit report standards,and have no administrative, civil or criminal determinations.

Originators must also meet specific financial responsibility,character and general fitness standards.

To determine these standards have been met, Bahhur said creditunions must not only document criminal checks and credit reports,but also search for current outstanding judgments, tax liens,nonpayment or child support, or any pattern of bankruptcies,foreclosures or delinquencies.

Credit unions must also consider any acts of unfairness ordishonesty, and any disciplinary actions taken against theemployee, Bahhur said.

No single factor will automatically disqualify a loanoriginator, the NAFCU compliance attorney said. Rather, anoriginator's qualification standards must be taken as a whole. Anexception would be a conviction for any felony over the past sevenyears, or conviction of a fraud-related felony at any time, sheadded.

Bahhur stressed that the regulation only applies to new hires.Loan originators hired before Jan. 10, 2013, are considered to bein compliance with the reg if they passed other screeningregulations in effect at their hire date.

Periodic training rules apply to all originators, regardless ofwhen they were hired. Originators must also disclose theirname and Nationwide Mortgage Licensing System and Registry ID onloan documents.

Director of Regulatory Compliance Steve Van Beek said the newcombined TILA/RESPA disclosures will include a specific place todisclose originator information. However, because the TILA/RESPArule has not yet been finalized, he said credit unions mustdisclose the originator information in the loan document.