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Banking Interpretations

General Regulations of the Banking Board Part 38

March 14, 2006

[ ]

Re: Loan Officers employed by two entities

Dear [ ]:

Your request for a legal opinion, dated January 4, 2006, to Keith Nicholson, Principal Bank Examiner - New York State Banking Department (the “Department”), has been referred to me for response. In your request you asked whether an employee of a New York State registered mortgage broker may contemporaneously be employed by an out-of-state federally chartered bank as a loan officer.

Part 38.1 (f) of the General Regulations of Banking Board defines employee as:

(1) any individual performing a service for any one of either a mortgage broker, mortgage banker or exempt organization for whom such entity would be liable for withholding taxes pursuant to title 26 of the United States Code; or

(2) any individual engaged in regulated activities as an independent contractor pursuant to Title 26 of the United States Code of any one of either a mortgage broker, mortgage banker or exempt organization.

Per Part 39.2 (a) of the General Regulations of Banking Board, a national bank is an exempt organization. Although there are no regulations or statutes that explicitly prohibit an employee from working for two mortgage brokers, bankers or exempt organizations, or any combination of the different types of entities, the Department has determined that such prohibition is implicit in the above-recited definition.

Therefore, an employee cannot be contemporaneously employed by a registered mortgage broker and an out-of-state federally chartered bank as a loan officer.

I trust the foregoing is responsive to your inquiry.

Very truly yours,
Harry C. Goberdhan
Assistant Counsel

cc: Keith Nicholson

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