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Explanatory All Institutions Letter

April 9, 2008


RE: New Part 420 of the Superintendent’s Regulations and Supervisory Procedure MB 107 (Mortgage Loan Originators)

The Superintendent has adopted the attached new Part 420 of the Superintendent’s Regulations and Supervisory Procedure MB 107.  The regulations will become effective upon publication in the State Register, which is expected to occur on April 16, 2008.  While the language has been modified in some respects, the adopted regulations are similar in substance to the proposed regulations and to the emergency regulations which have been in effect since December 18, 2007. 

The regulations were referred to in a December 19, 2007 Industry Letter, which was sent to all mortgage bankers and mortgage brokers.

The regulations implement Article 12-E of the Banking Law, as amended by the Legislature in 2007, which creates a framework for the regulation of mortgage loan originators (MLOs) and authorizes the Superintendent to make such rules and regulations as may in his or her judgment be necessary or appropriate for the effective administration or enforcement of that article.

Article 12-E, which went into effect on January 1, 2008, requires individuals to obtain authorization from the Superintendent of Banks before engaging in mortgage loan origination with respect to New York residential real estate. A section of the Banking Department website ( provides information for MLOs and mortgage bankers and mortgage brokers about the new regulatory framework, including an outline of the application process and answers to frequently asked questions about compliance with the new MLO regulations.

The new regulations will enable the Department to identify, track and hold accountable those individuals who engage in abusive practices, and ensure continuing education for all MLOs that are authorized by the Department. The Department estimates as many as 40,000 originators may register in 2008. The regulations will improve accountability among mortgage industry professionals, protect and promote the integrity of the mortgage industry, and improve the quality of service, thereby helping to restore consumer confidence.

Very truly yours,

Sam L. Abram
Secretary of the Banking Board

Department of Financial Services


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