Tuesday, May 18, 2010
Exempts Nonprofit & Government Counselors from SAFE Act Regulations
Good News for Habitat for Humanity. After a long legislative session, Minnesota Governor Tim Pawlenty signed an omnibus bill that includes language that allows the Minnesota Department of Commerce to exempt Habitat for Humanity affiliates, government agencies and housing counselors from SAFE Act regulations - if HUD allows states to create those exemptions.
Bill Language:
111.10(5) an employee of a nonprofit organization exempt from taxation under section
111.11 501(c)(3) of the Internal Revenue Code of 1986, or a local unit of government, that
111.12 is not otherwise engaged in the mortgage loan business, engaged in the financing of
111.13 housing for low- and moderate-income households or housing counseling under programs
111.14 designed specifically for those purposes, to the extent exempted by the commissioner
111.15 by rule, advisory ruling, or interpretation, after taking into consideration any law, rule,
111.16 advisory ruling, or interpretation by the United States Department of Housing and Urban
111.17 Development.
This is the news we have been waiting for and why our visits during Habitat on the Hill -Minnesota were so important. Everyone who has participated during this legislative session either in person or through our action alerts should feel very good about this victory.
But Wait! The news gets even better.
We also just received word from Washington that Chair Barney Frank sent a letter to Secretary Shaun Donovan clarifying the Congressional intent of the federal SAFE Act. In the letter, Chair Frank writes that Congress’ intent is for states to have the authority to make exemptions "for individuals and organizations that do not meet the statutory definition of a ‘loan originator,’ because such individuals do not engage in SAFE Act loan origination activities for compensation or gain." This is good news for us as the July 31 implementation date looms in Minnesota.
To date, key banking leaders, including Chairman Frank, have expressed reluctance to re-open the SAFE Act, because a large number of groups are seeking similar exemptions from it. With continued encouragement and understanding of Habitat for Humanity's work, they are starting to realize the need.
Trista Matascastilllo, Community Relations Sr. Associate
matt haugen
