KENNEWICK, Wash.— Doug Wadsworth, president/CEO of the $75-million Tri-CU Federal Credit Union and president of the Endangered Small Credit Union Defense (ESCUD), is pressing both the NCUA and CFPB to give small credit unions broad relief from NMLS/SAFE Act mortgage-loan originator requirements, arguing the rules impose costly compliance burdens with little or no consumer or safety and soundness benefit.
In parallel March 20 letters, Wadsworth said ESCUD’s coalition now includes 30 small credit unions nationwide serving more than 100,000 members and holding roughly $1 billion in combined assets.
In a letter to NCUA Chairman Kyle Hauptman, Wadsworth asked the agency to issue immediate supervisory guidance telling examiners to “cease all enforcement, review, or concern” related to NMLS/SAFE Act requirements for small credit unions—defined as institutions under $500 million in assets or originating fewer than 500 mortgages annually. ESCUD wants examiners to stop checking for NMLS numbers on mortgage-related documents, stop reviewing annual SAFE Act audits and compliance checks, and stop issuing findings, Documents of Resolution or supervisory comments tied to NMLS registration, labeling, renewals or fingerprinting.
At the same time, Wadsworth urged CFPB Acting Director Russell Vought to go further by using the Bureau’s SAFE Act and Regulation G authority to provide what he called permanent relief. In that letter, ESCUD asked the CFPB to issue interpretive guidance or begin rulemaking exempting small federal credit unions from having to place NMLS numbers on mortgage and home-equity documents, conduct or submit annual SAFE Act compliance audits, and comply with registration, renewal, fingerprinting and related requirements. Wadsworth said the CFPB action would complement near-term NCUA supervisory relief by creating a more durable exemption.
Wadsworth ties both requests directly to President Trump’s March 13 executive order, “Promoting Access to Mortgage Credit,” which he says calls on regulators to reduce duplicative licensing and registration burdens for smaller lenders and to tailor mortgage rules to expand access in rural and underserved communities. In the NCUA letter, he argued the agency already has enough flexibility through its examination program, supervisory letters and risk-focused policies to de-prioritize or ignore low-risk NMLS requirements without waiting for formal rule changes.
Feedback Wadsworth said he has gathered from small credit unions underscores the practical frustrations behind the push. In comments shared with him and provided anonymously, executives described repeated application problems, lost paperwork and fingerprints, duplicate fees, annual renewal hassles, website lockouts and added printing and audit costs—all for institutions that in some cases do not originate mortgages in-house or make only a handful of loans a year. One small credit union estimated the NMLS and SAFE Act process can add more than $400 per mortgage once audit and compliance costs are included, money the CEO said would be better used to reduce closing costs for members.
The broader argument from Wadsworth and ESCUD is that the SAFE Act framework was built for high-volume mortgage-broker environments, not for tiny, relationship-based credit unions making limited numbers of home loans. He wrote that small CUs can spend “hundreds of hours” on technical compliance with no meaningful member benefit, while examiners sometimes treat NMLS issues as urgent despite what he described as negligible risk to the National Credit Union Share Insurance Fund. ESCUD said it is prepared to provide compliance-cost data and examples of low-volume mortgage activity to both agencies as it seeks to turn the Administration’s deregulatory posture into concrete relief for small institutions.