Bank group seeks standardized mortgage licensing requirements
A group of banking regulators is working to “modernize” the National Multistate Licensing System. This would allow for greater standardization in the mortgage-industry industry. Vickie Peck (CSBS executive vice president for products and solutions), stated that adopting a standard approach to mortgage industry licensing will increase uniformity within the system. Peck added that uniform standards will simplify the licensing process for mortgage companies looking to be licensed in multiple states. The proposal addresses topics such as location reporting, documentation requirements, and rules regarding listed business contacts. The comment submission window remains open until May 15. Guidance on how to provide proof that state offices have policies in place is one of many rules that vary from country to country, according the CSBS filing. The proposal stated that agencies can ask for copies of policies or not to inquire about the policies. The proposal, if adopted in its current form would also establish separate regulations for financial statements submissions by applicants who wish to become licensed. This would depend on the type of business. For example, new startups with less than $500,000 of revenue would be exempted from the obligation to submit audited financial statements. For startups with less than $500,000 in revenue, audited financial statements would not be required. CSBS manages NMLS on behalf state regulators. This week’s CSBS call for comments is the second to seek public input about current licensing policies for mortgage enterprises. The Consumer Financial Protection Bureau will also undergo a mandatory 10-year review to ensure that the Truth in Lending Act sections have been updated. This will impact various aspects of loan originators’ work as well as their compensation. These laws were enacted following the passage of Dodd-Frank Act.