States Move Aggressively to Implement SAFE Act and Improve Mortgage Supervision

Washington, DC - July 29, 2009 - (RealEstateRama) — The Conference of State Bank Supervisors (CSBS) submitted a report to Congress relaying the rapid and successful implementation of provisions required under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act). The report can be viewed here.

Passed on July 30, 2008, the SAFE Act gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies on the Nationwide Mortgage Licensing System and Registry (NMLS), a system developed and launched in January 2008 by CSBS and the American Association of Residential Mortgage Regulators (AARMR). State legislatures have responded in an unprecedented fashion to become compliant with the SAFE Act. To date, 49 states and the District of Columbia have enacted or introduced legislation implementing the requirements of the SAFE Act.

“The rapid response of state legislatures and state mortgage regulators has been simply outstanding,” said Neil Milner, President and CEO of CSBS. “By their tremendous efforts to draft, introduce, and pass legislation that meets the extensive requirements of the SAFE Act, state authorities have demonstrated their commitment to create a seamless system of supervision for the residential mortgage industry.”

Some industry participants have criticized state authorities for creating what they call a “patchwork quilt” of laws, statutes, and regulations that provide inconsistent and uneven supervisory standards from state to state. “The swift and uniform adoption of the SAFE Act requirements across the country puts an end to the patchwork quilt argument once and for all,” said Idaho Director of Finance Gavin M. Gee, who also serves as Chairman of the State Regulatory Registry, the limited-liability company established by CSBS that owns and operates NMLS.

Gee added that “the states have demonstrated our commitment to stringent mortgage supervision by working with one another to meet the deadline and requirements imposed by Congress. The coordination and communication among state mortgage regulators, attorneys general, and state legislatures to implement the SAFE Act has truly been unprecedented.”

Further, CSBS and AARMR are pleased President Obama’s plan for financial regulatory reform recognizes the effort of the states in this area and to protect consumers. Often, state authorities are able to identify troubling practices and products that may be harmful to consumers or market participants. The SAFE Act and NMLS provide a model for effective cooperative federalist financial oversight that draws upon the resources and expertise of both state and federal authorities. As Congress debates financial regulatory reform, CSBS and AARMR encourage Congress to build upon the successful model they implemented by passing the SAFE Act.

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CSBS is the nationwide organization for state bank regulators, representing the bank supervisors of the 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands, who are responsible for oversight of the nation’s approximately 6,000 state-chartered financial institutions. CSBS is responsible for defending state authority to determine banking structure and the products and services state-chartered institutions can offer for improving the quality of state bank supervision by providing department performance evaluation and accreditation programs and supervisory education/training programs for state banking department personnel. In addition, most state banking departments have regulatory oversight of residential mortgage providers operating within their states.

AARMR is the national organization representing state residential mortgage regulators. AARMR’s mission is to (a)promote the exchange of information between and among the executives and employees of the various states who are charged with the responsibility, pursuant to the laws of the individual states, for the administration and regulation of residential mortgage lending, servicing and brokering; (b) assist in resolving conflicts of jurisdiction in relation to mortgage lending, servicing, and brokering; (c) promote a better understanding of mortgage regulation; (d) develop model legislation applicable to the administration and regulation of mortgage lending, servicing and brokering; (e) increase the knowledge and ability of those engaged in the administration and enforcement of mortgage regulation and those engaged in mortgage lending, servicing or brokering by organizing and sponsoring lectures, seminars, and training programs and by providing a forum for the exchange of information; and (f) do everything necessary, proper, advisable or convenient for the accomplishment of the Corporation’s purposes and goals.

Information contact: Catherine Woody, CSBS Director of Public Relations for Policy, (202) 728-5733 or .

Conference of State Bank Supervisors
1155 Connecticut Avenue, NW, Fifth Floor, Washington, DC, 20036

American Association of Residential Mortgage Regulators
2300 N Street, NW, Suite 710, Washington, DC, 20037

Tagged as: AARMR, NMLS, S.A.F.E. Act

 

 

 

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