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Asian Americans to lead future homeownership growth

Nov 19, 2006

CSBS to develop nationwide mortgage professional licensing systemMortgagePress.comCSBS, regulation, licensing The Conference of State Bank Supervisors (CSBS) has announced the development of a nationwide licensing system for state residential mortgage regulators. Once deployed, the system will host uniform online mortgage industry license applications, track their status and provide consumers with a central repository of information on licensing and publicly adjudicated enforcement actions relating to lenders, brokers and originators. This announcement is the result of an 18-month collaboration among CSBS, the American Association of Residential Mortgage Regulators (AARMR), the National Association of Securities Dealers (NASD) and the mortgage lending industry. "The national licensing system and repository will enhance the state regulator's ability to protect consumers through an increased ability to hold industry professionals accountable for their actions," said CSBS President and CEO Neil Milner. "Fraud and other illegal or unethical behavior, such as predatory lending, should decline as states participate in the system." CSBS Senior Vice President Bill Matthews added, "The system will also streamline the licensing process for state agencies and the industry through the use of modern technology and centralizing redundant state agency operations." CSBS is the nationwide organization for state banking, representing the bank regulators of the 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands, and approximately 6,200 state-chartered financial institutions. AARMR is the national organization representing state residential mortgage regulators. Two years ago, CSBS recognized a need for more consistent regulation and supervision of the mortgage lending industry. The conference also discovered that no government or self-regulatory organization exists to provide state regulatory agencies, consumers, businesses and law enforcement organizations with comprehensive information on a regional or national basis about mortgage lenders, brokers and loan officers. Initially, the project envisioned the development of a uniform mortgage application for every state. A joint task force consisting of more than 20 agencies representing state regulators began meeting two years ago and developed a set of uniform mortgage applications for companies, branches and individuals. A taskforce is now in the process of developing a uniform renewal form and report that can also be used by each state agency. As the idea evolved, participants seemed interested in taking it further, to enable applications to be processed online through a single portal, along with the development of a comprehensive licensing and supervisory repository. "Companies and professionals will only have to complete one online application when applying for licenses in one or more jurisdictions," said AARMR Vice President and Taskforce Co-Chairman Chuck Cross. "Both groups will benefit from access to a national licensing and enforcement repository and more homogeneous state regulations that will likely result from the uniform application." Currently, 48 states license or register mortgage lenders or brokers (Colorado will become the 49th state to license/register mortgage brokers in January). Some states have multiple agencies that regulate the industry. Based on a CSBS/AARMR survey of 50 state mortgage regulators conducted earlier this year, state licenses are held by approximately 90,000 companies, with 63,000 branches and 280,000 loan officers and other professionals. NASD has been selected to design and implement the system, which will be available over the Internet. Milner stated, NASD was selected to develop and operate the system based on its successful track record in developing and operating national licensing systems for states in the securities and investment advisor industries. NASD, a self-regulatory organization for the United States securities industry, operates two national licensing systems for state regulators in the securities and investment advisory industries: the Central Registration Depository, used to register broker-dealer firms and the securities professionals who work for them, and the Investment Adviser Registration Depository system, which provides a secure, Web-based electronic filing, registration and regulation system for investment adviser firms and registered advisers. It also provides regulatory examiners and investigators with compliance and enforcement tools. CSBS expects to begin developing the system this summer and to deploy the system over a secured Internet site on Jan. 1, 2008. Approximately 10-12 states will participate in the first year and more than 30 states are expected to join in 2009 and 2010. Some benefits of the new system include: - Protection for consumers through increased accountability for industry professionals; - Declines in fraud and illegal or unethical behavior (i.e. predatory lending) as states participate in the system; - Streamlined processes through the use of modern technology and centralizing redundant state agency operations; and - Completion of just one online application when applying for licenses in multiple jurisdictions. For more information, visit
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