Asian Americans to lead future homeownership growth

Asian Americans to lead future homeownership growth

November 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
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
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.
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