Treasury Department aims to revamp financial regulatory structureMortgagePress.comNAMB, Mortgage Origination Commission, Treasury Secretary Henry Paulson
NAMB supports creation of federal Mortgage Origination
The National Association of Mortgage
Brokers expressed support for Treasury Secretary Henry
Paulson's recommendation to form a federal Mortgage Origination
Commission, as long as it would have oversight over all mortgage
originators, including those employed by subsidiaries of
federally-chartered banks. The formation of the Commission is just
one of a series of short-, intermediate- and long-term
recommendations for reform of the U.S. regulatory structure
presented by the U.S. Treasury
Department in its "Blueprint for a Modernized Financial
Regulatory Structure." A copy of the 212-paged document is
available online at www.treas.gov/press/releases/reports/Blueprint.pdf.
"Although we are still analyzing the plan, Treasury Secretary
Paulson's recommendation in this area [a federal Mortgage
Origination Commission] appears to compliment efforts by the House
and the Senate to create a federal clearinghouse or registry for
all loan originators," said NAMB President George Hanzimanolis,
CRMS. "This proposal addresses how the registry requirement would
be enforced, and establishes an office to oversee individual and
state compliance with its rules. We support this aspect of the
recommendations, and look forward to hearing more details in the
The "Blueprint for a Modernized Financial Regulatory Structure"
proposes the following changes to reform government regulation of
•Expand President Bush's working group on financial
•Establish a federal Mortgage Origination Commission to set
minimum licensing and consumer protection standards.
•Expand the Federal Reserve's powers to regulate non-bank
•Eliminate the Office of
Thrift Supervision, and merge its responsibilities into the Office of the Comptroller of the
•Determine whether the Federal Reserve or the Federal Deposit Insurance Company
should have oversight of state-chartered banks.
•Give the Federal Reserve regulatory authority over systems
that process payments and transfer securities.
•Propose a Congressionally-created Office of Insurance
Oversight within the Department of Treasury.
•Streamline the Commodity
Futures Trading Commission and the Securities and Exchange Commission
into a single entity.
•Create an entirely new regulatory structure consisting of a
market stability regulator, a prudential regulator, and a business
conduct regulator with a focus on consumer protection.
"We should, and can, have a structure that is designed for the
world we live in, one that is more flexible, one that can better
adapt to change, one that will allow us to more effectively deal
with inevitable market disruptions and one that will better protect
investors and consumers," said Treasury Secretary Paulson. "The
challenge is to evolve to a more flexible, efficient and effective
regulatory framework—and that is the purpose of this
In defining the role of the Mortgage Oversight Commission, NAMB
believes federal regulators should closely follow the guidelines
established in HR 3915, which has already won bipartisan support in
the House of Representatives, as well as the Secure and Fair
Enforcement in Mortgage Licensing (SAFE) Act, S 2595, introduced in
the Senate by Sens. Dianne Feinstein (D-CA) and Mel Martinez
NAMB has long contended that real consumer protection can be
achieved by creating a single national registry that includes all
mortgage originators, including Mortgage Brokers, loan officers and
bank employees who originate loans at a bank or bank subsidiary,
credit union, or mortgage brokerage; and to create national
standards that include professional education and passage of an
examination and criminal background check.
"An all-inclusive registry will give consumers access to the
information they need about their mortgage professional in order to
make sound financial decisions," said Hanzimanolis. "Hopefully, the
current instability of our financial markets makes clear that an
overhaul of the entire system overseeing the activities of
financial institutions and Wall Street firms is critically needed
to ensure the safety and soundness of the system and restore public
Federal financial institutions have historically been
untouchable when it comes to enforcing state consumer protections
imposed on individuals originating mortgage loans. State
requirements for criminal background checks and education
requirements for mortgage originators have been pre-empted by
federal regulators. NAMB believes a uniform standard for
individuals in the mortgage origination business should mean
"uniform" and apply to those employed by federal institutions and
their subsidiaries as well.
NAMB has established similar standards for its members, and
after the 2008 grace period, all new and renewing NAMB professional
and loan originator members must attend professional education and
ethics training, pass a criminal background check, and, if their
state requires it, hold a valid state license to conduct business
as a Mortgage Broker or loan officer.
For more information, visit www.namb.org.