The Conference of State Bank Supervisors (CSBS) published final regulatory standards designed to “enhance and align states’ existing authority” over nonbank mortgage servicing companies. CSBS has consistently cited need for increased oversight based on growth of nonbank mortgage servicers in the past 10 years. The potential for alignment is welcomed by the industry, hoping states do not vary from approved policy.
As signaled in a prior article, the previous proposal brought industry comment and significant engagement to align the policy with federal standards of Fannie Mae, Freddie Mac and Ginnie Mae. MBA provided detailed comment on the proposed standards and engaged in discussions as part of the development process. As a result, MBA President and CEO Bob Broeksmit expressed support for the standards with hopes that the standard that can be applied across all states.
However, not all states currently license nonbank mortgage servicers and the standards are not yet the requirements in states that do regulate nonbank mortgage servicers. The published requirements would only become effective after state regulators utilize this policy as part of their sovereign jurisdictional authority. That means each state will need to propose, debate, and consider the CSBS standards as part of their legislative process. As part of the release, CSBS encourages state regulators to stay true to the proposed standards. The final five pages of the document contain model language for states to utilize as part of this process.