The Conference of State Bank Supervisors (CSBS) has proposed creating uniform state licensing standards for mortgage companies.
The organization, which operates the Nationwide Multistate Licensing System (NMLS) on behalf of state regulators, is currently seeking public comment on the proposal.
“Adopting a standardized approach for mortgage industry licensing will help increase uniformity within the state system,” said Vickie Peck, CSBS executive vice president of products and solutions. “In turn, uniform standards will streamline the licensing process for mortgage companies seeking licensure in multiple states.”
The full proposal is available here.
To develop the Mortgage Business-Specific Requirements Proposal, business activities and all mortgage state licensing requirements checklists were analyzed by license type (i.e., lender, broker, and servicer), the proposal states.
“Very few differences were found, therefore the business-specific requirements presented are applicable to all mortgage license types, except for the financial statement requirements as denoted,” the proposal states.
The 20-page proposal consists of eight major components:
- Contacts
- Periodic Reporting
- Data Requirements
- Document Requirements
- Required Functionality
- Location Reporting
- Company Operated Work Locations’ Information
- Key Individual Requirements
CSBS is the national organization of bank regulators from all 50 states, as well as from American Samoa, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.
State regulators supervise approximately three-quarters of all U.S. banks and a variety of nondepository financial services. CSBS, on behalf of state regulators, also operates NMLS to license and register nondepository financial service providers in the mortgage, money services businesses, consumer finance, and debt industries.
According to CSBS, state-licensed mortgage companies originated $2.9 trillion in loans in 2022, accounting for 64% of mortgage originations in the United States.
In 2022, approximately 662,000 state-licensed companies and individuals, and depository institutions (as required by the SAFE Act) maintained their licenses or registrations through NMLS, the CSBS said. The majority of the state-licensed companies are in the mortgage industry, it said.
Public comment on the proposal will be accepted at [email protected] until May 15 at 5 p.m. ET, and will be published at https://nationwidelicensingsystem.org, CSBS said. The final requirements will be built into the NMLS in the future.
