Joint Supervisory Exams near for Multistate Firms
Sichelman, Lew, American Banker
Byline: Lew Sichelman
SAVANNAH, Ga. - Nonbank mortgage companies that operate across state lines will soon be subject to the same coordinated oversight that banks have operated under for years.
Regulators in all 50 states have agreed to perform joint supervisory examinations on mortgage companies doing business in more than one jurisdiction. Now they have to persuade those companies to get behind the concept of uniformity with banks.
One company already has been through the process. Citing confidentiality, Chuck Cross, the vice president of regulatory reform at the Conference of State Bank Supervisors, would not reveal the name of the company or the results of the exam.
All 50 states and the District of Columbia and Puerto Rico have adopted the nationwide protocol for sharing information and coordinating multistate exams.
The pact covers mortgage lenders, mortgage brokerages and mortgage subsidiaries of banks, credit unions and holding companies that are subject to state licensing or exam requirements. It does not cover banks themselves, which have had their own multistate examination agreement for several years.
But at the American Association of Residential Mortgage Regulators' annual conference in Savannah this month, Cross called on lenders to embrace the concept of multistate exams, which he said foster consistency in a flexible and risk-focused manner.
"We've been talking about uniformity for a long time now," he said. "The industry has asked for it, and here it is."
A former president of the mortgage regulator trade group, Cross once ran the consumer services division of Washington's Department of Financial Institutions.
He told the meeting that "we're all in this together" and asked lenders to "cooperate in the process and support the results."
"In the long term," he said, "this is going to be positive and will go a long way toward restoring consumer confidence" in both the mortgage industry and the state employees who enforce the rules.
Under the multistate examination process, rather than submit to examinations in each state in which they operate, national and regional lenders will be scrutinized by a pool of examiners representing all those states. …