CSBS Head: IMBs Should Expect ‘Reasonable,’ ‘Robust’ Supervision

AMELIA ISLAND, FLA.–John Ryan, President and CEO of the Conference of State Bank Supervisors, said in the decade since the financial crisis, the non-bank (independent) mortgage bank has emerged as a major player in the real estate finance industry.

“As we’ve seen the major players move back and the non-banks move in, they have played a major role in stabilizing the mortgage market,” Ryan said here at the MBA Independent Mortgage Bankers Conference. “Now, they are recognized as better regulated and with greater accountability.”

Ryan said CSBS has worked hard at providing more effective supervision of the nonbank sector. “It continues to be a work in progress,” he said. “MBA has provided a lot of feedback on the notion of coordinated supervision.”

For example, over the past several years MBA worked with state legislatures to create and enact a Uniform State Test for mortgage loan originators. Ryan praised MBA for its work and said CSBS will continue to work with MBA on key regulatory issues.

Ryan said “robust supervision” of the real estate finance industry will continue–“a reasonable environment, but a more robust environment,” he said.

CSBS has developed plans to modernize and harmonize the state regulatory system for non-banks and financial technology firms through a series of initiatives called Vision 2020.

“The mortgage industry will be the primary beneficiary, including fintech firms,” Ryan said. He noted CSBS has formed a Fintech Advisory Group, calling it a “rare opportunity to reduce regulatory burden and provide more robust supervision.”

Ryan noted the Nationwide Mortgage Licensing System, now in its 10th year, continues to undergo modification. “We know it can be a difficult system to navigate,” he said. “The goal of the system is to better monitor mortgage loan originators operating in multiple states.”

Ryan said the ultimate goal of CSBS is efficient supervision–and regulation. “We’re firm believers in the use of technology to do our jobs better,” he said. “Let’s keep our engagement going.