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CSBS Examiner

A weekly report of events affecting the state banking system from the Conference of State Bank Supervisors


 In This Issue...

 Upcoming Events...

Credit Evaluation School, San Diego, May 7-11:  The Credit Evaluation School follows a blended learning model. It is delivered over a 5-month period utilizing the most effective and efficient delivery channels. Over this period, the examiner will receive all of the required training and experience necessary to review and evaluate credit. The program follows a “dance card” concept utilized by many states. In addition, the examiner will have the benefit of the instructor serving as a “coach” throughout the program. 

Certified Operations Examiner School, San Diego, May 7-11:  The full program is delivered over a 7 to 9 month period utilizing all of the EFSBS delivery channels. Over this period the examiner will receive all of the required training and experience necessary to be in charge of an operations examination. 

State-Federal Supervisory Forum, Savannah, GA, May 21-23:   The State Federal Supervisory Forum is an annual gathering of senior executives in key leadership positions with state and federal regulatory agencies. Participants will discuss current and emerging policy and operational issues affecting state financial regulation and the state/federal regulatory partnership. The program will include formal presentations on a variety of important topics, open forum Q&A sessions, as well networking opportunities. 

Examiners Forum, Portland, OR, June 18-20:  The 2012 Examiners Forum is designed to bring together Senior Certified Examiners and other "seasoned" examiners to discuss current and emerging issues. 

Senior School, Indianapolis, IN, June 25-29:  Senior School is designed to meet the specific leadership training needs of state financial regulators who are rising into supervisory and/or management positions within their departments, serve as an examiner-in-charge in the field, or currently hold a managerial position within the agency. The behavioral science and management techniques presented are developed and honed each year to apply to the unique and evolving needs of financial regulatory personnel. 

“One cannot think well, love well, sleep well, if one has not dined well.” – Virginia Woolf

We are reminded now and then that work and recreation need to be balanced.  And with Spring fever tipping the scales these days, the impulse to indulge in a bit of play grows stronger.  Wasn’t it Napoleon who observed that an army marches on its stomach?  At some point creature comfort becomes a need, not merely a desire.  When that happens, it’s time to let the good times roll – at least a little bit.

Curry Sworn in As Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) has a new leader.  On Monday, Thomas J. Curry was sworn in as the 30th Comptroller of the Currency.  In this role, Curry will oversee the supervision of more than 2,000 national banks and federal savings associations and 50 federal branches and agencies of foreign banks in the United States.

"I want to express my sincere appreciation to President Obama, Secretary Geithner, and the United States Senate for their confidence in my abilities to serve as Comptroller of the Currency," said Curry.  "The OCC’s distinguished history and the professionalism and dedication of its men and women make the OCC a special place.  Its mission of ensuring the safety and soundness of America’s national banks and federal savings associations has never been more important or more challenging.”

The Senate confirmed Curry as Comptroller in March, nearly nine months after President Barack Obama nominated him to replace former comptroller John Dugan, whose term expired August 2010.

Previously, Curry served as a director of the Federal Deposit Insurance Corporation (FDIC), a role he held since January 2004.  Prior to joining the FDIC’s Board of Directors, Curry served five Massachusetts Governors as the commissioner of the Massachusetts Division of Banks from 1990 to 1991 and from 1995 to 2003.  In 2000, Curry served as the chairman of the Conference of State Bank Supervisors (CSBS), and served two terms on the State Liaison Committee of the Federal Financial Institutions Examination Council, including a term as Committee chairman.

“Tom Curry has a tremendous track record as a respected and pragmatic regulator, both from his time with the Massachusetts Division of Banks and his tenure as a member of the FDIC Board,” said John W. Ryan, President and CEO of CSBS.  “At this critical point for our nation’s economy and financial system, Tom will be a steadfast Comptroller, providing effective supervision of some of the nation’s largest and most systemically significant financial institutions.”

The OCC’s press release announcing Curry as Comptroller is available here.

Office of Mortgage Settlement Oversight Opens its Doors

The Office of Mortgage Settlement Oversight (OMSO) opened its doors for business last week, just one day after a federal judge approved the $25 billion state-federal foreclosure settlement with the five largest mortgage servicers.

In his role as mortgage settlement monitor, Joseph A. Smith, Jr., the former North Carolina banking commissioner and a past chairman of CSBS, will oversee compliance of the mortgage settlement terms.  He will receive self-monitoring reports four times a year from the five servicers, starting in the third quarter of 2012, and he has the power to iron out corrective plans if the servicers fall behind.

"I'm going to be engaged with them a lot between now and then — and we will obey the agreement, but we may augment it by [adding] what I would call supervisory activity, to be sure I'm fully informed, so we don't wait 'til the last minute," Smith told the American Banker.  " I think the intention so far in my discussions with the banks is to have an early understanding about what's expected, and how things are going to be done, and to move forward in a way that removes friction, but also removes surprises," he said.

Smith has two full-time employees working at the OMSO and is currently looking to hire an outside firm to help with the monitoring work.  Understanding that many of the larger U.S. law firms and accounting firms have connections to the large banks, Smith said he will do his due diligence to find a firm that is free of conflicts of interest.   

More information about the Office of Mortgage Oversight is available here.

CFPB Reveals Plans to Introduce New Mortgage Servicing Rules

The Consumer Financial Protection Bureau (CFPB) announced plans Tuesday to propose new mortgage servicing rules.  The yet-to-be-proposed rules will call for more transparency and accountability in mortgage servicing.

“The mortgage servicing rules we are considering reflect two basic, common-sense principles – no surprises and no runarounds,” said CFPB Director Richard Cordray in a press release.  “For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress. It’s time to put the ‘service’ back in mortgage servicing.”

To address the issue of greater transparency, the CFPB is considering rules that would provide consumers with clear and timely information about changes to their mortgages.  The rules under consideration include: a requirement that servicers give advance notice and pricing information to consumers before charging them for “force-placed” insurance; a proposal requiring servicers to provide consumers with itemized breakdowns of monthly mortgage statements; a proposal requiring servicers to provide disclosures before interest rates change on most adjustable-rate mortgages; and a rule that would require servicers to make good-faith efforts to contact delinquent borrowers and inform them of their options to help avoid foreclosure.

The CFPB plans to formally propose rules this summer and finalize them in January 2013.  A factsheet on the mortgage servicing rules under consideration is available here.

Timothy Siwy Named NMLS Ombudsman

Timothy M. Siwy, Acting Deputy Secretary of Non-Depository Institutions and Consumer Services for the Pennsylvania Department of Banking, has been named NMLS Ombudsman.

NMLS is a web-based system that allows non-depository companies, branches, and individuals in the mortgage, consumer lending, money-services businesses, and debt collection industries to apply for, amend, update, or renew a license online using a single set of uniform applications.  Further, mortgage loan originators employed by insured depository institutions are also registered with NMLS. 

As NMLS Ombudsman, Siwy will provide the non-depository financial services industries and other interested parties with a neutral venue to discuss issues or concerns regarding NMLS and state licensing.  The objective of the NMLS Ombudsman is to foster constructive dialogue between industry users of NMLS and state regulators to work mutually toward the goal of modern and efficient state regulation. 

“Tim’s extensive background in non-depository financial supervision and law enforcement make him an exceptional choice to serve as NMLS Ombudsman,” said David J. Cotney, Commissioner of Banks at the Massachusetts Division of Banks and Chairman of the State Regulatory Registry LLC — a CSBS subsidiary that operates NMLS.  “The role of the NMLS Ombudsman carries tremendous responsibility and ensures an honest and open dialogue can take place between state regulators and the non-depository service providers licensed through NMLS.  Non-depository service providers and other licensees will find Tim to be a receptive and neutral advocate.”

Siwy will be serving as NMLS Ombudsman while fulfilling his duties with the Pennsylvania Department of Banking.  He succeeds Deborah Bortner – Director of Non-Depository Institutions of the Washington Department of Financial Institutions – as NMLS Ombudsman.

More information on the NMLS Ombudsman is available here.

Around the States

KY:  Cleveland Federal Reserve Bank President Sandra Pianalto will be the keynote speaker at “A Day with the Commissioner” hosted by the Kentucky Department of Financial Institutions.  Ms. Pianalto will address the economic outlook and issues facing Kentucky bankers and the banking industry.  The event takes place April 16 at the Griffin Gate Marriott in Lexington, Ky.  Read more.

PA:  In recognition that financial education is essential to ensure that Pennsylvanians of all ages are prepared to manage money, credit, investments and debt, Governor Tom Corbett has proclaimed April to be “Financial Education Month” in Pennsylvania.  In his proclamation, Governor Corbett praised several Pennsylvania initiatives aimed at promoting financial education and literacy, including the Pennsylvania Department of Banking’s “Your Money’s Best Friend” website which provides consumers with a trusted source of information about personal money management issues.  Read more.

PA:  The Pennsylvania Department of Banking's Bureau of Compliance and Licensing released its quarterly report this week showing that the agency took 87 enforcement actions during the first quarter of 2012.  Read more.

SD:  Northern State University now offers an online Master of Science Degree in Banking and Financial Services. The program, approved by the South Dakota Board of Regents during its March 2012 meeting, is the only such program in South Dakota or the bordering states.  Read more.

Around the Agencies

CFPB:  The CFPB has launched the next phase of its “Know Before You Owe” student loan project by releasing a beta version of the Financial Aid Comparison Shopper, an interactive, online tool designed to help families plan for the costs of post-secondary education.  Read more.

FRB:  Michael L. Stevens, Senior Executive Vice President of CSBS, shares insight into the regulator-banker dynamic during an interview with the Federal Reserve Bank of Atlanta.  Read more.

INTERAGENCY:  The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the March edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market.  “The data this month show that we’re making important progress in providing relief to homeowners under the Obama Administration’s programs.  With fewer borrowers falling behind on their mortgages and some 425,000 families taking advantage of our enhanced Home Affordable Refinance Program – standing to save on average $2,500 per year – it’s clear that the Administration’s efforts continue to provide significant positive benefits,” said HUD Assistant Secretary Raphael Bostic.  Read more.

SEC:  The Securities and Exchange Commission (SEC) announced Wednesday that it will begin accepting comments from the public before the agency proposes its regulatory reform rules and amendments required under the recently-signed Jumpstart Our Business Startups (JOBS) Act.  The SEC is generally required by law to establish a public comment period at the time it proposes rules or rule amendments.  However, similar to the Commission’s action with the Dodd-Frank Act, the public will have an opportunity to voice its views before rules or amendments are proposed under the JOBS Act.  Read more.

Upcoming Events

May 7-11:  The CSBS Credit Evaluation School will be held in San Diego.  The school follows a blended learning model and is delivered over a five-month period utilizing the most effective and efficient delivery channels.  Read more.

May 7-11:  The CSBS Certified Operations Examiner School will be held in San Diego.  The full program is delivered over a seven to nine month period utilizing all of the CSBS Education Foundation delivery channels.  Over this period examiners will receive all of the required training and experience necessary to be in charge of an operations examination.  Read more.

Closing Comment

“I spend a lot of time talking to the CEOs on both the banking and insurance sides of the house.  We have good relationships there.  Are they always happy with everything I do?  No.  But that’s OK.  We have a relationship of respect and dialogue, and when they think I’ve made a mistake, I listen to them, and if I agree that I’ve made a mistake, I’m not afraid to course-correct.”

– Benjamin Lawsky, Superintendent of the New York Department of Financial Services, in a Buffalo News article, on April 9.

Catherine Woody, Editor
Rockhelle Johnson, Writer
Edward Smith, Contributing Editor

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