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Media Release

Conference of State Bank Supervisors
        1129 20th Street, NW, 9th Floor, Washington, DC, 20036

 CSBS Says Future Mortgage Reform Legislation Should Build On States’ Initiatives in Mortgage Supervision  

WASHINGTON D.C. — In testimony today before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Massachusetts Commissioner of Banks Steven L. Antonakes said that states are leading the fight to reign in abusive lending through predatory lending laws, licensing and supervision of mortgage lenders and brokers, and through tough enforcement of consumer protection laws.

Testifying on behalf of the Conference of State Bank Supervisors (CSBS) at a hearing on Mortgage Lending Reform, Antonakes saidstates have been active in mortgage regulation since the 1980s, when the first states passed mortgage broker licensing laws.

“All 50 states, plus the District of Columbia, have now adopted some form of regulatory oversight of the residential mortgage industry,” he said.

Antonakes said that CSBS actively supported the Mortgage Reform and Anti-Predatory Lending Act that was introduced in the last Congress. CSBS supports a national anti-predatory lending act, but only if the legislation establishes a federal minimum predatory lending standard that allows the states to further address predatory practices as they evolve.

“The federal standard must be a floor for all lenders that does not stifle a state’s authority to protect its citizens through state legislation that builds on the federal standard.

CSBS also supported the Housing and Economic Recovery Act of 2008, which included the S.A.F.E. Mortgage Licensing Act, which created a state-federal model for regulation and supervision.

Antonakes cited a number of state initiatives that have been undertaken over the past several years to enhance mortgage supervision, including the development of the Nationwide Mortgage Licensing System (NMLS), which serves as the foundation of modern mortgage supervision. Only 15 months after its launch on Jan. 2, 2008, 23 states are now using the System for mortgage licensing. CSBS expects 40 states to be using NMLS by January 2010.

Since the passage of S.A.F.E., the states, through CSBS, drafted the Model State Law for uniform implementation of the S.A.F.E. Act. CSBS expects all 50 states will adopt the model law by its deadline, Aug. 1, 2009,

“Much progress has been made towards enhancing supervision of the residential mortgage industry, as federal and state regulators have engaged in an unprecedented number of cooperative initiatives and agreements, including guidelines, best practices, and regulations to prevent abusive lending in the mortgage industry.

He pointed to a pilot program initiated late in 2007, where CSBS, the Federal Reserve System, the Federal Trade Commission, and the Office of Thrift Supervision engaged in a pilot program to examine the mortgage industry.

Other programs undertaken by the states, through CSBS and the American Association of Residential Mortgage Regulators (AARMR), include:

  • Issuance of CSBS-AARMR Guidance on Nontraditional Mortgage Product Risks that paralleled the federal agencies’ Interagency Guidance on Nontraditional Mortgage Product Risks
  • Establishment of state Model Examination Guidelines for field implementation of the aforementioned guidance
  • Development of a Nationwide Cooperative Protocol and Agreement for Mortgage Supervision setting forth a basic framework for supervising multi-state mortgage entities
  • Development and implementation of Reverse Mortgage Examination Guidelines

“While much is being done to enhance supervision of the mortgage market, more progress must be made towards the development of a coordinated and cooperative system of state-federal supervision,” Antonakes added,

He urged Congress to implement a recommendation made by the Congressional Oversight Panel in its “Special Report on Regulatory Reform” to eliminate federal preemption of the application of state consumer protection laws to national banks.

He also recommended Congress must address systemic risk, but not enact measures that would place community banks at a disadvantage.

Antonakes emphasized that states must remain active in mortgage supervision “because of our knowledge of local economies and our ability to react quickly and decisively to protect consumers.”

Antonakes’s testimony may be found at

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