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Prepared Remarks for Charles G. Cooper

Chairman, Conference of State Bank Supervisors

Commissioner, Texas Department of Banking

2017 National Multistate Licensing System Annual Conference

Austin, Texas

February 14, 2017


Welcoming Remarks


When I talked with Bill Matthews about what to say this morning, he said, “Give some welcoming remarks, and say a thing or two about NMLS.” Well, even though Bill and I have known each other for a long time, he still needs to learn more about me. I seldom say “a thing or two” about any topic. So, sit back and let that breakfast settle in.


In all seriousness, welcome to Austin, and welcome to our conference. This is the ninth time we have come together – NMLS users, other industry professionals, regulators, guest speakers, and CSBS staff. We are privileged to have all of you join us. We have a terrific agenda for you. Over the next couple days, you will have the opportunity to participate in a wide range of sessions, and hear the latest on NMLS. I will let Bill and Tim [Doyle] explain all that to you.


If you come away with one impression from this conference, I hope it is this: NMLS is one of the great developments in financial regulation and business innovation. From my perspective as a regulator, in today’s environment if we did not have an NMLS, we would need to invent one. It has become that important. Let me explain why.


First, because state regulators collaborate with each other, we need a common platform to license and regulate non-depository companies. And that is what NMLS enables us to do. Today, NMLS is the system of record for 62 agencies operating at the state level. Together, we use the system to supervise the important industries of mortgages, money services, debt, and consumer finance. In mortgages alone, companies licensed through NMLS originated $900 billion in loans last year, and service almost $3.9 trillion worth of loans. Those are big numbers.


Second, as a state regulator, it is important to support a healthy business environment. And the states are doing precisely that through innovative and responsive supervision. Look at the mortgage lending business. Over the past five years, in NMLS the number of mortgage loan officers has grown by almost 25 percent to almost 150,000. And the number of state licenses they hold has jumped by 116 percent to almost half a million. In other words, more loan officers operating in more states. Clearly, ours is a system that enables the financial sector to bring its ideas and services to market.


Third, as a state regulator, it is our job to make the licensing process as efficient as possible. Here, the trend line is going in the right direction. Once states started to use NMLS, their approval times improved dramatically. For instance, to approve new licenses for MLOs, it used to take 32 days, on average. Now, that is down to 16. On renewals, many states are down to as few as two days. To make the licensing process go even faster, NMLS recently introduced an important process innovation – electronic surety bond issuances, which does away with the old manual process. And we now can process criminal background checks for all individuals in NMLS who require one. As you can see, we have embraced what we call “reg-tech” to enhance state regulation, and we are excited to see what more we can do.


Fourth, it is important for state regulators to coordinate the supervision of companies that operate across state lines. And again, the states are taking action. Through NMLS, we have supported multi-state operations through common forms and standardized licensing. One result: over the past five years, we have seen 70-percent growth in the number of mortgage companies operating nationwide – from 154 conducting business in 25 or more states to, now, 264. That is good growth. And we are committed to addressing other obstacles to multi-state operations for all industries.


Fifth, no state regulation can be complete without ensuring transparency to the consumer. We have a web site, NMLS Consumer Access, where consumers can see which companies are licensed to operate in their state, giving them confidence that they are working with a credible entity. In 2016, Consumer Access was used by 3.7 million people who viewed more than 100 million pages. I imagine you have heard the radio commercial by a well-known online lender. The ad ends with a promotion for Consumer Access and their NMLS number. That is transparency. That is accountability.


Well, I have gone beyond my “a thing or two” directive. But I hope you can see how central NMLS is to state regulators. We simply could not function without it. Because of NMLS, there is a robust, vibrant regulatory system for non-depository companies operating in the United States. It is a system that has encouraged business growth and competition, made the licensing process more efficient, including for those operating on a national basis, all while ensuring transparency to the consumer. And we are not standing still. Our 2.0 initiative, which you will hear about, will modernize NMLS, with an entirely new version and even greater capabilities.


Now, much of the credit for NMLS goes to you, our users. You are the ones who have helped us improve our system and make it what it is today. Moreover, you have given us the experience and feedback to make both NMLS and state regulation more effective. I thank you for this. We want to make your experience as easy, comprehensive, and error-free as possible. And the NMLS team has great plans to deliver on this promise.


Again, welcome to Austin. Welcome to our conference. I hope you find the next couple days a valuable experience.