A&B ABstract
The Conference of State Bank Supervisors (CSBS) revolutionized state licensing with the National Mortgage Licensing System (NMLS) by providing a more uniform approach to state licensing of non-bank financial services companies. CSBS will bring a similar transformation to supervising such companies.
The New State Examination System
CSBS designed the State Examination System (SES) to be an end-to-end system for scheduling a single or multi-state examination to completion; the system can also be used for investigations, enforcement actions and complaints.
Within the SES, regulators will be able to access an agency library of resources, track examination time and expenses, prepare and send information requests, and engage in collaborative scheduling. Compliance and examination support staff within companies will be able to schedule examinations, receive and respond to information requests, and receive completed examination reports. Further, such staff also will be able to access the licensee’s company NMLS record, which should decrease regulator requests for additional information throughout the course of an examination. How the system will work outside the examination context is yet to be seen.
CSBS has announced a pilot of the SES system with 11 agencies and nine mortgage or money servicer examinations. The pilot is scheduled to run from October 1 to December 31, 2019. Assuming that the pilot program runs smoothly, CSBS expects to make SES available nationwide early in 2020.
Takeaways
The CSBS should be commended for taking this initiative to modernize the supervision process and make it less burdensome for non-bank financial institutions and regulators alike. Companies should keep an eye out for training on this new system in the not-so-distant future.