The annual NMLS Conference was held February 6 through 9, 2018 in New Orleans. It was attended by over 450 industry members and regulators from all 50 states. Industries represented include mortgage lenders and brokers, money transmitters and money service businesses, auto finance, debt management, collection and settlement and consumer finance. There was much information sharing regarding the new, upcoming NMLS system “NMLS 2.0” and attendees had the ability to try the new system.
There was a presentation regarding the electronic surety bond which is a functionality available through the NMLS. There is significant cost savings to industry through use of the electronic surety bonds in particular in overnight delivery fees necessitated by requiring original bonds with raised seals. Twenty-seven states have adoped use of the electronic surety bond thus far.
The Ombudsman Meeting is one of the highlights of the annual conference. Industry members raise issues and problems they are having with the NMLS as well as the licensing processes in the variousstates and regulators have the opportunity to respond. Both industry members and regulators typically engage in a spirited discussion of the issues. Issues which were discussed included:
- proposed changes to the percentage of ownership to constitute a “control person” and how this may impact industry licensees who planned their ownership structure in reliance upon the existing ownership percentages and how this may cause industry licensees to be required to obtain “change in control” approval from states.
- one of the central purposes of the NMLS is to streamline and make uniform the licensing processes in all 50 states and how this purpose may conflict with the desire of states to require state-specific documents and information.
- how state-specific information and documents should be stored in the NMLS and should regulators from other states be able to view such information and documents Some industry representatives expressed the opinion that regulators from other states should not be able to view the information since they did not request it and the statutes of their states may not authorize them to have the the information and documentation. Some regulators expressed the desire to see all information posted in the NMLS, while other regulators stated they did not want to be required to view information from other states to, for example, process a licensee’s renewal application as this can greatly slow down processing times.
- new functionality for the licensing of foreign entities and foreign individuals.
- the importance of following state-specific procedures such as the use of state mandated fingerprint cards, in particular when applying for mortgage licensing in New York.
- impediments and issues involving the licensing of statutory and common law trusts including who will be a “control person” on the NMLS.
- how much should “indirect owners” be required to disclose, with industry representatives advocating for less disclosure since such persons are often not managing the day to day affairs of the business, while regulators expressing that often “bad actors” are hiding their identity as indirect owners to avoid regulator scrutiny.
Each year at the NMLS Conference it is evident that progress is being made on the issues discussed during prior years at the Ombudsman Meeting. As always, the conference was informative and allowed for networking with other industry members and regulators.