InfoBytes, November 12, 2010 - Weekly In-depth review of news & developments in the financial services industry


Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Banking

• Consumer Finance

• Litigation

Excerpt from "Federal Issues"

CSBS Adds New Credit Report Functionality to NMLS. On November 1, the Conference of State Bank Supervisors (CSBS) announced that the Nationwide Mortgage Licensing System and Registry (NMLS) now can process credit histories for individual mortgage loan originators (MLOs) and that, effective immediately, all licensed residential MLOs participating in the NMLS must complete a credit authorization process, regardless of prior state requirements. Providing credit history processing through the NMLS fulfills a mandate in the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act) that MLOs authorize the NMLS to obtain independent credit reports from a consumer reporting agency. NMLS now has automated this process so that a single credit report may be used by one or more states. New license applicants wishing to obtain an MLO license and transitioning applicants will be required to authorize a credit report and score with the submission of their license application or their transition request. Those MLOs who have already filed an application through NMLS will need to authorize a credit report and score through NMLS prior to the deadline(s) imposed by the state(s) in which they are licensed, even if credit information was previously reviewed by a state agency. The credit report functionality in NMLS will require the MLO to complete an identity verification process and pay a $15 fee. Once an MLO has authorized the credit report, each state regulator will independently review the credit information of MLOs licensed in their jurisdiction. The SAFE Act leaves it to the discretion of each state regulator to develop their own processes and standards for reviewing credit information and determining the financial responsibility of its licensees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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