The Conference of State Bank Supervisors (CSBS) and the Federal Housing Finance Agency (FHFA) have entered into an agreement designed to facilitate information sharing with respect to non-bank mortgage companies.
The Memorandum of Understanding (MOU) between the two groups establishes sharing protocols between state financial regulators and the FHFA, improving the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system.
Pictured above, CSBS President and CEO Brandon Milhorn, FHFA Director Sandra L. Thompson, and CSBS Board Chair Lise Kruse sign the historic agreement.
Developing crucial framework
“The development of an information sharing framework is an important milestone that will better equip both FHFA and state regulators to oversee our respective regulated entities,” said FHFA Director Thompson. “Improved communication leads to better coordination, which in turn leads to better outcomes for consumers, market participants, and taxpayers.”
CSBS is an organization of financial regulators from all 50 states, American Samoa, District of Columbia, Guam, Puerto Rico and U.S. Virgin Islands. State regulators supervise roughly three-quarters of all U.S. banks and a variety of non-depository financial services. CSBS, on behalf of state regulators, also operates the Nationwide Multistate Licensing System (NMLS) to license and register non-depository financial service providers in the mortgage, money services businesses, consumer finance and debt industries.
The FHFA is an independent agency established by the Housing and Economic Recovery Act of 2008 (HERA), responsible for the supervision, regulation, and housing mission oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, which includes the 11 Federal Home Loan Banks (FHLBanks) and the Office of Finance (OF). The FHFA was established to ensure that the government-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac—and the FHLBanks fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment. Since 2008, FHFA has also served as conservator of both Fannie Mae and Freddie Mac.
New avenues to collaboration
“Information sharing between state regulators and federal supervisors is common sense given our shared interest in a vibrant, stable mortgage marketplace,” said CSBS Board Chair Kruse, who also serves as North Dakota Commissioner of Financial Institutions. “Establishing information sharing opens the door to a more collaborative oversight process that is beneficial to all involved.”
State financial regulators are the primary regulators of non-bank mortgage companies. While each supervisory agency maintains specific authorities related to the mortgage industry, only state financial regulators have complete prudential authority over non-bank mortgage companies.
