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CSBS Publishes Annual Report
On May 1, the Conference of State Bank Supervisors (CSBS) published its 2013 annual report, which aggregates and reviews the organization’s activities in the prior year, identifies future goals for the organization, and outlines specific priorities for 2014. Those priorities include, among others, continuing to coordinate with federal regulators on cybersecurity and with the CFPB on complaint sharing. The report also includes more detailed reports on past and future activities by various CSBS divisions and boards, including a report from the Policy and Supervision Division that reviews the CSBS’s legislative and regulatory policy positions, and its bank supervision and consumer protection and non-bank supervision activities.
State Regulators Circulate Model Consumer Guidance On Virtual Currency
On April 23, the CSBS’s Emerging Payment Task Force, together with the North American Securities Administrators Association, released “Model State Consumer and Investor Guidance on Virtual Currency.” The model guidance provides basic background information on virtual currency, and tips for consumers considering buying, selling, transacting with, or investing in a virtual currency.
State Regulators Form Emerging Payments Task Force
On February 20, the CSBS announced the formation of an Emerging Payments Task Force to study changes in payment systems—including virtual currencies and other innovations—to determine the potential impact on consumer protection, state law, and banks and nonbank entities chartered or licensed by the states. The Task Force is comprised of nine state regulators, including New York State Department of Financial Services Superintendent Lawsky who has recently indicated New York will seek to become the first state to directly address virtual currency through new regulations. The Task Force will be chaired by David Cotney, Commissioner of the Massachusetts Division of Banks, who testified on these issues on behalf of the CSBS last fall before the Senate Banking Committee. The CSBS stated that the Task Force will “take a comprehensive approach to studying the changing payment systems” by engaging with a broad range of federal, state, and industry stakeholders to understand how new entrants and technologies affect the stability of payment systems and the broader financial marketplace and “to develop ideas for connecting the emerging payments landscape to the financial regulatory fabric.”
CSBS Announces Four More State Agencies Transitioning To Uniform Mortgage Test
On January 7, the CSBS announced that, as of January 1, four additional state or U.S. territorial agencies began using the National SAFE MLO test. With the addition of these four agencies—the Nevada Department of Business & Industry, the New Mexico Financial Institutions Division, the Puerto Rico Office of the Commissioner of Financial Institutions, and the U.S. Virgin Islands Division of Banking & Insurance—a total of 39 agencies are now using the test, which was announced last January and launched in April 2013. The test includes a uniform state component to replace the state-specific component in adopting states.
Senate Committees Begin Review Of Virtual Currency Regulation
This week, two Senate Committees—Homeland Security and Governmental Affairs and Banking, Housing and Urban Affairs—held hearings to hear from regulators and other stakeholders about how virtual currencies fit within the existing regulatory framework, and to assess whether there is a need to alter that framework in response to potential risks presented by emerging virtual currency technologies. The hearings followed an inquiry initiated by Senate Homeland Security leaders over the summer. Senators who participated in the hearings did not indicate any desire to move quickly to establish new federal regulations to address potential risks presented by innovation in virtual currencies. Rather, the lawmakers generally expressed a desire not to inhibit continued innovation, while supporting market participants who want to play by the rules and protecting the market from those who do not. In both hearings, FinCEN Director Jennifer Shasky Calvery described her agency’s ability to address the BSA/AML and terrorism financing risks presented by virtual currencies by employing FinCEN’s existing statutory authority and regulatory tools. Similarly, during the Senate Banking hearing, the Conference of State Bank Supervisors expressed confidence in the ability of state regulators to address consumer protection and other risks posed by virtual currencies through the existing state regulatory framework and processes. Still, committee members raised broader questions about the how to define or categorize virtual currencies (e.g. as a currency versus as a security) and the impact of such a classification on a range of other issues including monetary policy and tax administration. The breadth of the issues, which may need to be addressed by a range of government actors, formed the basis of Senate Homeland Security Committee Chairman Tom Carper’s (D-DE) call for a “whole government” approach to virtual currency.
State Regulators Proposes Changes to Uniform Licensing Forms and Mortgage Call Report
On October 11, the State Regulatory Registry (SRR) proposed changes to (i) the uniform NMLS company, branch, and individual licensing forms developed by state regulators and used by all states through NMLS and (ii) the NMLS Mortgage Call Report (MCR). The proposal incorporates public comments received following an initial April 2013 proposal. The proposed licensing form changes would, among other things, (i) allow a company to designate more than one branch manager within an industry, (ii) revise business activity on company and branch forms, and (iii) collect other trade names on company and branch forms by agency and not by state. Changes to the NMLS licensing forms and certain changes to the format of the MCR are expected to be implemented in March 2014. The proposal notes that given expected changes to HMDA reporting requirements, the SRR will propose substantive changes to the MCR in 2014 with an expected implementation timeframe in 2015. Comments on the proposed changes are due by November 11, 2013.
Thirty-Five State Agencies Now Using Uniform Mortgage Test
On October 1, the Conference of State Bank Supervisors announced that five additional state agencies have implemented the new national SAFE MLO test, bringing the total number of participating state agencies to 35. The new test, which was announced in January and launched in April, includes a uniform state component to replace the state-specific component in adopting states.
Ten More States Adopt Uniform MLO Test
On July 1, the CSBS announced that ten additional state agencies will use the new National SAFE MLO test. Twenty state agencies adopted the test when it initially was introduced in April 2013. The uniform test combines both the national and state testing requirements of the SAFE Act, replaces the separate, state-specific tests for the states that adopt it, and streamlines the license application process for mortgage loan originators (MLOs) seeking licenses in multiple states. The CSBS reports that an additional five state agencies are scheduled to adopt the test by the start of 2014.
CFPB, State Regulators Announce Supervision Framework
On May 21, the CFPB and the CSBS released an agreement to coordinate supervision of entities subject to concurrent jurisdiction of the CFPB and one or more state regulators. The Supervisory Coordination Framework is a nonbinding guide that builds off of the parties' 2011 Memorandum of Understanding, which has since been signed by 59 state regulators. The Framework establishes processes for information sharing, consulting on corrective actions, and coordinating exam schedules and supervisory plans. The Framework also includes a general process for resolving disputes between the CFPB and state regulators, and directs the parties to develop additional processes and procedures to ensure standardization and consistency in implementing the Framework.
CSBS Releases Annual Report
On May 2, the CSBS released its 2012 annual report, which aggregates and reviews the organization’s activities in the prior year, identifies future goals for the organization, and outlines specific priorities for 2013. The paper also incorporates more focused reports on past and future activities by various CSBS divisions and boards, including a report from the Policy and Supervision Division that reviews bank supervision, consumer protection and non-bank supervision, and legislative and regulatory policy, including the CSBS positions on community bank regulatory relief and federal proposed capital rules.