State Regulators Promote Fintech Friendly Features of National Registry

Financial regulators from Texas and Louisiana today highlighted innovative, “fintech friendly” features of state regulation in remarks before the annual conference of the Nationwide Multistate Licensing System (NMLS).

img_4900“We have embraced what we call ‘reg-tech’ to take state regulation to the next level,” said Charles G. Cooper, Chairman of the Conference of State Bank Supervisors (CSBS) and Commissioner of the Texas Department of Banking. “It is a system that has made the licensing process more efficient, including for those operating on a national basis, all while ensuring transparency to the consumer.”

“Because of NMLS, there is a robust, vibrant regulatory system for non-depository companies operating in the United States,” said Cooper. “NMLS is one of the great developments in financial regulation.”

NMLS Highlights

  • NMLS is the system of record for 62 state agencies
  • Through NMLS, companies engaged in mortgage lending, consumer finance, money services, and debt collection can obtain state licenses and operate in one or more states
  • In 2008, Congress embraced NMLS to license and register mortgage professionals, and lawmakers have continued to support NMLS as an efficient, effective licensing system
  • State regulators have cut in half average approval times to license new companies
  • Since 2011, the number of state-licensed mortgage companies operating nationwide has jumped 70 percent
  • State regulators and the industry have redesigned the business process for surety bond issuances
  • At year-end 2016, roughly 20,000 companies operated under state licenses in NMLS
  • In 2016, 3.7 million people viewed 100+ million web pages on NMLS Consumer Access

John Ducrest“NMLS gives us a regulatory platform to get innovators up and running, and enable existing companies to expand their reach,” said John Ducrest, Commissioner of the Louisiana Office of Financial Institutions. “We recognize that fintech has the potential to deliver financial services more easily and perhaps more broadly. But we also recognize that business innovations must protect consumers and the safety and soundness of the financial system.”

Ducrest explained how state regulators balance these goals by crafting regulatory regimes that:

  • Focus on business activities, not technology alone
  • Support businesses of all shapes and sizes
  • Ensure local accountability to small business and consumers
  • Adhere to regulatory evolution, not revolution
  • Encourage collaboration with other regulators to learn new approaches

“Financial technology is affecting so many business and policy decisions today,” said Ducrest. “Only by working together will we find the right answers.”