Arizona Association of Mortgage Brokers
We've all seen the acronyms – SAFE, NMLS, AZDFI, etc. – but do we know what they mean?
Learn more about the legislation and regulatory groups behind mandatory loan originator licensing (all information is from primary source websites with links back to those sites).
What is the SAFE Act?
On July 30,
2008, the President signed into law the Housing and Economic Recovery Act of
2008. Title V of this Act, entitled The Secure and Fair Enforcement Mortgage
Licensing Act of 2008 (“S.A.F.E. Act”), recognizes and builds on states efforts
by requiring all mortgage loan originators, regardless of the type of entity
they are employed by, to be either state-licensed or federally-registered. All
mortgage loan originators must be licensed or registered through the expanded
Nationwide Mortgage Licensing System and Registry.
Under the
S.A.F.E. Act, all states must implement a mortgage loan originator licensing
process that meets certain minimum standards and must license loan originators
through NMLS.
What is NMLS?
The
Nationwide Mortgage Licensing System will streamline the licensing process for
both regulatory agencies and the mortgage industry by providing
a centralized and standardized system for mortgage licensing. The NMLS
initiative was begun by state mortgage regulators in 2004 in response to the
increased volume and variety of residential mortgage originators and the need
to address these changes with modern tools and authorities.
NMLS was
created by the Conference of State Bank Supervisors (CSBS) and the American
Association of Residential Mortgage Regulators (AARMR). It is owned and
operated by the State Regulatory Registry LLC (SRR), a wholly owned subsidiary
of CSBS. The system has been built and maintained by the Financial
Industry Regulatory Authority (FINRA), who operates similar systems in the
securities industry.
NMLS will
only process license applications or renewals.
Each state agency (e.g. AZDFI) will retain its regulatory authority to approve, deny,
suspend or revoke licenses.
What is AZDFI?
The
Department of Financial Institutions is statutorily charged with the licensing,
supervision and regulation of state chartered financial institutions and
enterprises. The responsibility is twofold: ensuring the safety and soundness
of state chartered financial entities, as well as compliance with applicable
state and federal laws. The Department also reviews complaints that are
filed by consumers against licensed entities when violations of state law or
rules have been alleged, directing appropriate remedial action if the
violations are substantiated. The Department serves approximately 3,600
entities licensed to conduct business in the state, as well as Arizona
What is CSBS?
Conference of State Bank Supervisors (CSBS) is the national
organization for state banking, representing the bank regulators of the 50
states, the District of Columbia, Guam, Puerto
Rico and the Virgin Islands, and approximately
6,200 state-chartered financial institutions. The Conference is responsible for
defending state authority to determine banking structure and the products and
services state-chartered institutions can offer and for improving the quality
of state bank supervision by providing the departments with performance
evaluation and accreditation programs and supervisory education/training
programs for state banking department personnel.
What is AARMR?
American Association of Residential Mortgage Regulators (AARMR) is the
national organization representing state residential mortgage regulators.
AARMR's mission is to promote the exchange of information between and among the
executives and employees of the various states who are charged with the
responsibility for the administration and regulation of residential mortgage
lending, servicing and brokering.
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