To facilitate information sharing regarding nonbank mortgage
companies, the Federal Housing Finance Agency (FHFA) and the Conference of
State Bank Supervisors (CSBS) entered into a memorandum of understanding
establishing protocols between state financial regulators and the FHFA.
Federal and state regulators hope the agreement will improve
coordination on addressing market developments, identifying and mitigating
risks and further efforts to protect consumers, taxpayers and the nation’s
housing finance system.
“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,” FHFA Director Sandra Thompson said
in a press release. “Improved communication leads to better coordination, which
in turn leads to better outcomes for consumers, market participants, and
taxpayers.”
Nonbank mortgage providers are primarily supervised by state
financial regulators, whereas the FHFA serves as the regulator and conservator for
two of the largest and most prominent nonbank counterparties in the mortgage
industry – Fannie Mae and Freddie Mac.
“Information sharing between state regulators and federal
supervisors is common sense given our shared interest in a vibrant, stable
mortgage marketplace,” CSBS Board Chair and North Dakota Commissioner of
Financial Institutions Lise Kruse said in a press release. “Establishing
information sharing opens the door to a more collaborative oversight process
that is beneficial to all involved.”
State and federal regulatory agencies maintain specific supervisory
authorities within the mortgage industry, but only state financial regulators are
instilled with prudential authority over nonbank mortgage companies, making the
agreement between the FHFA and CSBS potentially invaluable for interagency
coordination moving forward.