District of Columbia Legislative and Regulatory Update

District of Columbia Legislative and Regulatory Update

The District of Columbia Council adopted an emergency act entitled the Nationwide Mortgage Licensing System Conformity Emergency Act of 2014 (the “Act”) and pertaining to standardized licensing through the Nationwide Mortgage Licensing System (“NMLS”), effective July 10, 2014.  This emergency act expires on October 8, 2014.  The District of Columbia Department of Insurance, Securities and Banking  (“Department”) also finalized rules governing foreclosure mediation effective June 27, 2014.

 

DISTRICT OF COLUMBIA B20-0845

 

“Commissioner” means the Commissioner of the Department of Insurance, Securities, and Banking.

 

“Applicant” means a person filing an initial or renewal application for licensure or registration under the Banking Code.

 

“Application” means an initial or renewal application for licensure or registration under the Banking Code processed through the Department or its designee such as the NMLS or any other person or third party prescribed by the Commissioner.

 

“Banking Code” means the statutory provisions concerning banking and financial institutions which are codified in Title 26 of the District of Columbia Official Code, laws administered by the Commissioner, and rules and regulations promulgated under those statutory provisions and laws.

 

“Conference of State Bank Supervisors” or “CSBS” means the professional association of state officials responsible for chartering, regulating, and supervising state-chartered commercial and savings banks and state-licensed branches and agencies of foreign banks.

 

“Nationwide Mortgage Licensing System and Registry” or “NMLS” means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, or their successors for the licensing and registration of persons engaged in the state-regulated financial service industries.

 

“State Regulatory Registry, LLC” or “SRR” means the entity which owns and operates the NMLS, or its successors.

 

“Unique identifier” means a number or other identifier assigned by protocols established by the NMLS.

 

Each licensee and registrant under the Banking Code must register with, and maintain, a valid unique identifier issued by the NMLS.

 

An application must be filed on a form prescribed by the Commissioner, including all information required by the Commissioner as set forth by statute or regulation.

 

For purposes of participating in the NMLS, the Commissioner is authorized to waive or modify in whole or by part any statutory or regulatory requirements for applications in any provision of the Banking Code, and to establish new requirements as are reasonably necessary to participate in NMLS.

 

The Commissioner may use the NMLS as an agent for requesting information from, and distributing information to, the Federal Bureau of Investigation, the Department of Justice, any governmental agency, or any source as directed by the Commissioner.

 

To assist in the performance of the Commissioner’s duties under the Act, the

Commissioner may:

  • Share documents, materials, or other information, including confidential and privileged documents, materials, or information subject to the Act, with state, federal, and international regulatory agencies and law enforcement authorities, and with the CSBS, SRR, and NMLS, and their affiliates or subsidiaries; provided, that the recipient agrees to maintain the confidentiality and privileged status of the documents, materials, or other information;
  • Receive documents, materials, or information, including confidential and privileged documents, materials, or other information, from state, federal, or international regulatory agencies or law enforcement authorities or from the CSBS, SRR, NMLS or their affiliates or subsidiaries, and maintain as confidential or privileged any documents, materials, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, or other information;
  • Enter into agreements for sharing and using confidential information consistent with the Act;
  • Authorize a national criminal background check and submission of fingerprints and other identifying information, submitted through the NMLS, and receive criminal history record information from, NMLS, the Metropolitan Police Department, and the Federal Bureau of Investigation for the purposes of facilitating determinations regarding eligibility for licensure or registration under the Banking Code; and
  • Contract with a third party, including the SRR, the CSBS, or their affiliates or subsidiaries, to perform any functions, including the collection of licensing, registration, and processing fees, collection of contact information and other identifying information, fingerprints, written consent to a criminal background check, personal history and experience, and conduct of examinations-related activities covered under the Banking Code, that the Commissioner may consider appropriate.

 

A license or registration issued under this law will expire on a date to be determined by the Commissioner.  A license or registration may thereafter be renewed for one-year term extensions.

 

Before a license expires, the applicant may renew the license or registration for additional one-year terms, if the applicant:

  • Demonstrates that the applicant continues to meet the standards for licensing or registration under the Act and under all relevant provisions of the Banking Code;
  • Pays all applicable fees as prescribed by the Commissioner and all third-party fees; and
  • Submits to the Commissioner a renewal application on the form that the Commissioner requires.

 

When filing an application, each applicant must pay the applicable fees prescribed by the Commissioner and any third-party fees.  Any fees paid in connection with the processing of an application will be non-refundable.

 

The Commissioner may, from time to time, increase or decrease the fees set forth in this section.  The fees will be fixed at such rates, and computed on such bases and in such manner as may, in the judgment of the Commissioner, be necessary to defray the approximate costs of carrying out the regulatory functions set forth in the Act and the Banking Code.  These fees may not be abated or refunded by surrender, suspension, cancellation, or revocation of a registration.

 

The Commissioner will regularly report violations of the Banking Code, as well as enforcement actions and other relevant information, to the NMLS.  The reports will be subject to the confidentiality provisions previously indicated.

 

The Commissioner will establish a process whereby applicants, licensees, and registrants may challenge information entered into the NMLS by the Commissioner.

 

The Commissioner may issue rules to implement the provisions of the Act.

 

The Act will remain in effect for no longer than 90 days, as provided for emergency acts of the Council of the District of Columbia.

DISTRICT OF COLUMBIA RULES CHAPTER 27

In our March 28, 2014 memorandum, we discussed the Department’s emergency amendments to its rules governing foreclosure mediation.  The Department has finalized those rules, adopting the regulations without change from the emergency implementation.