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.
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