Legislative Package Introduced to Reform Oversight of the Financial Services & Banking Industries
California Political Desk
December 02, 2008
SACRAMENTO –Assemblymember Pedro Nava, Chair of the Banking & Finance Committee announced the introduction of a legislative package to reform regulatory oversight of the financial services and banking industry and provide increased protections for consumers in California.
The time for reform is now. Consumers want protection and lenders want to know which rules they have to follow. This legislative package will provide for stepped up safeguards for California families," said Nava. "My committee held a number of hearings on the housing and mortgage crisis in California and as a result of those hearings; we are taking the necessary actions to fix what is broken."
California SAFE ACT of 2009
AB 33 will bring much needed reform by implementing the Mortgage Lending Regulatory Reform & the Secure & Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) that passed the United States Congress in response to the housing and financial crisis and the rampant abuse in the mortgage lending industry. Assemblymember Nava´s legislation will set-up up a framework to provide increased protections for consumers in California who are seeking mortgage loans, and to ensure the mortgage lending industry is operating without unfair, deceptive, and fraudulent practices on the part of mortgage loan originators.
Additionally, California will take part in a Nationwide Mortgage Licensing System and Registry (NMLSR) for the residential mortgage industry. The main objective for the new system is to require residential mortgage originators to act in the best interests of the consumer to the greatest extent possible and that the system facilitates the collection and distribution of consumer complaints to both state and federal regulators. In addition, this bill requires the licensing of all loan originators.
California and other states have until August 1, 2009 to put in place a new regulatory framework, or face direct oversight and implementation from the Federal Department of Housing and Urban Development (HUD).
Financial Services Reform Act of 2009
AB 34 will consolidate the Department of Corporations (DOC), Department of Real Estate and the Department of Financial Institutions (DFI) thereby creating improved regulatory efficiency, accountability and oversight of California´s financial services, banking and mortgage lending industries. The measure will address the shortcomings in the current system and
provide for increased protections for consumers.
California is one of only a handful of states that does not have a centralized regulator of these industries. Currently, the regulation in California is split across three regulators, the Department of Corporations (DOC), Department of Real Estate and the Department of Financial Institutions (DFI). DOC has jurisdiction over residential mortgage lending, finance lender, payday lending, escrow agents, securities dealer, and financial advisors, just to name a few. DRE regulates real estate agents and mortgage brokers, while DFI's primary responsibility is the regulation of state chartered banks and credit unions.
Regulation of the mortgage lending industry is most problematic under the present system. Those who wish to engage in the business of offering home loans have several licenses and regulators to choose from, which creates a regulatory arbitrage and confusion for consumers and the regulated community.
The time for reform is now. Consumers want protection and lenders want to know which rules they have to follow. This legislative package will provide for stepped up safeguards for California families," said Nava. "My committee held a number of hearings on the housing and mortgage crisis in California and as a result of those hearings; we are taking the necessary actions to fix what is broken."
California SAFE ACT of 2009
AB 33 will bring much needed reform by implementing the Mortgage Lending Regulatory Reform & the Secure & Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) that passed the United States Congress in response to the housing and financial crisis and the rampant abuse in the mortgage lending industry. Assemblymember Nava´s legislation will set-up up a framework to provide increased protections for consumers in California who are seeking mortgage loans, and to ensure the mortgage lending industry is operating without unfair, deceptive, and fraudulent practices on the part of mortgage loan originators.
Additionally, California will take part in a Nationwide Mortgage Licensing System and Registry (NMLSR) for the residential mortgage industry. The main objective for the new system is to require residential mortgage originators to act in the best interests of the consumer to the greatest extent possible and that the system facilitates the collection and distribution of consumer complaints to both state and federal regulators. In addition, this bill requires the licensing of all loan originators.
California and other states have until August 1, 2009 to put in place a new regulatory framework, or face direct oversight and implementation from the Federal Department of Housing and Urban Development (HUD).
Financial Services Reform Act of 2009
AB 34 will consolidate the Department of Corporations (DOC), Department of Real Estate and the Department of Financial Institutions (DFI) thereby creating improved regulatory efficiency, accountability and oversight of California´s financial services, banking and mortgage lending industries. The measure will address the shortcomings in the current system and
provide for increased protections for consumers.
California is one of only a handful of states that does not have a centralized regulator of these industries. Currently, the regulation in California is split across three regulators, the Department of Corporations (DOC), Department of Real Estate and the Department of Financial Institutions (DFI). DOC has jurisdiction over residential mortgage lending, finance lender, payday lending, escrow agents, securities dealer, and financial advisors, just to name a few. DRE regulates real estate agents and mortgage brokers, while DFI's primary responsibility is the regulation of state chartered banks and credit unions.
Regulation of the mortgage lending industry is most problematic under the present system. Those who wish to engage in the business of offering home loans have several licenses and regulators to choose from, which creates a regulatory arbitrage and confusion for consumers and the regulated community.
Print
Share
Email
