Richard Neiman, superintendent of New York State banks, called Wednesday on state and federal regulators to work together to implement Dodd-Frank, particularly for nondepository supervision.
In a speech before the Exchequer Club, Neiman, who is rumored to be a candidate for comptroller of the currency, said Dodd-Frank reaffirmed the dual banking system and the need for states and federal regulators to partner, particularly for consumer protection.
He said that partnership could come on consumer protection for banks and nondepository supervision and enforcement.
"Reform could have eliminated a meaningful state oversight and enforcement role," he said. "It could have removed supervisory authority from the [Federal Deposit Insurance Corp.] and the Federal Reserve, the agencies that partner with the states, and created a single monolithic regulator.
"It could have undermined state supervision of the vast majority of branches of foreign banks operating in the United States. But instead... Congress confirmed that the state role is critical — providing checks and balances, more cops on the beat in enforcement, and serving as a proving ground for new laws," Neiman said.
Neiman suggested that the Consumer Financial Protection Bureau coordinate with existing state efforts as it designs a system to regulate nonbank institutions.
States already have the National Mortgage Licensing System for mortgage loan originators, and the Secure and Fair Enforcement Act mandated federal registration of mortgage loan originators.
Neiman suggested expanding the licensing system to include other nondepository lenders such as money transmitters and payday lenders.
