Re: "Nonbank Mortgage Lenders Grapple with Licensing Mess": I take exception to an element of your otherwise exceptional reporting. For instance, "SAFE Act licensing is a much bigger issue for nonbank mortgage lenders, which, unlike their bank-owned competitors, must meet tougher educational requirements and take tests in every state where they want to be licensed."

True, the licensing and education requirements are unique to nonbank lenders. But, your implication is that bank employee lenders are less capable because they don’t have "tough" professional skill requirements. This isn’t true. The reason that there is a registration requirement for bank employees and a separate licensing and education requirement for nonbank lenders is that bank employees already are subject to standards to become bank employees (such as fingerprinting, which they will do again as part of the registration process), and their banks are examined to ensure bank employee capabilities and consumer law compliance.

Congress intended that the licensing and education requirements for nonbank lenders would help to elevate the compliance performance of nonbank originators to that of bank originators who are supervised to a standard by the regulators. That is why separate, new education requirements weren’t imposed on bank employees. So, while nonbank originators may be having to tough time meeting their standards, they don’t have tougher standards to meet.

Of course, a common factor across bank and nonbank originators is that they will soon all be in the registry with unique identifiers. This will enable consumers to evaluate the history of individual originators, which is a comparison that many bank employees will be happy to have.

Bob Davis
Executive vice president
American Banker’s Association