[Congressional Record Volume 160, Number 120 (Tuesday, July 29, 2014)]
[House]
[Pages H6997-H6998]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SAFE ACT CONFIDENTIALITY AND PRIVILEGE ENHANCEMENT ACT
Mrs. CAPITO. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4626) to ensure access to certain information for financial
services industry regulators, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4626
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SAFE Act Confidentiality and
Privilege Enhancement Act''.
SEC. 2. CONFIDENTIALITY OF INFORMATION SHARED BETWEEN STATE
AND FEDERAL FINANCIAL SERVICES REGULATORS.
Section 1512(a) of the S.A.F.E. Mortgage Licensing Act of
2008 (12 U.S.C. 5111(a)) is amended by inserting ``or
financial services'' before ``industry''.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
West Virginia (Mrs. Capito) and the gentleman from Colorado (Mr.
Perlmutter) each will control 20 minutes.
The Chair recognizes the gentlewoman from West Virginia.
General Leave
Mrs. CAPITO. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and submit extraneous materials for the Record on H.R. 4626, currently
under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from West Virginia?
There was no objection.
Mrs. CAPITO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in strong support of the Safe Act
Confidentiality and Privilege Enhancement Act, legislation that I
introduced this year.
One of the lessons learned from the financial crisis of the last
decade was there were significant gaps in communication between State
regulators. Duplicitous mortgage originators were able to move from
State to State, virtually undetected, perpetuating fraud on consumers.
In response, Congress passed the SAFE Act, which required all mortgage
loan originators to be licensed and registered through the National
Mortgage Licensing System and Registry. The SAFE Act also set minimum
licensing standards that States must meet.
Since its creation in 2008, this registry has allowed State
regulators to efficiently search a mortgage loan originator's history
and detect previous fraudulent behavior.
The success of this registry has not gone unnoticed. Since April
2012, State regulators have been working with other financial services
providers to use the NMLS as a platform for the licensing and registry
of other financial services providers, like money service businesses,
debt collectors, pawnbrokers, and check cashers. In fact, my home State
of West Virginia is now using this platform for their money service
businesses.
The use of this national licensing system not only provides
efficiencies for the regulated businesses, but it also strengthens
consumer protections for the licensed products. The licensing of these
providers and the sharing of information between State regulators helps
ensure that the consumers are properly protected from fraudulent
lending. These registries will allow State regulators to better track
fraudulent actors, making it less likely that these fraudsters can
obtain a license to do business and harm consumers.
H.R. 4626 provides a minor amendment to the SAFE Act, ensuring that
information shared between the State financial services regulators is
protected. My legislation simply clarifies that information that is
shared with these State regulators receives the same privileged and
confidential treatment that is currently afforded to State banking and
mortgage regulators. Without this minor change, there will be gaps in
the system that could limit information sharing.
During a hearing in the Financial Institutions and Consumer Credit
Subcommittee 2 weeks ago, West Virginia Division of Financial
Institutions Commissioner Sally Cline said: ``This possible gap limits
the States' ability to use NMLS as a licensing system for nonmortgage
financial services providers. The change proposed by H.R. 4626
addresses this uncertainty and would provide me and West Virginia-
regulated entities with certainty that confidential or privileged
information shared through NMLS would continue to be protected under
State and Federal law.''
{time} 1400
Ensuring the confidentiality of the shared information will bolster
the effectiveness of these national registries. Expanding licensing to
new lines of business and tracking those that are licensed will better
protect consumers in my State and across the country.
Mr. Speaker, I urge support of this legislation, and I reserve the
balance of my time.
Mr. PERLMUTTER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, H.R. 4626, introduced by Chairwoman Capito, aims at
protecting shared information in the mortgage and financial services
industry by putting safeguards on confidentiality.
The bill is very simple. It applies the same confidentiality
standards to information shared with State regulators regarding
nondepository financial services companies that it enjoyed prior to
being entered into the national mortgage licensing system, as long as
that information is shared through the Nationwide Mortgage Licensing
System among all mortgage regulators.
In the lead-up to the financial crisis, State regulators and Congress
recognized the need to oversee the mortgage industry more
comprehensively and efficiently by promoting smart and efficient
financial regulations to State-licensed, nonbank financial services
providers.
[[Page H6998]]
H.R. 4626 helps develop the Nationwide Mortgage Licensing System,
NMLS, so that regulators retain the ability to keep track of bad actors
and provide responsible mortgage providers with greater efficiency and
consistency in the licensing process.
H.R. 4626 does not create any additional privilege or confidentiality
rights, but the SAFE Act currently provides that information shared
through the Nationwide Mortgage Licensing System among mortgage
industry regulators retains existing State and Federal privilege and
confidentiality protections.
The bill makes it so that these privileges and confidentiality
protections remain as long as the information is shared with another
mortgage regulator.
Mr. Speaker, the bill addresses uncertainty of confidentiality by
clarifying that confidential or privileged information shared through
the NMLS would continue to be protected under State and Federal law.
This bill will increase the cooperation--and I think this is the key
piece--this bill will increase the cooperation between Federal and
State regulators while ensuring that the NMLS fulfills its mission to
enhance consumer protection and stability in the mortgage lending
industry.
This is a good bill. It should be passed by the House of
Representatives. It provides for safety for the home mortgage lending
system and the licensure system. It provides for cooperation between
Federal regulators and State regulators while preserving
confidentiality rights of folks who are part of the licensing system,
so I think a number of different goals are achieved.
I thank the gentlewoman from West Virginia for introducing this bill.
With that, I urge its passage, and I yield back the balance of my time.
Mrs. CAPITO. Mr. Speaker, I yield myself such time as I may consume.
I would like to thank my friend from Colorado for his support of this
and for his service on the committee. He is a great member of the
Financial Services Committee.
Mr. Speaker, I would just like to reiterate that ensuring
confidentiality will bring about more effectiveness with the national
registers. We are responding basically to what a lot of our State
regulators have asked us to do, to make sure that they better protect
consumers and are able to keep the information in a privileged and
confidential manner.
With that, I would urge passage of the bill, and I yield back the
balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from West Virginia (Mrs. Capito) that the House suspend the
rules and pass the bill, H.R. 4626.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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