[Congressional Record (Bound Edition), Volume 160 (2014), Part 9]
[House]
[Pages 13395-13396]
[From the U.S. 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.

[[Page 13396]]

  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.
  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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