[House Report 114-62]
[From the U.S. Government Publishing Office]


114th Congress       }                              {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session         }                              {      114-62
====================================================================
 
      SAFE ACT CONFIDENTIALITY AND PRIVILEGE ENHANCEMENT ACT

                                _______
                                

 April 13, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1480]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1480) to ensure access to certain information 
for financial services industry regulators, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          Purpose and Summary

    H.R. 1480, the ``SAFE Act Confidentiality and Privilege 
Enhancement Act,'' amends the Secure and Fair Enforcement of 
Mortgage Licensing Act of 2008 (SAFE Act) to allow state and 
federal financial regulators to share information regarding 
consumer financial services businesses that are licensed at the 
state level in the Nationwide Mortgage Licensing System and 
Registry (NMLS or the System) without waiving any applicable 
privilege or confidentiality protections provided by state and 
federal law.

                  Background and Need for Legislation

    The NMLS was developed by state regulators in 2006 in order 
to help increase uniformity, reduce regulatory burden, enhance 
consumer protection, and reduce fraud by providing a single 
system for the licensing and registration of the nation's 
mortgage industry. The System was originally created to allow 
states to track mortgage loan originators from state-to-state 
on a nationwide basis while keeping licensing and oversight 
authority at the state level. Under current law, only mortgage 
regulators are permitted access to information provided by the 
NMLS.
    The Secure and Fair Enforcement for Mortgage Licensing Act 
(SAFE Act) was enacted on July 30, 2010, as part of the Housing 
and Economic Recovery Act of 2008 (P.L 110-289). The SAFE Act 
requires all mortgage loan originators to be licensed and 
registered through the NMLS. The SAFE Act also requires states 
to adopt minimum standards for licensing residential mortgage 
loan originators.
    Regulatory agencies in all 50 states, the District of 
Columbia, Puerto Rico and the Virgin Islands use the NMLS. 
Section 1512 of the SAFE Act (12 U.S.C. 5111(a)) provides that 
confidentiality and privilege protections arising under federal 
and state law applicable to information provided to the NMLS 
are not lost when shared among federal and state mortgage 
regulators.
    States license other types of consumer finance businesses. 
For example, many states license and regulate:
    1. Mortgages, including residential mortgage finance 
activities, underwriting, mortgage loan modifications, and 
commercial mortgage brokering or lending.
    2. Consumer Finance, including consumer lending, student 
lending, title lending, payday lending, and pawn brokering.
    3. Debt, including collections activities, credit 
counseling, and non-mortgage loan modifications.
    4. Money Services, including money transmitters, check 
cashers, prepaid card issuers, and currency exchange services.
    State regulators have begun using the NMLS as a licensing 
platform for regulating other non-depository financial service 
providers beyond residential mortgage providers to increase 
uniformity, reduce regulatory burden, enhance consumer 
protection and reduce fraud while ensuring privacy protections 
are maintained. As more state regulatory agencies--specifically 
state regulatory agencies that are not considered mortgage 
regulators--expand their use of NMLS with a broader range of 
licensees, greater assurance is needed that information 
provided to NMLS will not lose confidentiality and privilege 
protections when shared with these regulators. H.R. 1480 would 
clarify that such information and material may be shared with 
all State and Federal regulatory officials with mortgage or 
financial services industry oversight authority without the 
loss of privilege or the loss of confidentiality protections 
provided by Federal and State laws.
    In a letter to the Committee dated March 24, 2015, the 
Conference of State Bank Supervisors stated its support for 
H.R. 1480, writing that it ``support[s] state regulators' 
expanded use of the Nationwide Multi-state Licensing System and 
Registry (NMLS) as a licensing and regulatory system without 
the loss of privilege or confidentiality protections provided 
by state and federal laws.''

                                Hearings

    The Committee on Financial Services did not hold hearings 
on H.R. 1480 in the 114th Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 25, 2015 and March 26, 2015, and ordered H.R. 1480 to be 
reported favorably to the House without amendment by a recorded 
vote of 58 yeas to 0 nays (Record vote no. FC-18), a quorum 
being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole vote in committee was a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 58 yeas to 0 nays 
(Record vote no. FC-18), a quorum being present.


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee, based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 1480 
will ensure that state financial regulators who are not 
mortgage regulators can use the Nationwide Mortgage Licensing 
Sysem without weakening privilege and confidentiality 
protections applicable to information contained within the 
System.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:
                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 6, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1480, the SAFE Act 
Confidentiality and Privilege Enhancement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 1480--SAFE Act Confidentiality and Privilege Enhancement Act

    H.R. 1480 would broaden the group of regulators authorized 
to share information submitted to the Nationwide Mortgage 
Licensing System and Registry (NMLSR) without losing privilege 
or confidentiality protections to include public officials that 
oversee the financial services industry.
    CBO estimates that enacting H.R. 1480 would increase direct 
spending; therefore, pay-as-you-go procedures apply. However, 
we expect those effects would be insignificant. CBO estimates 
that enacting H.R. 1480 would not affect revenues. Implementing 
the bill would not affect discretionary spending because the 
Bureau of Consumer Financial Protection (CFPB) is permanently 
authorized to spend amounts transferred from the Federal 
Reserve System.
    Under current law, the confidentiality of information 
submitted to the NMLSR, a system established by the S.A.F.E 
Mortgage Licensing Act (Public Law 110-289) to register all 
originators of mortgage loans, is protected by state and 
federal privacy laws. H.R. 1480 would extend those protections 
to information that is shared with state or federal officials 
that oversee the mortgage industry.
    Based on information from the CFPB, CBO estimates that 
enacting H.R. 1480 could affect the agency's workload and 
operating costs, but such effects would not be significant.
    H.R. 1480 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by Theresa Gullo, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1480 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 1480 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 1480 does not require any 
directed rulemakings.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 1480 as the ``SAFE Act 
Confidentiality and Privilege Enhancement Act.''

Section 2. Confidentiality of information shared between state and 
        federal financial services regulators

    This section amends the SAFE Act to extend to state and 
federal regulatory officials having financial services 
oversight authority access to any information provided to the 
Nationwide Mortgage Licensing System and Registry (or any 
system established by the Director of the Consumer Financial 
Protection Bureau) without the loss of privilege or 
confidentiality protections provided by federal and state laws.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

S.A.F.E. MORTGAGE LICENSING ACT OF 2008

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DIVISION A--HOUSING FINANCE REFORM

           *       *       *       *       *       *       *


TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

           *       *       *       *       *       *       *


SEC. 1512. CONFIDENTIALITY OF INFORMATION.

  (a) System Confidentiality.--Except as otherwise provided in 
this section, any requirement under Federal or State law 
regarding the privacy or confidentiality of any information or 
material provided to the Nationwide Mortgage Licensing System 
and Registry or a system established by the Director under 
section 1509, and any privilege arising under Federal or State 
law (including the rules of any Federal or State court) with 
respect to such information or material, shall continue to 
apply to such information or material after the information or 
material has been disclosed to the system. Such information and 
material may be shared with all State and Federal regulatory 
officials with mortgage or financial services industry 
oversight authority without the loss of privilege or the loss 
of confidentiality protections provided by Federal and State 
laws.
  (b) Nonapplicability of Certain Requirements.--Information or 
material that is subject to a privilege or confidentiality 
under subsection (a) shall not be subject to--
          (1) disclosure under any Federal or State law 
        governing the disclosure to the public of information 
        held by an officer or an agency of the Federal 
        Government or the respective State; or
          (2) subpoena or discovery, or admission into 
        evidence, in any private civil action or administrative 
        process, unless with respect to any privilege held by 
        the Nationwide Mortgage Licensing System and Registry 
        or the Director with respect to such information or 
        material, the person to whom such information or 
        material pertains waives, in whole or in part, in the 
        discretion of such person, that privilege.
  (c) Coordination With Other Law.--Any State law, including 
any State open record law, relating to the disclosure of 
confidential supervisory information or any information or 
material described in subsection (a) that is inconsistent with 
subsection (a) shall be superseded by the requirements of such 
provision to the extent State law provides less confidentiality 
or a weaker privilege.
  (d) Public Access to Information.--This section shall not 
apply with respect to the information or material relating to 
the employment history of, and publicly adjudicated 
disciplinary and enforcement actions against, loan originators 
that is included in Nationwide Mortgage Licensing System and 
Registry for access by the public.

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