[House Report 114-62]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-62
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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
* * * * * * *
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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