The Conference of State Bank Supervisors (CSBS) propelled a new web page including a video overview highlighting major initiatives and ideals of VISION 2020. The web page and video are slick, but VISION 2020 was announced last May, when the CSBS Board approved this policy statement:
“CSBS, the states and territories will create consistent and data-driven solutions that support innovation by minimizing friction in the state regulatory system. By 2020, state regulators will adopt an integrated, 50-state licensing and supervisory system, leveraging technology and smart regulatory policy to transform the interaction between industry, regulators and consumers.”
While not acknowledged as a response, this policy statement certainly is a direct alternative to the OCC’s proposed licensing of non-depository FinTech companies as special purpose national banks. The subject of this article is not about that proposal, but the move by another regulator to discuss regulation in the to another regulator’s backyard is worthy of your review. My eyes focused on the motivational message this provided to all state regulators.
This is truly a commitment, as evidenced by the testimony of Charles Cooper, commissioner for the Texas Department of Banking and immediate past CSBS chair, who said, “Vision 2020 promises that state supervisors will continue to strengthen our financial system by streamlining and simplifying licensing requirements, and harmonizing state supervision of non-banks.” His testimony was before the Committee on Banking, Housing, and Urban Affairs in June 2017.
While his words and timing have real value, Mr. Cooper’s authority of state agencies outside of Texas is non-existent. Yet CSBS has an incredible opportunity to lead us to higher ground, though it too represents and does not manage the state regulators.
There are six major initiatives of VISION 2020, and they apply to us all. The Vision 2020 website shares more of Mr. Cooper’s testimony. Vision 2020 initiatives “will transform the licensing process, harmonize supervision, engage fintech companies, assist state banking departments, make it easier for banks to provide services to non-banks, and make supervision more efficient for third parties.”
Since the implementation of the Nationwide Multistate Licensing System (NMLS), mortgage licensing has seen vast improvements, general standardization, and a more coordinated state supervisory system. However, we require more.
FinTech companies are bringing us more than mobile banking and online mortgage applications. NMLS Conference attendees will hear more and will of course ask for more—we always do. States need to coordinate better in exams, license processes need to align more, and fewer documents should be sent outside the system.
The change must come from within the system. CSBS is telling regulators they must become the change they wish to see in the world of regulation. The clock is ticking, and competition is out there if we do not move now—motivation that any sales manager should love.
Also, a challenge to the American Association of Residential Mortgage Regulators and each state regulator to now respond and move forward toward our mutual destination—the challenge will be getting 50 state regulators to agree on just how to harmonize.