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Thursday, March 3, 2016

NMLS Examination Management Tool Suite

As a stateside licensed mortgage lender in many states, I am frustrated with the process of managing the examination process. Are there any plans in place to streamline the process?

Back in August of 2012, the CSBS Technology Task Force prepared a proposal which introduced the NMLS Examination Management Tool Suite (EMTS). In the interim, the CSBS EMTS State Regulator Working Group was staffed and an Executive Steering Committee was formed to oversee the requirements phase, vendor selection and development. The SRR Board approved the Request for Proposal (RFP) which was issued in July of 2015. The purpose of the initiative is defined as the development of a full-service examination management suite of tools for state agency use for single, multistate, and state/federal non-depository examinations while aligning with, to the fullest extent practicable, the examination tool being developed by CFPB.

The tool must incorporate a federated-type system of management between CSBS and the individual state agencies while maintaining autonomy of use by each participating state agency. Specifically, the tool must be housed within NMLS and go beyond the mortgage space by including Money Service Businesses and other non-depository entities. The tools must also work equally well for both single-state and multi-state supervision. 

The system was designed to solve three major business problems:
  • Current state systems for examinations do not allow for efficient collaboration among state agencies and/or with federal agencies.
  • Multistate supervisory efforts, such as the Multistate Mortgage Committee (MMC) and the Multistate MSB Examination Taskforce (MMET) require a coordinating system to fully realize their goals of improved supervision and efficiency for licensees.
  • Not all current systems provide licensees with an efficient and secure manner to exchange documents and communicate with one or multiple regulators.
The functional pieces of the system are categorized as either Primary or Support.

The functional pieces of the system are categorized as Primary or SPrimary functions are those activities that are directly focused on creating and delivering an examination product or service. Some of the elements include core examination management functions such as selection of the examinee, the scope and schedule of the exam, information requests, conducting the exam itself, the examinee portal and post exam activities.

The support functions and systems are defined as activities and systems used by one or more primary functions to improve their effectiveness and efficiency. Examples include data integration and security, workflow and document management, system integration, security and access control, workflow and document management and reporting, to name a few.

Finally, what are the benefits or deliverables that will be provided by the system? The system will: 
  • Enhance the uniformity and efficiency of the single state, multi-state and CFPB coordinated exams as many states do not have a complete examination system;
  • Drive the building of best practices for examination processes for states and CFPB;
  • Promote consistent terminology, standard workflows and facilitate data sharing between a CFPB and state system where possible;
  • Allow state agencies to retain depository examination materials in a secure manner so that they can be used for future work; and
  • Provide a secure portal to exchange examination communications and documentation between the examiner and examinee.
At this time, a thorough, on-going RFP review process is in place and a system implementation plan is being developed. You will be hearing more about the progress of this initiative in the coming months.

Alan Cicchetti
Director/Agency Relations
Lenders Compliance Group
Executive Director
Brokers Compliance Group