Vermont Department of Financial Regulation

Cynthia Stuart Sue Clark Ned Pike Deputy Commissioner of Banking Regulatory & Consumer Affairs Director Ned Pike Senior Financial Examiner

Topics to Explore Cynthia Stuart, deputy commissioner of banking Department of Financial Regulation Overview Who Does the Banking Division Regulate? Vermont Foreclosure Trends NMLS Update Advertising & Social Media Examination Process Q & A

Department of Financial Regulation Captives Division Deputy David Provost Commissioner Michael Pieciak Banking Division Deputy Cynthia Stuart Insurance Division Deputy Kaj Samson Securities Division Deputy William Carrigan

Who does the Banking Division regulate?

Who does the Banking Division regulate?

Mortgage Loan Originator Licenses Vermont MLOs 2016 1935 2015 1700 2014 1265 2013 1301 2012 1004 2011 851 2010 633

New Foreclosure Filings

NMLS UPDATE Electronic Surety Bonds Criminal Background Checks (CBC) Individual Document Upload NMLS 2.0 Guiding Principles

ELECTRONIC SURETY BONDS Vermont is one of nine states accepting surety bonds electronically through NMLS Functionality is designed for Company, not Branches Transition of existing surety bonds Money Servicers & Debt Adjusters – 11/1/2016 All Other Licensees – 7/1/2017

CRIMINAL BACKGROUND CHECKS (CBC) Allows States to require CBC for any MU2 Individual Vermont requires CBC Qualifying Individuals & Branch Managers Executive Officers – CEO, President, CFO, COO, CIO, CCO Direct Owners of 10% or more Indirect Owners of 25% or more Process is a two steps process Companies must grant CBC Agency Access by State Individuals authorize the CBC

INDIVIDUAL DOCUMENT UPLOAD Document upload capability for state individual filings (MU2 and MU4) Vermont Tax Certification

NMLS 2.0 Guiding Principles Real Time System Uniform Data Legal System of Record Automation

ADVERTISING Vermont Statutes Other Names Responsibility

VERMONT STATUTES 8 V.S.A. § 2244 Unique Identifier The unique identifier issued by the NMLS of any person shall be clearly shown on all loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents. 8 V.S.A. § 2228 Other Names or Business Places No licensee shall transact such business or make any loan provided for by this chapter under any other name or at any other place of business than that named in the license.

OTHER NAMES NMLS #ID issued to an individual, is not a team, and correlates to a mortgage loan originator license NMLS #ID issued to a company correlates to various functional licenses (Lender License, Mortgage Broker License), each authorizing the company to transaction business using a specific name at a specific address If a Company wishes to advertise using another name for branding, such as “The Jane Doe Team,” then it is must apply for a license to use the name at the location(s) where it intends to transact business

RESPONSIBILITY Establish a policy for advertising that includes websites, periodic advertising, and social media Review all advertisements before publication and periodically Follow-up with third party contractors that design websites or provide platforms, i.e. Facebook or Linked In

Examination Process Ned Pike, Senior Financial Examiner Multiple Licenses – In an effort to streamline the examination process, if an entity holds multiple Vermont licenses, DFR will attempt to examine all licenses at the same time. Increased focus on: Management actions Financial Capacity Internal Controls/Audit/Quality Control

Examination Process   Initial Request Letter – An initial request letter sent is sent to a licensee with a two to three week timeframe to produce a loan lists. Licensee should be collecting other requested data during this period for presentation at on-site examination. Loan Review & Exam Scheduling - The examiner-in-charge will select loans from the received list for review. A proposed on-site examination date is also sent to licensee with a minimum of two weeks advance time, but timing will depend greatly on examiner scheduling.

Examination Process On-site Examination – The on-site examination will go relatively quickly for Lender and Broker Licenses. Loan Servicer Licenses often require additional time.   Examination Results – The goal is to have a completed examination report mailed to the licensee within 30 days of the on-site contact or exit conference call (whichever is later).

Examination Process Examination Licensee Response – The Vermont statutory requirement is for a licensee to respond within 30 days of receipt of the examination report.   Response Review - The Examiner-in-Charge will assess the received examination response. If satisfactory, examination is closed. If not satisfactory, the exam and response is referred to Director and Deputy Commissioner.

ADDITIONAL POINTS Drop Box – New! Encrypt / Password Protect Through Winzip Escrow Issues – Always an area of review for compliance with Vermont requirements. New TRID Compliance – DFR is reviewing for attempt to comply with focus on assisting industry to comply. Commitment Letter Regulation & TRID Mortgage Broker Contracts Reverse Mortgages

Q & A