Slide1of 24 1 Federal Reserve Bank of Kansas City 2013 Community Banking Conference Responding to Economic and Regulatory Uncertainty Session 2: Bank vs. Non-bank Issues October 9, 2013 Denver, Colorado

Slide2of 24 2 CFPB’s impact on state supervision of State-chartered Banks Non-Banks Only for banks > $10 bil. Most FRB District Ten state regulators examine for safety and soundness and BSA/AML only. Except for BSA/AML, federal compliance supervision for banks < $10 billion done by a bank’s PFR. First federal regulator of consumer financial activities formerly subject to state supervision only. Another dimension of mortgage supervision. State regulators are examining for compliance with federal consumer lending regulations.

Slide3of 24 3 CFPB Coordination With PFRs Through the FFIEC. All federal and state regulators are represented on the FFIEC’s Consumer Compliance Task Force. In examining banks > $10 billion. With state regulators Through the State Coordinating Committee (SCC). Coordination of non- bank examinations. Information-sharing agreements, including sharing of examination reports and enforcement info.

Slide4of 24 4 The Path to Coordination 2011 MOU: Every state – nearly every regulator Agree to information sharing 2013 Framework: CFPB and CSBS for the States Agree to coordinate supervision on depository and non-depository Coordinated exams to begin Nationwide Cooperative Agreement for State Governance of Non-Depository Supervision: AARMR, CSBS, MTRA, NACCA, NACARA, NASCUS Creates SCC and implements the Framework

Slide5of 24 5 Mortgage Loan Originators For Banks SAFE Act required registration. Lower bar than licensing. Banks approve their own MLO registrants For Non-Banks SAFE Act required licensing. Testing. Education. Credit reports. Criminal history checks. State regulator approves. “Transitioning” from registration to licensing? Could banks be a safe harbor for bad MLO actors?

Slide6of 24 6 Other Non-Bank areas of State Supervision Debt collection Foreclosure relief services Money transmission Mortgage-servicing operations Payday lending Securities firms Small loan companies Stored-value cards Student lending Title lending Internet delivery of these financial services?

Slide7of 24 7 Other Non-Bank areas of State Supervision

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Slide9of 24 9 Other Non-Bank areas of CFPB Supervision Debt collection Foreclosure relief services Mortgage-servicing operations Payday lending Private Student lending Pending larger participant rule for supervision over additional financial services.

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Slide11of John Munn Director Phone: Building, Suite K Street Lincoln, NE