In a Request for Information (RFI) posted on the Federal Business Opportunity website last month, the Consumer Financial Protection Bureau (CFPB)  solicited information from vendors so it can "better understand current, state-of-the-art capabilities and strategies to aid its consideration on whether to propose a registration system for nonbank financial institutions."

Pursuant to Dodd-Frank Section 1022, the CFPB is authorized to "prescribe rules regarding registration requirements applicable to a covered person, other than an insured depository institution, insured credit union, or related person." The CFPB stated in its Fall 2015 and Spring 2016 rulemaking agendas that in addition to considering  "larger participant" rules for consumer installment loans and vehicle title loans, it was "also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision." In the RFI, the CFPB stated that should it propose a registration rule, "it would provide notice and an opportunity for comment pursuant to the Administrative Procedure Act" and "would issue a final rule only after giving careful consideration to all comments."

In the RFI, the CFPB stated that it is considering "whether to procure a comprehensive and interactive online web-based Registration System that would allow nonbank financial institutions supervised or regulated by the CFPB to apply for, amend, update, or renew registration online using a single set of uniform applications and would allow the CFPB to process these registration applications and amendments through automated workflows." The CFPB further stated that such a system "might also be used to collect financial and operational data as well as organizational structure data. The registration information collected might include business register data such as the name, address, aliases, industry, and ownership information.  The system might also be used to integrate data with other regulatory data."

To "determine the availability and cost associated with" an automated online registration system that would meet the CFPB’s potential requirements (which are described in the RFI), the CFPB asked vendors interested in providing related services to provide information regarding their capabilities, past performance, and costs for a system and system support. The CFPB also asked vendors to provide any comments or suggestions related to the CFPB’s potential requirements. Responses to the RFI were due by July 29, 2016.

At the American Association of Residential Mortgage Regulators Annual Conference last week in Tampa, Bill Mathews, President of State Regulatory Registry LLC (SRR), announced that SRR had responded to the RFI.  (SRR is the entity that owns and operates the Nationwide Multistate Licensing System & Registry (NMLS).) The NMLS (which uses a uniform application and allows licensees to amend, update and renew licenses online) is the system of record for non-depository, financial services licensing or registration for more than 60 state or territorial governmental agencies. It is the sole system of record for mortgage companies for 58 state agencies, the sole system of record for individual mortgage loan originators for 59 state and territorial agencies, and the sole system of record for the registration of depositories, subsidiaries of depositories, and mortgage loan originators under Regulation G. Currently, more than half of the states manage additional license types in the money services business, debt and consumer finance industries, with new states and new license types being added fairly regularly.

Given that NMLS is already the system of record for so many state agencies, it would be very surprising if the CFPB elected to use a different vendor, particularly as SRR is in the midst of designing and then launching NMLS 2.0, which will purportedly address some of the limitations under the current version of NMLS and provide for even more automation and functionality.