Washington—Senators Dianne Feinstein (D-Calif.) and James Lankford (R-Okla.) today led a bipartisan group of senators in introducing the State Licensing Efficiency Act of 2015, a bill to streamline the licensing process for financial service providers.
In addition to Feinstein and Lankford, the legislation is cosponsored by Senators Patrick Leahy (D-Vt.), Jeff Merkley (D-Ore.), Mike Crapo (R-Idaho), Tom Cotton (R-Ark.) and Shelley Moore Capito (R-W.Va.).
In 2008, President Bush signed into law the SAFE Mortgage Licensing Act, a bill authored by Senator Feinstein that required fingerprints for federal background checks for mortgage loan originators. This information is provided to the Nationwide Mortgage Licensing System (NMLS), a central entity that all states can utilize.
Today, states have authorized the use of NMLS for licensing additional financial service providers. However, the FBI is only authorized to provide background check information to the NMLS for mortgage loan originators. The State Licensing Efficiency Act of 2015 clarifies that the FBI is authorized to provide the same information for other financial service providers.
With this change, financial service providers could request only one federal background check through NMLS, instead of for each state where they are seeking a license, as required by current law.
“Ensuring financial service providers are subject to oversight and background checks is a vital role each state plays, but the process can be made much more efficient,” said Senator Feinstein. “This bill would reduce the duplicative background check requests going to the FBI for the same person and is an all-around commonsense fix.”
“I am proud to sponsor this commonsense bipartisan fix that will leverage existing resources to help state regulators expedite background checks for financial services providers,” said Senator Lankford. “By providing the FBI the explicit authority to process criminal background checks for more financial services providers through the Nationwide Mortgage Licensing System, potential employees in some state-regulated industries will be able to get to work quicker, which will create efficiencies that reduces the regulatory burdens for both licensees and state regulators.”