Keeping Closer Tabs On Brokers

"This is going to be very cumbersome, very expensive and time-consuming," said Anne Canfield, executive director of the Consumer Mortgage Coalition, a Washington-based association of large national banks and mortgage subsidiaries.

Major lenders already have extensive training programs in place for their retail loan officers, Canfield said. "A lot of this is going to be duplicative and unnecessary" for employees of the biggest banks.

The National Association of Mortgage Brokers said it welcomes uniform standards covering all originators in all states.

Marc Savitt, president of the brokers group, called the legislation "a major step forward for the entire industry and for consumers."

But what about mandatory fingerprinting? Lending trade groups have not complained, but a politically diverse coalition of advocacy organizations -- including the American Civil Liberties Union and the American Conservative Union -- wants the Senate to strip the fingerprinting requirement on financial-privacy grounds.

Bill Matthews, president of the State Regulatory Registry, a subsidiary of the Conference of State Bank Supervisors, said fingerprinting should not be an issue. Stockbrokers, among others, are fingerprinted and subject to FBI background checks, and a number of states already have similar requirements for mortgage originators, with no data security lapses.

Coming off the fraud and foreclosure scandals of the boom years, a national registration and oversight system for the mortgage lending industry appears highly likely, and could be up and running within a year.

Kenneth R. Harney's e-mail address is KenHarney@earthlink.net.