(Washington, DC) Commissioner Thomas E. Hampton of the District of Columbia Department of Insurance, Securities and Banking (DISB) today announced that the agency will be adopting a set of regulatory guidelines that cover how nontraditional mortgages are marketed by District-licensed mortgage lenders and brokers. 

“These guidelines are designed to level the playing field in the mortgage market to protect consumers from taking on high-risk mortgages without having a full understanding of the terms of such loans,” Hampton said. 

The guidance was developed in cooperation with the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR), and applies to state-licensed mortgage lenders and brokers. The guidance will be used to promote consistent regulation in the mortgage market and to simplify how residential mortgage providers can offer nontraditional mortgage products in a way that clearly discloses the risks borrowers may assume. 

The CSBS/AARMR guidance parallels final guidance released September 29 by the federal banking agencies including the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration. The federal interagency guidance applies to federally insured financial institutions and their affiliates. To promote consistency, CSBS/AARMR’s guidance substantially mirrors the federal interagency guidance, except for the deletion of sections inapplicable to non-depository institutions. 

Hampton added that the goal of CSBS and AARMR is for all states to adopt the guidelines so that consumers will see equal protection, and that all originators of residential mortgages will be subject to similar supervisory guidance. This guidance is for all District-licensed mortgage lenders and brokers. 

The regulatory guidance can be found on DISB’s website* or visit CSBS’ website. 

If you need more information on this regulatory guidance, please e-mail DISB’s Banking Bureau contacts: Financial Institutions Examination Officer Edna Boateng at edna.boateng@dc.gov or Policy Analyst Evelyn Carmen at evelyn.carmen@dc.gov.