New Vision for NMLS 2.0 Unveiled at Annual Conference

Several months ago, the CSBS revealed that it had decided to make a change in the development of the NMLS 2.0. At the recent NMLS conference in Orlando, the CSBS advised that the developers of the system were changed and a new company was brought in approximately 2-3 months ago. Due to this change, there is currently no timetable for when NMLS 2.0 will be ready for roll out.

Over the last several months, the new developers worked on prototypes for several processes the new system will provide. These include a license wizard, which would assist applicants and licensees with determining what license they may need based on their business activities, and a control person wizard to assist applicants and licensees with identifying individuals who would qualify as a control person.

Developers continue to move forward on the development of the State Examination System, which will provide a one-stop area for regulators and industry to monitor examinations and allow licensees to provide information to multiple states in one system.

In addition, state regulators are considering proposals that would: 1) allow licensees to self-correct and report compliance issues with regulators in more of an oversight role; and 2) implement a collaborative licensing review process. 

The collaborative review is a proposed process whereby, instead of each regulator separately reviewing all general application information separately, one regulator would be appointed as the “Regulator in Charge” and would assign certain parts of each application to different state regulators, such as business plans and other basic company information, and come to a consensus on that information. The states would then only review their state-specific information. If no other information is required, the application could be automatically approved. This system would only work if an applicant was submitting several new license applications within a certain period of time. Several state money services regulators are currently involved in a trial of such a system. We note that, even with the initial consensus, if a new license application is submitted after the initial review, a state could request additional information and updates to information previously reviewed, so it is unclear how the initial review would assist with future applications.